Document:

<PAGE>

                                                                  EXHIBIT 10.3.5

                     MEZZANINE PLEDGE AND SECURITY AGREEMENT

          THIS MEZZANINE PLEDGE AND SECURITY AGREEMENT, dated as of November 1,
2002 (as amended, restated, replaced, supplemented or otherwise modified from
time to time, the "Security Agreement"), is made by THI OF OHIO SNFS, LLC (the
"Ohio Pledgor"), THI OF MARYLAND SNFS I, LLC (the "Maryland I Pledgor") and THI
OF MARYLAND SNFS II, LLC (the "Maryland II Pledgor"), each a Delaware limited
liability company, and each having an address at 4660 Trindle Road, Suite 103,
Camp Hill, Pennsylvania 17011 (each a "Pledgor" and collectively, the
"Pledgors"), in favor of VENTAS REALTY, LIMITED PARTNERSHIP, a Delaware limited
partnership (together with its successors and assigns, "Secured Party").

                                    RECITALS

     A. WHEREAS, Ventas Realty, Limited Partnership, a Delaware limited
partnership, in its capacity as the mortgage lender, is making a first-priority
mortgage loan (the "Mortgage Loan") to those entities listed as a "Mortgage
Borrower" on Schedule I attached hereto, each a Delaware limited liability
company (each a "Mortgage Borrower" and collectively the "Mortgage Borrowers")
in the maximum principal amount of $55,000,000;

     B. WHEREAS, the Ohio Pledgor owns one hundred percent (100%) of the
membership interests in each of the Mortgage Borrowers listed under its name on
Schedule I attached hereto (each, an "Ohio Mortgage Borrower" and collectively
the "Ohio Mortgage Borrowers");

     C. WHEREAS, the Maryland I Pledgor owns one hundred percent (100%) of the
membership interests in each of the Mortgage Borrowers listed under its name on
Schedule I attached hereto (each, a "Maryland Mortgage Borrower" and
collectively the "Maryland Mortgage Borrowers");

     D. WHEREAS, the Maryland II Pledgor owns one hundred percent (100%) of the
membership interests in each of THI of Maryland at Franklin Square, LLC and THI
of Maryland at Fort Washington, LLC (each, a "Maryland Leasehold Entity" and
collectively, the "Maryland Leasehold Entities"; the Maryland Leasehold Entities
and the Mortgage Borrowers are referred to herein individually as, an "Existing
Company" and collectively as, the "Existing Companies" and each corporation,
limited liability company, limited partnership, general partnership or other
entity which may hereafter be formed by any Pledgor, together with each Existing
Company is referred to herein as, a "Company" and collectively as, the
"Companies");

     E. WHEREAS, concurrently with the mortgage loan referred to in Recital A
above, Secured Party is making a mezzanine loan (the "Mezzanine Loan") to the
Pledgors and the Other Mezzanine Borrowers (as hereinafter defined) in the
initial principal amount of $22,000,000;

<PAGE>

     F. WHEREAS, all of the agreements, instruments and other documents which
govern, evidence and/or secure the Mezzanine Loan, as the same may from time to
time hereafter be modified, supplemented or amended, are hereinafter referred to
as the "Mezzanine Loan Documents", and capitalized terms used herein, unless
otherwise defined herein, shall have the meanings ascribed thereto in that
certain Mezzanine Loan Agreement by and among the Pledgors, the Other Mezzanine
Borrowers and Secured Party executed concurrently herewith (as the same may from
time to time hereafter be modified, supplemented or amended, the "Mezzanine Loan
Agreement"); and

     G. WHEREAS, as a condition precedent to making the Mezzanine Loan, Secured
Party has required, among other things, that this Security Agreement be executed
and delivered by each of the Pledgors;

          NOW THEREFORE, in consideration of the foregoing, and in order to
induce the Secured Party to make the Mezzanine Loan to the Pledgors and the
Other Mezzanine Borrowers, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, each of the
Pledgors and Secured Party, intending to be legally bound, do hereby agree as
follows:

          1. Definitions. As used in this Security Agreement, the following
terms have the meanings set forth in or incorporated by reference below:

               (a) "Code" means the Uniform Commercial Code from time to time in
effect in the State of New York

               (b) "Other Mezzanine Borrowers" means, collectively, THI of Ohio
ALFs I, LLC; THI of Ohio at Kent, LLC; THI of Ohio at Cortland, LLC; THI of Ohio
at Berea, LLC; THI of Maryland at Franklin Square, LLC and THI of Maryland at
Fort Washington, LLC, each a Delaware limited liability company.

               (c) "Pledged Company Interests" means the regular membership
interests, limited partnership interests or general partnership interests of any
Pledgor in each Company, together with all membership or partnership interest
certificates, options or rights of any nature whatsoever which may be issued or
granted by such Company, while this Security Agreement is in effect.

               (d) "Proceeds" means all "proceeds" as such term is defined in
Section 9-306(1) of the Code on the date hereof and, in any event, shall
include, without limitation, all dividends or other income from the Pledged
Company Interests, collections thereon or distributions with respect thereto.

                                       2

<PAGE>

          2. Pledge, Security Interest And Assignment of Limited Liability
Company Distributions.

               (a) As security for the full and punctual payment when due
(whether upon stated maturity, by acceleration or otherwise) of the Mezzanine
Loan and the full and faithful payment, performance and observance by each
Pledgor of all obligations to be paid, performed or observed by such Pledgor
under the Mezzanine Loan Documents (collectively, the "Secured Obligations"),
each Pledgor hereby grants and pledges to Secured Party, as pledgee, a first
priority and continuing lien on, and a first priority and continuing security
interest in, and, in furtherance of such grant and pledge, hereby transfers and
assigns to Secured Party as collateral security, all of its right, title and
interest in, to and under, and/or with respect to, and/or arising from or out
of, the following, whether now owned or hereafter acquired, whether now existing
or hereafter arising and wherever located (collectively, the "Pledged
Collateral"):

                    (i) all of Pledgor's right, title and interest in and to the
Pledged Company Interests;

                    (ii) all rights, privileges, authority and power arising
from Pledgor's interest in each Company (provided, however, that, so long as no
Event of Default exists, Pledgor may exercise such rights, privileges, authority
and power vested in Pledgor as a member of such Company);

                    (iii) the capital of Pledgor in each Company and any and all
profits, losses, distributions and allocations attributable thereto as well as
the proceeds of any distribution thereof, whether arising under the terms of any
of the following documents, as applicable (each an "Organizational Document" and
collectively, the "Organizational Documents"): articles of incorporation,
certificate of formation, certificate of organization, by-laws, limited
partnership agreement, limited liability company agreement, stock certificates,
certificates of limited partnership interests or general partnership interests
(if any), certificates of limited liability company membership interests (if
any), and all amendments or modifications of any of the foregoing, and all other
agreements, instruments and/or other organizational or governing documents of or
relating to each Company;

                    (iv) all other payments, if any, due or to become due to
Pledgor in respect of the Pledged Collateral, under or arising out of any
Organizational Document of any Company, or otherwise, whether as contractual
obligations, damages, insurance proceeds, condemnation awards or otherwise
(including, without limitation, all amounts deposited and/or to be deposited in
the Cash Management Account (as defined in the Mezzanine Loan Agreement) and all
other cash collateral for the Mezzanine Loan);

                    (v) all of Pledgor's claims, rights, powers, privileges,
authority, options, security interests, Liens and remedies, if any, under or
arising out of the ownership of the Pledged Collateral;

                                       3

<PAGE>

                    (vi) all present and future claims, if any, of Pledgor
against any Company for monies loaned or advanced, for services rendered or
otherwise;

                    (vii) all of Pledgor's rights pursuant to any Organizational
Document of any Company or at law, to exercise and enforce every right, power,
remedy, authority, option and privilege of Pledgor relating to the Pledged
Company Interests, including the right to execute any instruments and to take
any and all other action on behalf of and in the name of Pledgor in respect of
the Pledged Company Interests and/or such Company to make determinations, to
exercise any election (including, but not limited to, election of remedies) or
option or to give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce or collect
any of the foregoing or any property of such Company, to enforce or execute any
checks, or other instruments or orders and to file any claims and to take any
action in connection with any of the foregoing;

                    (viii) all Investment Property (as such term is defined in
the Code) issued by, or relating to, any Company, as applicable;

                    (ix) all equity interests or other property now owned or
hereafter acquired by Pledgor as a result of exchange offers, recapitalizations
of any type, contributions to capital, options or other rights relating to the
Pledged Collateral; and

                    (x) to the extent not otherwise included, all Proceeds of
any or all of the foregoing, as applicable.

               (b) Concurrently with the execution of this Security Agreement,
(i) each of the Pledgors shall deliver to Secured Party, for filing, all UCC-1
financing statements in proper form necessary to perfect the security interests
granted hereunder in all jurisdictions deemed relevant by Secured Party
(collectively, the "Financing Statements"), and each of the Pledgors agrees to
pay any and all fees or other charges relating to the filing of the Financing
Statements and hereby authorizes and instructs Secured Party to make such
payments by deducting from the proceeds of the Mezzanine Loan advanced to the
Pledgors the full amount of such fees or other charges.

               (c) (i) With respect to each Ohio Mortgage Borrower, the Ohio
Pledgor shall deliver to Secured Party a sole original executed certificated
security in registered form which represents the sole limited liability company
membership interest in such Ohio Mortgage Borrower, (ii) with respect to each
Maryland Mortgage Borrower, the Maryland I Pledgor shall deliver to Secured
Party a sole original executed certificated security in registered form which
represents the sole limited liability company membership interest in such
Maryland Mortgage Borrower, and (iii) with respect to each Maryland Leasehold
Entity, the Maryland II Pledgor shall deliver to Secured Party a sole original
executed certificated security in registered form which represents the sole
limited liability company membership interest in such Maryland Leasehold Entity.
Attached hereto as Exhibit A is a copy of each of the certificates to be
delivered to Secured Party pursuant to the immediately preceding sentence (each,
a "Certificate" and collectively, the "Certificates"). Each Certificate shall be
duly "indorsed in blank" within

                                       4

<PAGE>

the meaning of the Code in a manner sufficient to provide Secured Party with
"control" of such certificated security within the meaning of Section 8-106 of
the Code.

               (d) That portion of the Pledged Collateral which is comprised of
all distributions or other payments or receipts of cash or other property
(including, but not limited to, Investment Property or other property described
in Section 2(a)(viii) or Section 2(a)(ix) hereof) received by any Pledgor
directly or indirectly from any Company is referred to hereinafter sometimes as
the "Distributions". Notwithstanding anything to the contrary set forth in this
Security Agreement, with respect to the Distributions, subject to the other
provisions of the Mezzanine Loan Documents, this Security Agreement constitutes
a present, and current assignment of the Distributions effective upon the
execution and delivery hereof. Accordingly, if any Pledgor shall at any time
during a Cash Management Period receive, irrespective of whether or not such
receipt occurs before or after an Event of Default, one or more Distributions
(including, but not limited to, any distribution of the items of Pledged
Collateral referred to in Section 2(a)(viii) or Section 2(a)(ix) above), such
funds or property shall be held by such Pledgor in trust for Secured Party and
delivered within three (3) Business Days to Secured Party (duly endorsed in
blank in the case of certificated securities in registered form (within the
meaning of relevant Sections of the Code)) for application by Secured Party in
accordance with Section 11 hereof.

