Document:

Exhibit 4.2

	 

ROSS STORES, INC.

and 

U.S. BANK NATIONAL ASSOCIATION

as Trustee 

	 
	

    

INDENTURE 

Dated as of •, 2014

SENIOR DEBT SECURITIES

	 

TABLE OF
CONTENTS 

					Page
	 	 	 	 	 
	ARTICLE I	DEFINITIONS AND INCORPORATION BY REFERENCE  	1
	             
      	Section 1.1.	             
      	Definitions	1
		Section 1.2.		Other Definitions	10
		Section 1.3.		Incorporation by Reference of Trust Indenture Act	10
		Section 1.4.		Rules of Construction	11
	ARTICLE II	THE
      SECURITIES	11
		Section 2.1.		Form, Dating and Terms	11
		Section 2.2.		Denominations	14
		Section 2.3.		Forms Generally	14
		Section 2.4.		Execution, Authentication, Delivery and Dating	15
		Section 2.5.		Registrar and Paying Agent	17
		Section 2.6.		Paying Agent to Hold Money in Trust	17
		Section 2.7.		Holder Lists	17
		Section 2.8.		Transfer and Exchange	18
		Section 2.9.		Mutilated, Destroyed, Lost or Wrongfully Taken Securities	18
		Section 2.10.		Outstanding Securities	19
		Section 2.11.		Cancellation	20
		Section 2.12.		Payment of Interest; Defaulted Interest	20
		Section 2.13.		Temporary Securities	21
		Section 2.14.		Persons Deemed Owners	21
		Section 2.15.		Computation of Interest	21
		Section 2.16.		Global Securities; Book-Entry Provisions	22
		Section 2.17.		CUSIP Numbers, Etc.	23
		Section 2.18.		Original Issue Discount and Foreign-Currency Denominated	
				Securities	24
	ARTICLE III	COVENANTS	24
		Section 3.1.		Payment of Securities	24
		Section 3.2.		Reports	24
		Section 3.3.		Maintenance of Office or Agency	25
		Section 3.4.		Corporate Existence	25
		Section 3.5.		Maintenance of Properties	26
		Section 3.6.		Payment of Taxes and Other Claims	26

-i- 

	             
      	Section 3.7.	             
      	Limitation on Liens	26
		Section 3.8.		Limitation on Sale and Leaseback Transactions	28
		Section 3.9.		Limitations Upon Permitting Restricted Subsidiaries to
    become	
				Unrestricted Subsidiaries and Unrestricted Subsidiaries
to	
				become Restricted Subsidiaries	29
		Section 3.10.		Compliance Certificate	29
		Section 3.11.		Statement by Officers as to Default	30
		Section 3.12.		Additional Amounts	30
		Section 3.13.		Calculation of Original Issue Discount	30
	ARTICLE IV	SUCCESSORS	31
		Section 4.1.		Merger, Consolidation or Sale of Assets	31
	ARTICLE
V	REDEMPTION OF
      SECURITIES	31
		Section 5.1.		Applicability of Article	31
		Section 5.2.		Election to Redeem; Notice to Trustee	32
		Section 5.3.		Selection by Trustee of Securities to Be Redeemed	32
		Section 5.4.		Notice of Redemption	32
		Section 5.5.		Deposit of Redemption Price	33
		Section 5.6.		Securities Payable on Redemption Date	33
		Section 5.7.		Securities Redeemed in Part	34
	ARTICLE VI	DEFAULTS AND REMEDIES	34
		Section 6.1.		Events of Default	34
		Section 6.2.		Acceleration	36
		Section 6.3.		Other Remedies	37
		Section 6.4.		Waiver of Past Defaults	37
		Section 6.5.		Control by Majority	37
		Section 6.6.		Limitation on Suits	38
		Section 6.7.		Rights of Holders to Receive Payment	38
		Section 6.8.		Collection Suit by Trustee	38
		Section 6.9.		Trustee May File Proofs of Claim	38
		Section 6.10.		Priorities	39
		Section 6.11.		Undertaking for Costs	39
	ARTICLE VII	TRUSTEE	39
		Section 7.1.		Duties of Trustee	39
		Section 7.2.		Rights of Trustee	41
		Section 7.3.		Individual Rights of Trustee	43

