Document:

Exhibit 10.35

 

RESTRICTED
STOCK UNIT AWARD AGREEMENT

for Independent Directors

 

Non-transferable

GRANT TO

 

 

(“Director”)

 

by Sally Beauty Holdings, Inc. (the “Company”) of

 

[             ]

restricted stock units convertible into shares of its common stock, par
value $0.01 (the “RS Units”)

 

pursuant
to and subject to the provisions of the Sally Beauty Holdings, Inc. 2010
Omnibus Incentive Plan (the “Plan”) and to the terms and conditions set forth
on the following page (the “Terms and Conditions”).  By accepting the RS Units, Grantee shall be
deemed to have agreed to the Terms and Conditions set forth in this Award
Agreement and the Plan.  Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Plan.

 

IN
WITNESS WHEREOF, Sally Beauty Holdings, Inc. has caused this Award
Agreement to be executed as of the Grant Date, as indicated below.

 

	
   

  	
  SALLY
  BEAUTY HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:
  Authorized Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Grant
  Date:

  	
   

  
				

 

 

TERMS AND CONDITIONS

1.             Vesting of RS Units.

 

(a)           Vesting Date.  The RS Units have been credited to a
bookkeeping account on behalf of Director. 
Except as otherwise provided in this Section 1, if Director
provides continuous, eligible service to the Company and its Subsidiaries, as
determined by the Committee or its designee, in the Committee’s or the designee’s
sole and absolute discretion, as applicable, from the Grant Date until September 30,
2011 (the “Vesting Date”), Director shall vest as to one hundred percent (100%)
of the RS Units.

 

(b)           Forfeiture of RS Units.  If Director terminates service with the
Company and its Subsidiaries prior to the Vesting Date for any reason other
than Director’s death, Disability, or involuntary termination without Cause,
then Director (or Director’s estate, as applicable) shall, for no
consideration, forfeit all RS Units; provided, however, that the Committee or
its designee may, in the Committee’s or the designee’s sole and absolute
discretion, as applicable, provide for the acceleration of the vesting of the
RS Units, eliminate or make less restrictive any restrictions contained in this
Agreement, waive any restriction or other provision of the Plan or this
Agreement or otherwise amend or modify this Agreement in any manner that is
either (i) not adverse to Director, or (ii) consented to by Director.

 

(c)           Death, Disability, or Involuntary Termination Without
Cause.  If, as a result of
Director’s death, Disability, or involuntary termination without Cause,
Director terminates service with the Company and its Subsidiaries prior to the
Vesting Date, then, provided Director has provided continuous, eligible service
to the Company from the Grant Date until Director’s death, Disability, or
involuntary termination without Cause, Director shall vest in and have a
non-forfeitable right to a pro-rata portion of the RS Units determined by
multiplying the total number of RS Units awarded under this Agreement by a
fraction the numerator of which is the number of whole months Director served
as a member of the Board after the Grant Date, and the denominator of which is
12.

 

(d)           Change in Control.  Unless the Committee otherwise
determines as provided in Section 9.2 of the Plan, upon the occurrence of
a Change in Control prior to the Vesting Date, the Director shall vest as to
one hundred percent (100%) of the RS Units, provided Director has provided
continuous, eligible service to the Company from the Grant Date until the
effective date of such Change in Control.

 

2.             Restrictions on Transfer and
Pledge.  Unless otherwise determined
by the Committee and provided in this Agreement or the Plan, the RS Units shall
not be sold, assigned, pledged, exchanged, hypothecated or otherwise
transferred except by will or the laws of descent and distribution.  Any
attempted assignment of an RS Unit in violation of this Agreement shall be null
and void.  The Company shall not be required to honor the transfer of any
RS Units that have been sold or otherwise transferred in violation of any of
the provisions of this Agreement or the Plan.

 

3.             Rights.  RS Units represent an unsecured promise of
the Company to issue shares of Common Stock of the Company as otherwise
provided in this Agreement.  Other than the rights provided in this
Agreement, Director shall have no rights of a stockholder of the Company with
respect to the RS Units awarded under this Agreement until such RS Units have
vested and the related shares of Common Stock have been issued pursuant to the
terms of this Agreement. 

 

 

Upon
conversion of the RS Units into shares of Common Stock, Director will obtain
full voting and other rights as a stockholder of the Company.

 

4.             Dividend Equivalents.  Unless otherwise determined by the Committee,
(i) any cash dividends or
distributions credited to Director’s account shall be deemed to have been
invested in additional restricted stock units on the record date established
for the related dividend or distribution in an amount equal to the greatest
whole number which may be obtained by dividing (A) the value of such dividend or distribution on the record
date by (B) the Fair
Market Value of one share of Common Stock on such date, and such additional
restricted stock units shall be subject to the same terms and conditions as are
applicable in respect of RS Units with respect to which such dividends or
distributions were payable, and (ii) if
any such dividends or distributions are paid in shares of Common Stock or other
securities, such shares and other securities shall be subject to the same
restrictions as apply to the RS Units with respect to which they were paid.

 

5.             Conversion to Common Stock.  Unless the RS Units are forfeited prior to
the Vesting Date as provided in Section 1(b) of this Agreement, the
vested RS Units will be converted to actual shares of Common Stock on the
Vesting Date (the “Conversion Date”).  Evidence of the issuance of the
shares of Common Stock on the Conversion Date pursuant to this Agreement may be
accomplished in such manner as the Company or its authorized representatives
shall deem appropriate including, without limitation, electronic registration,
book-entry registration or issuance of a certificate or certificates in the
name of Director or in the name of such other party or parties as the Company
and its authorized representatives shall deem appropriate.

 

In
the event the shares of Common Stock issued pursuant to this Agreement remain
subject to any additional restrictions, the Company and its authorized
representatives shall ensure that Director is prohibited from entering into any
transaction that would violate any such restrictions, until such restrictions
lapse.

 

6.             Community Interest of Spouse.  The community interest, if any, of any spouse
of Director in any of the RS Units shall be subject to all of the terms,
conditions and restrictions of this Agreement and the Plan, and shall be
forfeited and surrendered to the Company upon the occurrence of any of the
events requiring Director’s interest in such RS Units to be so forfeited and
surrendered pursuant to this Agreement.

 

7.             Tax Matters.  Director acknowledges that the tax
consequences associated with the Award are complex and that the Company has
urged Director to review with Director’s own tax advisors the federal, state,
and local tax consequences of this Award.  Director is relying solely on
such advisors and not on any statements or representations of the Company or
any of its agents.  Director understands that Director (and not the
Company) shall be responsible for Director’s own tax liability that may arise
as a result of this Agreement.

 

8.
            Restrictions on Issuance of
Shares of Common Stock.  If at any
time the Committee shall determine in its discretion, that registration,
listing or qualification of the shares of Common Stock covered by the RS Units
upon any securities exchange or under any foreign, federal, or local law or
practice, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition to the settlement of the RS Units, the RS
Units may not be settled in whole or in part unless and until such registration,
listing, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.

 

 

9.             Plan Controls.  The terms contained in the Plan are
incorporated into and made a part of this Award Agreement and this Award
Agreement shall be governed by and construed in accordance with the Plan. In
the event of any actual or alleged conflict between the provisions of the Plan
and the provisions of this Award Agreement, the provisions of the Plan shall be
controlling and determinative.

 

10.           No Right to Continued Service.  Nothing in this Award Agreement shall
interfere with or limit in any way the right of the Company to terminate
Director’s service as a director at any time, nor confer upon Director any
right to continue as a director of the Company.

 

11.           Successors.  This Award Agreement shall be binding upon
any successor of the Company, in accordance with the terms of this Award
Agreement and the Plan.

 

12.           Notice.  Notices hereunder must be in writing,
delivered personally or sent by registered or certified U.S. mail, return
receipt requested, postage prepaid. Notices to the Company must be addressed to
Sally Beauty Holdings, Inc., 3001 Colorado Boulevard, Denton, TX 76210,
Attn: Secretary, or any other address designated by the Company in a written
notice to Director. Notices to Director will be directed to the address of
Director then currently on file with the Company, or at any other address given
by Director in a written notice to the Company.

 

13.           Compensation Recoupment Policy.  This Award Agreement shall be subject to the
terms and conditions of any compensation recoupment policy adopted from time to
time by the Board or any committee of the Board, to the extent such policy is
applicable.

 

IN WITNESS WHEREOF, the Company has caused
this Agreement to be duly executed by an authorized officer and Director has
executed this Agreement, all as of the date first above written.

 

	
   

  	
  SALLY BEAUTY HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

DIRECTOR
ACKNOWLEDGES AND AGREES THAT THE RS UNITS SUBJECT TO THIS AWARD SHALL VEST AND
THE RESTRICTIONS RESULTING IN THE FORFEITURE OF THE RS UNIT SHALL LAPSE, IF
AT ALL, ONLY DURING THE PERIOD OF DIRECTOR’S SERVICE TO THE COMPANY OR AS
OTHERWISE PROVIDED IN THIS AGREEMENT (NOT THROUGH THE ACT OF BEING GRANTED THE
RS UNITS).  DIRECTOR FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
AGREEMENT OR THE PLAN SHALL CONFER UPON DIRECTOR ANY RIGHT WITH RESPECT TO
FUTURE AWARDS OR CONTINUATION OF DIRECTOR’S SERVICE TO THE COMPANY. 
DIRECTOR ACKNOWLEDGES RECEIPT OF A COPY OF THE PLAN, REPRESENTS THAT HE OR SHE
IS FAMILIAR WITH THE TERMS AND PROVISIONS THEREOF, AND HEREBY ACCEPTS THE RS
UNITS SUBJECT TO ALL OF THE TERMS AND PROVISIONS HEREOF AND THEREOF, INCLUDING
THE MANDATORY DISPUTE RESOLUTION PROVISIONS.  DIRECTOR HAS REVIEWED THIS
AGREEMENT AND 

 

 

THE
PLAN IN THEIR ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL
PRIOR TO EXECUTING THIS AGREEMENT, AND FULLY UNDERSTANDS ALL PROVISIONS OF THIS
AGREEMENT AND THE PLAN.

 

	
   

  	
   

  	
   

  	
  DIRECTOR

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DATED:

  	
   

  	
   

  	
  SIGNED:Exhibit 4.3

 

SALLY BEAUTY HOLDINGS, INC.,

as Issuer

and

 

 

[                                        ],

as Trustee

 

 

INDENTURE

 

Dated as of
                    ,
20

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
  DEFINITIONS AND INCORPORATION
  BY REFERENCE

  
	
   

  
	
  SECTION 1.1.

  	
  DEFINITIONS

  	
  1

  
	
  SECTION 1.2.

  	
  INCORPORATION BY REFERENCE OF TIA

  	
  7

  
	
  SECTION 1.3.

  	
  RULES OF CONSTRUCTION

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
  SECURITY
  FORMS

  
	
   

  
	
  SECTION 2.1.

  	
  FORMS GENERALLY

  	
  8

  
	
  SECTION 2.2.

  	
  FORM OF SECURITIES

  	
  8

  
	
  SECTION 2.3.

  	
  GLOBAL SECURITIES

  	
  9

  
	
  SECTION 2.4.

  	
  FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
  THE
  SECURITIES

  
	
   

  
	
  SECTION 3.1.

  	
  AMOUNT UNLIMITED; ISSUABLE IN SERIES

  	
  10

  
	
  SECTION 3.2.

  	
  DENOMINATIONS

  	
  13

  
	
  SECTION 3.3.

  	
  EXECUTION, AUTHENTICATION, DELIVERY AND DATING

  	
  13

  
	
  SECTION 3.4.

  	
  TEMPORARY SECURITIES

  	
  14

  
	
  SECTION 3.5.

  	
  HOLDER LISTS

  	
  15

  
	
  SECTION 3.6.

  	
  REGISTRAR, PAYING AGENT AND DEPOSITARY

  	
  15

  
	
  SECTION 3.7.

  	
  REGISTRATION OF TRANSFER AND EXCHANGE

  	
  15

  
	
  SECTION 3.8.

  	
  MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES

  	
  17

  
	
  SECTION 3.9.

  	
  PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

  	
  18

  
	
  SECTION 3.10.

  	
  PAYING AGENT TO HOLD MONEY IN TRUST

  	
  19

  
	
  SECTION 3.11.

  	
  PERSONS DEEMED OWNERS

  	
  20

  
	
  SECTION 3.12.

  	
  CANCELLATION

  	
  20

  
	
  SECTION 3.13.

  	
  COMPUTATION OF INTEREST; USURY

  	
  20

  
	
  SECTION 3.14.

  	
  CUSIP NUMBERS

  	
  21

  
	
  SECTION 3.15.

  	
  BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
  REDEMPTION

  
	
   

  
	
  SECTION 4.1.

  	
  APPLICABILITY OF ARTICLE

  	
  22

  
	
  SECTION 4.2.

  	
  ELECTION TO REDEEM; NOTICE TO TRUSTEE

  	
  22

  
	
  SECTION 4.3.

  	
  SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED

  	
  22

  
	
  SECTION 4.4.

  	
  NOTICE OF REDEMPTION

  	
  23

  
	
  SECTION 4.5.

  	
  DEPOSIT OF REDEMPTION PRICE

  	
  24

  

 

i

 

	
  SECTION 4.6.

  	
  SECURITIES PAYABLE ON REDEMPTION DATE

  	
  24

  
	
  SECTION 4.7.

  	
  SECURITIES REDEEMED IN PART

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
  SINKING
  FUNDS

  
	
   

  
	
  SECTION 5.1.

  	
  APPLICABILITY OF ARTICLE

  	
  25

  
	
  SECTION 5.2.