          3. Representations and Warranties. Each Pledgor represents and
warrants as of the date hereof that:

               (a) no authorization, consent of or notice to any other Person
(including, without limitation, any member, partner, shareholder or creditor of
Pledgor, or of any Company) that has not been obtained, is required in
connection with the execution, delivery, performance, validity or enforceability
of this Security Agreement including, without limitation, the assignment and
transfer by Pledgor of any of the Pledged Collateral to Secured Party or the
subsequent transfer thereof by Secured Party pursuant to the terms hereof;

               (b) the Pledged Company Interests constitute all the issued and
outstanding equity, membership interests, limited partnership interests, general
partnership interests or capital stock, as the case may be, in each Company;

               (c) Pledgor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Company Interests pledged by it, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the Lien created by this Security Agreement;

               (d) upon the filing of the UCC-1 financing statements referred to
in Section 2(b) and delivery of the Certificates referred to in Section 2(c),
the Lien granted pursuant to this Security Agreement will constitute a valid,
perfected first priority Lien on the Pledged Company Interests and related
Proceeds, enforceable as a valid, perfected first priority Lien against all
creditors of Pledgor and any Persons purporting to purchase any Pledged Company
Interests and related Proceeds from Pledgor;

                                       5

<PAGE>

               (e) the exact name of Pledgor is as set forth in the introductory
paragraph of this Security Agreement;

               (f) Pledgor is organized under the laws of the State of Delaware;

               (g) the principal place of business and chief executive office of
Pledgor is located at 4660 Trindle Road, Suite 103, Camp Hill, Pennsylvania
17011; and

               (h) the Ohio Mortgage Borrowers represent all the existing direct
and indirect subsidiaries of the Ohio Pledgor, the Maryland Mortgage Borrowers
represent all the existing direct and indirect subsidiaries of the Maryland I
Pledgor and the Maryland Leasehold Entities represent all the existing direct
and indirect subsidiaries of the Maryland II Pledgor ; and

               (i) there are no shareholder, partnership or member agreements or
other Organizational Documents, as applicable, which limit the rights of any
Pledgor to pledge the Pledged Collateral or limit the ability of Lender to
exercise any of its rights with respect to the Pledged Collateral.

          4. Covenants. Each Pledgor covenants and agrees with Secured Party
that, from and after the date of this Security Agreement until the Mezzanine
Loan (exclusive of any indemnification or other obligations which are expressly
stated in any of the Mezzanine Loan Documents to survive satisfaction of the
Mezzanine Loan Documents) is paid in full:

               (a) if Pledgor shall, as a result of its ownership of the Pledged
Company Interests, become entitled to receive or shall receive any stock
certificate, limited partnership or general partnership certificate, or regular
membership certificate, as applicable (including, without limitation, any
certificate representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights, whether in addition to,
in substitution of, as a conversion of, or in exchange for any of the Pledged
Company Interests, or otherwise in respect thereof, Pledgor shall accept the
same as Secured Party's agent, hold the same in trust for Secured Party and
deliver the same forthwith to Secured Party in the exact form received, duly
endorsed by Pledgor to Secured Party, if required, together with an undated
stock, regular limited partnership or general partnership interest, or
membership interest power covering such certificate duly executed in blank and
with signature guaranteed if Secured Party shall so request, to be held by
Secured Party hereunder as additional security for the Mezzanine Loan. Any sums
paid upon or in respect of the Pledged Company Interests upon the liquidation or
dissolution of any Company shall be paid over to Secured Party to be held by it
hereunder as additional security for the Mezzanine Loan, and in case any
distribution of capital shall be made on or in respect of the Pledged Company
Interests or any property shall be distributed upon or with respect to the
Pledged Company Interests pursuant to the recapitalization or reclassification
of the capital of any Company or pursuant to the reorganization thereof, the
property so distributed shall be delivered to Secured Party to be held by it,
subject to the terms hereof, as additional security for the Mezzanine Loan. If
any sums of money or property so paid or distributed in respect of the Pledged
Company Interests shall be received by Pledgor, Pledgor shall, until such money
or property is paid or delivered to Secured Party, hold such

                                       6

<PAGE>

money or property in trust for Lender, segregated from other funds of Pledgor,
as additional security for the Mezzanine Loan.

               (b) Without the prior written consent of Secured Party, Pledgor
shall not, directly or indirectly, (i) vote to enable, or take any other action
to permit, any Company to issue any limited or general partnership interests,
membership interests or shares, as applicable, or to issue any other securities
convertible into, or to grant the right to purchase or exchange for, any limited
or general partnership interests or membership interests, as applicable, in any
Company, or (ii) except as permitted by the Mezzanine Loan Agreement, sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Pledged Collateral, or (iii) create, incur, authorize or permit
to exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Pledged Collateral, or any interest therein, except for the Lien
provided for by this Security Agreement. Pledgor shall defend the right, title
and interest of Secured Party in and to the Pledged Collateral against the
claims and demands of all Persons whomsoever.

               (c) If any amount payable under or in connection with any of the
Pledged Collateral shall be or become evidenced by any promissory note, other
instrument or chattel paper, such note, instrument or chattel paper shall be
promptly delivered to Secured Party, duly endorsed in a manner satisfactory to
Secured Party, to be held as Pledged Collateral pursuant to this Security
Agreement.

               (d) Pledgor (i) will not, and will not permit any Company to,
create, incur or permit to exist, (ii) will, and will cause each Company to,
defend the Pledged Company Interests against, and (iii) will, and will cause
each Company to, take all such other action as is necessary to remove, any Lien
or claim on or to the Pledged Company Interests, other than the Liens created
hereby. Pledgor will, and will cause each Company to, defend the right, title
and interest of Secured Party in, to and under the Pledged Company Interests
against the claims and demands of all Persons whomsoever.

               (e) Pledgor will furnish and will cause each Company to furnish
to Secured Party from time to time statements and schedules further identifying
and describing the Pledged Company Interests and such other reports in
connection with the Pledged Company Interests as Secured Party may reasonably
request, all in reasonable detail.

               (f) Pledgor will not, and will not permit any Company to (unless
(i) it shall have given thirty (30) days' prior written notice to such effect to
Secured Party and (ii) all action necessary or advisable, in Secured Party's
opinion, to protect and perfect the Liens and security interests intended to be
created hereunder with respect to the Pledged Company Interests shall have been
taken): (A) change the location of its chief executive office or principal place
of business from that specified in Section 3 above, or (B) change its name,
identity or structure, or (c) reorganize or reincorporate under the laws of
another jurisdiction.

               (g) Pledgor shall pay, and save Secured Party harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise,

                                       7

<PAGE>

sales or other taxes which may be payable or determined to be payable with
respect to any of the Pledged Collateral or in connection with any of the
transactions contemplated by this Security Agreement.

          5. Indemnification.

               (a) Each Pledgor shall indemnify and hold harmless Secured Party
and its directors, officers, employees, agents and contractors from and against
any and all liability, loss, expense, cost or damage which any of them may
suffer or incur and which arises out of or results from:

                    (i) this Security Agreement, the grant, pledge and
assignment of security hereunder, the receipt of Distributions, and/or the
exercise of any right, remedy or power hereunder, except to the extent that it
is finally judicially determined that any such liability, loss, expense, cost or
damage resulted from the gross negligence, fraud or willful misconduct of any
indemnified person; or

                    (ii) any claim or any alleged obligation, liability or duty
on the part of Secured Party to perform or discharge on behalf of Pledgor any
obligation, liability or duty of Pledgor which arises or accrues prior to the
date, if ever, on which Secured Party acquires title to the Pledged Collateral
by foreclosure, assignment in lieu of foreclosure or otherwise.

               (b) Each Pledgor shall reimburse each person indemnified under
this Section 5 within ten (10) Business Days after demand by Secured Party or
such indemnified person for the full amount of any indemnity to which such
person may be entitled hereunder, which shall include all of such person's
reasonable costs and expenses with respect thereto (including, without
limitation, court costs and reasonable attorneys' fees and related expenses as
and when incurred), and the full amount of Pledgor's indemnity obligation shall
be considered to be a Secured Obligation and shall be secured hereby. The
indemnity set forth in this Section 5 shall survive the termination of this
Security Agreement.

               (c) Notwithstanding anything contained herein or in any of the
other Mezzanine Loan Documents to the contrary, no Pledgor will be liable for
any losses described in this Section 5, which occur following the effective date
of a transfer of title to the Pledged Collateral to Secured Party or its
Affiliates, in foreclosure or otherwise.

               (d) The occurrence of an "Event of Default" under and as defined
in the Mezzanine Loan Agreement or in any of the other Mezzanine Loan Documents
shall constitute an event of default by each Pledgor hereunder (an "Event of
Default").

          6. Remedies. If an Event of Default shall occur and be continuing:

               (a) Secured Party, without obligation to resort to any other
security, right or remedy granted under any other agreement or instrument, shall
have the right, in addition

                                       8

<PAGE>

to all rights, powers and remedies of a secured party pursuant to the Code
and/or any other applicable laws, to, at any time and from time to time, (i)
cause any part or all of the Pledged Collateral to be registered in or
transferred into the name of Secured Party or into the name of a nominee or
nominees, or designee or designees, of Secured Party, and/or (ii) apply the
cash, if any, then held by it as Pledged Collateral in reduction of the Secured
Obligations in accordance with the terms of the Mezzanine Loan Agreement, and/or
(iii) sell, resell, assign and deliver, in its sole and absolute discretion, any
or all of the Pledged Collateral (whether in whole or in part and at the same or
different times) and all right, title and interest, claim and demand therein and
right of redemption thereof, at public or private sale, for cash and/or with
credit provided by Secured Party, and in connection therewith Secured Party may
grant options and may impose conditions such as requiring any purchaser to
represent that any "securities" (within the meaning of the Federal securities
laws) constituting any part of the Pledged Collateral are being purchased for
investment only, and in connection with any of the foregoing described in clause
(iii), each Pledgor hereby irrevocably waives and releases any and all rights of
redemption. If all or any part of the Pledged Collateral is sold by Secured
Party upon credit provided by Secured Party, Secured Party shall not be liable
for the failure of the purchaser to purchase or pay for the same and, in the
event of any such failure, Secured Party may freely resell such Pledged
Collateral. Secured Party may exercise its rights with respect to less than all
of the Pledged Collateral, leaving unexercised its rights with respect to the
remainder of the Pledged Collateral; such partial exercise shall in no way
restrict or jeopardize Secured Party's right to exercise its rights with respect
to all or any part of the remaining Pledged Collateral at a later time or times.
Secured Party may, instead of the power of sale herein conferred upon it,
proceed by a suit or suits at law or in equity to foreclose all or any part of
the security interests in the Pledged Collateral and sell the Pledged
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.

               (b) Secured Party may exercise, either by itself or by its
nominee or designee, in the name and place of any Pledgor, the rights, powers
and remedies granted to Secured Party under Section 2(a) hereof, including but
not limited to Section 2(a)(ii) hereof, in respect of the Pledged Collateral.
Such rights, powers and remedies shall include, without limitation, the right to
exercise all voting, consent, managerial and other rights relating to the
Pledged Collateral, whether in such Pledgor's name or otherwise, and the right
to exercise such Pledgor's rights, if any, of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any of the Pledged
Collateral, including, without limitation, the right to exchange, at its
discretion, any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other readjustment of any
Company, all without liability, except to account for property actually received
by Secured Party.