-ii- 

	             
      	Section
7.4.	             
      	Trustee’s
      Disclaimer	43
		Section
7.5.		Notice of
      Defaults	43
		Section
7.6.		Reports by Trustee to
      Holders	43
		Section
7.7.		Compensation and
      Indemnity	44
		Section
7.8.		Replacement of
      Trustee	44
		Section
7.9.		Successor Trustee by
      Merger	46
		Section
    7.10.		Eligibility;
      Disqualification	46
		Section
    7.11.		Preferential
      Collection of Claims Against Company	46
	ARTICLE
VIII	LEGAL DEFEASANCE AND
      COVENANT DEFEASANCE	47
		Section
8.1.		Option to Effect
      Legal Defeasance or Covenant Defeasance	47
		Section
8.2.		Legal Defeasance and
      Discharge	47
		Section
8.3.		Covenant
      Defeasance	48
		Section
8.4.		Conditions to Legal
      or Covenant Defeasance	48
		Section
8.5.		Deposited Cash and
      Government Securities to be Held in	
				Trust; Other
      Miscellaneous Provisions	49
		Section
8.6.		Repayment to
      Company	50
		Section
8.7.		Reinstatement	50
	ARTICLE IX	AMENDMENTS	50
		Section
9.1.		Without Consent of
      Holders	50
		Section
9.2.		With Consent of
      Holders	52
		Section
9.3.		Compliance with Trust
      Indenture Act	53
		Section
9.4.		Revocation and Effect
      of Consents and Waivers	53
		Section
9.5.		Notation on or
      Exchange of Securities	54
		Section
9.6.		Trustee To Sign
      Amendments	54
	ARTICLE X	SATISFACTION AND
      DISCHARGE	54
		Section
    10.1.		Satisfaction and
      Discharge	54
	ARTICLE XI	MISCELLANEOUS	55
		Section
    11.1.		Trust Indenture Act
      Controls	55
		Section
    11.2.		Notices	56
		Section
    11.3.		Communication by
      Holders with other Holders	56
		Section
    11.4.		Certificate and
      Opinion as to Conditions Precedent	56
		Section
    11.5.		Statements Required
      in Certificate or Opinion	57
		Section
    11.6.		When Securities
      Disregarded	58
		Section
    11.7.		Rules by Trustee,
      Paying Agent and Registrar	58
		Section
    11.8.		Legal
    Holidays	58

-iii- 

	             
      	Section 11.9.	             
      	GOVERNING LAW; WAIVER OF JURY TRIAL	58
		Section 11.10.		No
      Recourse Against Others	58
		Section 11.11.		Successors	58
		Section 11.12.		Multiple Originals	58
		Section 11.13.		Severability	59
		Section 11.14.		No
      Adverse Interpretation of Other Agreements	59
		Section 11.15.		Table of Contents; Headings	59
		Section 11.16.		Force Majeure	59
		Section 11.17.		U.S.A. Patriot Act	59

-iv- 

CROSS-REFERENCE TABLE

	TIA		Indenture
	Section	 	       	Section
	310(a)(1)		7.10
	(a)(2)		7.10
	(a)(3)		N.A.
	(a)(4)		N.A.
	(b)		7.8;
    7.10
	311(a)		7.11
	(b)		7.11
	312(a)		2.7
	(b)	 	11.3
	(c)		11.3
	313(a)		7.6
	(b)(1)		7.6
	(b)(2)		7.6
	(c)		7.6
	(d)		7.6
	314(a)		3.2; 3.5;
      11.2
	(b)		N.A.
	(c)(1)		11.4
	(c)(2)		11.4
	(c)(3)		N.A.
	(d)		N.A.
	(e)		11.5
	315(a)		7.1
	(b)		7.5;
    11.2
	(c)		7.1
	(d)		7.1
	(e)		6.11
	316(a)(last
      sentence)		12.6
	(a)(1)(A)		6.5
	(a)(1)(B)		6.4
	(a)(2)		N.A.
	(b)		6.7
	317(a)(1)		6.8
	(a)(2)		6.9
	(b)		2.6
	318(a)		11.1

N.A. means Not Applicable.

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

-v- 

     THIS
INDENTURE, dated as of •, 2014, is entered into by and between ROSS STORES, INC. a
Delaware corporation (the “Company”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of
the United States (the
“Trustee”). 

WITNESSETH:

     WHEREAS, the Company may from time to
time duly authorize the issue of its unsecured debentures, notes or other
evidences of indebtedness to be issued in one or more series (the
“Securities”) up to such principal amount or amounts as may
from time to time be authorized in accordance with the terms of this Indenture;

     WHEREAS, the Company has duly authorized
the execution and delivery of this Indenture to provide, among other things, for
the authentication, delivery and administration of the Securities; and

     WHEREAS, all things necessary to make
this Indenture a valid indenture and agreement in accordance with its terms have
been done; 

     NOW, THEREFORE: 

     In consideration of the premises and the
purchases of the Securities by the holders thereof, the Company and the Trustee
mutually covenant and agree for the equal and proportionate benefit of the
respective holders from time to time of the Securities as follows: 

ARTICLE I 

Definitions and
Incorporation by Reference

     Section 1.1. Definitions. 

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

     “Affiliate” of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person. For purposes of this definition, “control,” as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise. For
purposes of this definition, the terms “controlling,” “controlled by” and “under
common control with” have correlative meanings. 