  	
  SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES

  	
  25

  
	
  SECTION 5.3.

  	
  REDEMPTION OF SECURITIES FOR SINKING FUND

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
  COVENANTS

  
	
   

  
	
  SECTION 6.1.

  	
  PAYMENT OF SECURITIES

  	
  26

  
	
  SECTION 6.2.

  	
  MAINTENANCE OF OFFICE OR AGENCY

  	
  26

  
	
  SECTION 6.3.

  	
  CORPORATE EXISTENCE

  	
  27

  
	
  SECTION 6.4.

  	
  MAINTENANCE OF PROPERTIES

  	
  27

  
	
  SECTION 6.5.

  	
  COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT

  	
  28

  
	
  SECTION 6.6.

  	
  REPORTS

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
  SUCCESSOR
  CORPORATION

  
	
   

  
	
  SECTION 7.1.

  	
  LIMITATION ON MERGER, SALE OR CONSOLIDATION

  	
  29

  
	
  SECTION 7.2.

  	
  SUCCESSOR CORPORATION SUBSTITUTED

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
  EVENTS
  OF DEFAULT AND REMEDIES

  
	
   

  
	
  SECTION 8.1.

  	
  EVENTS OF DEFAULT

  	
  30

  
	
  SECTION 8.2.

  	
  ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT

  	
  31

  
	
  SECTION 8.3.

  	
  COLLECTION OF DEBT AND SUITS FOR ENFORCEMENT BY TRUSTEE

  	
  32

  
	
  SECTION 8.4.

  	
  TRUSTEE MAY FILE PROOFS OF CLAIM

  	
  32

  
	
  SECTION 8.5.

  	
  TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
  SECURITIES

  	
  33

  
	
  SECTION 8.6.

  	
  PRIORITIES

  	
  33

  
	
  SECTION 8.7.

  	
  LIMITATION ON SUITS

  	
  34

  
	
  SECTION 8.8.

  	
  UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
  PREMIUM AND INTEREST

  	
  35

  
	
  SECTION 8.9.

  	
  RIGHTS AND REMEDIES CUMULATIVE

  	
  35

  
	
  SECTION 8.10.

  	
  DELAY OR OMISSION NOT WAIVER

  	
  35

  
	
  SECTION 8.11.

  	
  CONTROL BY HOLDERS

  	
  35

  
	
  SECTION 8.12.

  	
  WAIVER OF EXISTING OR PAST DEFAULT

  	
  36

  
	
  SECTION 8.13.

  	
  UNDERTAKING FOR COSTS

  	
  36

  
	
  SECTION 8.14.

  	
  RESTORATION OF RIGHTS AND REMEDIES

  	
  37

  

 

ii

 

	
  SECTION 8.15.

  	
  WAIVER OF STAY, EXTENSION OR USURY LAWS.

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
  TRUSTEE

  
	
   

  
	
  SECTION 9.1.

  	
  DUTIES OF TRUSTEE

  	
  37

  
	
  SECTION 9.2.

  	
  RIGHTS OF TRUSTEE

  	
  38

  
	
  SECTION 9.3.

  	
  INDIVIDUAL RIGHTS OF TRUSTEE

  	
  40

  
	
  SECTION 9.4.

  	
  TRUSTEE’S DISCLAIMER

  	
  40

  
	
  SECTION 9.5.

  	
  NOTICE OF DEFAULT

  	
  40

  
	
  SECTION 9.6.

  	
  REPORTS BY TRUSTEE TO HOLDERS

  	
  40

  
	
  SECTION 9.7.

  	
  COMPENSATION AND INDEMNITY

  	
  41

  
	
  SECTION 9.8.

  	
  REPLACEMENT OF TRUSTEE

  	
  42

  
	
  SECTION 9.9.

  	
  SUCCESSOR TRUSTEE BY MERGER, ETC.

  	
  43

  
	
  SECTION 9.10.

  	
  ELIGIBILITY; DISQUALIFICATION

  	
  43

  
	
  SECTION 9.11.

  	
  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

  	
  43

  
	
  SECTION 9.12.

  	
  MONEY HELD IN TRUST

  	
  43

  
	
  SECTION 9.13.

  	
  CONFLICTING INTERESTS

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
  LEGAL
  DEFEASANCE AND COVENANT DEFEASANCE

  
	
   

  
	
  SECTION 10.1.

  	
  OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE

  	
  43

  
	
  SECTION 10.2.

  	
  LEGAL DEFEASANCE AND DISCHARGE

  	
  44

  
	
  SECTION 10.3.

  	
  COVENANT DEFEASANCE

  	
  44

  
	
  SECTION 10.4.

  	
  CONDITIONS TO LEGAL OR COVENANT DEFEASANCE

  	
  45

  
	
  SECTION 10.5.

  	
  DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD
  IN TRUST; OTHER MISCELLANEOUS PROVISIONS

  	
  46

  
	
  SECTION 10.6.

  	
  REPAYMENT TO THE COMPANY

  	
  46

  
	
  SECTION 10.7.

  	
  REINSTATEMENT

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  
	
   

  
	
  SECTION 11.1.

  	
  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS

  	
  47

  
	
  SECTION 11.2.

  	
  AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
  CONSENT OF HOLDERS

  	
  49

  
	
  SECTION 11.3.

  	
  COMPLIANCE WITH TIA

  	
  50

  
	
  SECTION 11.4.

  	
  REVOCATION AND EFFECT OF CONSENTS

  	
  51

  
	
  SECTION 11.5.

  	
  NOTATION ON OR EXCHANGE OF SECURITIES

  	
  51

  
	
  SECTION 11.6.

  	
  TRUSTEE TO SIGN AMENDMENTS, ETC.

  	
  52

  

 

iii

 

	
  ARTICLE XII

  
	
  MISCELLANEOUS

  
	
   

  
	
  SECTION 12.1.

  	
  TIA CONTROLS

  	
  52

  
	
  SECTION 12.2.

  	
  FORM OF DOCUMENTS DELIVERED TO TRUSTEE

  	
  52

  
	
  SECTION 12.3.

  	
  ACTS OF HOLDERS; RECORD DATES

  	
  53

  
	
  SECTION 12.4.

  	
  NOTICES

  	
  55

  
	
  SECTION 12.5.

  	
  COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS

  	
  56

  
	
  SECTION 12.6.

  	
  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT

  	
  56

  
	
  SECTION 12.7.

  	
  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION

  	
  56

  
	
  SECTION 12.8.

  	
  RULES BY TRUSTEE, PAYING AGENT, REGISTRAR

  	
  57

  
	
  SECTION 12.9.

  	
  LEGAL HOLIDAYS

  	
  57

  
	
  SECTION 12.10.

  	
  GOVERNING LAW

  	
  57

  
	
  SECTION 12.11.

  	
  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS

  	
  57

  
	
  SECTION 12.12.

  	
  NO RECOURSE AGAINST OTHERS

  	
  57

  
	
  SECTION 12.13.

  	
  SUCCESSORS

  	
  58

  
	
  SECTION 12.14.

  	
  DUPLICATE ORIGINALS

  	
  58

  
	
  SECTION 12.15.

  	
  SEVERABILITY

  	
  58

  
	
  SECTION 12.16.

  	
  TABLE OF CONTENTS, HEADINGS, ETC.

  	
  58

  

 

iv

 

CROSS-REFERENCE TABLE

 

	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  
	
  310(a)(1)

  	
   

  	
  9.10

  	
   

  
	
  (a)(2)

  	
   

  	
  9.10

  	
   

  
	
  (a)(3)

  	
   

  	
  N.A.

  	
   

  
	
  (a)(4)

  	
   

  	
  N.A.

  	
   

  
	
  (a)(5)

  	
   

  	
  9.10

  	
   

  
	
  (b)

  	
   

  	
  9.10

  	
   

  
	
  (c)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  311(a)

  	
   

  	
  9.11

  	
   

  
	
  (b)

  	
   

  	
  9.11

  	
   

  
	
  (c)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  312(a)

  	
   

  	
  3.5

  	
   

  
	
  (b)

  	
   

  	
  12.5

  	
   

  
	
  (c)

  	
   

  	
  12.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  313(a)

  	
   

  	
  9.6

  	
   

  
	
  (b)

  	
   

  	
  9.6

  	
   

  
	
  (c)

  	
   

  	
  9.6

  	
   

  
	
  (d)

  	
   

  	
  9.6

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  314(a)

  	
   

  	
  6.5(a), 6.6

  	
   

  
	
  (b)(1)

  	
   

  	
  N.A.

  	
   

  
	
  (b)(2)

  	
   

  	
  N.A.

  	
   

  
	
  (c)(1)

  	
   

  	
  12.6

  	
   

  
	
  (c)(2)

  	
   

  	
  12.6

  	
   

  
	
  (c)(3)

  	
   

  	
  N.A.

  	
   

  
	
  (d)

  	
   

  	
  N.A.

  	
   

  
	
  (e)

  	
   

  	
  12.7

  	
   

  
	
  (f)

  	
   

  	
  N.A.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  315(a)

  	
   

  	
  9.1

  	
   

  
	
  (b)

  	
   

  	
  9.5

  	
   

  
	
  (c)

  	
   

  	
  9.1

  	
   

  
	
  (d)

  	
   

  	
  9.1

  	
   

  
	
  (e)

  	
   

  	
  8.13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  316(a)(last
  sentence)

  	
   

  	
  1.1

  	
   

  
	
  (a)(1)(A)

  	
   

  	
  8.11

  	
   

  
	
  (a)(1)(B)

  	
   

  	
  N.A.

  	
   

  
	
  (a)(2)

  	
   

  	
  8.12

  	
   

  
	
  (b)

  	
   

  	
  8.8

  	
   

  
	
  (c)

  	
   

  	
  12.3

  	
   

  

 

v

 

	
  TIA

  Section

  	
   

  	
  Indenture

  Section

  
	
   

  	
   

  	
   

  	
   

  
	
  317(a)(1)

  	
   

  	
  8.3

  	
   

  
	
  (a)(2)

  	
   

  	
  8.4

  	
   

  
	
  (b)

  	
   

  	
  3.10

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  318(a)

  	
   

  	
  12.1

  	
   

  
	
  (b)

  	
   

  	
  N.A.

  	
   

  
	
  (c)

  	
   

  	
  12.1

  	
   

  

 

N.A.
means Not Applicable

 

Note:
This Cross-Reference Table shall not, for any purpose, be deemed to be a part
of this Indenture.

 

vi

 

INDENTURE,
dated as of
                    ,
20    , by and between Sally Beauty Holdings, Inc., a
Delaware corporation (the “Company”), and
[                              ],
a                               ,
as trustee (the “Trustee”).

 

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

 

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

 

NOW,
THEREFORE, THIS INDENTURE WITNESSETH:

 

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

 

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.1.                                                                       DEFINITIONS

 

“Acceleration Notice” shall have the meaning
specified in Section 8.2.

 

“Act”, when used with respect to any Holder, has the
meaning specified in Section 12.3.

 

“Affiliate” means any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
another specified Person. For purposes of this definition, the term “control”
means the power to direct the management and policies of a Person, directly or
through one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise.

 

“Agent” means any Registrar, Paying Agent or co-Registrar.

 

“Applicable Procedures” of a Depositary means, with
respect to any matter at any time, the policies and procedures of such
Depositary, if any, that are applicable to such matter at such time.

 

“Bankruptcy Law” means Title 11, U.S. Code, or any similar
Federal, state or foreign law for the relief of debtors.

 

“Beneficial Owner” or “beneficial
owner” for purposes of the definition of Affiliate has the meaning
attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act, whether
or not applicable; the term “beneficial ownership” shall have a corresponding
meaning.

 

“Board of Directors” means either the board of
directors of the Company or any duly authorized committee of that board.

 

 

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

 

“Business Day”, when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close; provided
that, when used with respect to any Security, “Business Day” may have such
other meaning, if any, as may be specified for such Security as contemplated by
Section 3.1.

 

“Cash” or “cash” means
such coin or currency of the United States of America as at the time of payment
shall be legal tender for the payment of public or private debts.

 

“Code” means the Internal Revenue Code of 1986, as
amended.

 

“Company” means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture, and thereafter means
such successor.

 

“Company Request” or “Company Order”
means, respectively, a written request or order signed in the name of the
Company by an Officer and delivered to the Trustee from time to time.

 

“Consolidated Subsidiary” means a Subsidiary of the
Company whose financial statements are consolidated with those of the Company
in accordance with GAAP.

 

“Corporate Trust Office” means the principal office
of the Trustee at which at any time its corporate trust business shall be
administered, which office at the date hereof is located at [·], Attention: [·], or such other address as the Trustee may
designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee (or such other
address as a successor Trustee may designate from time to time by notice to the
Holders and the Company).

 

“Covenant Defeasance” shall have the meaning
specified in Section 10.3.

 

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

 

“Debt” means, at any time, all obligations of the Company
and each Consolidated Subsidiary, to the extent such obligations would appear
as a liability upon the consolidated balance sheet of the Company and the
Consolidated Subsidiaries, in accordance with GAAP, (1) for borrowed
money, (2) evidenced by bonds, debentures, notes or other similar
instruments, and (3) in respect of any letters of credit supporting any
Debt of others, and all guarantees by the Company or any Consolidated
Subsidiary of Debt or others.

 

“Default” means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.

 

“Defaulted Interest” shall have the meaning
specified in Section 3.9.

 

2

 

“Depositary” means, with respect to Securities of any series
issuable in whole or in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act or other applicable law or regulation
that is designated to act as the Depositary for such Securities as contemplated
by Section 3.1, until a successor shall have been appointed and become
such pursuant to the applicable provision of this Indenture, and, thereafter, “Depositary”
shall mean or include such successor.