               (c) Each Pledgor hereby irrevocably authorizes and empowers
Secured Party, and assigns and transfers to Secured Party, and constitutes and
appoints Secured Party and any of its assigns, its true and lawful
attorney-in-fact, and as its agent, irrevocably, with full power of substitution
for it and in its name, in order to more fully vest in Secured Party the rights
and remedies provided for herein, and each Pledgor, further authorizes and
empowers Secured Party and any of its assigns, as its attorney-in-fact, and as
its agent, irrevocably, with full

                                       9

<PAGE>

power of substitution for it and in its name, to proceed from time to time in
Pledgor's name in any statutory or non-statutory legal or other proceeding,
including but not limited to any bankruptcy proceeding, affecting Pledgor or the
Pledged Collateral, and Secured Party, any of its assigns or their respective
nominees or designees, may in connection herewith (i) execute and file proofs of
claims relating to the Pledged Collateral and vote such claims for all or any
portion of the Pledged Collateral (x) for or against any proposal or resolution,
(y) for a trustee or trustees or for a receiver or receivers or for a committee
of creditors and/or (z) for the acceptance or rejection of any proposed
arrangement, plan or reorganization, composition or extension, and Secured Party
or its nominee or designee may receive any payment or distribution and give
acquittance therefor and may exchange or release any portion or all of the
Pledged Collateral; and (ii) endorse any draft or other instrument for the
payment of money, execute releases and negotiate settlements. Nothing contained
in the foregoing provisions of this Section 6(c) shall be deemed or construed to
be a limitation on, or waiver by Secured Party of, any of Secured Party's other
rights or remedies hereunder or under any of the other Mezzanine Loan Documents,
including, without limitation, pursuant to the provisions of the Mezzanine Loan
Agreement. Secured Party shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for any failure to do
so or delay in so doing. The foregoing powers of attorney are irrevocable and
coupled with an interest, and any similar or dissimilar powers heretofore given
by any Pledgor in respect of the Pledged Collateral to any other person other
than Secured Party are hereby revoked. The power of attorney granted herein
shall terminate automatically upon the termination of this Security Agreement in
accordance with Section 15 hereof.

               (d) Secured Party may at any time and from time to time, without
notice to, or assent by, any Pledgor or any other person, but without affecting
any of the Secured Obligations, in the name of such Pledgor or in the name of
Secured Party (i) notify any other party to make payment and performance with
respect to any item of Pledged Collateral directly to Secured Party, (ii) extend
the time of payment and performance of, compromise or settle for cash, credit or
otherwise, and upon any terms and conditions, any obligations owing to such
Pledgor, or claims of such Pledgor under any of the Organizational Documents of
any Company, (iii) file any claims, and/or commence, maintain or discontinue any
actions, suits or other proceedings deemed by Secured Party to be necessary or
advisable for the purpose of collecting upon or enforcing any of the
Organizational Documents of any Company, and (iv) execute any instrument and do
all other things deemed necessary and proper by Secured Party to protect and
preserve and realize upon the Pledged Collateral or any portion thereof and the
other rights contemplated hereby.

               (e) Secured Party may without notice to, or the consent of, any
Pledgor require (i) that any and all Distributions, and/or other distributions
or payments of any type payable to such Pledgor with respect to all or any part
of the Pledged Collateral be paid to Secured Party and/or its nominees, and/or
(ii) that Secured Party or its nominee, designee, agent or assignee be
substituted for such Pledgor or any of its nominees or designees, as officers
and/or directors and/or other agents or representatives of any Company.

                                       10

<PAGE>

               (f) Pursuant to the powers of attorney provided for by Section
6(c) hereof, Secured Party may reasonably take any action and exercise and
execute any instrument which it may deem necessary or advisable to accomplish
the purposes of this Security Agreement. Without limiting the generality of the
foregoing, Secured Party shall have the right and power to receive, endorse and
collect all checks and other orders for the payment of money made payable to any
Pledgor representing any Distribution, interest, payment of principal or other
distribution or payment payable in respect of the Pledged Collateral or any part
thereof, and for and in the name, place and stead of such Pledgor, to execute
endorsements, assignments or other instruments of conveyance or transfer in
respect of the Pledged Collateral and any other property which is or may become
a part of the Pledged Collateral hereunder.

               (g) Without limiting any other provision of this Security
Agreement, and without waiving or releasing any Pledgor from any obligation or
default hereunder, Secured Party shall have the right, but not the obligation,
to perform any act or take any action, as it, in its judgment, may deem
necessary to cure any Event of Default, cause any term, covenant, condition or
obligation required under this Security Agreement to be performed or observed by
any Pledgor to be promptly performed or observed on behalf of such Pledgor, or
protect the security provided to Secured Party under this Security Agreement.
All amounts advanced by, or on behalf of, Secured Party in exercising its rights
under this Section 6(g) (including, but not limited to, reasonable legal
expenses and disbursements incurred in connection therewith as and when
incurred), together with interest thereon at the Default Rate (as defined in the
Mezzanine Loan Agreement) from the date of each such advance, shall be payable
by the Pledgors to Secured Party within fifteen (15) days after written demand
therefor and shall be Secured Obligations under this Security Agreement.

          7. Sales of the Pledged Collateral; Strict Foreclosure.

               (a) To the extent permitted by law, no demand, advertisement or
notice, all of which are hereby expressly waived by each Pledgor, shall be
required in connection with any sale or other disposition of all or any part of
the Pledged Collateral pursuant to Section 6 hereof, except that Secured Party
shall give such Pledgor at least ten (10) days' prior written notice of the time
and place of any public sale or of the time and the place at which any private
sale or other disposition is to be made, which notice such Pledgor hereby agrees
is reasonable, and all other demands, advertisements and notices are hereby
irrevocably waived by such Pledgor. To the extent permitted by law, Secured
Party shall not be obligated to make any sale of the Pledged Collateral if it
shall determine not to do so, regardless of the fact that notice of sale may
have been given, and Secured Party may without notice or publication adjourn any
public or private sale, and such sale may, without further notice, be made at
the time and place to which such sale is so adjourned. Subject only to
provisions of applicable law which cannot be waived, upon each public or private
sale of any portion of or all of the Pledged Collateral, Secured Party (or its
nominee or designee) may purchase any or all of the Pledged Collateral being
sold, free and clear of and discharged from any trusts, claims, equity or right
of redemption of any Pledgor, all of which are hereby waived and released to the
extent permitted by law, and may make payment therefor by credit against any of
the Secured Obligations in lieu of cash or

                                       11

<PAGE>

any other obligations. In the case of any sale, public or private, of any
portion of or all of the Pledged Collateral, each Pledgor shall be responsible
for, and shall pay within fifteen (15) days after demand therefore, all costs
and expenses of every kind relating to the sale and delivery of the Pledged
Collateral, including, without limitation, brokers' and reasonable attorneys'
fees and disbursements and any tax imposed thereon and such obligation to pay
such costs and expenses shall be a Secured Obligation.

               (b) To the extent permitted under applicable law, Secured Party
shall not be required to conduct any foreclosure sale of any part of the Pledged
Collateral. Secured Party may, in its sole and absolute discretion, retain and
acquire for itself and/or its designees or nominees, the Pledged Collateral by,
as contemplated by Section 6(a)(i) hereof, instructing each Pledgor to register
on its ledgers and books Secured Party's acquisition of the Pledged Collateral
and the Certificate which embodies the Pledged Collateral, subject to any rights
of such Pledgor to object in accordance with the Code, if such Pledgor has not
renounced or waived such rights in accordance with the Code. In connection
therewith, Secured Party shall have the right to complete any endorsements in
its favor on the Certificates or any other certificated securities or
instruments which at any time are part of the Pledged Collateral.

          8. Securities Laws.

          If an Event of Default shall have occurred, Secured Party may, in its
sole and absolute discretion, sell all of the Pledged Collateral or any part
thereof by private sale in such manner and under such circumstances as Secured
Party may deem necessary or advisable in order that such sale may legally be
effected without registration pursuant to the Securities Act of 1933 or any
other Federal, state or local law governing the offering or sale of securities,
provided that at least ten (10) days' prior written notice of the time and place
of any such sale shall be given to the applicable Pledgor. Without limiting the
generality of the foregoing, in any such event Secured Party, in its sole and
absolute discretion (i) may proceed to make such private sale notwithstanding
that a registration statement for the purpose of registering such Pledged
Collateral or part thereof shall not have been filed or shall not have become
effective such Securities Act, (ii) may approach and negotiate with a single
potential purchaser to effect such sale, and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Pledged Collateral or part thereof. In the event of any such sale, Secured
Party shall incur no responsibility or liability for selling all or any part of
the Pledged Collateral at a price which Secured Party may in good faith deem
reasonable under the circumstances, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration as aforesaid.

          9. Receipt of Sale Proceeds.

          Upon any sale of the Pledged Collateral, or any portion thereof, by
Secured Party hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of Secured Party or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Pledged Collateral so sold, and such purchaser or

                                       12

<PAGE>

purchasers shall not be obligated to see to the application of any part of the
purchase money paid over to Secured Party or such officer or be answerable in
any way for the misapplication or nonapplication thereof.

          10. Costs and Expenses.

               (a) Each Pledgor agrees that it shall pay to Secured Party:

                    (i) within fifteen (15) days after receipt of an invoice
therefor (accompanied by customary supporting material), the amount of any taxes
Secured Party may have been required to pay by reason of the security interests
created in the Pledged Collateral hereunder (excluding any income taxes,
franchise taxes or other taxes based upon Secured Party's income) or any amount
necessary to free any of the Pledged Collateral from any lien not created in
favor of Secured Party thereon, and

                    (ii) within fifteen (15) days after receipt of an invoice
therefor (accompanied by customary supporting material), the amount of any and
all reasonable expenses, including the reasonable fees and disbursements of
counsel as and when incurred and of any other agents or experts and any transfer
taxes or other taxes or governmental charges or fees (whether now existing or
hereinafter enacted), Secured Party may incur in connection with (a) the
enforcement of this Security Agreement, including such reasonable expenses as
are incurred to preserve the value of the Pledged Collateral or the validity,
effectiveness, enforceability, perfection, priority or value of any security
interest, (b) after the occurrence of an Event of Default, the collection, sale
or other disposition of any of the Pledged Collateral, (c) the exercise by
Secured Party of any of the rights and/or remedies conferred upon it hereunder,
or (d) any Event of Default.

               (b) Any amount required to be paid by any Pledgor under Section
10(a) above which is not paid when due shall bear interest for each day from the
date advanced by or on behalf of the Secured Party until repaid by such Pledgor
at the Default Rate. All obligations and liabilities of each Pledgor under
Section 10(a) above and this Section 10(b) shall be Secured Obligations under
this Security Agreement.

          11. Application of Pledgor's Pledged Collateral.

          The Pledged Collateral and any proceeds thereof (including, without
limitation, any proceeds from the sale of all or any portion of the Pledged
Collateral and all Distributions) now or at any time hereafter received or
retained by Secured Party pursuant to the provisions of this Security Agreement
shall, after the occurrence of an Event of Default and acceleration of the
Mezzanine Loan, be applied by Secured Party in the following order of priority:
first, to the payment of all costs and expenses incurred in connection with the
administration and enforcement of, or the preservation of any rights under, this
Security Agreement (including, without limitation, reasonable attorneys' fees)
and, second, to the payment of the Secured

                                       13

<PAGE>

Obligations  in such order and manner as Secured Party may determine in its sole
and absolute discretion.