     “Attributable
Debt” in respect of a Sale and Leaseback Transaction referred to in Section
3.8 means, at the time of determination, the present value (discounted at the
imputed rate of interest of such transaction determined in accordance with
generally accepted accounting principles) of the obligation of the lessee for
net rental payments during the remaining term of the lease included in such Sale
and Leaseback Transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended). The term “net rental
payments” under any lease for any period shall mean the sum of the rental and
other payments required to be paid in such period by the lessee thereunder, not
including any amounts required to be paid by such lessee (whether or not
designated as rental or additional rental) on account of maintenance and
repairs, insurance, taxes, assessments, water rates or similar charges required
to be paid by such lessee thereunder or any amounts required to be paid by such
lessee thereunder contingent upon the amount of sales, maintenance and repairs,
insurance, taxes, assessments, water rates or similar charges. 

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

     “Board of Directors” means:

	       	(1)	       	with
      respect to a corporation, the board of directors of the corporation or any
      committee thereof duly authorized to act on behalf of such
  board;
		 
	 	(2)	 	with
      respect to a partnership, the board of directors of the general partner of
      the partnership;
		 
	 	(3)	 	with
      respect to a limited liability company, the manager, managers, managing
      member or members or any controlling committee of managers or managing
      members thereof, as the case may be; and
		 
	 	(4)	 	with
      respect to any other Person, the board or committee of such Person serving
      a similar function.

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

     “Business Day” means any
day other than a Saturday, a Sunday or a day on which banking institutions in
the City of New York and Los Angeles or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is not a
Business Day, payment may be made on the next succeeding day that is a Business
Day, and no interest shall accrue for the intervening period. 

     “Capital Stock” means:

	       	(1)	       	with
      respect to any Person that is a corporation, any and all shares,
      interests, participations or other equivalents (however designated and
      whether or not voting) of corporate stock, including each class of Common
      Stock and Preferred Stock of such Person, and all options, warrants or
      other rights to purchase or acquire any of the foregoing; and
				 
	 	(2)	 	with respect to any
      Person that is not a corporation, any and all partnership, membership or
      other equity interests of such Person, and all options, warrants or other
      rights to purchase or acquire any of the
foregoing.

2 

     “Capitalized Lease Obligation” means, as to any Person, the obligations of such Person under a lease
that are required to be classified and accounted for as capital lease
obligations under GAAP and, for purposes of this definition, the amount of such
obligations at any date shall be the capitalized amount of such obligations at
such date, determined in accordance with GAAP, and the stated maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease. 

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

     “Company” has the meaning
ascribed to it in the first introductory paragraph of this Indenture.

     “Company Order” and
“Company Request” mean, respectively, a written order or request
signed in the name of the Company by two Officers of the Company, and delivered
to the Trustee. 

     “Consolidated” when used
with respect to, any of the terms defined herein refers to such terms as
reflected in a consolidation of the accounts of the Company and its Restricted
Subsidiaries in accordance with generally accepted accounting principles.

     “Consolidated Net Tangible Assets” means the total amount of assets (less depreciation and valuation
reserves and other reserves and items deductible from the gross book value of
specific asset accounts under generally accepted accounting principles) which
under generally accepted accounting principles would be included on a
consolidated balance sheet of the Company and its Restricted Subsidiaries, after
deducting therefrom (i) all current liabilities (excluding any amounts that
constitute Funded Debt by reason of being extendible or renewable), and (ii) all
goodwill, trade names, trademarks, patents, unamortized Debt discount and
expense and other like intangibles, all as computed in accordance with generally
accepted accounting principles and as shown in the latest quarterly consolidated
balance sheet of the Company contained in the Company’s then most recent annual
report to stockholders or quarterly report filed with the SEC, as the case may
be. 

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

     “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. 

     “Depositary” means, with
respect to the Securities of any series issuable or issued in whole or in part
in global form, the Person specified pursuant to Section 2.1 hereof as the initial Depositary with respect to the Securities of that
series, until a successor shall have been appointed and become such pursuant to
the applicable provision of this Indenture, and thereafter “Depositary” shall
mean or include that successor. 

3 

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

     “DTC” means The Depository
Trust Company, its nominees and their respective successors and assigns, or such
other depositary institution hereinafter appointed by the Company. 

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

     “Exempted Debt” means the
sum of the following items outstanding as of the date Exempted Debt is being
determined: (i) Indebtedness of the Company and its Restricted Subsidiaries
secured by a Mortgage and not permitted to exist pursuant to Section 3.7(a), and
(ii) Attributable Debt of the Company and its Restricted Subsidiaries in respect
of all Sale and Leaseback Transactions not permitted pursuant to Section 3.8(a). 