 

“Event of Default” shall have the meaning
specified in Section 8.1.

 

“Exchange Act” means the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the SEC promulgated
thereunder.

 

“Expiration Date” has the meaning specified in Section 12.3.

 

“GAAP” means United States generally accepted accounting
principles as in effect from time to time. All ratios and computations based on
GAAP contained in this Indenture shall be computed in conformity with GAAP.

 

“Global Security” means a Security that evidences all or part
of the Securities of any series and bears the legend set forth in Section 2.3
(or such legend as may be specified as contemplated by Section 3.1 for
such Securities).

 

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

 

“Indenture” means this
instrument as originally executed and as it may from time to time be
supplemented or amended by one or more Supplemental Indentures, including, for
all purposes of this instrument and any such Supplemental Indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and
govern this instrument and any such Supplemental Indenture, respectively. The term
“Indenture” shall also include the terms of particular series of Securities
established as contemplated by Section 3.1.

 

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

 

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

 

“Legal Defeasance” shall have the meaning
specified in Section 10.2.

 

“Lien” means any mortgage, pledge, hypothecation,
encumbrance, security interest, statutory or other lien, or preference,
priority or other security or similar agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).

 

“Maximum Interest Rate” shall have the meaning
specified in Section 3.13.

 

3

 

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

 

“Officer” means the Chief Executive Officer, the President,
any Vice President, the Chief Financial Officer, the Treasurer, Chief
Accounting Officer, or the Secretary of the Company.

 

“Officers’ Certificate” means a certificate signed
by two Officers or by an Officer and an Assistant Secretary of the Company,
delivered to the Trustee from time to time and otherwise complying with the
requirements of Sections 12.6 and 12.7, if applicable.

 

“Opinion of Counsel” means a written opinion
from legal counsel who is reasonably acceptable to the Trustee and, if
applicable, complying with the requirements of Sections 12.6 and 12.7.

 

“Original Issue Discount Security” means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 8.2.

 

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

 

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

 

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

 

(3)           such Securities as to which Legal
Defeasance has been effected pursuant to Section 10.2;

 

(4)           such Securities which have been paid
pursuant to Section 3.8 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this Indenture,
other than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are held
by a bona fide purchaser in whose hands such Securities are valid obligations
of the Company; and

 

(5)           such Securities as to which any
property deliverable upon conversion thereof has been delivered (or such
delivery has been duly provided for), or as to which any other particular
conditions have been satisfied, in each case as may be provided for such
Securities as contemplated in Section 3.1;

 

4

 

provided, however, that
in determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given, made or taken any request, demand,
authorization, direction, notice, consent, waiver or other action hereunder as
of any date, (A) the principal amount of an Original Issue Discount
Security which shall be deemed to be Outstanding shall be the amount of the
principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 8.2,
(B) if, as of such date, the principal amount payable at the Stated
Maturity of a Security is not determinable, the principal amount of such
Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 3.1, (C) the
principal amount of a Security denominated in one or more foreign currencies,
composite currencies or currency units which shall be deemed to be Outstanding
shall be the U.S. dollar equivalent, determined as of such date in the manner
provided as contemplated by Section 3.1, of the principal amount of such
Security (or, in the case of a Security described in Clause (A) or (B) above,
of the amount determined as provided in such clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent, waiver or other action, only Securities which a Trust Officer of the
Trustee actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee’s right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.

 

“Paying Agent” shall have the meaning specified in Section 3.6.

 

“Person” or “person” means
any corporation, individual, limited liability company, joint stock company,
joint venture, partnership, unincorporated association, governmental regulatory
entity, country, state or political subdivision thereof, trust, municipality or
other entity.

 

“Place of Payment”, when used with respect to
the Securities of any series and subject to Section 6.2, means the place
or places where the principal of and any premium and interest on the Securities
of that series are payable as specified as contemplated by Section 3.1.

 

“Predecessor Security” of any particular Security
means every previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.8 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.

 

“Principal” of any Debt means the principal amount of such Debt
as of any date of determination.

 

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

 

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

 

5

 

“Registrar” shall have the meaning specified in Section 3.6.

 

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

 

“Regulation S-X” means Regulation S-X promulgated under the
Securities Act, as it may be amended from time to time, and any successor
provision thereto.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” means unsecured debentures, notes or other
evidences of indebtedness of any series, as the case may be, issued by the
Company from time to time, and 
authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC promulgated thereunder.

 

“Securities Custodian” means the Trustee, as
custodian with respect to the Global Securities, or any successor entity
thereto.

 

“Security Register” shall have the meaning
specified in Section 3.6.

 

“Special Record Date” for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.9.

 

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

 

“Subsidiary” means any Person of which the Company, or the
Company and one or more Subsidiaries, or any one or more Subsidiaries, directly
or indirectly own more than 50% of the Voting Stock.

 

“Supplemental Indenture” means an indenture
supplemental to this Indenture, which supplements, amends or modifies this
Indenture and is entered into by the parties to this Indenture as provided in Article XI.

 

“TIA” means the Trust Indenture Act of 1939, as amended,
(15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of the execution of
this Indenture, except as provided in Section 11.3.

 

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

 

6

 

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

 

“U.S. Government Obligations” means direct non-callable
obligations of, or noncallable obligations guaranteed by, the United States of
America for the payment of which obligation or guarantee the full faith and
credit of the United States of America is pledged.

 

“Voting Stock” means outstanding shares of capital stock or
similar equity interests having under ordinary circumstances voting power for
the election of directors, managers or the substantial equivalent thereof
whether at all times or only so long as no senior class of stock or similar
equity interest has such voting power by reason of the happening of any
contingency.

 

SECTION 1.2.                                                                       INCORPORATION BY REFERENCE OF TIA

 

Whenever
this Indenture refers to a provision of the TIA, such provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

 

“Commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Holder.

 

“indenture to be qualified” means this Indenture.

 

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

 

“obligor” on the indenture securities means the Company and
any other obligor on any Security.

 

All
other terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule and not otherwise
defined herein have the meanings assigned to them thereby.

 

SECTION 1.3.                                                                       RULES OF CONSTRUCTION

 

Unless
the context otherwise requires:

 

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

 

(2)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP;

 

(3)           “or” is not exclusive;

 

7

 

(4)           “including” means including, without
limitation;

 

(5)           words in the singular include the
plural, and words in the plural include the singular;

 

(6)           provisions apply to successive events
and transactions;

 

(7)           “herein,” “hereof” and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and

 

(8)           references to Sections or Articles
means reference to such Section or Article in this Indenture, unless
stated otherwise.

 

ARTICLE II

SECURITY FORMS

 

SECTION 2.1.                                                                       FORMS GENERALLY

 

All
Securities shall have such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of
any securities exchange or Depositary therefor or as may, consistently
herewith, be determined by the Officers executing such Securities, as evidenced
by their execution thereof.  The
definitive Securities shall be printed, typewritten, lithographed or engraved
or produced by any combination of these methods on any type of paper, or may be
produced in any other manner permitted by the rules of any securities
exchange all as determined by the Officers executing such Securities, as
evidenced by their execution of such Securities.

 

SECTION 2.2.                                                                       FORM OF SECURITIES

 

Each
Security in a series shall be in a form approved by or pursuant to a
Supplemental Indenture hereto or a Board Resolution or by an Officer or
Officers pursuant to authority delegated to that Officer or those Officers
pursuant to a Board Resolution. If the form of the Securities of a series is
not prescribed by the Supplemental Indenture relating to that series, upon or
prior to the delivery to the Trustee for authentication of the first Security
to be issued of that series, the Company shall deliver to the Trustee, the
Board Resolution by or pursuant to which such form of the Security for that
series has been approved, which Board Resolution shall have attached thereto a
copy of the form of the Security approved, or a certificate of an Officer,
attested to by the Secretary or an Assistant Secretary of the Company,
certifying that an Officer, acting pursuant to delegated authority from the
Board of Directors, approved the form of the Securities of that series and
attaching a copy of the form of the Security approved and a true and complete
copy of the resolutions of the Board of Directors delegating authority to that
Officer to approve the form of Securities. If temporary Securities of any
series are issued in global form as permitted by Section 3.4, the form
thereof also shall be established as provided in this Section 2.2.

 

8

 

SECTION 2.3.                                                                       GLOBAL SECURITIES

 

If
Securities of a series are issuable in whole or in part in global form, as
specified as contemplated by Section 3.1, then, notwithstanding Section 3.1
and Section 3.2, such Global Security shall represent such of the
Outstanding Securities of that series as shall be specified in such Global
Security and may provide that it shall represent the aggregate amount of
Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced or increased to reflect exchanges or partial redemptions or
increased to reflect the issuance of additional uncertificated Securities of
that series. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of Outstanding Securities of a series
represented thereby shall be made in such manner and upon instructions given by
such Person or Persons as shall be specified therein or in the Company Order to
be delivered to the Trustee pursuant to Section 3.3.

 

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

 

THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY.  THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
[OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),] TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF [CEDE & CO.] OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE [OF DTC] (AND
ANY PAYMENT IS TO BE MADE TO [CEDE & CO.] OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE [OF DTC]), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, [CEDE & CO.], HAS AN INTEREST
HEREIN.

 

SECTION 2.4.                                                                       FORM OF TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

 

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

 

9

 

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

 

	
   

  	
  [                              ],

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

ARTICLE III

THE SECURITIES

 

SECTION 3.1.                                                                       AMOUNT UNLIMITED; ISSUABLE IN SERIES

 

The
aggregate principal amount of Securities which may be authenticated and delivered
under this Indenture is unlimited.  The
Securities may be issued in one or more series. There shall be established in
or pursuant to a Board Resolution and, subject to Section 3.3, set forth,
or determined in the manner provided, in an Officers’ Certificate, or
established in one or more Supplemental Indentures hereto, prior to the
issuance of Securities of any series,

 

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

 

(2)           any limit upon the aggregate
principal amount of the Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 3.4 or 4.7 and except
for any Securities which, pursuant to Section 3.3, are deemed never to
have been authenticated and delivered hereunder); provided, however, that the authorized aggregate principal
amount of such series may from time to time be increased above such amount by a
Board Resolution to such effect;

 

(3)           the Person to whom any interest on a
Security of the series shall be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;

 

(4)           the date or dates on which the
principal of any Securities of the series is payable or the method by which
such date or dates shall be determined or extended;

 

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

 

10

 

(6)           the Place of Payment;

 

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

 

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

 

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

 

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

 

(11)         if other than the currency of the
United States of America, the currency, currencies, composite currency,
composite currencies or currency units in which the principal of or any premium
or interest on any Securities of the series shall be payable and the manner of
determining the equivalent thereof in the currency of the United States of
America for any purpose, including for the purposes of making payment in the
currency of the United States of America and applying the definition of “Outstanding” in Section 1.1;

 

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

 

(13)         if other than the entire principal
amount thereof, the portion of the principal amount of any Securities of the
series which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 8.2 or the method by which such portion shall
be determined;

 

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

 

11

 

Maturity or which shall be
deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal amount
shall be determined);

 

(15)         if applicable, that the Securities of
the series, in whole or any specified part, shall be defeasible pursuant to Section 10.2
or Section 10.3 or both such Sections, or pursuant to a manner varying
from such Sections, any provisions to permit a pledge of obligations other than
U.S. Government Obligations (or the establishment of other arrangements) to
satisfy the requirements of Section 10.4 for defeasance of such Securities
and, if other than by a Board Resolution, the manner in which any election by
the Company to defease such Securities shall be evidenced;

 

(16)         if applicable, that any Securities of
the series shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the respective Depositaries for such
Global Securities, the form of any legend or legends which shall be borne by
any such Global Security in addition to or in lieu of that set forth in Section 2.3,
any addition to, elimination of or other change in the circumstances set forth
in clause (2) of the last paragraph of Section 3.7 in which any such
Global Security may be exchanged in whole or in part for Securities registered,
and any transfer of such Global Security in whole or in part may be registered,
in the name or names of Persons other than the Depositary for such Global
Security or a nominee thereof and any other provisions governing exchanges or
transfers of any such Global Security;

 

(17)         any addition to, elimination of or
other change in the Events of Default which applies to any Securities of the
series and any change in the right of the Trustee or the requisite Holders of
such Securities to declare the principal amount thereof due and payable
pursuant to Section 8.2;

 

(18)         any addition to, elimination of or other
change in the covenants set forth in Article VI which applies to
Securities of the series;

 

(19)         any provisions necessary to permit or
facilitate the issuance, payment or conversion of any Securities of the series
that may be converted into securities or other property other than Securities
of the same series and of like tenor, whether in addition to, or in lieu of,
any payment of principal or other amount and whether at the option of the
Company or otherwise;

 

(20)         the terms and conditions, if any, pursuant
to which the Securities of the series are secured;

 

(21)         any restriction or condition on the
transferability of the Securities of such series;

 

(22)         the exchanges, if any, on which the
Securities may be listed; and

 

(23)         any other terms of the series (which
terms shall not be inconsistent with the provisions of this Indenture, except
as permitted by Section 11.1(4)).

 

12

 

All
Securities of any one series shall be substantially identical except as to
denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 3.3) set forth,
or determined in the manner provided, in the Officers’ Certificate referred to
above or in any such Supplemental Indenture hereto.  If any of the terms of the series are
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers’ Certificate setting forth the terms of the
series.

 

SECTION 3.2.                                                                       DENOMINATIONS

 

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

 

SECTION 3.3.                                                                       EXECUTION, AUTHENTICATION, DELIVERY AND DATING

 

The
Securities shall be executed on behalf of the Company by two Officers by manual
or facsimile signature.