          12. Further Assurances.

          Each Pledgor agrees that, at its sole expense and in such manner and
form as Secured Party reasonably may require at any time and from time to time,
it shall execute, deliver, file and/or record any financing statement, specific
assignment or other writing or instrument, and take any other action that
Secured Party may deem reasonably necessary or desirable, or that Secured Party
may reasonably request, in order to create, preserve or validate any security
interests created hereunder or the priority thereof or to enable Secured Party
to exercise and enforce its rights hereunder with respect to any of the Pledged
Collateral. Each Pledgor hereby authorizes Secured Party to execute and file at
any time or from time to time, in the name of such Pledgor, such UCC financing
statements and other similar instruments as Secured Party in its sole discretion
may deem necessary or desirable to perfect and continue the security interests
created hereunder.

          13. Attorney-In-Fact.

          Secured Party is hereby appointed the attorney-in-fact, with full
power of substitution, of each Pledgor for the purpose of carrying out the
provisions hereof from time to time, after an Event of Default, in Secured
Party's discretion, and taking any action and executing any instruments
(including, without limitation, financing or continuation statements,
conveyances, assignments and transfers) which Secured Party may deem necessary
or advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is coupled with an interest and is irrevocable. Each Pledgor
shall indemnify and hold harmless Secured Party from and against any liability,
loss, cost, expense and/or damage which it may incur in the exercise and
performance, in good faith, of any of Secured Party's powers and/or duties
specifically set forth herein.

          14. Waivers.

          No Pledgor shall be entitled to any notices of any nature whatsoever
from Secured Party except with respect to matters for which this Security
Agreement or the other Mezzanine Loan Documents specifically and expressly
provide for the giving of notice by Secured Party to Pledgor and except with
respect to matters for which Pledgor is not, pursuant to applicable Legal
Requirements, permitted to waive the giving of notice. To extent permitted by
law, Pledgor hereby expressly waives the right to receive any notice from
Secured Party with respect to any matter for which this Security Agreement or
the other Mezzanine Loan Documents does not specifically and expressly provide
for the giving of notice by Secured Party to Pledgor. No delay or omission on
the part of Secured Party in exercising any right hereunder shall operate as a
waiver of that right or of any other right hereunder. Any waiver of any right on
any one occasion shall not be construed as a bar to or waiver of that or any
other right on any future occasion. No course of dealing between any Pledgor and
Secured Party nor any failure to exercise, nor any delay in exercising, on the
part of Secured Party, any right, power or privilege hereunder or with

                                       14

<PAGE>

respect to any of the Secured Obligations shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
or otherwise with respect to the Secured Obligations preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.

          15. Termination.

          This Security Agreement and the security interests in and lien on each
Pledgor's Pledged Collateral created hereby shall terminate upon the
indefeasible payment and satisfaction in full of all of the Secured Obligations,
except contingent indemnity obligations not then due and payable.

          16. Integration Clause.

          This Security Agreement, together with all of the other Mezzanine Loan
Documents, represents the entire agreement between the parties with respect to
the subject matter hereof, and all prior or contemporaneous agreements,
understandings or other communications, oral or written, regarding the subject
matter which are not expressed herein or therein shall be of no force and
effect.

          17. Amendments and Waivers In Writing Only.

          This Security Agreement shall not be amended or otherwise modified
except by a further written agreement executed and delivered by all of the
parties hereto. No waiver, express or implied, of any of the provisions hereof
shall be effective unless embodied in a written document executed by the party
hereto who is charged with such waiver.

          18. Successors and Assigns.

          Except as may be expressly permitted in the Mezzanine Loan Agreement,
neither this Security Agreement, nor any right title and/or interest herein,
shall be assigned or otherwise transferred by any Pledgor without the prior
written consent of Secured Party. Subject to the preceding sentence, this
Security Agreement shall inure to the benefit of the parties hereto and their
respective successors and assigns.

          19. Notices.

          All notices, demands, requests, consents, approvals or other
communications (collectively, "Notices") required or permitted to be given
hereunder to Secured Party or any Pledgor or which are given to Secured Party or
any Pledgor with respect to this Security Agreement shall be in writing and
otherwise given in accordance with Section 11.6 of the Mezzanine Loan Agreement.

                                       15

<PAGE>

          20. No Duty to Preserve Pledgor's Pledged Collateral.

          To the extent permitted by applicable law, Secured Party shall not
have any duty as to the collection or protection of the Pledged Collateral or
any income thereon or payments with respect thereto, or as to the preservation
of any rights pertaining thereto, beyond exercising reasonable care with respect
to any cash or any Certificate that is actually in Secured Party's possession
pursuant hereto.

          21. No Release.

          The obligations of each Pledgor under this Security Agreement shall be
absolute and unconditional and shall remain in full force and effect without
regard to, and, subject to Section 15 hereof, shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstances or occurrence
whatsoever, including, without limitation: (a) any renewal, extension, amendment
or modification of, or addition or supplement to or deletion from, any of the
Mezzanine Loan Documents or the Mortgage Loan Documents or any other instrument
or agreement referred to therein, or any assignment or transfer of any thereof;
(b) any waiver, consent, extension, indulgence or other action or inaction under
or in respect of any of the Mezzanine Loan Documents or the Mortgage Loan
Documents or any exercise or non-exercise of any right, remedy, power or
privilege under or in respect of any of the Mezzanine Loan Documents or the
Mortgage Loan Documents, respectively; (c) any furnishing of any additional
security to Secured Party or any acceptance thereof or any sale, exchange,
release, surrender or realization of or upon any security by Secured Party; or
(d) any invalidity, irregularity or unenforceability of all or part of the
Secured Obligations or of any security therefor.

          22. Waiver of Marshalling of Assets Defense.

          To the fullest extent that each Pledgor may legally do so, each
Pledgor hereby waives all rights to a marshalling of the assets of Pledgor,
and/or any others with interests in Pledgor, and/or of the Pledged Collateral,
or to a sale in inverse order of alienation in the event of foreclosure of the
interests hereby created, and agree not to assert any right under any laws
pertaining to the marshalling of assets, sales in inverse order of alienation or
any other matters whatsoever to defeat, reduce or affect the right of Secured
Party to a sale of the Pledged Collateral for the collection of the Secured
Obligations without any prior or different resort for collection.

          23. General Provisions Relating To Secured Party's Remedies.

          Without limitation of any right or remedy of Secured Party in this
Security Agreement, each Pledgor acknowledges and agrees that upon the
occurrence and during the continuance of an Event of Default (i) the rights and
remedies of Secured Party herein provided or provided under any of the other
Mezzanine Loan Documents shall be cumulative, and shall be in addition to and
not exclusive of or in limitation of any rights and remedies provided by
applicable law, including, without limitation, the rights and remedies of a
secured party under the Code or any other applicable laws or in an equity
proceeding, (ii) Secured Party shall have the

                                       16

<PAGE>

right to pursue all of its rights and remedies in one proceeding, or separately
and independently in separate proceedings, in each case as Secured Party, in its
sole and absolute discretion, shall determine from time to time, (iii) Secured
Party shall not be required to either marshal assets or sell the Pledged
Collateral in any inverse order of alienation, and shall not be subjected to any
"one action" or "election of remedies" law or rule, (iv) the exercise by Secured
Party of any remedies against any of the Pledged Collateral shall not impede
Secured Party from subsequently or simultaneously exercising remedies against
any other collateral or security, and (v), subject to Section 15 hereof, all
liens and other rights, remedies and privileges provided to Secured Party in
this Security Agreement and the other Mezzanine Loan Documents or otherwise
shall remain in full force and effect and shall in no event terminate prior to
the exhaustion by Secured Party of all of its remedies against the Pledged
Collateral and Secured Party's foreclosure, sale and/or other realization upon
all of the Pledged Collateral.

          24. Limited Recourse.

          Notwithstanding anything herein to the contrary, each Pledgor's
recourse liability under or with respect to this Security Agreement shall be
limited to the identical extent provided in Section 11.22 of the Mezzanine Loan
Agreement.

          25. Governing Law.

          This Security Agreement shall be governed and construed in accordance
with the internal laws of the State of New York, without regard to its conflicts
of law principles.

                         [NO FURTHER TEXT ON THIS PAGE]

                                       17

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered as of the date first above written.

                                           PLEDGOR:

                                           THI OF OHIO SNFS, LLC,
                                           a Delaware limited liability company

                                           By:  /s/ JOHN E. BAUER
                                              ----------------------------------
                                              Name:  John E. Bauer
                                              Title: Vice-President

                                           THI OF MARYLAND SNFS I, LLC,
                                           a Delaware limited liability company

                                           By:  /s/ JEFFREY A. BARNHILL
                                              ----------------------------------
                                              Name:  Jeffrey A. Barnhill
                                              Title: Vice-President

                                           THI OF MARYLAND SNFS II, LLC,
                                           a Delaware limited liability company

                                           By:  /s/ JEFFREY A. BARNHILL
                                              ----------------------------------
                                              Name:  Jeffrey A. Barnhill
                                              Title: Vice-President

                       [Signatures continued on next page]

<PAGE>

                                           SECURED PARTY:

                                           VENTAS REALTY, LIMITED PARTNERSHIP,
                                           a Delaware limited partnership

                                           By: Ventas, Inc.
                                               a Delaware corporation,
                                               its sole general partner

                                               By:  /s/ T. RICHARD RINEY
                                                  ------------------------------
                                                  Name:  T. Richard Riney
                                                  Title: Executive Vice
                                                         President/General
                                                         CounselRegistration Rights Agreement

  
 Exhibit 4.2 
  
 J. C. PENNEY CORPORATION, INC. 
  
 9.000% Notes Due 2012

  
 REGISTRATION RIGHTS AGREEMENT 
  
 New York, New York 
 July 26, 2002 
  
 Salomon Smith Barney Inc. 
 Fleet
Securities, Inc. 
 Wachovia Securities, Inc. 
   as Dealer Managers 
  
 c/o Salomon Smith Barney Inc.

 388 Greenwich Street 
 New York, New York 10013 
  
 Ladies and Gentlemen: 
  
 J. C. Penney Corporation, a Delaware corporation (the “Company”), proposes to issue its 9.000% notes due 2012 (the “New
Notes”) as part of an exchange offer (the “Initial Exchange Offer”) for its outstanding 6.125% Notes due 2003, 7.375% Notes due 2004, and 6.90% Debentures due 2026 (collectively, the “Old Notes”), upon the terms set forth in
a Dealer Manager Agreement (the “Dealer Manager Agreement”) dated as of June 26, 2002, among the Company, J. C. Penney Company, Inc., a Delaware corporation and the sole stockholder of the Company (the “Co-Obligor” and, together
with the Company, the “Issuers”), and you as the dealer managers (the “Dealer Managers”), relating to the Initial Exchange Offer. The New Notes are to be issued under an indenture (the “Indenture”) dated as of April 1,
1994, as amended by the first supplemental indenture dated as of January 27, 2002, among the Company, the Co-Obligor, and U.S. Bank National Association (formerly Bank of America National Trust and Savings Association), as trustee (the
“Trustee”). To induce the Dealer Managers to enter into the Dealer Manager Agreement and to satisfy a condition to your obligations thereunder, the Issuers, jointly and severally, agree with you for your benefit and the benefit of the
holders (each a “Holder” and, together, the “Holders”) from time to time of the New Notes or the Exchange Notes (as hereinafter defined), as follows: 
  
 1.  Definitions.    Capitalized terms used herein without definition shall have their respective meanings set forth in the Dealer
Manager Agreement. As used in this Agreement, the following capitalized defined terms shall have the following meanings: 
  
 “Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder. 
  