     “Funded Debt” of any Person
means Indebtedness, whether incurred, assumed or guaranteed, maturing by its
terms more than one year from the date of creation thereof or that is extendable
or renewable at the sole option of the obligor in such manner that it may become
payable more than one year from the date of creation thereof; provided, however, that Funded Debt shall not include (i)
obligations created pursuant to leases, (ii) any Indebtedness or portion thereof
maturing by its terms within one year from the time of any computation of the
amount of outstanding Funded Debt unless such Indebtedness shall be extendable
or renewable at the sole option of the obligor in such manner that it may become
payable more than one year from such time, or (iii) any Indebtedness for the
payment or redemption of which money in the necessary amount shall have been
deposited in trust either at or before the maturity date thereof. 

     “GAAP” means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time in the United States. 

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

     “Government Securities”
means direct obligations of, or obligations guaranteed by, the United States of
America for the payment of which obligations or guarantee the full faith and
credit of the United States of America is pledged. 

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

4 

     “Indebtedness”
means, with respect to any Person, (i) the principal of and any premium and
interest on (a) indebtedness of such Person for money borrowed and (b)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all
Capitalized Lease Obligations of such Person; (iii) all obligations of such
Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all obligations under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business); (iv) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker’s acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in (i) through (iii) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on the
letter of credit); (v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons and all dividends of other Persons for the payment
of which, in either case, such Person is responsible or liable as obligor,
guarantor or otherwise, (vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured; and (vii) any
amendments, modifications, refundings, renewals or extensions of any
indebtedness or obligation described as Indebtedness in clauses (i) through (vi)
above. 

     “Indenture” means this Indenture as amended or supplemented
from time to time by one or more indentures supplemental hereto entered into
pursuant to the applicable provisions hereof, including, for all purposes of
this instrument and any such supplemental indenture, the provisions of the Trust
Indenture Act that are deemed to be a part of and govern this instrument and any
such supplemental indenture, respectively. The term “Indenture” shall also
include the terms of any particular series of Securities established as
contemplated by Section
2.1. 

     “Interest Payment Date,”
when used with respect to any Security, shall have the meaning assigned to that
term in the Security as contemplated by Section 2.1. 

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

     “Non-U.S. Person” means a
person who is not a U.S. person, as defined in Regulation S. 

     “Obligations” means any
principal, premium, if any, interest, penalties, fees, indemnifications,
reimbursements, charges, damages and other liabilities payable under the
documentation governing any indebtedness. 

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

     “Officers’ Certificate”
means, with respect to any Person, a certificate signed by two Officers of the
Person, at least one of whom shall be the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer or the
Treasurer. 

5 

     “Operating Assets” means
all merchandise inventories, furniture and equipment (including all
transportation and warehousing equipment and store racks and showcases but
excluding office equipment and data processing equipment) owned by the Company
or a Restricted Subsidiary. 

     “Operating Property” means
all real property and improvements thereon owned by the Company or a Restricted
Subsidiary constituting, without limitation, any store, warehouse, service
center or distribution center wherever located, provided that such term shall
not include any store, warehouse, service center or distribution center that the
Board of Directors declares by resolution not to be of material importance to
the business of the Company and its Restricted Subsidiaries. Operating Property
is treated as having been “acquired” on the day the Operating Property is placed
in operation by the Company or a Restricted Subsidiary after the later of (a)
its acquisition from a third party, including an Unrestricted Subsidiary, (b)
completion of its original construction or (c) completion of its substantial
reconstruction, renovation, remodeling, expansion or improvement (whether or not
constituting an Operating Property prior to such reconstruction, renovation,
remodeling, expansion or improvement). 

     “Opinion of Counsel” means
a written opinion from legal counsel who is reasonably acceptable to the
Trustee. The counsel may be an employee of or counsel to the Company or any
Subsidiary of the Company. 

     “Original Issue Discount Security” means any Security that provides for an amount less than the principal
amount thereof to be due and payable on a declaration of acceleration of the
Maturity thereof pursuant to Section 6.2. 

     “Person” means any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, limited liability company or
government or other entity. 

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

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

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

     “Restricted Subsidiary” of
any Person means any Subsidiary of such Person which at the time of
determination is not an Unrestricted Subsidiary. 

     “SEC” means the Securities
and Exchange Commission. 

     “Securities” has the
meaning ascribed to it in the second introductory paragraph of this Indenture.

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

6 

     “Securities Register” means
the register of Securities, maintained by the Registrar, pursuant to
Section 2.5. 

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

     “Senior Funded Debt” means
all Funded Debt of the Company or any other Person, except Subordinated Funded
Debt. 

     “Stated Maturity” means,
with respect to any installment of interest or principal on any series of
indebtedness, the date on which the payment of interest or principal was
scheduled to be paid in the documentation governing such indebtedness as of the
date of this Indenture, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof. 