 

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

 

At
any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee shall, upon
receipt of the Company Order, authenticate and deliver such Securities as this
Indenture provides and not otherwise.

 

If
the form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.2 and 3.1,
in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 9.1) shall
be fully protected in relying upon, an Opinion of Counsel stating,

 

(1)           if the form of such Securities has
been established by or pursuant to Board Resolution as permitted by Section 2.2,
that such form has been established in conformity with the provisions of this
Indenture;

 

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

 

(3)           that such Securities, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such 

 

13

 

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

 

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

 

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

 

Each
Security shall be dated the date of its authentication.

 

No
Security shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose unless there appears on such Security a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.12, for all purposes of
this Indenture such Security shall be deemed never to have been authenticated
and delivered hereunder and shall never be entitled to the benefits of this
Indenture.

 

SECTION 3.4.                                                                       TEMPORARY SECURITIES

 

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

 

If
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of that series, the temporary
Securities of that series shall be exchangeable for definitive Securities of
that series upon surrender of the temporary Securities of that series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, 

 

14

 

the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Securities of the same series, of any
authorized denominations and of like tenor and aggregate principal amount.
Until so exchanged, the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of that series and tenor.

 

SECTION 3.5.                                                                       HOLDER LISTS

 

The
Trustee shall preserve, in as current a form as is reasonably practicable, the
most recent list available to it of the names and addresses of all Holders of
Securities of each series, by series, and shall otherwise comply with TIA
§312(a). If the Trustee is not the Registrar, the Company shall furnish, or
shall cause the Registrar (if other than the Company) to furnish, to the
Trustee at least seven Business Days before each Interest Payment Date with
respect to a series of Securities and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of such series,
and the Company shall otherwise comply with TIA §312(a).

 

SECTION 3.6.                                                                       REGISTRAR, PAYING AGENT AND DEPOSITARY

 

The
Company shall maintain an office or agency where Securities may be presented
for registration of transfer or for exchange (“Registrar”)
and an office or agency where Securities may be presented for payment (“Paying Agent”). The Registrar shall keep a register (the “Security Register”) of each series of Securities and of
their transfer and exchange. The Company may appoint one or more co-registrars
and one or more additional paying agents. The term “Registrar” includes any
co-registrar and the term “Paying Agent” includes any additional paying agent.
The Company may change any Paying Agent or Registrar with respect to the
Securities of any series without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain an entity other than the
Trustee as either Registrar or Paying Agent for the affected series of
Securities, the Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar. The Company initially
appoints The Depository Trust Company to act as Depositary with respect to the
Global Securities. The Company initially appoints the Trustee to act as
Registrar and Paying Agent and to act as Securities Custodian with respect to
the Global Securities.

 

SECTION 3.7.                                                                       REGISTRATION OF TRANSFER AND EXCHANGE

 

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

 

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

 

15

 

execute,
and the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.

 

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

 

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

 

No
service charge shall be made for any registration of transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 3.4, 11.5 or 3.7 not involving any transfer.

 

If
the Securities of any series (or of any series and specified tenor) are to be
redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series
and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 4.3
and ending at the close of business on the day of such mailing, or (B) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

 

The
provisions of clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:

 

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

 

(2)           Notwithstanding any other provision
in this Indenture, and subject to such applicable provisions, if any, as may be
specified as contemplated by Section 3.1, a Global Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Securities will be
exchanged by the Company for other certificated Securities if (i) the
Company delivers to the Trustee written notice from the Depositary that (x) the
Depositary is unwilling or unable to continue to act as Depositary for the
Global Securities and the Company thereupon fails to appoint a successor
Depositary within 90 days or (y) the Depositary is no longer a clearing
agency registered under the Exchange Act, (ii) the Company, in its sole
discretion, determines that the Global Securities (in whole but not in part)
should be exchanged for other certificated Global Securities and delivers a
written notice to such 

 

16

 

effect to the Trustee or (iii) upon
request of the Trustee or Holders of a majority of the aggregate principal
amount of Outstanding Securities of the applicable series if there shall have
occurred and be continuing a Default or Event of Default with respect to such
Securities.  If the Company designates a
successor Depositary as aforesaid, such Global Security shall promptly be
exchanged in whole for one or more other Global Securities registered in the
name of the successor Depositary, whereupon such designated successor shall be
the Depositary for such successor Global Security or Global Securities and the
provisions of Clauses (1), (2), (3) and (4) of this Section shall
continue to apply thereto.

 

(3)           Subject to Clause (2) above and
to such applicable provisions, if any, as may be specified as contemplated by Section 3.1,
any exchange of a Global Security for other Securities may be made in whole or
in part, and all Securities issued in exchange for a Global Security or any
portion thereof shall be registered in such names as the Depositary for such
Global Security shall direct.

 

(4)           Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of, a
Global Security or any portion thereof, whether pursuant to this Section, Section 3.4,
3.6, 11.5 or 3.7 or otherwise, shall be authenticated and delivered in the form
of, and shall be, a Global Security, unless such Security is registered in the
name of a Person other than the Depositary for such Global Security or a
nominee thereof.

 

SECTION 3.8.                                                                       MUTILATED, DESTROYED, LOST AND STOLEN
SECURITIES

 

If
any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

 

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

 

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

 

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

 

17

 

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

 

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

 

SECTION 3.9.                                                                       PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED

 

Except
as otherwise provided as contemplated by Section 3.1 with respect to any
Securities of a series, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest (or, if no business is conducted by the Trustee at its
Corporate Trust Office on such date, at 5:00 P.M. New York City time on such
date).

 

Any
interest on any Security of any series which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to
the Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below:

 

(1)           The Company may elect to make payment
of any Defaulted Interest payable on any Securities of a series to the Persons
in whose names such Securities (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each of such Securities and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as provided in this clause (1). Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be given to each Holder of such
Securities in the manner set forth in Section 12.4, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so mailed,
such Defaulted Interest shall be paid to the Persons in whose names such
Securities (or their respective Predecessor Securities) are registered at the 

 

18

 

close of business on such
Special Record Date and shall no longer be payable pursuant to the following
Clause (2).

 

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

 

Except
as may otherwise be provided in this Section 3.9 or as contemplated in
Section 3.1 with respect to any Securities of a series, the Person to whom
interest shall be payable on any Security that first becomes payable on a day
that is not an Interest Payment Date shall be the Holder of such Security on
the day such interest is paid.

 

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

 

In
the case of any Security which is converted after any Regular Record Date and
on or prior to the next succeeding Interest Payment Date (other than any
Security whose Maturity is prior to such Interest Payment Date), interest whose
Stated Maturity is on such Interest Payment Date shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable. Notwithstanding the
foregoing, the terms of any Security that may be converted may provide that the
provisions of this paragraph do not apply, or apply with such additions,
changes or omissions as may be provided thereby, to such Security.

 

SECTION 3.10.                                                                 PAYING AGENT TO HOLD MONEY IN TRUST

 

The
Company shall require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders of
the applicable Securities of any series or the Trustee all money held by the
Paying Agent for the payment of principal or any premium or interest on such
Securities and will notify the Trustee in writing of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders of such Securities all money
held 

 

19

 

by
it as Paying Agent with respect to such Securities. Upon any bankruptcy or
reorganization proceedings relating to the Company, the Trustee shall serve as
Paying Agent for any Securities.

 

SECTION 3.11.                                                                 PERSONS DEEMED OWNERS

 

Prior
to due presentment of a Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and any premium and (subject to Section 3.9)
any interest on such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the
contrary.

 

SECTION 3.12.                                                                 CANCELLATION

 

All
Securities surrendered for payment, redemption, registration of transfer or
exchange or conversion or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by the Trustee. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be disposed of as directed by a
Company Order; provided, however, that the
Trustee shall not be required to destroy such cancelled Securities.

 

SECTION 3.13.                                                                 COMPUTATION OF INTEREST; USURY

 

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

 

The
amount of interest (or amounts deemed to be interest under applicable law)
payable or paid on any Security shall be limited to an amount which shall not
exceed the maximum nonusurious rate of interest allowed by the applicable laws
of the State of New York, or any applicable law of the United States permitting
a higher maximum nonusurious rate that preempts such applicable New York law,
which could lawfully be contracted for, taken, reserved, charged or received
(the “Maximum Interest Rate”). If, as a result of any circumstances whatsoever,
the Company or any other Person is deemed to have paid interest (or amounts
deemed to be interest under applicable law) or any Holder of a Security is
deemed to have contracted for, taken, reserved, charged or received interest
(or amounts deemed to be interest under applicable law), in excess of the
Maximum Interest Rate, then, ipso facto, the obligation to be fulfilled shall
be reduced to the limit of validity, and if under any such circumstance, the
Trustee, acting on behalf of the Holders, or any Holder shall ever receive
interest or anything that might be deemed interest under applicable law that
would exceed the Maximum Interest Rate, such amount that

 

20

 

would
be excessive interest shall be applied to the reduction of the principal amount
owing on the applicable Security or Securities and not to the payment of
interest, or if such excessive interest exceeds the unpaid principal balance of
any such Security or Securities, such excess shall be refunded to the Company;
provided that the Company and not the Trustee shall be responsible for
collecting any such refund from the Holders. In addition, for purposes of
determining whether payments in respect of any Security are usurious, all sums
paid or agreed to be paid with respect to such Security for the use,
forbearance or detention of money shall, to the extent permitted by applicable
law, be amortized, prorated, allocated and spread throughout the full term of
such Security.

 

SECTION 3.14.                                                                 CUSIP NUMBERS

 

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

 

SECTION 3.15.                                                                 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES

 

(a)           Each Global Security initially shall (i) be
registered in the name of the Depositary for such Global Security or the
nominee of such Depositary, in each case for credit to the account of a
Participant, (ii) be delivered to the Trustee as custodian for such
Depositary and (iii) bear a legend as set forth in Section 2.3.  Neither the Company, the Trustee, the Paying
Agent, nor any other agent of the Company shall have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Security, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

 

Members of, or
participants in, the Depositary (“Participants”) shall have no rights under
this Indenture with respect to any Global Security held on their behalf by the
Depositary, or its custodian, or under such Global Security.  The Depositary may be treated by the Company,
any other obligor upon the Securities, the Trustee and any agent of any of them
as the absolute owner of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall prevent the Company, any other obligor upon the Securities, the Trustee
or any agent of any of them from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Participants, the operation of customary practices
governing the exercise of the rights of a beneficial owner of any
Security.  The registered holder of a
Global Security may grant proxies and otherwise authorize any Person, including
Participants and Persons that may hold interests through Participants, to take
any action that a Holder is entitled to take under this Indenture or the
Securities.

 

21

 

(b)           Transfers of a Global Security shall be limited to
transfers of such Global Security in whole to the Depositary, its successors or
their respective nominees.

 

(c)           The transfer and exchange of a Global Security or
beneficial interests therein shall be effected through the Depositary, in
accordance with this Indenture and the procedures of the Depositary therefor of
the Depositary.

 

(d)           The Company, any other obligor upon the Securities or the
Trustee, in the discretion of any of them, may treat as the Act of a Holder any
instrument or writing of any Person that is identified by the Depositary as the
owner of a beneficial interest in the Global Security, provided that the fact
and date of the execution of such instrument or writing is proved in accordance
with Section 12.3.

 

ARTICLE IV

REDEMPTION

 

SECTION 4.1.                                                                       APPLICABILITY OF ARTICLE

 

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

 

SECTION 4.2.                                                                       ELECTION TO REDEEM; NOTICE TO TRUSTEE

 

The
election of the Company to redeem any Securities shall be established in or
pursuant to a Board Resolution or in another manner specified as contemplated
by Section 3.1 for such Securities. In case of any redemption at the
election of the Company of less than all the Securities of any series
(including any such redemption affecting only a single Security), the Company
shall, at least 30 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be agreed to in writing by the Trustee), notify
the Trustee in writing of such Redemption Date, of the principal amount of
Securities of that series to be redeemed and, if applicable, of the tenor of
the Securities to be redeemed. In the case of any redemption of Securities (i) prior
to the expiration of any restriction on such redemption provided in the terms
of such Securities or elsewhere in this Indenture or (ii) pursuant to an
election of the Company that is subject to a condition specified in the terms
of those Securities, the Company shall furnish the Trustee with an Officers’
Certificate evidencing compliance with such restriction or condition and if
requested by the Trustee under Section 9.2(b) hereof, an Opinion of
Counsel.

 

SECTION 4.3.                                                                       SELECTION BY TRUSTEE OF SECURITIES TO BE
REDEEMED

 

If
less than all the Securities of any series are to be redeemed (unless all the
Securities of that series and of a specified tenor are to be redeemed or unless
such redemption affects only a single Security), the particular Securities to
be redeemed shall be selected not more than 30 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of that series not
previously called for redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of that series; provided that
the unredeemed portion of the principal amount of any 

 

22

 

Security
shall be in an authorized denomination (which shall not be less than the
minimum authorized denomination) for such Security. If less than all the
Securities of that series and of a specified tenor are to be redeemed (unless
such redemption affects only a single Security), the particular Securities to
be redeemed shall be selected not more than 30 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of that series and
specified tenor not previously called for redemption in accordance with the
preceding sentence.

 

If
any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Securities which have been
converted during a selection of Securities to be redeemed shall be treated by
the Trustee as Outstanding for the purpose of such selection.