 “Additional Interest” shall have the meaning set forth in Section 5 hereto. 

  
 “Affiliate” of any specified person shall mean any other person that,
directly or indirectly, is in control of, is controlled by, or is under common control with, such specified person. For purposes of this definition, control of a person shall mean the power, direct or indirect, to direct or cause the direction of
the management and policies of such person whether by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing. 
  

“Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act. 
  
 “Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or
obligated by law to close in New York City, New York. 
  
 “Commission” shall mean the Securities and
Exchange Commission. 
  
 “Dealer Manager Agreement” shall have the meaning set forth in the preamble
hereto. 
  
 “Dealer Managers” shall have the meaning set forth in the preamble hereto. 

 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder. 
  
 “Exchange Notes” shall mean debt securities of the Issuers identical
in all material respects to the New Notes (except that the cash interest and interest rate step-up provisions and the transfer restrictions shall be modified or eliminated, as appropriate) and to be issued under the Exchange Notes Indenture.

  
 “Exchange Notes Indenture” shall mean an indenture among the Issuers and the Exchange Notes Trustee,
identical in all material respects to the Indenture (except that the cash interest and interest rate step-up provisions and the transfer restrictions shall be modified or eliminated, as appropriate) entered into in connection with the issuance of
the Exchange Notes. 
  
 “Exchange Notes Trustee” shall mean a bank or trust company reasonably satisfactory
to the Dealer Managers, as trustee with respect to the Exchange Notes under the Exchange Notes Indenture. 
  
 “Exchange Offer Registration Period” shall mean the one-year period following the consummation of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement. 
  
 “Exchange Offer Registration Statement”
shall mean a registration statement of the Issuers on an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and supplements to such registration statement, including post-effective amendments thereto, in
each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. 

 
 2 

  
 “Exchanging Dealer” shall mean any Holder (which may include any Dealer
Manager) that is a Broker-Dealer and elects to exchange for Exchange Notes any New Notes that it acquired for its own account as a result of market-making activities or other trading activities (but not directly from the Company or any Affiliate of
the Company) for Exchange Notes. 
  
 “Expiration Date” shall have the meaning set forth in Section 2(c)(ii)
hereto. 
  
 “Fee” shall have the meaning set forth in the Dealer Manager Agreement. 

 
 “Holder” shall have the meaning set forth in the preamble hereto. 
  
 “Indenture” shall have the meaning set forth in the preamble hereto. 
  
 “Initial Exchange Offer” shall have the meaning set forth in the preamble hereto. 
  
 “Losses” shall have the meaning set forth in Section 7(d) hereof. 
  
 “Majority Holders” shall mean, on any date, the Holders of a majority of the aggregate principal amount of the New Notes registered or to be registered under a Registration Statement.

  
 “Managing Underwriters” shall mean the investment banker or investment bankers and manager or managers
that shall administer an underwritten offering, if any, under a Registration Statement. 
  
 “New Notes”
shall have the meaning set forth in the preamble hereto. 
  
 “Old Notes” shall have the meaning set forth
in the preamble hereto. 
  
 “Prospectus” shall mean the prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the New Notes or the Exchange Notes covered by such Registration Statement, and all amendments and supplements thereto, including all exhibits thereto and all material
incorporated by reference therein. 
  
 “Registered Exchange Offer” shall mean the proposed offer of the
Issuers to issue and deliver to the Holders of the New Notes that are not prohibited by any law or policy of the Commission from participating in such offer, in exchange for the New Notes, a like aggregate principal amount of the Exchange Notes.

  
 “Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf Registration
Statement that covers any of the New Notes or the Exchange Notes pursuant to the provisions of this Agreement, any amendments and supplements to such registration statement, including post-effective amendments (in each case including the Prospectus
contained therein), all exhibits thereto and all material incorporated by reference therein. 

 
 3 

  
 “Settlement Date” shall mean the date on which the Initial Exchange
Offer has been consummated. 
  
 “Shelf Registration” shall mean a registration under the Act effected
pursuant to Section 3 hereof. 
  
 “Shelf Registration Period” has the meaning set forth in Section 3(b)
hereof. 
  
 “Shelf Registration Statement” shall mean a “shelf” registration statement of the
Company pursuant to the provisions of Section 3 hereof which covers some or all of the New Notes, on an appropriate form under Rule 415 under the Act, or any similar rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including (i) post-effective amendments and (ii) any “shelf” registration statement filed prior to the date of this Agreement under which the Company may register resales of the New Notes, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. 
  
 “Trustee” shall have the meaning set forth in the preamble hereto. 
  
 “Trust
Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder. 
  
 “Underwriter” shall mean any underwriter of New Notes in connection with an offering thereof under a Shelf Registration Statement. 
  
 2.  Registered Exchange Offer.  (a) The Issuers shall prepare and, not later than 120 days following the Settlement Date (or if such 120th day is
not a Business Day, the next succeeding Business Day), shall file with the Commission the Exchange Offer Registration Statement with respect to the Registered Exchange Offer. The Issuers shall use their reasonable best efforts to (i) cause the
Exchange Offer Registration Statement to become effective under the Act within 180 days of the Settlement Date (or if such 180th day is not a Business Day, the next succeeding Business Day) and (ii) consummate the Registered Exchange Offer within
210 days of the Settlement Date (or if such 210th day is not a Business Day, the next succeeding Business Day). 
  
 (b)    Upon the effectiveness of the Exchange Offer Registration Statement, the Issuers shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable
each Holder electing to exchange New Notes for Exchange Notes (provided that such Holder is not an Affiliate of any of the Issuers, acquires the Exchange Notes in the ordinary course of such Holder’s business, has no arrangements with any
person to participate in the distribution of the Exchange Notes and is not prohibited by any law, rule or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Notes from and after their receipt without
any limitations or restrictions under the Act and without material restrictions under the securities laws of a substantial proportion of the several states of the United States. 

 
 4 

  
 (c)    In connection with the Registered Exchange Offer, the
Issuers shall: 
  
 (i)    mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; 
  
 (ii)    keep the Registered Exchange Offer open for not less than 20 Business Days and not more than 30 Business Days after the date notice thereof is mailed to the Holders (or, in
each case, longer if required by applicable law) (the “Expiration Date”); 
  
 (iii)    use their reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective under the Act, supplemented and amended as required under the Act to ensure that it is available
for sales of Exchange Notes by Exchanging Dealers during the Exchange Offer Registration Period; 
  
 (iv)    utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan in New York City, which may be the Trustee, the Exchange Notes Trustee or an Affiliate of
either of them; 
  
 (v)    permit Holders to withdraw tendered New Notes at any
time prior to the close of business, New York time, on the last Business Day on which the Registered Exchange Offer is open; 
  
 (vi)    prior to effectiveness of the Exchange Offer Registration Statement, provide a supplemental letter to the Commission (A) stating that the Issuers are conducting the
Registered Exchange Offer in reliance on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), and (B) including a representation
that the Issuers have not entered into any arrangement or understanding with any person to distribute the Exchange Notes to be received in the Registered Exchange Offer and that, to the best of the Issuers’ information and belief, each Holder
participating in the Registered Exchange Offer is acquiring the Exchange Notes in the ordinary course of business and has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes; and 

 
 (vii)    comply in all material respects with all applicable laws. 
  
 (d)    As soon as practicable after the close of the Registered Exchange Offer, the Issuers shall: 

 
 (i)    accept for exchange all New Notes tendered and not validly withdrawn pursuant to the
Registered Exchange Offer; 
  
 (ii)    deliver to the Trustee for cancellation in
accordance with Section 4(t) all New Notes so accepted for exchange; and 

 
 5 

  
 (iii)    cause the Exchange Notes Trustee
promptly to authenticate and deliver to each Holder of New Notes a principal amount of Exchange Notes equal to the principal amount of the New Notes of such Holder so accepted for exchange. 
  
 (e)    Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder using the Registered Exchange Offer to participate in a
distribution of the Exchange Notes (x) could not under Commission policy as in effect on the date of this Agreement rely on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley
and Co., Inc. (pub. avail. June 5, 1991), as interpreted in the Commission’s letter to Shearman & Sterling dated July 2, 1993 and similar no-action letters, and (y) must comply with the registration and prospectus delivery requirements
of the Act in connection with any secondary resale transaction, and any secondary resale transactions by such Holder must be covered by an effective registration statement containing the selling security holder and plan of distribution information
required by Item 507 or 508, as applicable, of Regulation S-K under the Act if the resales are of Exchange Notes obtained by such Holder in exchange for New Notes acquired by such Holder directly from any of the Issuers or one of their respective
Affiliates. Accordingly, each Holder participating in the Registered Exchange Offer shall be required to provide a written representation to the Issuers that, at the time of the consummation of the Registered Exchange Offer: 
  
 (i)    any Exchange Notes received by such Holder will be acquired in the ordinary course of such
Holder’s business; 
  
 (ii)    such Holder is not engaged in, and does not
intend to engage in and will have no arrangement or understanding with any person to participate in the distribution of the New Notes or the Exchange Notes within the meaning of the Act; and 
  
 (iii)    such Holder is not an Affiliate of any of the Issuers. 
  
 3.  Shelf Registration.  (a) If (i) due to any change in law or applicable interpretations thereof by the Commission’s staff, the Issuers
determine upon advice of their outside counsel that they are not permitted to effect the Registered Exchange Offer as contemplated by Section 2 hereof; or (ii) for any other reason the Registered Exchange Offer is not consummated within 210 days of
the Settlement Date; or (iii) any Holder notifies the Issuers that it is not eligible to participate in the Registered Exchange Offer, the Issuers shall effect a Shelf Registration Statement in accordance with subsection (b) below. 

 
 (b)    (i)  The Issuers shall as promptly as practicable (but in no event more
than 45 days after so required or requested pursuant to this Section 3), file with the Commission and thereafter shall use their reasonable best efforts to cause to be declared effective under the Act a Shelf Registration Statement relating to the
offer and sale of the New Notes by the Holders thereof from time to time in accordance with the methods of distribution elected by such Holders and set forth in such Shelf Registration Statement; provided, however, that no Holder shall be entitled
to have the New Notes held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder; and provided further that with respect to a Shelf
Registration Statement required pursuant to clause (ii) 

 
 6 

 of Section 3(a), the consummation of a Registered Exchange Offer shall relieve the Issuers of their obligations under
this Section 3(b) but only in respect of their obligations under such clause (ii) of Section 3(a). 
  
 (ii)    The Issuers shall use their reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the Act, in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of two years from the date the Shelf Registration Statement is declared effective by the Commission or such shorter period that will terminate when all the New Notes covered by the Shelf
Registration Statement (A) have been sold pursuant to the Shelf Registration Statement or (B) are freely tradable pursuant to Rule 144(k) under the Securities Act (in any such case, such period being called the “Shelf Registration
Period”). The Issuers shall be deemed not to have used their reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if they voluntarily take any action that would result in Holders of New Notes
covered thereby not being able to offer and sell such New Notes during that period, unless (A) such action is required by applicable law or (B) such action is taken by the Issuers in good faith and for valid business reasons (not including avoidance
of the Issuers’ obligations hereunder), including the acquisition or divestiture of assets, so long as the Issuers promptly thereafter comply with the requirements of Section 4(k) hereof, if applicable. 
  