     “Subordinated Funded Debt”
means any unsecured Indebtedness of the Company that is expressly made
subordinate and junior in rank and right of payment to the Securities of any
Series and such other Indebtedness of the Company as may be specified or
characterized in the instruments evidencing the Subordinated Funded Debt or the
indenture or other similar instrument under which it is issued (which indenture
or other instrument shall be binding on all holders of such Subordinated Funded
Debt) (the Securities and any other Indebtedness of the Company to which the
Subordinated Funded Debt is subordinate and junior being hereinafter in this
paragraph called “Superior Debt”), by provisions not substantially more
favorable to the holders of the Subordinated Funded Debt than the following:

     (1) in the
event of any insolvency or bankruptcy proceedings, any receivership,
liquidation, reorganization or other similar proceedings in connection
therewith, relative to the Company or to its creditors, as such, or to its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy, then the holders of Superior Debt shall be entitled to
receive payment in full of all Principal and interest on all Superior Debt
before the holders of the Subordinated Funded Debt are entitled to receive any
payment on account of Principal or interest upon the Subordinated Funded Debt,
and to that end (but subject to the power of a court of competent jurisdiction
to make other equitable provision reflecting the rights conferred by the
provisions of the Subordinated Funded Debt upon the Superior Debt and the
holders thereof with respect to the Subordinated Funded Debt and the holders
thereof by a lawful plan or reorganization under applicable bankruptcy or
insolvency law) the holders of Superior Debt shall be entitled to receive for
application in payment thereof any payment or distribution of any kind or
character, whether in cash or property or securities, which may be payable or
deliverable in any such proceedings in respect of the Subordinated Funded Debt,
except securities which are subordinate and junior in right of payment to the
same extent as the Subordinated Funded Debt to the payment of all Superior Debt
(and any securities issued in exchange therefor) then outstanding; 

7 

     (2) in the
event that any Subordinated Funded Debt is declared due and payable before its
expressed maturity because of the occurrence of an event of default with respect
to such Subordinated Funded Debt (under circumstances when the provisions of the
foregoing clause (i) shall not be applicable), the holders of the Superior Debt
outstanding at the time such Subordinated Funded Debt became so due and payable
because of such occurrence of such an event of default shall be entitled to
receive payment in full of all Principal and interest on all Superior Debt
before the holders of such Subordinated Funded Debt are entitled to receive any
payments on account of the Principal or interest upon such Subordinated Funded
Debt except payments at the expressed maturity of such Subordinated Funded Debt,
current interest payments as provided in such Subordinated Funded Debt, payments
pursuant to any mandatory sinking fund (or analogous provision) in respect of
such Subordinated Funded Debt, and payments for the purpose of curing any such
event of default; 

     (3) in the
event that (x) there shall have occurred a default in the payment of the
principal of or interest on any Superior Debt, or (y) there, shall have occurred
any other event of default with respect to any Superior Debt permitting the
holders thereof to accelerate the maturity thereof and if written notice thereof
shall have been given to the Company by a holder or holders of such Superior
Debt or their representative or representatives or trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Superior Debt
may have been issued, or (z) the payment hereinafter referred to would itself
constitute an event of default with respect to any Superior Debt, then, in any
such case, unless or until such event of default shall have been cured or waived
or shall have ceased to exist, no payment shall be made by the Company on
account of Principal of, interest on or Additional Amounts with respect to, any
Subordinated Funded Debt (whether pursuant to any sinking fund or otherwise) or
on account of the purchase or other acquisition of any Subordinated Funded Debt;
and 

     (4) no
holder of Superior Debt or trustee for such holder shall be prejudiced in his or
her right to enforce subordination of the Subordinated Funded Debt by any act or
failure to act on the part of the Company; 

provided, however, that the Subordinated Funded Debt may provide
that the foregoing provisions are solely for the purposes of defining the
relative rights of the holders of Superior Debt on the one hand, and the holders
of the Subordinated Funded Debt on the other hand, and that nothing therein
shall impair, as between the Company and the holders of the Subordinated Funded
Debt, the obligation of the Company, which is unconditional and absolute, to pay
to the holders thereof the Principal thereof and interest thereon in accordance
with its terms, nor shall anything therein prevent the holders of the
Subordinated Funded Debt from exercising all remedies otherwise permitted by
applicable law or thereunder upon default thereunder, subject to the rights
under clauses (i), (ii) and (iii) above of holders of Superior Debt to receive
cash, property or securities otherwise payable or deliverable to the holders of
the Subordinated Funded Debt; and provided, further, that the Subordinated Funded Debt may provide that, insofar as a
trustee or paying agent for such Subordinated Funded Debt is concerned, the
foregoing provisions shall not prevent the application by such trustee or paying
agent of any moneys deposited with such trustee or paying agent for the purpose
of the payment of or on account of the principal and interest on such
Subordinated Funded Debt if such trustee or paying agent did not have knowledge
at the time of such application that such payment was prohibited by the
foregoing provisions. 