 

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

 

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

 

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

 

SECTION 4.4.                                                                       NOTICE OF REDEMPTION

 

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

 

All
notices of redemption shall identify the Securities to be redeemed (including
CUSIP numbers, if any) and shall state:

 

(1)           the Redemption Date,

 

(2)           the Redemption Price,

 

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

 

23

 

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

 

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

 

(6)           for any Securities that by their
terms may be converted, the terms of conversion, the date on which the right to
convert the Security to be redeemed will terminate and the place or places
where such Securities may be surrendered for conversion, and

 

(7)           that the redemption is for a sinking
fund, if such is the case.

 

Notice
of redemption of Securities to be redeemed at the election of the Company shall
be given by the Company or, at the Company’s written request, by the Trustee in
the name and at the expense of the Company and shall be irrevocable.  The failure to give such notice by mail or
any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.

 

SECTION 4.5.                                                                       DEPOSIT OF REDEMPTION PRICE

 

On
or before 12:00 Noon, New York City time on any Redemption Date, the Company
shall deposit with the Trustee or with a Paying Agent (or if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in Section 3.10)
an amount of money sufficient to pay the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date, other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit.

 

If
any Security called for redemption is converted, any money deposited with the
Trustee or with any Paying Agent or so segregated and held in trust for the
redemption of such Security shall (subject to any right of the Holder of such
Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 3.9 or in the terms of such Security) be paid to
the Company upon Company Request or, if then held by the Company, shall be
discharged from such trust.

 

SECTION 4.6.                                                                       SECURITIES PAYABLE ON REDEMPTION DATE

 

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

 

24

 

registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 3.7.

 

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

 

SECTION 4.7.                                                                       SECURITIES REDEEMED IN PART

 

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

 

ARTICLE V

SINKING
FUNDS

 

SECTION 5.1.                                                                       APPLICABILITY OF ARTICLE

 

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

 

The
minimum amount of any sinking fund payment provided for by the terms of any
Securities is herein referred to as a “mandatory sinking fund payment”, and any
payment in excess of such minimum amount provided for by the terms of such
Securities is herein referred to as an “optional sinking fund payment”. If
provided for by the terms of any Securities, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 5.2. Each
sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.

 

SECTION 5.2.                                                                       SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES

 

The
Company (1) may deliver Outstanding Securities of a series (other than any
previously called for redemption) and (2) may apply as a credit Securities
of a series which have been converted in accordance with their terms or which
have been redeemed either at the election of the Company pursuant to the terms
of such Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to any Securities
of that series required to be made pursuant to the terms of such Securities as
and to the extent provided for by the terms of such Securities; provided that
the Securities to be so credited have

 

25

 

not
been previously so credited. The Securities to be so credited shall be received
and credited for such purpose by the Trustee at the Redemption Price, as
specified in the Securities so to be redeemed (or at such other prices as may
be specified for such Securities as contemplated in Section 3.1), for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.

 

SECTION 5.3.                                                                       REDEMPTION OF SECURITIES FOR SINKING FUND

 

Not
less than 90 days (or such shorter period as shall be agreed to in writing by
the Trustee) prior to each sinking fund payment date for any Securities, the
Company will deliver to the Trustee an Officers’ Certificate specifying the
amount of the next ensuing sinking fund payment for such Securities pursuant to
the terms of such Securities, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities pursuant to Section 5.2
and will also deliver to the Trustee any Securities to be so delivered. Not
less than 60 days prior to each such sinking fund payment date, the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 4.3 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 4.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 4.6 and 4.7.

 

ARTICLE VI

COVENANTS

 

SECTION 6.1.                                                                       PAYMENT OF SECURITIES

 

The
Company shall pay the principal of and any premium and interest on the
Securities of any series on the dates and in the manner provided herein and in
the applicable Security. An installment of principal of or interest on any
Security of any series shall be considered paid on the date it is due if the
Trustee or Paying Agent (other than the Company or an Affiliate of the Company)
holds for the benefit of the Holders of such Security (on or before 10:00 a.m.
New York City time to the extent necessary to provide the funds to the
Depositary in accordance with the Depositary’s procedures) on that date cash
deposited and designated for and sufficient to pay the installment.

 

The
Company shall pay interest on overdue principal and on overdue installments of
interest at the rate specified in the Security of that series compounded semi-annually,
to the extent lawful.

 

SECTION 6.2.                                                                       MAINTENANCE OF OFFICE OR AGENCY

 

The
Company shall maintain in each Place of Payment for any series of Securities,
an office or agency (which may be an office of the Trustee, of the Registrar or
of an agent of the Trustee or the Registrar) where Securities of that series
may be presented or surrendered for payment, where Securities of that series
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securities of 

 

26

 

that
series and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.

 

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

 

With
respect to any Global Security, and except as otherwise may be specified for
such Global Security as contemplated by Section 3.1, the Corporate Trust
Office of the Trustee shall be the Place of Payment where such Global Security
may be presented or surrendered for payment or for registration of transfer or
exchange, or where successor Securities may be delivered in exchange therefor; provided, however, that
any such payment, presentation, surrender or delivery effected pursuant to the
Applicable Procedures of the Depositary for such Global Security shall be
deemed to have been effected at the Place of Payment for such Global Security
in accordance with the provisions of this Indenture.

 

SECTION 6.3.                                                                       CORPORATE EXISTENCE

 

Except
as otherwise permitted by Article VII, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence in accordance with its organizational documents and the
material rights (charter and statutory) and material corporate franchises of
the Company; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company.

 

SECTION 6.4.                                                                       MAINTENANCE OF PROPERTIES

 

The
Company shall cause all properties used or useful in the conduct of its
business and the business of each of its Subsidiaries to be maintained and kept
in good condition, repair and working order (reasonable wear and tear excepted)
and supplied with all necessary equipment and shall cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in their reasonable judgment may be necessary, so that the
business carried on in connection therewith may be properly conducted at all
times, except where the failure to do so would not, individually or in the
aggregate, have a material adverse effect on the current or future financial
position, stockholders’ equity or results of operations of the Company and its
Subsidiaries; provided, however, that nothing
in this Section 6.4 shall prevent the Company from discontinuing any
operation or maintenance of any of such properties, or disposing of any of
them, if such discontinuance or disposal is (i) in the judgment of the
Board of 

 

27

 

Directors
of the Company, desirable in the conduct of the business of the Company and (ii) not
materially adverse to the Holders.

 

SECTION 6.5.                                                                       COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT

 

(a)           The Company shall deliver to the Trustee within 120 days
after the end of each fiscal year of the Company an Officers’ Certificate, one
of the signers of which shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company, complying
with TIA § 314(a)(4) and stating that a review of its activities
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture (without
regard to notice requirements or grace periods) and further stating, as to each
such Officer signing such certificate, whether or not the signer knows of any
failure by the Company to comply with any conditions or covenants in this
Indenture and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with particularity. The Officers’
Certificate shall also notify the Trustee in writing should the relevant fiscal
year end on any date other than the current fiscal year end date.  The Officer’s Certificate need not comply
with Section 12.6 hereof.

 

(b)           The Company shall, so long as any Security of any series
are Outstanding, deliver to the Trustee, promptly upon becoming aware of any
Default or Event of Default with respect to such Security, an Officers’
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto. The Trustee shall
not be deemed to have knowledge of any Default, any Event of Default or any
such fact unless one of its Trust Officers receives written notice thereof from
the Company or any of the Holders.

 

SECTION 6.6.                                                                       REPORTS

 

So
long as any of the Securities remain Outstanding, the Company shall cause
copies of all annual reports and of the information, documents, and other
reports (or copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company is required to file with the SEC
pursuant to Section 13 or Section 15(d) of the Exchange Act, to
be filed with the Trustee and mailed to the Holders of such series of
Securities at their addresses appearing in the Security Register maintained by
the Security Registrar, in each case, within 15 days of filing with the SEC; provided, that if the SEC has accepted any report filed by
the Company as provided in this paragraph and such report has been made
available to the public on the SEC’s EDGAR system (or any similar system), the
Company will not be required to furnish such report to the Trustee or Holders.
The Company shall also comply with the provisions of TIA § 314(a).

 

28

 

ARTICLE VII

SUCCESSOR
CORPORATION

 

SECTION 7.1.                                                                       LIMITATION ON MERGER, SALE OR CONSOLIDATION

 

The
Company shall not consolidate or merge with or into, or transfer or lease its
assets substantially as an entirety, whether in a single transaction or a
series of related transactions, to another Person or group of affiliated
Persons, unless:

 

(1)           either (a) the Company is the
surviving entity or (b) the resulting, surviving or transferee entity
formed by such consolidation or into which the Company is merged or which
acquires or leases the Company’s assets is a corporation, partnership, trust or
limited liability company organized and existing under the laws of the United
States, any state thereof or the District of Columbia and expressly assumes by
a Supplemental Indenture (in form and substance reasonably satisfactory to the
Trustee) all of the Company’s obligations in connection with the Securities and
this Indenture;

 

(2)           no Default or Event of Default exists
or will occur immediately after giving effect to such transaction (applying Article 11
of Regulation S-X to such transaction as and to the extent applicable); and

 

(3)           the Company delivers to the Trustee
an Officers’ Certificate and an Opinion of Counsel meeting the requirements of
Sections 12.6 and 12.7 hereof.

 

For
purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the assets, substantially as an entirety, of one or more
Subsidiaries of the Company, the Company’s interest in which constitutes the
Company’s assets substantially as an entirety, shall be deemed to be the
transfer of the Company’s assets substantially as an entirety.

 

SECTION 7.2.                                                                       SUCCESSOR CORPORATION SUBSTITUTED

 

Upon
any consolidation or merger or any transfer or lease of the assets of the
Company substantially as an entirety in accordance with Section 7.1, the
surviving entity formed by such consolidation or into which the Company is
merged or to which such transfer or lease is made shall succeed to and (except
in the case of a lease) be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
surviving entity had been named herein as the Company, and (except in the case
of a lease) when a surviving entity duly assumes all of the obligations of the
Company pursuant hereto and pursuant to the Securities, the Company shall be
released from such obligations (except with respect to any obligations that
arise from, or are related to, such transaction).

 

29

 

ARTICLE VIII

EVENTS OF
DEFAULT AND REMEDIES

 

SECTION 8.1.                                                                       EVENTS OF DEFAULT

 

“Event
of Default” with respect to Securities of any series, wherever used herein,
means any one of the following events (whatever reason for such Event of
Default and whether it shall be caused voluntarily or involuntarily or
effected, without limitation, by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

 

(i)            the Company’s failure to pay any
installment of interest on any Security of that series as and when the same
becomes due and payable and the continuance of any such failure for 30 days; or

 

(ii)           the Company’s failure to pay all or
any part of the principal of, or premium, if any, on any Security of that
series when and as the same becomes due and payable at maturity, redemption, by
acceleration or otherwise; or

 

(iii)          the Company’s failure to deposit any
sinking fund payment, when and as due by the terms of a Security of that
series, and continuance of any such failure for 30 days; or

 

(iv)          with respect to the Securities of that
series, the Company’s failure to observe or perform any other covenant or
agreement in respect of any Security of that series contained in this Indenture
or in such Security (other than a covenant or agreement a default in whose
performance is elsewhere in this Section specifically dealt with or that
has been expressly included in this Indenture by means of a Supplemental
Indenture solely for the benefit of Securities of a series other than that
series) or in the applicable Board Resolution under which that series is issued
as contemplated by Section 3.01 and, the continuance of such failure for a
period of 60 days after written notice of such failure, specifying such failure
and requiring the same to be remedied, has been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities of that series; or

 

(v)           a decree, judgment, or order by a
court of competent jurisdiction shall have been entered adjudicating the
Company as bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company under any bankruptcy or similar law, and
such decree or order shall have continued undischarged and unstayed for a
period of 60 days; or a decree, judgment or order of a court of competent
jurisdiction appointing a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency for the Company, or any substantial part of the
property of the Company, or for the winding up or liquidation of the affairs of
the Company, shall have been entered, and such decree, judgment, or order shall
have remained in force undischarged and unstayed for a period of 60 days; or

 

30

 

(vi)          the Company shall institute
proceedings to be adjudicated a voluntary bankrupt, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization under any bankruptcy or similar law or
similar statute, or shall consent to the filing of any such petition, or shall
consent to the appointment of a custodian, receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of it or any substantial part of its
assets or property, or shall make a general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally
as they become due, or take any corporate action in furtherance of any of the
foregoing; or

 

(vii)         any other event or occurrence that is
designated to be an Event of Default provided with respect to Securities of
that series in the Supplemental Indenture or Board Resolution that establishes
the terms of the Securities of that series.

 

Notwithstanding
the foregoing provisions of this Section 8.1, if the principal or any
premium or interest on any Security is payable in a currency other than the
currency of the United States of America and such currency is not available to
the Company for making payment thereof due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company
will be entitled to satisfy its obligations to Holders of the Securities by
making such payment in the currency of the United States of America in an
amount equal to the currency of the United States of America equivalent of the
amount payable in such other currency, as determined by the Trustee by
reference to the noon buying rate in The City of New York for cable transfers
for such currency (the “Exchange Rate”), as such Exchange Rate is reported or
otherwise made available by the Federal Reserve Bank of New York on the date of
such payment, or, if such rate is not then available, on the basis of the most
recently available Exchange Rate. 
Notwithstanding the foregoing provisions of this Section 8.1, any
payment made under such circumstances in the currency of the United States of
America where the required payment is in a currency other than the currency of
the United States of America will not constitute an Event of Default under this
Indenture.