 (iii)    The Issuers shall cause the Shelf Registration Statement and the related Prospectus and any
amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply in all material respects with the applicable requirements of the Act and the rules and regulations of the
Commission; and (B) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of a Prospectus contained therein, in the
light of the circumstances under which they were made) not misleading. 
  
 4.  Additional Registration
Procedures.  In connection with any Shelf Registration Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following provisions shall apply. 
  
 (a)    The Issuers shall: 
  
 (i)    furnish to you, not less than five Business Days prior to the filing thereof with the Commission, a copy of any Exchange Offer Registration Statement and any Shelf Registration Statement, and each
amendment thereof and each amendment or supplement, if any, to the Prospectus included therein (including all documents incorporated by reference therein after the initial filing) and shall use their reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments as you reasonably propose; 
  
 (ii)    include the information set forth (A) in Annex A hereto on the facing page of the Exchange Offer Registration Statement, (B) in Annex B hereto in the forepart of the Exchange Offer Registration Statement
in a section setting forth details of 

 
 7 

 
the Registered Exchange Offer, (C) in Annex C hereto in the underwriting or plan of distribution section of the Prospectus contained in the Exchange Offer Registration Statement, and (D) in Annex
D hereto in the letter of transmittal delivered pursuant to the Registered Exchange Offer; and 
  
 (iii)    in the case of a Shelf Registration Statement, include the information regarding the Holders that propose to sell New Notes pursuant to the Shelf Registration Statement as selling security holders.

  
 (b)    The Issuers shall ensure that: 
  

(i)    any Registration Statement and any amendment thereto and any Prospectus forming part thereof and any amendment or supplement
thereto complies in all material respects with the Act and the rules and regulations thereunder; and 
  
 (ii)    any Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. 
  
 (c)    The Issuers shall advise you,
the Holders of New Notes or Exchange Notes, as the case may be, covered by any Registration Statement and any Exchanging Dealer under any Exchange Offer Registration Statement that has provided in writing to the Issuers a telephone or facsimile
number and address for notices, and, if requested by you or any such Holder or Exchanging Dealer, shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) below shall be accompanied by an instruction to suspend the use of the
Prospectus until the Issuers shall have remedied the basis for such suspension): 
  
 (i)    when a Registration Statement and any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective; 

 
 (ii)    of any request by the Commission for any amendment or supplement to a Registration
Statement or the Prospectus or for additional information; 
  
 (iii)    of the
issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or the initiation or threatening of any proceedings for that purpose; 
  
 (iv)    of the receipt by either Issuer of any notification with respect to the suspension of the qualification of the securities
included in any Registration Statement for sale in any jurisdiction or the initiation of any proceeding for such purpose; and 
  
 (v)    of the happening of any event that requires any change in a Registration Statement or the Prospectus so that, as of such date, the statements therein do not contain any
untrue statement of a material fact and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case 

 
 8 

 
of the Prospectus, in the light of the circumstances under which they were made) not misleading. 
  
 Upon receiving notice of the occurrence of any of the events listed in this Section 4(c), each Holder will, upon request by the Company in writing, immediately discontinue disposition of New Notes or
Exchange Notes pursuant to a Registration Statement until such Holder’s receipt of copies of the supplemented or amended Prospectus contemplated by Section 4(k) or until it is advised in writing by the Issuers that use of the applicable
Prospectus may resume, and, if so directed by the Issuers, such Holder will deliver to the Company (at the Issuers’ expense) all copies in such Holder’s possession, other than permanent file copies, of the Prospectus covering such New
Notes or Exchange Notes that was current at the time of receipt of such notice. 
  
 (d)    The
Issuers shall use their best efforts to prevent the issuance and, if issued, to obtain the withdrawal at the earliest possible time of any order suspending the effectiveness of any Registration Statement or the qualification of the securities
therein for sale in any jurisdiction. 
  
 (e)    The Issuers shall furnish to each Holder of New
Notes covered by any Shelf Registration Statement, without charge, at least one copy of such Shelf Registration Statement and any post-effective amendment thereto, including all material incorporated therein by reference, and, if the Holder so
requests in writing, all exhibits thereto (including exhibits incorporated by reference therein). 
  
 (f)    The Issuers shall, during the Shelf Registration Period, promptly deliver to you and to each Holder of New Notes covered by any Shelf Registration Statement, and any sales or placement agents or
underwriters acting on behalf of such Holder, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such person may
reasonably request. The Issuers consent to the use of the Prospectus or any amendment or supplement thereto by each of the foregoing in connection with the offering and sale of the New Notes covered by the Prospectus, or any amendment or supplement
thereto, included in the Shelf Registration Statement. 
  
 (g)    The Issuers shall furnish to
each Exchanging Dealer that so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including all material incorporated by reference therein, and, if the Exchanging Dealer
so requests in writing, all exhibits thereto (including exhibits incorporated by reference therein). 
  
 (h)    The Issuers shall promptly deliver to you and to each Holder, each Exchanging Dealer and each other person required to deliver a Prospectus during the Exchange Offer Registration Period, without charge, as
many copies of the Prospectus included in such Exchange Offer Registration Statement and any amendment or supplement thereto as any such person may reasonably request. The Issuers consent to the use of the Prospectus or any amendment or supplement
thereto by you, any Holder, any Exchanging Dealer and any such other person that may be required to deliver a Prospectus following the Registered Exchange 

 
 9 

 Offer in connection with the offering and sale of the Exchange Notes covered by the Prospectus, or any amendment or supplement thereto, included
in the Exchange Offer Registration Statement. 
  
 (i)    Prior to the Registered Exchange Offer
or any other offering of New Notes or Exchange Notes, as the case may be, pursuant to any Registration Statement, the Issuers shall arrange, if necessary, for the qualification of the New Notes or the Exchange Notes, as the case may be, for sale
under the laws of such jurisdictions as any Holder shall reasonably request and will use their reasonable best efforts to maintain such qualification in effect so long as required; provided that in no event shall either Issuer be obligated to (i)
qualify to do business or as a broker or dealer of securities in any jurisdiction where it is not then so qualified, (ii) take any action that would subject it to service of process in suits, other than those arising out of the Initial Exchange
Offer, the Registered Exchange Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction where it is not then so subject or (iii) subject itself to taxation in any jurisdiction if it is not already so subject.

  
 (j)    The Issuers shall cooperate with the Holders of New Notes or Exchange Notes, as the
case may be, to facilitate the timely preparation and delivery of certificates representing New Notes or Exchange Notes to be issued or sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request. 
  
 (k)    Upon the occurrence of any event
contemplated by subsections (ii) through (v) of Section 4(c) hereof, the Issuers shall promptly prepare a post-effective amendment to the applicable Registration Statement or an amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to the persons entitled to the delivery thereof pursuant to Section 4(c) hereof, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and to notify each Holder to suspend use of the Prospectus as promptly as practicable after the occurrence
of such an event, and each Holder hereby agrees to suspend use of the Prospectus until the Issuers have amended or supplemented the Prospectus to correct such misstatement or omission. In such circumstances, the period of effectiveness of the
Exchange Offer Registration Statement provided for in Section 2 and the Shelf Registration Statement provided for in Section 3(b) shall each be extended by the number of days from and including the date of the giving of a notice of suspension
pursuant to Section 4(c) hereof to and including the date the persons entitled to the delivery thereof pursuant to Section 4(c) hereof shall have received such amended or supplemented Prospectus pursuant to this Section. 
  
 (l)    (A) Not later than the effective date of an Exchange Offer Registration Statement, the Issuers shall provide a
CUSIP number for the Exchange Notes registered under such Exchange Offer Registration Statement and provide the Exchange Notes Trustee with printed certificates for such Exchange Notes, free of any restrictive legends, in a form eligible for deposit
with The Depository Trust Company (“DTC”) and (B) on the first business day following the effective date of any Shelf Registration Statement hereunder or as soon as practicable thereafter, the Issuers shall use their reasonable best
efforts to cause DTC to remove (1) from any existing CUSIP number assigned to the New Notes any designation indicating that 

 
 10 

 the New Notes are “restricted securities,” which efforts shall include delivery to DTC of a letter executed by the Company
substantially in the form of Exhibit A hereto and (2) any other stop or restriction on DTC’s system with respect to the New Notes. In the event the Issuers are unable to cause DTC to take the actions described in the immediately preceding
sentence, the Issuers shall take such actions as the Majority Holders may reasonably request to provide, as soon as practicable, a CUSIP number for the New Notes registered under the Shelf Registration Statement and to cause the CUSIP number to be
assigned to the New Notes or Exchange Notes, as the case may be (or to the maximum aggregate principal amount of the New Notes or Exchange Notes, as the case may be, to which such number may be assigned). Upon compliance with the foregoing
requirements of this Section 4(l)(B), the Company shall provide the Trustee with printed certificates for such New Notes in a form eligible for deposit with DTC. 
  
 (m)    The Issuers shall comply with all applicable rules and regulations of the Commission and shall make generally available to its security holders as soon as practicable after
the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of Section 11(a) of the Act. 
  
 (n)    The Issuers shall cause the Indenture or the Exchange Notes Indenture, as the case may be, to be qualified under the Trust Indenture Act in a timely manner. 
  
 (o)    The Issuers may require each Holder of New Notes to be sold pursuant to any Shelf Registration Statement to
furnish to the Issuers such information regarding the Holder and the distribution of such New Notes as the Issuers may from time to time reasonably require for inclusion in such Shelf Registration Statement. The Issuers may exclude from such Shelf
Registration Statement the New Notes of any Holder that fails to furnish such information within a reasonable time after receiving such request. 
  
 (p)    The Issuers shall, if requested, use their reasonable best efforts to incorporate promptly in a Prospectus supplement or post-effective amendment to a Shelf Registration
Statement such information as a Holder may reasonably provide from time to time to the Company in writing for inclusion in a Prospectus or any Shelf Registration Statement concerning such Holder and the distribution of such Holder’s New Notes
and shall make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably possible after receipt of notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment.

  
 (q)    In the case of any Shelf Registration Statement, the Issuers shall enter into such
agreements and take all other appropriate actions (including, if requested, an underwriting agreement in customary form) in order to expedite or facilitate the registration or the disposition of the New Notes, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable than those set forth in Section 7 (or such other provisions and procedures acceptable to the Majority Holders and the
Managing Underwriters, if any, with respect to all parties to be indemnified pursuant to Section 7). 
  