8 

     “Subsidiary” with respect
to any Person, means: 

	       	(1)	       	any
      corporation of which the outstanding Capital Stock having at least a
      majority of the votes entitled to be cast in the election of directors
      under ordinary circumstances shall at the time be owned, directly or
      indirectly, by such Person; or
		 
	 	(2)	 	any other
      Person of which at least a majority of the voting interest under ordinary
      circumstances is at the time, directly or indirectly, owned by such
      Person.

     “TIA” or “Trust Indenture Act,” except as otherwise provided in Section 9.3, means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa 77bbbb), as in effect on the date hereof. 

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

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

     “Unrestricted Subsidiary”
of any Person means: 

	       	(1)	       	any
      Subsidiary of the Company that at the time of determination shall be or
      continue to be designated an Unrestricted Subsidiary by the Board of
      Directors of the Company in the manner provided below; and
		 
	 	(2)	 	any
      Subsidiary of an Unrestricted Subsidiary.

     “Voting Stock” of any
specified Person as of any date means the Capital Stock of such Person that is
at the time entitled to vote generally in the election of the Board of Directors
of such Person. 

9 

     “Wholly Owned Restricted Subsidiary” means any Restricted Subsidiary all of the outstanding Funded Debt and
capital stock of which, other than directors’ qualifying shares, is owned by the
Company and its other Wholly Owned Restricted Subsidiaries. 

     Section 1.2. Other Definitions.

			Defined in
	Term	 	       	Section
	“Agent Members”		2.16
	“Corporate Trust Office”		3.3
	“Covenant Defeasance”		8.3
	“Defaulted Interest”		2.12
	“Event of Default”		6.1
	“Exchange Rate”		2.18
	“Legal Defeasance”		8.2
	“Legal Holiday”		11.8
	“Mortgage”		3.7
	“Paying Agent”		2.5
	“protected purchaser”		2.9
	“Registrar”		2.5
	“Sale and Leaseback Transaction”		3.8
	“Special Interest Payment Date”		2.12(a)
	“Special Record Date”		2.12(a)
	“substantial improvement”		3.7
	“Surviving Entity”		4.1

     Section 1.3. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory
provisions of the TIA which are incorporated by reference in and made a part of
this Indenture. The following TIA terms have the following meanings: 

     “Commission” means the SEC. 

     “indenture securities” means the
Securities. 

     “indenture security holder” means a
Holder of a Security.

     “indenture to be qualified” means this Indenture.

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

     “obligor” on any series of Securities
means the Company and any other obligor on such series of Securities.

     All other TIA terms used in this
Indenture that are defined by the TIA, defined in the TIA by reference to
another statute or defined by SEC rules promulgated under the TIA have the
meanings assigned to them by such definitions. 

10 

     Section 1.4. Rules of Construction.
Unless the context otherwise requires: 

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

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

     (3)
“or” is not exclusive;

     (4)
“including” means including without
limitation; 

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

     (6)
the principal amount of any
noninterest bearing or other discount security at any date shall be the
principal amount thereof that would be shown on a balance sheet of the Company
dated such date prepared in accordance with GAAP; and 

     (7)
provisions apply to successive events
and transactions. 

ARTICLE II 

The
Securities 

     Section 2.1. Form, Dating and Terms.

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

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

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

     (2) if
there is to be a limit, the limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section
2.8, 2.9, 2.13, 2.16, 5.7
or 9.5 and except for any
Securities that, pursuant to Section 2.4 or 2.16, are deemed never to have been authenticated and
delivered hereunder); provided,
however, that unless otherwise
provided in the terms of the series, the authorized aggregate principal amount
of such series may be increased before or after the issuance of any Securities
of the series by a Board Resolution (or
action pursuant to a Board Resolution) to such effect;

11 

     (3) whether any Securities of the series are to be issuable initially in
temporary global form and whether any Securities of the series are to be
issuable in permanent global form, as Global Securities or otherwise, and, if
so, whether beneficial owners of interests in any such Global Security may
exchange such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 2.16, and
the initial Depositary and Security Custodian, if any, for any Global Security
or Securities of such series; 

     (4) the
manner in which any interest payable on a temporary Global Security on any
Interest Payment Date will be paid if other than in the manner provided in
Section 2.12;

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

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

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

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

     (9)
[Reserved] 

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

12 

     (11) if
other than denominations of $2,000 and any integral multiple of $1,000 in excess
thereof, the denomination in which any Securities of that series shall be
issuable;

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

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

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

     (15) if
other than the entire principal amount thereof, the portion of the principal
amount of Securities of the series that shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 6.2;