 

SECTION 8.2.                                                                       ACCELERATION OF MATURITY DATE; RESCISSION AND
ANNULMENT

 

If
an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing (other than an Event of Default specified
in Section 8.1(v) or Section 8.1(vi)), then in every such case,
unless the principal of the Outstanding Securities of that series shall have
already become due and payable, either the Trustee or the Holders of at least
25% in aggregate principal amount of the Outstanding Securities of that series,
by notice in writing to the Company specifying the respective Event of Default
(and to the Trustee if given by Holders) (an “Acceleration
Notice”), may declare all principal, determined as set forth below,
and accrued interest on such series (or, if the Securities of that series are
Original Issue Discount Securities, such portion of the principal amount as may
be specified in, or determined in accordance with, the terms of that series) to
be due and payable immediately. If an Event of Default specified in Section 8.1(v) or
Section 8.1(vi) occurs, all principal and accrued interest on such
series (or, in the case of any Security of that series which specifies an
amount to be due and payable thereon upon acceleration of the Maturity thereof,
such amount as may be specified by the terms thereof) 

 

31

 

will
be immediately due and payable on all Outstanding Securities of that series
without any declaration or other act on the part of the Trustee or any Holders.

 

The
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series, by written notice to the Trustee, may rescind and
annul any acceleration and its consequences with respect to the Securities of
that series so long as (a) such rescission occurs before a judgment or
decree is entered based on such acceleration and (b) all existing Events
of Default, other than the non-payment of the principal of, premium, if any,
and interest, if any, on all Securities of that series that have become due
solely because of the acceleration, have been cured or waived as provided in Section 8.12.

 

SECTION 8.3.                                                                       COLLECTION OF DEBT AND SUITS FOR ENFORCEMENT
BY TRUSTEE

 

The
Company covenants that if an Event of Default in payment of principal, premium
or interest specified in clause (i) or (ii) of Section 8.1
hereof occurs and is continuing with respect to Securities of any series, the
Company shall, upon demand of the Trustee, pay to it, for the benefit of the
Holders of Securities of that series, the whole amount then due and payable on
Securities of that series for principal, premium (if any), and interest, and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any), and on any overdue
interest, at the rate borne by such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including compensation to, and expenses, disbursements and advances
of the Trustee and its agents and counsel and all other amounts due the Trustee
under Section 9.7.

 

If
the Company fails to pay such amounts forthwith upon such demand, the Trustee,
in its own name and as trustee of an express trust in favor of the Holders of
Securities of that series, may institute a judicial proceeding for the
collection of the sums so due and unpaid, may prosecute such proceeding to
judgment or final decree and may enforce the same against the Company or any
other obligor upon the Securities of that series and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.

 

If
an Event of Default occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders of
Securities of that series by such appropriate judicial proceedings as the
Trustee shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

 

SECTION 8.4.                                                                       TRUSTEE MAY FILE PROOFS OF CLAIM

 

In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities of
any series or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of such
Securities shall then be due and payable as therein expressed or by declaration
or otherwise 

 

32

 

and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal, premium, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

 

(1)           to file and prove a claim for the
whole amount of principal (and premium, if any) and interest owing and unpaid
in respect of such Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee and its agent and counsel and all other amounts due the Trustee
under Section 9.7) and of the Holders of Securities of that series allowed
in such judicial proceeding, and

 

(2)           to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same;

 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder of a series to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to such
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and its
agents and counsel, and any other amounts due the Trustee under Section 9.7
hereof.

 

Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder of Securities of any
series any plan of reorganization, arrangement, adjustment or composition
affecting Securities of that series or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any such Holder in any
such proceeding.

 

SECTION 8.5.                                                                       TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF SECURITIES

 

All
rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of such
Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders of such Securities, and
any recovery of judgment shall, after provision for the payment of compensation
to, and expenses, disbursements and advances of the Trustee and its agents and
counsel and all other amounts due the Trustee under Section 9.7, be for
the ratable benefit of such Holders of such Securities in respect of which such
judgment has been recovered.

 

SECTION 8.6.                                                                       PRIORITIES

 

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

 

33

 

FIRST:  To the
Trustee in payment of all amounts due pursuant to Section 9.7 hereof,
including payment of all compensation, expense and liabilities incurred, and
all advances made, by the Trustee and the costs and expenses of collection, as
provided in such Section;

 

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

 

THIRD:  To the
Company or such other Person as may be lawfully entitled thereto, the
remainder, if any, each as their respective interests may appear.

 

The
Trustee may, but shall not be obligated to, fix a record date and payment date
for any payment to the Holders under this Section 8.6.

 

SECTION 8.7.                                                                       LIMITATION ON SUITS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

SECTION 8.8.                                                                       UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST

 

Notwithstanding
any other provision of this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the
principal of, and premium (if any), and (subject to Section 3.9) interest
on, such Security on the Maturity Dates of such payments as expressed in such
Security (in the case of redemption, the Redemption Price on the applicable
Redemption Date), and, if the terms of such Security so provide, to convert such
Security in accordance with its terms, and to institute suit for the
enforcement of any such payment after such respective dates, and such rights
shall not be impaired without the consent of such Holder.

 

SECTION 8.9.                                                                       RIGHTS AND REMEDIES CUMULATIVE

 

Except
as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities  in Section 3.8
hereof, no right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

 

SECTION 8.10.                                                                 DELAY OR OMISSION NOT WAIVER

 

No
delay or omission by the Trustee or by any Holder of any Securities to exercise
any right or remedy arising upon any Event of Default with respect to such
Securities shall impair the exercise of any such right or remedy or constitute
a waiver of any such Event of Default. Every right and remedy given by this Article VIII
or by law to the Trustee or to the Holders of any Security may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or
by such Holders, as the case may be.

 

SECTION 8.11.                                                                 CONTROL BY HOLDERS

 

The
Holder or Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred upon the Trustee with
respect to the Securities of that series; provided that

 

(1)           such direction shall not be in
conflict with any applicable rule of law or with this Indenture;

 

(2)           the Trustee shall not determine that
the action so directed would be unduly prejudicial to the Holders not taking
part in such direction; and

 

(3)           the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.

 

35

 

SECTION 8.12.                                                                 WAIVER OF EXISTING OR PAST DEFAULT

 

The
Holder or Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of any series may, on behalf of all Holders of all
the Securities of that series, waive any existing or past Default or Event of
Default with respect to the Securities of that series and its consequences
under this Indenture, except a continuing Default or Event of Default with
respect to the Securities of that series:

 

(A)          in
the payment of the principal of, premium, if any, or interest on, any Security
of that series as specified in clauses (i) and (ii) of Section 8.1
hereof and not yet cured; or

 

(B)           with
respect to any covenant or provision hereof which, under Article XI,
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of that series affected.

 

Upon
any such waiver, such Default or Event of Default shall cease to exist, and any
other Default or Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture, but no such waiver shall extend
to any subsequent or other Default with respect to the Securities of that
series or impair the exercise of any right arising therefrom.  The Company shall deliver to the Trustee an
Officers’ Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents (or other
evidence of such consents as may be reasonably satisfactory to the Trustee).

 

This
Section 8.12 shall be in lieu of TIA §§ 316(a)(1)(A) and
316(a)(1)(B) and such sections of the TIA are hereby expressly excluded
from this Indenture, as permitted by the TIA.

 

SECTION 8.13.                                                                 UNDERTAKING FOR COSTS

 

All
parties to this Indenture agree, and each Holder of any Security of any series
by his acceptance thereof shall be deemed to have agreed, that in any suit for
the enforcement of any right or remedy under this Indenture with respect to the
Security of that series, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee with respect to that series,
any court may in its discretion require the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys’
fees and expenses, against any party litigant in such suit, having due regard
to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 8.13 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder of the
Security of that series, or group of Holders of the Security of that series,
holding in the aggregate more than 10% in aggregate principal amount of the Outstanding
Security of that series, or to any suit instituted by any Holder of that series
for enforcement of the payment of principal of, or premium (if any), or
interest on, any Security of that series on or after the respective Maturity
Date expressed in such Security (including, in the case of redemption, on or
after the Redemption Date).

 

36

 

SECTION 8.14.                                                                 RESTORATION OF RIGHTS AND REMEDIES

 

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

 

SECTION 8.15.                                                                 WAIVER OF STAY, EXTENSION OR USURY LAWS.

 

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

 

ARTICLE IX

TRUSTEE

 

The
Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed, subject to the
terms hereof.

 

SECTION 9.1.                                                                       DUTIES OF TRUSTEE

 

(a)           If an Event of Default has occurred and is continuing (and
has not been cured or waived in accordance with the terms of this Indenture)
with respect to Securities of any series, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture with respect to such
Securities and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

 

(b)           Except during the continuance of an Event of Default with
respect to Securities of any series:

 

(1)           the Trustee need perform only those
duties as are specifically set forth in this Indenture and no others; no
covenants or obligations shall be implied in or read into this Indenture which
are adverse to the Trustee; and any rights of the Trustee to take any action
that is permitted, but not required, to be taken by this Indenture shall not be
construed as an obligation or duty to do so; and

 

37

 

(2)           in the absence of bad faith on its
part, the Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; provided, however, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).

 

(c)           The Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

 

(1)           this paragraph does not limit the
effect of paragraph (b) of this Section 9.1;

 

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

 

(3)           the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 8.11 hereof.

 

(d)           No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or at the request, order or direction of the Holders
or in the exercise of any of its rights or powers.

 

(e)           Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c), (d), (f) and (g) of
this Section 9.1.

 

(f)            The Trustee shall not be liable for interest on any
assets received by it except as the Trustee may agree in writing with the
Company (including without limitation to the extent the Trustee receives funds
prior to the interest payment date in order to comply with the provisions of Section 6.1).
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.

 

(g)           The Trustee shall not be required to give any bond or
surety with respect to the performance of its duties or the exercise of its
powers under this Indenture.

 

(h)           Every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section and to
the provisions of the TIA.

 

SECTION 9.2.                                                                       RIGHTS OF TRUSTEE

 

Subject
to Section 9.1 hereof, with respect to Securities of any series:

 

38

 

(a)           The Trustee may conclusively rely on any document
reasonably believed by it to be genuine and to have been signed or presented by
the proper Person. The Trustee need not investigate any fact or matter stated
in such document.

 

(b)           Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers’ Certificate or an Opinion of
Counsel, which shall conform to Sections 12.6 and 12.7 hereof, except as
specifically provided herein. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or advice
of counsel.

 

(c)           The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.

 

(d)           The Trustee shall not be liable for any action it or its
agent takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers conferred upon it by this Indenture.

 

(e)           The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its sole discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit.

 

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

 

(g)           Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company, as applicable.

 

(h)           The Trustee shall have no duty to inquire as to the
performance of the Company’s covenants in Article VI hereof or as to the
performance by any Agent of its duties hereunder. In addition, the Trustee
shall not be deemed to have knowledge of any Default or Event of Default except
any Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge of an event which is in fact
such a default (and such notice references the Securities and this Indenture),
and in the absence of any such notice or any such actual knowledge, the Trustee
may conclusively assume that no Default or Event of Default exists.

 

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

 

39

 

(j)            The Trustee may request that the Issuer or the Company
deliver an Officers’ Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant
to this Indenture, which Officers’ Certificate may be signed by any person
authorized to sign an Officers’ Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded.

 

(k)           The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities under this Indenture, and to each Agent,
Custodian and other person employed by the Trustee in furtherance of carrying
out its duties under this Indenture.

 

SECTION 9.3.                                                                       INDIVIDUAL RIGHTS OF TRUSTEE

 

The
Trustee, or any of its Affiliates, in its individual or any other capacity may
become the owner or pledgee of Securities of any series and may otherwise deal
with the Company, any of its Subsidiaries, or their respective Affiliates with
the same rights it would have if it were not Trustee. Any Agent or Custodian
may do the same with like rights. However, the Trustee must comply with
Sections 9.10 and 9.11 hereof.

 

SECTION 9.4.                                                                       TRUSTEE’S DISCLAIMER

 

The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Securities of any series, and it
shall not be accountable for the Company’s use of the proceeds from the
Securities, and it shall not be responsible for any statement of the Company in
the Indenture or any statement in the Securities of any series (other than the
Trustee’s certificate of authentication) or in any prospectus or other
disclosure materials distributed with respect to the Securities of any series
(other than information provided by the Trustee concerning the Trustee), or for
the use or application of any funds received by a Paying Agent other than the
Trustee.

 

SECTION 9.5.                                                                       NOTICE OF DEFAULT

 

If
a Default or an Event of Default occurs and is continuing with respect to Securities
of any series and if it is known to the Trustee as provided in Section 9.2(h) hereof,
the Trustee shall mail to each Holder of that series notice of the uncured
Default or Event of Default within 90 days after such Default or Event of
Default occurs.  Except in the case of a
Default in the payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of any Security, if
any), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interest of the Holders.

 

SECTION 9.6.                                                                       REPORTS BY TRUSTEE TO HOLDERS

 

Within
60 days after each March 15 beginning with the March 15 following the
date of this Indenture, the Trustee shall, if required by law, mail to each
Holder a brief report dated as of such March 15 that complies with
TIA § 313(a). The Trustee also shall comply with TIA §§ 313(b) and
313(c).

 

40

 

The
Company shall promptly notify the Trustee in writing if the Securities of any
series become listed on any securities exchange or automated quotation system
or of any delisting thereof.

 

A
copy of each report at the time of its mailing to Holders shall be mailed to
the Company and filed with the SEC and each securities exchange, if any, on
which any Securities are listed.

 

SECTION 9.7.                                                                       COMPENSATION AND INDEMNITY

 

The
Company agrees to pay to the Trustee (in its capacity as such) from time to
time such compensation for its services as the Company and the Trustee shall
from time to time agree in writing. The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. In
addition to such compensation for services, the Company shall promptly
reimburse the Trustee (and any predecessor Trustee with respect to all matters
and events existing or alleged to exist on or prior to the date such person
ceased to be a Trustee) upon request for all reasonable disbursements, expenses
(including costs of collection) and advances actually incurred or made by it in
accordance with this Indenture or carrying out its duties hereunder.  Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee’s agents, accountants,
experts and counsel.