 (r)    In the case of any Shelf Registration Statement, the Issuers shall: 

 
 11 

 (i)    make reasonably available for inspection by the selling Holders of New Notes
to be registered thereunder, any underwriter participating in any disposition pursuant to such Shelf Registration Statement, if any, and any attorney, accountant or other agent retained by the selling Holders or any such underwriter, all relevant
financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries; provided, however, that any information that is designated in writing by the Issuers, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by the selling Holders or any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an accompanying obligation of confidentiality and without any action or omission by any selling Holder in violation of this subsection (i); 
  
 (ii)    cause the Issuers’ officers, directors, employees, accountants and auditors to supply all
relevant information reasonably requested by the selling Holders or any such underwriter, attorney, accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however,
that any information that is designated in writing by the Issuers, in good faith, as confidential at the time of delivery of such information shall be kept confidential by the selling Holders or any such underwriter, attorney, accountant or agent,
unless such disclosure is made in connection with a court proceeding or required by law, or such information becomes available to the public generally or through a third party without an accompanying obligation of confidentiality and without any
action or omission by any selling Holder in violation of this subsection (ii); 
  
 (iii)    make such representations and warranties to the Holders of New Notes registered thereunder and the underwriters, if any, in form, substance and scope as are customarily made by the Issuers to underwriters
in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Dealer Manager Agreement; 
  
 (iv)    obtain opinions of counsel to the Issuers and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing
Underwriters, if any) addressed to each selling Holder and the underwriters, if any, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such
Holders and underwriters; 
  
 (v)    obtain “comfort” letters and
updates thereof from the independent certified public accountants of the Issuers (and, if necessary, any other independent certified public accountants of any subsidiary of the Issuers or of any business acquired directly or indirectly by the
Issuers for which financial statements and financial data are, or are required to be, included in the Registration Statement), addressed to each selling Holder of New Notes registered thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in “comfort” letters in connection with primary underwritten offerings; and 

 
 12 

  
 (vi)    deliver such documents and
certificates as may be reasonably requested by the Majority Holders or the Managing Underwriters, if any, including those to evidence compliance with Section 4(k) hereof and with any customary conditions contained in the underwriting agreement or
other agreement entered into by the Issuers. 
  
 The actions set forth in the foregoing subclauses (iii), (iv), (v) and (vi) shall be
performed at (A) the effectiveness of such Registration Statement and each post-effective amendment thereto; and (B) each closing under any underwriting or similar agreement as and to the extent required thereunder. 
  
 (s)    In the case of any Exchange Offer Registration Statement, the Issuers shall: 
  
 (i)    make reasonably available for inspection by you, and any attorney, accountant or other agent
retained by you, all relevant financial and other records, pertinent corporate documents and properties of the Issuers and their subsidiaries; 
  
 (ii)    cause the Issuers’ officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by you or any such attorney,
accountant or agent in connection with any such Registration Statement as is customary for similar due diligence examinations; provided, however, that any information that is designated in writing by the Issuers, in good faith, as confidential at
the time of delivery of such information shall be kept confidential by you or any such attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such information becomes available to
the public generally or through a third party without an accompanying obligation of confidentiality and without any action or omission by any selling Holder in violation of this subsection (ii); 
  

(iii)    make such representations and warranties to you, in form, substance and scope as are customarily made by the Issuers to
underwriters in primary underwritten offerings and covering matters including, but not limited to, those set forth in the Dealer Manager Agreement; 
  
 (iv)    obtain opinions of counsel to the Issuers (which counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to you and your counsel) and updates thereof, addressed to you, covering such matters as are customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by you or your
counsel; 
  
 (v)    obtain “comfort” letters and updates thereof from
the independent certified public accountants of the Issuers (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired directly or indirectly by the Company for which financial
statements and financial data are, or are required to be, included in the Registration Statement), addressed to you, in customary form and covering matters of the type customarily covered in “comfort” letters in connection with primary
underwritten offerings, or if 

 
 13 

 requested by you or your counsel in lieu of a “comfort” letter, an agreed-upon procedures letter under
Statement on Auditing Standards No. 35, covering matters requested by you or your counsel; and 
  
 (vi)    deliver such documents and certificates as may be reasonably requested by you or your counsel, including those to evidence compliance with Section 4(k) and with conditions customarily contained in
underwriting agreements. 
  
 The actions set forth in the foregoing subclauses (iii), (iv), (v) and (vi) shall be performed at (A) the close
of the Registered Exchange Offer and (B) the effective date of any post-effective amendment to the Exchange Offer Registration Statement. 
  
 (t)    If a Registered Exchange Offer is to be consummated, upon delivery of the New Notes by Holders to the Issuers (or to such other person as directed by the Issuers) in exchange for the Exchange
Notes, the Issuers shall mark, or cause to be marked, on the New Notes so exchanged that such New Notes are being cancelled in exchange for the Exchange Notes. In no event shall the New Notes be marked as paid or otherwise satisfied. 

 
 (u)    The Issuers shall use their reasonable best efforts to cause the securities covered by a
Registration Statement to be rated with at least one nationally recognized statistical rating agency, if so requested by the Majority Holders or by any Managing Underwriters unless such Securities are already so rated. 
  
 (v)    In the case of any Shelf Registration Statement, if any Broker-Dealer shall underwrite any New Notes or
participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the Rules of Fair Practice and the By-Laws of the National Association of Securities Dealers, Inc.) thereof,
whether as a Holder of such New Notes or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Issuers shall assist such Broker-Dealer in complying with the requirements of such Rules and By-Laws,
including, without limitation, by: 
  
 (i)    if such Rules or By-Laws shall so
require, engaging a “qualified independent underwriter” (as defined in such Rules) to participate in the preparation of such Registration Statement, to exercise usual standards of due diligence with respect thereto and, if any portion of
the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such New Notes; 
  
 (ii)    indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section
7 hereof; and 
  
 (iii)    providing such information to such Broker-Dealer as
may be required in order for such Broker-Dealer to comply with the requirements of such Rules or By-Laws. 
  
 (w)    The Issuers shall use their reasonable best efforts to take all other steps necessary to effect the registration of New Notes or Exchange Notes, as the case may be, covered by a Registration Statement.

 
 14 

  
 5.  Additional Interest 
  
 (a)    The parties hereto acknowledge that the Holders of New Notes or Exchange Notes, as the case may be, will suffer
damages if the Issuers fail to perform their obligations under Section 2 or 3 hereof and that it would not be feasible to ascertain the extent of such damages. Accordingly, in the event that: 
  

	 	(i)
	 
	the Exchange Offer Registration Statement has not been filed on or prior to the 120th day following the Settlement Date; 
 

  

	 	(ii)
	 
	the Exchange Offer Registration Statement has not been declared effective on or prior to the 180th day following the Settlement Date; 
 

  

	 	(iii)
	 
	neither the Exchange Offer has been completed nor the Shelf Registration Statement has been declared effective on or prior to the 210th day following the Settlement Date; or 
 

  

	 	(iv)
	 
	after either the Exchange Offer Registration Statement or Shelf Registration Statement has been declared effective, such Registration Statement ceases to be
effective or usable in connection with the Registered Exchange Offer or resales of the New Notes during a period in which it is required to be effective hereunder without being succeeded immediately by any additional Registration Statement or
post-effective amendment covering the New Notes or the Exchange Notes, as the case may be, which has been filed and declared effective; 
 

  
 (each such event referred to in the foregoing clauses (i) through (iv), a “Registration Default”), then additional interest (“Additional Interest”) will accrue on the principal amount of the New Notes and
the Exchange Notes, respectively (in addition to the stated interest on the New Notes and the Exchange Notes), from and including the date on which any Registration Default first occurs and while any such Registration Default has occurred and is
continuing, to but excluding the date on which all filings, declarations of effectiveness and consummations, as the case may be, have been achieved which, if achieved on a timely basis, would have prevented the occurrence of all of the then existing
Registration Defaults. Additional Interest will accrue at a rate of 0.25% per annum during the 90-day period immediately following such first occurrence of a Registration Default and while any such Registration Default has occurred and is
continuing, and shall increase by 0.25% per annum at the end of each subsequent 90-day period up to a maximum of 0.50% per annum with respect to all Registration Defaults, until the date on which all of the filings, declarations of effectiveness and
consummations referred to in the preceding sentence have been achieved, on which date the interest rate on the New Notes and the Exchange Notes, respectively, will revert to the interest rate originally borne by such notes. 
  
 (b)    The Issuers shall notify the Trustee or the Exchange Notes Trustee, as applicable, immediately upon their
knowledge of the happening of each and every Registration Default. The Issuers shall pay the Additional Interest due on the New Notes or Exchange Notes, as the case may be, by depositing with the Trustee or the Exchange Notes Trustee, as applicable

 
 15 

 (which in either case shall not be any of the Issuers for these purposes), in trust, for the benefit of the Holders thereof, prior to 11:00 A.M.
on the next interest payment date specified in the Indenture or the Exchange Notes Indenture, as applicable, sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable on each interest payment date
specified by the Indenture or the Exchange Notes Indenture, as applicable, to the record holders entitled to receive the interest payment to be made on such date. 
  
 (c)    The parties hereto agree that the Additional Interest provided for in this Section 5 constitutes a reasonable estimate of the damages that will
be suffered by Holders of New Notes or Exchange Notes by reason of the happening of any Registration Default. 
  
 (d)    All of the Issuers’ obligations set forth in this Section 5 shall survive the termination of this Agreement. 
  
 6.  Registration Expenses.  The Issuers shall, jointly and severally, bear all expenses incurred in connection with the performance of their obligations under Sections 2, 3,
and 4 hereof and, in connection with any Shelf Registration Statement, shall reimburse the Holders for the reasonable fees and disbursements of one firm or counsel designated by the Majority Holders to act as counsel for the Holders in connection
therewith, and, in the case of any Exchange Offer Registration Statement, will reimburse the Dealer Managers for the reasonable fees and disbursements of counsel acting in connection therewith; provided that such reimbursement shall not exceed
$15,000. 
  
 7.  Indemnification and Contribution.  (a) The Issuers, jointly and
severally, agree to indemnify and hold harmless each Holder of New Notes or Exchange Notes, as the case may be, covered by any Registration Statement (including each Dealer Manager and, with respect to any Prospectus delivery as contemplated in
Section 4(h) hereof, each Exchanging Dealer), the directors, officers, employees and agents of each such Holder and each person who controls you or any such Holder within the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which any of the foregoing may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement as originally filed or in any amendment thereof, or in
any preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred
by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Issuers will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of
or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Issuers by or on behalf of any such Holder specifically
for inclusion therein. This indemnity agreement shall be in addition to any liability which the Issuers may otherwise have. 
  

 
 16 

  
 The Issuers, jointly and severally, also agree to indemnify as provided in this
Section 7(a) or contribute as provided in Section 7(d) hereof to Losses of each underwriter of New Notes, registered under a Shelf Registration Statement, their directors, officers, employees or agents and each person who controls such underwriter
on substantially the same basis as that of the indemnification of the selling Holders provided in this Section 7(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section 4(p)
hereof. 
  
 (b)    Each Holder of securities covered by a Registration Statement (including each
Dealer Manager and, with respect to any Prospectus delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer), severally and not jointly, agrees to indemnify and hold harmless the Issuers, and each of their respective directors and
those officers who sign such Registration Statement and each person who controls the Issuers within the meaning of either the Act or the Exchange Act, to the same extent as the indemnity in Section 7(a) from the Issuers to each such Holder, but only
with reference to written information relating to such Holder furnished to the Issuers by or on behalf of such Holder specifically for inclusion in the documents referred to in the foregoing indemnity and shall reimburse the Issuers’ indemnitee
or controlling person for any legal or other expenses reasonably incurred by the Issuers indemnitee in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, judgment or action as such
expenses are incurred. This indemnity agreement shall be in addition to any liability which any such Holder may otherwise have. 
  