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

     (17) any
deletions or modifications of or additions to the Events of Default set forth in
Section 6.1 or covenants of the Company set forth in
Article III pertaining to the
Securities of the series;

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

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

13 

     (20) if
applicable, that the Securities of the series, in whole or any specified part,
shall not be defeasible pursuant to Section 8.2 or
Section 8.3 or both such Sections, and, if such Securities
may be defeased, in whole or in part, pursuant to either or both such Sections,
any provisions to permit a pledge of obligations other than Government
Securities (or the establishment of other arrangements) to satisfy the
requirements of Section
8.4(1) for defeasance of such
Securities and, if other than by a Board Resolution of the Company, the manner
in which any election by the Company to defease such Securities shall be
evidenced; and

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

     All Securities of any one series shall be
substantially identical except as to denomination and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and (subject
to Section 2.3) set forth, or determined in the manner provided,
in the Officers’ Certificate or Company Order referred to above or in any such
indenture supplemental hereto. 

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

     Section 2.2. Denominations. The
Securities of each series shall be issuable in such denominations as shall be
specified as contemplated by Section 2.1. In the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series denominated in Dollars shall be issuable in
denominations of $2,000 and any integral multiples of $1,000 thereof.

     Section 2.3. Forms Generally. The
Securities of each series shall be in fully registered form and in substantially
such form or forms (including temporary or permanent global form) established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto. The Securities may have notations, legends or endorsements required by
law, securities exchange rule, the Company’s certificate of incorporation,
bylaws or other similar governing documents, agreements to which the Company is
subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). A copy of the Board
Resolution establishing the form or forms of Securities of any series shall be
delivered to the Trustee at or prior to the delivery of the Officers’
Certificate or Company Order contemplated by Section 2.4 for the authentication and delivery of such Securities. 

14 

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

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

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

		U.S. BANK, NATIONAL ASSOCIATION, as
		Trustee
		 
		By:  	  
			       Authorized
      Signatory”

     Section 2.4. Execution, Authentication, Delivery and Dating. Two Officers of the Company shall sign the
Securities on behalf of the Company by manual or facsimile signature.

     If an Officer of the Company whose
signature is on a Security no longer holds that office at the time the Security,
is authenticated, the Security shall be valid nevertheless. 

     A Security shall not be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose until
authenticated by the manual signature of an authorized signatory of the Trustee,
which signature shall be conclusive evidence that the Security has been
authenticated under this Indenture. Notwithstanding the foregoing, if any
Security has been authenticated and delivered hereunder but never issued and
sold by the Company, and the Company delivers such Security to the Trustee for
cancellation as provided in Section 2.11, together
with a written statement (which need not comply with Section 11.5 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture. 

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

15 

     If the form or terms of the Securities of
the series have been established in or pursuant to one or more Board Resolutions
as permitted by Section
2.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall receive (in addition to the
Company Order referred to above and the other documents required by
Section 11.4), and (subject to Section 7.1) shall be fully protected in conclusively relying upon: 

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

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

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

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

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

         
(iv) that all laws and requirements in respect of the
execution and delivery by the Company of such Securities have been complied
with. 

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

     The Trustee shall not be required to
authenticate such Securities if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the issuance of such
Securities pursuant to this Indenture would affect the Trustee’s own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner not reasonably acceptable to the Trustee. 

     The Trustee may appoint an authenticating
agent acceptable to the Company to authenticate Securities. Unless limited by
the terms of such appointment, any such authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company,
or an Affiliate of the Company. 

16 

     Each
Security shall be dated the date of its authentication. 

     Section 2.5. Registrar and Paying Agent. The Company shall maintain an office or agency for each series of
Securities where Securities of such series may be presented for registration of
transfer or for exchange (the “Registrar”) and an office
or agency where Securities of such series may be presented for payment (the
“Paying Agent”). The Company shall cause each of the Registrar
and the Paying Agent to maintain an office or agency in the United States of
America. The Registrar shall keep a register of the Securities and of their
transfer and exchange (the “Securities Register”). The
Company may have one or more co-registrars and one or more additional paying
agents. The term “Paying
Agent” includes any additional
paying agent. 

     The Company shall enter into an
appropriate agency agreement with any Registrar, Paying Agent or co-registrar
not a party to this Indenture, which shall incorporate the terms of the TIA. The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of each such
agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee
shall act as such and shall be entitled to appropriate compensation therefor
pursuant to Section
7.7. The Company or any of its
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.