 

The
Company agrees to indemnify each of the Trustee (in any capacity under this
Indenture including as Trustee, Agent or Securities Custodian) and each
predecessor Trustee and each of its officers, directors, attorneys-in-fact and
agents for, and hold it harmless against, any claim, demand, expense (including
but not limited to reasonable compensation, disbursements and expenses of the
Trustee’s agents and counsel), loss or liability incurred by it without negligence,
willful misconduct or bad faith on the part of the Trustee, arising out of or
in connection with the acceptance and the administration of this trust and its
rights or duties hereunder, including, without limitation, the reasonable costs
and expenses of defending itself against any investigation, claim or liability
(whether asserted by the Company, any Holder or any other person) in connection
with the exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity; provided, however, that any failure to so notify the Company shall not
relieve the Company of its indemnity obligations hereunder. The Company shall
defend the claim and the Trustee shall provide reasonable cooperation at the
Company’s expense in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel; provided that the Company will not be required to pay such
fees and expenses if they assume the Trustee’s defense and if the Trustee is
advised by its counsel that there is no conflict of interest between the
Company and the Trustee in connection with such defense. The Company need not
pay for any settlement made without their written consent, which shall not be
unreasonably withheld. The Company need not reimburse any expense or indemnify
against any loss or liability to the extent incurred by the Trustee through its
negligence, bad faith or willful misconduct.

 

When
the Trustee incurs expenses or renders services after an Event of Default
specified in Section 8.1(v) or (vi) of this Indenture occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.

 

41

 

The
Company’s obligations under this Section 9.7 shall survive the resignation
or removal of the Trustee, the discharge of the Company’s obligations pursuant
to Article X of this Indenture and any rejection or termination of this
Indenture under any Bankruptcy Law.

 

SECTION 9.8.                                                                       REPLACEMENT OF TRUSTEE

 

The
Trustee may resign by so notifying the Company in writing. The Holder or
Holders of a majority in aggregate principal amount of the outstanding
Securities of any series may remove the Trustee with respect to that series by
so notifying the Company and the Trustee in writing and may appoint a successor
trustee with the Company’s consent. The Company may remove the Trustee with respect
to any series of Securities if:

 

(a)           the Trustee fails to comply with Section 9.10 hereof;

 

(b)           the Trustee is adjudged bankrupt or insolvent;

 

(c)           a receiver, Custodian or other public officer takes charge
of the Trustee or its property; or

 

(d)           the Trustee becomes incapable of acting.

 

If
the Trustee resigns or is removed or if a vacancy exists in the office of
Trustee for any reason with respect to Securities of any series, the Company
shall promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holder or Holders of a majority in principal amount
of that series of Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.

 

A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Immediately after that and, provided that
all sums owing to the retiring Trustee provided for in Section 9.7 hereof
have been paid, the retiring Trustee shall transfer all property held by it as
trustee to the successor Trustee, the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder of the affected
series at the current address of each such Holder as set forth in the Security
Register.

 

If
a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed with respect to Securities of any series, the
retiring Trustee (at the Company’s cost and expense), the Company or the Holder
or Holders of at least 10% in aggregate principal amount of the outstanding
Securities of that series may petition any court of competent jurisdiction for
the appointment of a successor Trustee.

 

If
the Trustee fails to comply with Section 9.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

 

Notwithstanding
replacement of the Trustee pursuant to this Section 9.8, the Company’s
obligations under Section 9.7 hereof shall continue for the benefit of the
retiring Trustee.

 

42

 

SECTION 9.9.                                                                       SUCCESSOR TRUSTEE BY MERGER, ETC.

 

If
the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall, if such resulting, surviving or
transferee corporation is otherwise eligible hereunder, be the successor
Trustee.

 

SECTION 9.10.                                                                 ELIGIBILITY; DISQUALIFICATION

 

The
Trustee shall at all times satisfy the requirements of TIA § 310(a)(1), (2) and
(5). The Trustee shall have a combined capital and surplus of at least
$50,000,000, as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA § 310(b).

 

SECTION 9.11.                                                                 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY

 

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

 

SECTION 9.12.                                                                 MONEY HELD IN TRUST

 

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

 

SECTION 9.13.                                                                 CONFLICTING INTERESTS

 

If
the Trustee has or shall acquire a conflicting interest within the meaning of
the TIA, the Trustee shall eliminate such interest, apply to the SEC for
permission to continue as Trustee with such conflict or resign, to the extent
and in the manner provided by, and subject to the provisions of, the TIA and
this Indenture.  To the extent permitted
by the TIA, the Trustee shall not be deemed to have a conflicting interest by virtue
of being a trustee under this Indenture with respect to Securities, or a
trustee under any other indenture between the Company and the Trustee.

 

ARTICLE X

LEGAL
DEFEASANCE AND COVENANT DEFEASANCE

 

SECTION 10.1.                                                                 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE

 

The
Company may elect to have Section 10.2, at the Company’s option and at any
time, or Section 10.3, at the Company’s option and at any time, of this
Indenture applied to all Outstanding Securities of any series upon compliance
with the conditions set forth below in this Article X.

 

43

 

SECTION 10.2.                                                                 LEGAL DEFEASANCE AND DISCHARGE

 

Upon
the Company’s exercise under Section 10.1 hereof of the option applicable
to this Section 10.2 with respect to the Outstanding Securities of any
series, the Company shall be deemed to have been discharged from its
obligations with respect to all Outstanding Securities as to which this option
provided in Section 10.1 is exercised, on the date the conditions set
forth below are satisfied (hereinafter, “Legal Defeasance”).
For this purpose, such Legal Defeasance means that the Company shall be deemed
to have paid and discharged the entire indebtedness represented by such
Outstanding Securities, and this Indenture shall cease to be of further effect
as to all such Outstanding Securities, except as to be deemed to be Outstanding
only for the purposes of the Sections of this Indenture referred to in (a) and
(b) below, and the Company shall be deemed to have satisfied all other of
its obligations under such Outstanding Securities and this Indenture with
respect to such Securities (and the Trustee, on written demand of and at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (a) the rights of Holders of Outstanding
Securities to receive payments in respect of the principal of, premium, if any,
and interest on such Securities when such payments are due from the trust
described in Section 10.5, (b) the Company’s obligations with respect
to such Securities under Sections 3.4, 3.5, 3.6, 3.7, 3.8, 3.10, 6.2, 10.5,
10.6 and 10.7 hereof, and (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, and the Company’s obligations in
connection therewith. Subject to compliance with this Article X, the
Company may exercise its option under this Section 10.2 notwithstanding
the prior exercise of its option under Section 10.3 hereof with respect to
such Securities.

 

SECTION 10.3.                                                                 COVENANT DEFEASANCE

 

Upon
the Company’s exercise under Section 10.1 hereof of the option applicable
to this Section 10.3 with respect to the Outstanding Securities of any
series, the Company shall be released from its obligations under any covenants
provided pursuant to Section 3.1(18) and the covenants contained in
Sections 6.5, 6.7, 6.9 and 6.10 and Article VII hereof with respect to all
Outstanding Securities as to which this option provided in Section 10.1 is
exercised, on and after the date the conditions set forth below are satisfied
(hereinafter, “Covenant Defeasance”), and such
Outstanding Securities shall thereafter be deemed not Outstanding for the
purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed Outstanding for all other purposes hereunder. For
this purpose, such Covenant Defeasance means that, with respect to the Outstanding
Securities of any series as to which the Covenant Defeasance has occurred, the
Company shall not need to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant with respect
to such Securities, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under Section 8.1(iii) with
respect to such Securities, but, except as specified above, the remainder of
this Indenture and such Securities shall be unaffected thereby.

 

44

 

SECTION 10.4.                                                                 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE

 

The
following shall be the conditions to the application of either Section 10.2
or 10.3 hereof to any Securities or any series of Securities, as the case may
be, to be defeased:

 

(a)           (i)  The Company shall irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Securities as to which
Legal Defeasance or Covenant Defeasance will occur, U.S. legal tender, U.S.
Government Obligations, a combination thereof, or other obligations as may be
provided as contemplated by Section 3.1(15) with respect to such
Securities, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on such Securities on the stated
date for payment thereof or on the redemption date of such principal or
installment of principal of, premium, if any, or interest on such Securities,
and the Holders of such Securities must have a valid, perfected, exclusive
security interest in such trust; (ii) in the case of Legal Defeasance, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that: (A) the
Company has received from, or there has been published by the Internal Revenue
Service, a ruling or (B) since the date of this Indenture, there has been
a change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders
of such Securities will not recognize income, gain or loss for federal income
tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not occurred; (iii) in
the case of Covenant Defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel in the United States reasonably acceptable to
such Trustee confirming that the Holders of such Securities will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred; (iv) no Default or Event of
Default with respect to such Securities shall have occurred and be continuing
on the date of such deposit or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; (v) such Legal Defeasance or Covenant
Defeasance shall not result in a breach or violation of, or constitute a
default under this Indenture or any other material agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound; (vi) the Company shall have delivered
to the Trustee an Officers’ Certificate stating that the deposit was not made
by the Company with the intent of preferring the Holders of such Securities
over any other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company or others;
and (vii) the Company shall have delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that the conditions
precedent provided for in, in the case of the Officers’ Certificate, (i) through
(vi) and, in the case of the Opinion of Counsel, clauses (i) (with
respect to the validity and perfection of the security interest), (ii), (iii) and
(v) of this paragraph have been complied with and the Company shall have
delivered to the Trustee an Opinion of Counsel (which may contain customary
qualifications and exceptions, including, without limitation, an assumption
that there has been no intervening bankruptcy of the Company between the date
of deposit and the 91st day following the deposit and an assumption
that no Holder of such Securities is an “insider” of the Company under
applicable Federal bankruptcy law), after 

 

45

 

the 91st day following the deposit, the trust funds
will not be subject to the effect of any applicable Federal bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally and the creation of the defeasance trust does not violate the
Investment Company Act of 1940. The Defeasance will be effective on the earlier
of (i) the 91st day after the date of deposit, and (ii) the day on
which all the conditions above have been satisfied.

 

(b)           If the funds deposited with the Trustee to effect Covenant
Defeasance are insufficient to pay the principal of, premium, if any, and
interest on the Securities to be so defeased when due, then the obligations of
the Company under this Indenture with respect to such Securities will be
revived and no such defeasance will be deemed to have occurred.

 

SECTION 10.5.                                                            DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS

 

Subject
to Section 10.6 hereof, all cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 10.5, the “Paying Agent”) pursuant to Section 10.4 hereof in
respect of any Securities to be defeased shall be held in trust and applied by
the Paying Agent, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any other Paying Agent as
the Trustee may determine, to the Holders of such Securities of all sums due
and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.

 

The
Company shall pay and indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 10.4 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Securities.

 

SECTION 10.6.                                                                 REPAYMENT TO THE COMPANY

 

(a)           Anything in this Article X to the contrary
notwithstanding, the Trustee or the Paying Agent shall deliver or pay to the
Company from time to time upon the request of the Company any cash or U.S.
Government Obligations held by it as provided in Section 10.4 hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 10.4(a) hereof),
are in excess of the amount thereof that would then be required to be deposited
to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

(b)           Any cash and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Securities and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its written request; and the Holder of such Security shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may 

 

46

 

at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.

 

SECTION 10.7.                                                                 REINSTATEMENT

 

If
the Trustee or Paying Agent is unable to apply any cash or U.S. Government
Obligations in accordance with Section 10.2 or 10.3 hereof, as the case
may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the Company’s obligations under this Indenture with respect to such
Securities affected and such Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Section 10.2 or 10.3 hereof
until such time as the Trustee or Paying Agent is permitted to apply such money
in accordance with Sections 10.2 and 10.3 hereof, as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, or interest on any such Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the cash or U.S.
Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE XI

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 11.1.                                                                 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS

 

Without
the consent of any Holder of any Securities, the Company, when authorized by
Board Resolutions, and the Trustee, at any time and from time to time, may
enter into one or more Supplemental Indentures hereto, in form satisfactory to
the Trustee, for any of the following purposes:

 

(1)           to cure any ambiguity or to correct
or supplement any provision contained herein or in any Supplemental Indenture
which may be defective or inconsistent with any other provision contained
herein or in any Supplemental Indenture or to make any changes hereto or to any
Supplemental Indenture that are required by law;

 

(2)           to add to the covenants of the
Company such further covenants, restrictions or conditions for the benefit of
the Holders of Securities of all or any series (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of that series or
those series specified in such Supplemental Indenture), and to make the
occurrence, or the occurrence and continuance, of a Default in any such
additional covenants, restrictions or conditions a Default or an Event of Default
permitting the enforcement of all or any of the several remedies provided in
this Indenture as herein set forth (and if such additional Events of Default
are to be for the benefit of less than all series of Securities, stating that
such additional Events of Default are expressly being included 

 

47

 

solely for the benefit of
that series or those series specified in such Supplemental Indenture); provided, however, that
in respect of any such additional covenant, restriction or condition such
Supplemental Indenture may provide for a particular period of grace after
Default (which period may be shorter or longer than allowed in the case of
other Defaults) or may provide for any immediate enforcement upon such Default
or may limit the remedies available to be exercised by the Trustee in its
discretion upon such Default but may not limit the remedies available to be
exercised by the Holders;

 

(3)           to add to or change any of the
provisions of this Indenture to such extent as shall be necessary to permit or
facilitate the issuance of Securities in uncertificated form;

 

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

 

(5)           to provide for collateral for or
guarantors of the Securities of any series;

 

(6)           to evidence the succession of another
Person to the Company, and the assumption by any such successor of the
obligations of the Company, herein and in the Securities in accordance with Article VII;

 

(7)           to modify, eliminate or add to the
provisions of this Indenture to comply with the TIA;

 

(8)           to evidence and provide for the
acceptance of appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to
the requirements of Section 9.8;

 

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

 

(10)         to add to or change any of the
provisions of this Indenture with respect to any Securities that by their terms
may be converted into securities or other property other than Securities of the
same series and of like tenor, in order to permit or facilitate the issuance,
payment or conversion of such Securities;

 

(11)         to comply with the rules or
regulations of any securities exchange or automated quotation system on which
any of the Securities may be listed or traded; or

 

(12)         to provide for the payment by the
Company of additional amounts in respect of taxes imposed on certain Holders
and for the treatment of such additional amounts as interest and for all
matters incidental thereto.