 (c)    Promptly after receipt by an indemnified party under this Section 7 or notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to
the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to
represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party; (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the 

 
 17 

 indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party shall not, without the prior
written consent of the indemnified parties (not to be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit or proceeding. 
  
 (d)    In the event that the indemnity provided in paragraph (a) or (b) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying
party shall have a joint and several obligation to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively
“Losses”) to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party, on the one hand, and such indemnified party, on the other hand, from the
Initial Exchange Offer and the Registration Statement which resulted in such Losses; provided, however, that in no case shall any Dealer Manager or any Holder of any New Note or Exchange Note be responsible, in the aggregate, for any amount in
excess of the Fee applicable to such New Note, or in the case of an Exchange Note, applicable to the New Note that was exchangeable into such Exchange Note, in connection with the Initial Exchange Offer as set forth in the Dealer Manager Agreement,
nor shall any underwriter be responsible for any amount in excess of the underwriting discount or commission applicable to the New Notes or Exchange Notes, as the case may be, purchased by such underwriter under the Registration Statement which
resulted in such Losses. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the indemnifying party and the indemnified party shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the statements or omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Issuers shall be deemed to be equal to (x) the aggregate principal amount of Old Notes exchanged in the Initial Exchange Offer (before deducting expenses), plus (y) the total amount of Additional
Interest which the Company was not required to pay as a result of registering the New Notes or Exchange Notes covered by the Registration Statement which resulted in such Losses, minus (z) the aggregate amount of Fees paid by the Company in
connection with the Initial Exchange Offer under the Dealer Manager Agreement. Benefits received by the Dealer Managers shall be deemed to be equal to the aggregate amount of Fees received by the Dealer Managers in connection with the Initial
Exchange Offer under the Dealer Manager Agreement, and benefits received by any Holders shall be deemed to be equal to the value of receiving New Notes or Exchange Notes, as applicable, registered under the Act. Benefits received by any underwriter
shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Registration Statement which resulted in such Losses. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue 

 
 18 

 statement or omission. The parties agree that it would not be just and equitable if contribution were determined by pro rata allocation (even if
the Holders were treated as one entity for such purpose) or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each person who controls a Holder
within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of such Holder shall have the same rights to contribution as such Holder, and each person who controls the Issuers within the meaning of either
the Act or the Exchange Act, each officer of the Issuers who shall have signed the Registration Statement and each director of the Issuers shall have the same rights to contribution as the Issuers, subject in each case to the applicable terms and
conditions of this paragraph (d). 
  
 (e)    The provisions of this Section 7 shall remain in
full force and effect, regardless of any investigation made by or on behalf of any Holder or any Issuer or any of the officers, directors or controlling persons referred to in this Section 7, and shall survive the sale by a Holder of securities
covered by a Registration Statement. 
  
 8.  Underwritten Registrations.  (a) If any of
the New Notes covered by any Shelf Registration Statement are to be sold in an underwritten offering, the Managing Underwriters shall be selected by the Majority Holders. 
  
 (b)    No Holder may participate in any underwritten offering pursuant to any Shelf Registration Statement, unless such Holder (i) agrees to sell such
Holder’s New Notes on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements, and (ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 
  
 9.  No Inconsistent Agreements.  None of the Issuers has, as of the date hereof, entered into, nor shall any of the Issuers, on or after the date hereof, enter into, any agreement with respect to any of its
securities that is inconsistent with the rights granted to the Holders herein or that otherwise conflicts with the provisions hereof. 
  
 10.  Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, qualified, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the Issuers have obtained the written consent of the Majority Holders (or, after the consummation of any Registered Exchange Offer in accordance with Section 2 hereof, the Holders of a
majority in the aggregate principal amount of the Exchange Notes); provided that, with respect to any matter that directly or indirectly affects the rights of any Dealer Manager hereunder, the Issuers shall obtain the written consent of each such
Dealer Manager against which such amendment, qualification, supplement, waiver or consent is to be effective. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may 

 
 19 

 alternatively be given by the Majority Holders of the New Notes or Exchange Notes, as the case may be, being sold rather than registered under
such Registration Statement. 
  
 11.  Notices.  All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing overnight delivery: 
  
 (a)    if to a Holder, at the most current address given by such Holder to the Issuers in accordance with the provisions of this Section 11, which
address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to you; 
  
 (b)    if to you, initially at the address set forth in the Dealer Manager Agreement; and 
  
 (c)    if to the Issuers, initially at the Company’s address set forth in the Dealer Manager Agreement. 
  
 All such notices and communications shall be deemed to have been duly given when received. 
  
 Each party hereto by notice to the other parties may designate additional or different addresses of such party for subsequent notices or communications. 

 
 12.  Successors.  This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties, including, without the need for an express assignment or any consent by the Issuers thereto, subsequent Holders of New Notes and Exchange Notes. The Issuers hereby agree to extend the benefits of this Agreement to
any Holder of New Notes and Exchange Notes, and any such Holder may specifically enforce the provisions of this Agreement as if an original party hereto. Each Issuer agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by the Issuers of the provisions of this Agreement and hereby agrees to waive in any action for specific performance the defense that a remedy at law would be adequate. 
  
 13.  Counterparts.  This Agreement may be signed in counterparts, each of which shall be deemed an original and
all of which together shall constitute one and the same agreement. 
  
 14.  Headings.  The
headings used herein are for convenience only and shall not affect the construction hereof. 
  
 15.  Applicable Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.

  
 16.  Severability.  In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every 

 
 20 

 other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest extent permitted by law. 
  
 17.  Securities Held by the Issuers, etc.  Whenever the consent or approval of Holders of a specified percentage of principal amount of New Notes or Exchange Notes is required hereunder, New Notes or
Exchange Notes, as applicable, held by any of the Issuers or any of their Affiliates (other than subsequent Holders of New Notes or Exchange Notes if such subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such New
Notes or Exchange Notes) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. 
  
 18.  Termination.  This Agreement and the obligations of the parties hereunder shall terminate upon the expiration of the Shelf Registration Period, except for any
liabilities or obligations under Sections 2(e), 3(b), 6 and 7 hereof and the obligations to make payments of and provide for additional interest under Section 5 hereof to the extent such damages accrue prior to the end of the Shelf Registration
Period, each of which shall remain in effect in accordance with its terms. 
  

 
 21 

  
 If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Issuers and the Dealer Managers. 
  
 
	 Very truly yours,
  
 J. C. Penney Corporation, Inc.
 
	 
	 By:
 	 	   /s/    ROBERT B. CAVANAUGH        

	  	 	 Name:   Robert B. Cavanaugh
 Title:     Executive Vice President and Chief
               Financial Officer
 
	 
	 J. C. Penney Company, Inc.
 
	 
	 By:
 	 	   /s/    MICHAEL P. DASTUGUE         

	  	 	 Name:   Michael P. Dastugue
 Title:     Vice President and Treasurer
 

 
  
  
 
	 The foregoing Agreement is hereby
 confirmed and accepted as of the
 date first above written.
  
 Salomon Smith Barney Inc.
 Fleet Securities, Inc.
 Wachovia Securities, Inc.
  
 By:  Salomon Smith Barney Inc.
 
	 
	 By:
 	 	     /s/            
 

	  	 	   Name:
   Title:
 

 

 
 22 

  
 ANNEX A 
  
 Each Broker-Dealer that receives Exchange Notes for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an “underwriter” within the meaning of the
Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of Exchange Notes received in exchange for New Notes where such New Notes were acquired by such Broker-Dealer as
a result of market-making activities or other trading activities. The Issuers have agreed that, starting on the Expiration Date (as defined herein) and ending on the close of business one year after the Expiration Date, they will make this
Prospectus available to any Broker-Dealer for use in connection with any such resale. See “Plan of Distribution.” 

 
 23 

  
 ANNEX B 
  
 Each Broker-Dealer that receives Exchange Notes for its own account in exchange for New Notes, where such New Notes were acquired by such Broker-Dealer as a result of
market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See “Plan of Distribution.” 

 
 24 

  
 ANNEX C 
  
 PLAN OF DISTRIBUTION 
  
 Each
Broker-Dealer that receives Exchange Notes for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus (the “Prospectus”) in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used by a Broker-Dealer in connection with resales of Exchange Notes received in exchange for New Notes where such New Notes were acquired as a result of market-making
activities or other trading activities. The Issuers have agreed that, starting on the Expiration Date and ending on the close of business one year after the Expiration Date, they will make this Prospectus, as amended or supplemented, available to
any Broker-Dealer for use in connection with any such resale. In addition, until [            ,             ,] all
dealers effecting transactions in the Exchange Notes may be required to deliver a prospectus. 
  
 The Issuers will
not receive any proceeds from any sale of Exchange Notes by Broker-Dealers. Exchange Notes received by Broker-Dealers for their own account pursuant to the Registered Exchange Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market
prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Broker-Dealer and/or the purchasers of any such
Exchange Notes. Any Broker-Dealer that resells Exchange Notes that were received by it for its own account pursuant to the Registered Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to
be an “underwriter” within the meaning of the Act and any profit of any such resale of Exchange Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Act. The Letter
of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Broker-Dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Act. 
  
 For a period of one year after the Expiration Date, the Issuers shall promptly send additional copies of this Prospectus and any amendment
or supplement to this Prospectus to any Broker-Dealer that requests such documents in the Letter of Transmittal. The Issuers have agreed to pay all expenses incident to the Registered Exchange Offer (including the expenses of one counsel for the
holders of the New Notes) other than commissions or concessions of any brokers or dealers and will indemnify the holders of the New Notes (including any Broker-Dealers) against certain liabilities, including liabilities under the Act. 

 
 [If applicable, add information required by Items 507 and 508 of Regulation S-K.] 

 
 25 

  
 ANNEX D 
  
 Rider A 
  
 CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. 
  
 Name:                                    
                                        
             
 Address:                                    
                                        
         
                                      
                                        
                      
  
 Rider B 
  
 If the undersigned is not a Broker-Dealer, the undersigned represents
that it acquired the Exchange Notes in the ordinary course of its business, it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes and it has no arrangements or understandings with any person to participate in a
distribution of the Exchange Notes. If the undersigned is a Broker-Dealer that will receive Exchange Notes for its own account in exchange for New Notes, it represents that the New Notes to be exchanged for Exchange Notes were acquired by it as a
result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will
not be deemed to admit that it is an “underwriter” within the meaning of the Act. 
  

 
 26 

  
 EXHIBIT A 
  
 FORM OF LETTER TO BE PROVIDED BY THE COMPANY TO 
  
 THE
DEPOSITORY TRUST COMPANY 
  
 The Depository Trust Company 
 7 Hanover Square, 23rd Floor 
 New York, NY 10004 
  
 Re:        9.000% Notes Due 2012 (the “Notes”) of J. C. Penney Company, Inc. (the “Issuer”) 

 
 Ladies and Gentlemen: 
  
 Please be advised that the Securities and Exchange Commission has declared effective a Registration Statement on Form S-3 under the Securities Act of 1933, as amended, with regard to all of the Notes referenced above. Accordingly,
there is no longer any restriction as to whom such Notes may be sold and any restrictions on the CUSIP designation are no longer appropriate and may be removed. I understand that upon receipt of this letter, DTC will remove any stop or restriction
on its system with respect to this issue. 
  
 As always, please do not hesitate to call if we can be of further
assistance. 
  
 
	 Very truly yours,
  
 Authorized Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]