 

48

 

Upon
the written request of the Company accompanied by a Board Resolution authorizing
the execution of any such Supplemental Indenture, and upon receipt by the
Trustee of any Officers’ Certificate or Opinion of Counsel requested under
Section 9.2(b) hereof, the Trustee shall join with the Company in the
execution of any Supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to (but
may in its discretion) enter into such Supplemental Indenture that affects its
own rights, duties, liabilities or immunities under this Indenture or
otherwise.

 

SECTION 11.2.                                                            AMENDMENTS, SUPPLEMENTAL INDENTURES AND
WAIVERS WITH CONSENT OF HOLDERS

 

Subject
to Section 8.8 hereof, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of each
series affected thereby (including consents obtained in connection with a
tender offer or exchange offer for such Securities), by written act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by Board
Resolutions, and the Trustee for Securities of each such series may amend or
supplement this Indenture or enter into one or more Supplemental Indentures for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of the Securities of that series under this
Indenture or the applicable Securities. Subject to Section 8.8, the Holder
or Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of each series may waive compliance by the Company with
any provision of this Indenture or such Securities with respect to such series.
Notwithstanding any of the above, however, no such amendment, Supplemental
Indenture or waiver shall, without the consent of the Holder of each
Outstanding Security affected thereby:

 

(1)           extend the Stated Maturity of the
principal of, or any installment of principal of or interest on, any Security,
or reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of the
principal of an Original Issue Discount Security or any other Security which
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 8.2, or change any Place of Payment where, or
the coin or currency in which, any such Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date); or

 

(2)           reduce the percentage in principal
amount of the Outstanding Securities of any series, the consent of whose
Holders is required for any such amendment, Supplemental Indenture or waiver
provided for in this Indenture;

 

(3)           modify any of the waiver provisions,
except to increase any required percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each outstanding Security affected thereby;

 

49

 

(4)           cause such Security to become
subordinate in right of payment to any other Debt, except to the extent
provided in the terms of such Security; or

 

(5)           if any Security provides that the
Holder may require the Company to repurchase or convert such Security, impair
such Holder’s right to require repurchase or conversion of such Security on the
terms provided therein.

 

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

 

Upon
the written request of the Company accompanied by a Board Resolution
authorizing the execution of any such amendment or supplement to this Indenture
or of any such Supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders as
aforesaid, and upon receipt by the Trustee of any Officers’ Certificate or
Opinion of Counsel requested under Section 9.2(b) hereof, the Trustee
shall join with the Company in the execution of such amendment or supplement to
this Indenture or of such Supplemental Indenture, but the Trustee shall not be
obligated to (but may in its discretion) enter into any such amendment or
supplement to this Indenture or any such Supplemental Indenture that affects
its own rights, duties, liabilities or immunities under this Indenture or
otherwise.

 

It
shall not be necessary for the consent of the Holders under this Section 11.2
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.

 

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

 

After
an amendment, supplement or waiver under this Section 11.2 or under Section 11.4
hereof becomes effective, it shall bind each Holder.

 

In
connection with any amendment, supplement or waiver under this Article XI,
the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder’s consent to such amendment, supplement or
waiver.

 

SECTION 11.3.                                                                 COMPLIANCE WITH TIA

 

Every
amendment, waiver or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.

 

50

 

SECTION 11.4.                                                                 REVOCATION AND EFFECT OF CONSENTS

 

Until
an amendment, waiver or supplement becomes effective with respect to any
Security of any series, a consent to it by a Holder of that series is a
continuing consent by such Holder and every subsequent Holder of such Security
or portion of such Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent is not made on any such
Security. However, any such Holder or subsequent Holder may revoke the consent
as to such Security or portion of such Security by written notice to the
Company or the Person designated by the Company as the Person to whom consents
should be sent if such revocation is received by the Company or such Person
before the date on which the Trustee receives an Officers’ Certificate
certifying that the Holders of the requisite principal amount of the
Outstanding Securities affected have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.

 

The
Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Holders entitled to consent to any amendment, supplement or
waiver, which record date shall be the date so fixed by the Company
notwithstanding the provisions of the TIA. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date, and only those Persons (or their
duly designated proxies), shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date.

 

After
an amendment, supplement or waiver becomes effective, it shall bind every
Holder of the Security of the affected series, unless it makes a change
described in any of clauses (1) through (5) of Section 11.2 hereof, in which
case, the amendment, supplement or waiver shall bind only each Holder of a
Security of that series who has consented to it and every subsequent Holder of
such Security or portion of such Security that evidences the same debt as the
consenting Holder’s Security; provided that
any such waiver shall not impair or affect the right of any Holder of that
series to receive payment of principal and premium of and interest on such
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates.

 

SECTION 11.5.                                                                 NOTATION ON OR EXCHANGE OF SECURITIES

 

Securities
of any series authenticated and delivered after the execution of any
Supplemental Indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such Supplemental Indenture. If an amendment, supplement or
waiver changes the terms of a Security of any series, the Trustee may require
such Holder of the Security of that series to deliver it to the Trustee or
require such Holder to put an appropriate notation on such Security. The
Trustee may place an appropriate notation on such Security about the changed
terms and return it to such Holder. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the affected Security shall
issue and the Trustee shall authenticate a new Security of the same series that
reflects the changed terms. Any failure to make the appropriate notation or to
issue a new Security shall not affect the validity of such amendment,
supplement or waiver.

 

51

 

SECTION 11.6.                                                                 TRUSTEE TO SIGN AMENDMENTS, ETC.

 

The
Trustee shall execute any amendment, supplement or waiver authorized pursuant
to this Article XI; provided that
the Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee’s own rights, liabilities,
duties or immunities under this Indenture. The Trustee shall be entitled to
receive, and shall be fully protected in relying upon an Officers’ Certificate
and an Opinion of Counsel stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article XI is authorized or
permitted by this Indenture.

 

ARTICLE XII

MISCELLANEOUS

 

SECTION 12.1.                                                                 TIA CONTROLS

 

If
any provision of this Indenture limits, qualifies, or conflicts with the duties
imposed by operation of the TIA, the imposed duties, upon qualification of this
Indenture under the TIA, shall control. 
If any provision of this Indenture modifies or excludes any provision of
the TIA which may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.

 

SECTION 12.2.                                                                 FORM OF DOCUMENTS DELIVERED TO TRUSTEE

 

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

 

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

 

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

 

52

 

SECTION 12.3.                                                                 ACTS OF HOLDERS; RECORD DATES

 

Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act”
of the Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 9.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

 

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

 

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

 

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

 

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

 

53

 

principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to
the Trustee in writing and to each Holder of Securities of the relevant series
in the manner set forth in Section 12.4.

 

The
Trustee may set any day as a record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to join in the giving
or making of (i) any notice of default pursuant to Section 9.5, (ii) any
declaration of acceleration referred to in Section 8.2, (iii) any request to
institute proceedings referred to in Section 8.7(B) or (iv) any direction
referred to in Section 8.11, in each case with respect to Securities of that
series. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of that series on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder
unless taken on or prior to the applicable Expiration Date by Holders of the
requisite principal amount of Outstanding Securities of that series on such
record date. Nothing in this paragraph shall be construed to prevent the
Trustee from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Company’s expense, shall cause notice of such record date, the proposed
action by Holders and the applicable Expiration Date to be given to the Company
in writing and to each Holder of Securities of the relevant series in the
manner set forth in Section 12.4.

 

With
respect to any record date set pursuant to this Section, the party hereto which
sets such record dates may designate any day as the “Expiration
Date” and from time to time may change the Expiration Date to any
earlier or later day; provided that
no such change shall be effective unless notice of the proposed new Expiration
Date is given to the other party hereto in writing, and to each Holder of
Securities of the relevant series in the manner set forth in Section 12.4, on
or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

 

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

 

54

 

SECTION 12.4.                                                                 NOTICES

 

Any
notices or other communications required or permitted hereunder shall be in
writing, and shall be sufficiently given if made by hand delivery, by telex, by
telecopier, recognized overnight courier or registered or certified mail,
postage prepaid, return receipt requested, and addressed as follows:

 

if
to the Company:

 

Sally
Beauty Holdings, Inc.

3001 Colorado Boulevard

Denton, Texas 76210

Attention:  Chief Financial Officer

Telecopy: 
(      )

 

with
a copy to:

 

Alston
& Bird LLP

One Atlantic Center

1201 West Peachtree Street

Atlanta, Georgia 30309

Attention:  William Scott Ortwein

Telecopy:  (404) 253-8376

 

if
to the Trustee:

 

                              

                              

                              

Attention: 
                              

Telecopy: 
(      )

 

Any
party by notice to each other party may designate additional or different
addresses as shall be furnished in writing by such party. Any notice or
communication to any party shall be deemed to have been given or made as of the
date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; the next Business Day after timely
delivery to a recognized overnight courier, if sent by such courier
guaranteeing next day delivery; and five Business Days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change
of address shall not be deemed to have been given until actually received by
the addressee).

 

Any
notice or communication mailed to a Holder shall be mailed to it by first class
mail or other equivalent means at its address as it appears on the registration
books of the Registrar and shall be sufficiently given to such Holder if so
mailed within the time prescribed.

 

Where
this Indenture provides for Notice of any event to a Holder of a Global
Security, such notice shall be sufficiently given if given to the Depositary or
its nominee for such Security 

 

55

 

(or
its designee), pursuant to its Applicable Procedures, not later than the latest
date (if any), and not earlier than the earliest date (if any), prescribed for
the giving of such notice.

 

Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.

 

SECTION 12.5.                                                                 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS

 

Holders
of any Security may communicate pursuant to TIA § 312(b) with other
Holders of that series with respect to their rights under this Indenture or the
applicable Securities. The Company, the Trustee, the Registrar and any other
Person shall have the protection of TIA § 312(c).

 

SECTION 12.6.                                                                 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT

 

Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:

 

(1)           an Officers’ Certificate (in form and
substance reasonably satisfactory to the Trustee and which shall include the
statements required by Section 12.7 hereof) stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and

 

(2)           an Opinion of Counsel (in form and
substance reasonably satisfactory to the Trustee and which shall include the
statements required by Section 12.7 hereof) stating that, in the opinion
of such counsel (who may rely on an Officers’ Certificate and certificates of
public officials as to matters of fact), all such conditions precedent have
been complied with.

 

SECTION 12.7.                                                                 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION

 

Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA § 314(a)) shall comply with the provisions of TIA § 314(e)
and shall include:

 

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

 

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

 

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

 

56

 

(4)           a statement as to whether or not, in
the opinion of each such Person, such condition or covenant has been complied
with; provided, however,
that, with respect to matters of fact, an Opinion of Counsel may rely on an
Officers’ Certificate or certificates of public officials.

 

SECTION 12.8.                                                                 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR

 

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

 

SECTION 12.9.                                                                 LEGAL HOLIDAYS

 

Unless
otherwise provided as contemplated by Section 3.1 with respect to Securities of
any series, in any case where any Interest Payment Date, Redemption Date,
Maturity of any Security, Stated Maturity or any date on which a Holder has the
right to convert his Security, shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of any Security which specifically states
that such provision shall apply in lieu of this Section)) payment of interest
or principal (and premium, if any), or conversion of such Security need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Maturity
or the Stated Maturity, or on such date for conversion, as the case may be and
no interest shall accrue for the intervening period.

 

SECTION 12.10.                                                           GOVERNING LAW

 

THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND RULE 327(b) OF
THE NEW YORK CIVIL PRACTICE LAWS AND RULES.

 

SECTION 12.11.                                                           NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS

 

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

 

SECTION 12.12.                                                           NO RECOURSE AGAINST OTHERS

 

No
direct or indirect stockholder, employee, officer or director, as such, past,
present or future, of the Company, or any successor entity, shall have any
personal liability in respect of the obligations of the Company under this Indenture
or the Securities solely by reason of his or its status as such stockholder,
employee, officer or director.  Each
Holder by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of any
Security.

 

57

 

SECTION 12.13.                                                           SUCCESSORS

 

All
agreements of the Company in this Indenture and any Security shall bind its
successor. All agreements of the Trustee in this Indenture shall bind its
successor.

 

SECTION 12.14.                                                           DUPLICATE ORIGINALS

 

All
parties may sign any number of copies or counterparts of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.

 

SECTION 12.15.                                                           SEVERABILITY

 

In
case any one or more of the provisions in this Indenture or in any Security
shall be held invalid, illegal or unenforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.

 

SECTION 12.16.                                                           TABLE OF CONTENTS, HEADINGS, ETC.

 

The
Table of Contents, Cross-Reference Table and headings of the Articles and the
Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.

 

58

 

SIGNATURES

 

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

 

	
   

  	
  SALLY
  BEAUTY HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                                  ],

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

59

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