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

     Section 2.6. Paying Agent to Hold Money in Trust. By no later than 11:00 a.m. (New York City time)
on the date on which any amount or Additional Amounts, if any, in respect of any
Security is due and payable, the Company shall deposit with the Paying Agent a
sum sufficient in immediately available funds to pay such amount or Additional
Amounts, if any, when due. The Company shall require each Paying Agent (other
than the Trustee) to agree in writing that such Paying Agent shall hold in trust
for the benefit of the applicable Holders or the Trustee all money held by such
Paying Agent for the payment of such amount and Additional Amounts, if any, on
the applicable Securities and shall notify the Trustee in writing of any default
by the Company in making any such payment. If the Company or a Subsidiary acts
as Paying Agent, it shall segregate the money held by it as Paying Agent and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent (other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section 2.6, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money delivered to the
Trustee. Upon any bankruptcy, reorganization or similar proceeding with respect
to the Company, the Trustee shall serve as Paying Agent for the Securities.

     Section 2.7. Holder Lists. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders. If the Trustee is
not the Registrar with respect to a series of Securities, or to the extent
otherwise required under the TIA, the Company shall furnish to the Trustee, in
writing at least five Business Days before each interest payment date with
respect to such series of Securities and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders of such series.

17 

     Section 2.8. Transfer and Exchange.
Except as set forth in Section
2.16 or as may be provided
pursuant to Section
2.1, when Securities of any
series are presented to the Registrar with the request to register the transfer
of those Securities or to exchange those Securities for an equal principal
amount of Securities of the same series of like tenor and of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements and the requirements of this Indenture for those
transactions are met; provided,
however, that the Securities
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instruction of transfer in form reasonably
satisfactory to the Registrar duly executed by the Holder thereof or by his
attorney, duly authorized in writing, on which instruction the Registrar can
conclusively rely. 

     To permit registrations of transfers and
exchanges, the Company shall execute Securities and the Trustee shall
authenticate such Securities at the Registrar’s written request and submission
of the Securities (other than Global Securities). No service charge shall be
made to a Holder for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than such transfer tax or similar governmental
charge payable on exchanges pursuant to Section 2.13, 5.7 or 9.5).
The Trustee shall authenticate Securities in accordance with the provisions of
Section 2.4. Notwithstanding any other provisions of this Indenture to the contrary,
the Company shall not be required to register the transfer or exchange of (a)
any Security selected for redemption in whole or in part pursuant to
Article V, except the unredeemed portion of any Security
being redeemed in part or (b) any Security during the period beginning 15
Business Days before the mailing of notice of any offer to repurchase Securities
of the series required pursuant to the terms thereof or of redemption of
Securities of a series to be redeemed and ending at the close of business on the
date of mailing. 

     Section 2.9. Mutilated, Destroyed, Lost or Wrongfully Taken Securities. If a mutilated Security is surrendered to the
Registrar or if the Holder of a Security claims that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security with respect to such series if the
requirements of Section 8-405 of the Uniform Commercial Code are met, such that
the Holder (a) satisfies the Company or the Trustee within a reasonable time
after such Holder has notice of such loss, destruction or wrongful taking and
the Registrar does not register a transfer prior to receiving such notification,
(b) makes such request to the Company or Trustee prior to the Security being
acquired by a protected purchaser as defined in Section 8-303 of the Uniform
Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Trustee.
Such Holder shall furnish an indemnity bond sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee, the Paying Agent,
the Registrar and any co-registrar from any loss which any of them may suffer if
a Security is replaced, and, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a protected purchaser, the
Company shall execute and, upon a Company Order, the Trustee shall authenticate
and make available for delivery, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or wrongfully taken Security, a new Security
of like tenor and principal amount, bearing a number not contemporaneously
outstanding. 

18 

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

     Upon the issuance of any new Security
under this Section
2.9, 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) in connection therewith. 

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

     The provisions of this Section 2.9 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 wrongfully taken Securities. 

     Section 2.10. Outstanding Securities.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those paid pursuant to Section
2.9 and those described in this
Section 2.10 as not outstanding. A Security ceases to be
outstanding in the event the Company or a Subsidiary of the Company holds the
Security, provided, however, that (i) for
purposes of determining which are outstanding for consent or voting purposes
hereunder, the provisions of Section 11.6 shall apply
and (ii) in determining whether the Trustee shall be protected in making a
determination whether the Holders of the requisite principal amount of
outstanding Securities are present at a meeting of Holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which a Trust Officer of the Trustee actually knows to be held by the Company or
an Affiliate of the Company shall not be considered outstanding. 

     If a Security is replaced pursuant to
Section 2.9, it ceases to be outstanding unless the Trustee
and the Company receive proof satisfactory to them that the replaced Security is
held by a protected purchaser. 

     If the Paying Agent segregates and holds
in trust, in accordance with this Indenture, on a Redemption Date or maturity
date money sufficient to pay all amounts and Additional Amounts, if any, payable
on that date with respect to the Securities (or portions thereof) to be redeemed
or maturing, as the case may be, and the Paying Agent is not prohibited from
paying such money to the Holders on that date pursuant to the terms of this
Indenture, then on and after that date such Securities (or portions thereof)
cease to be outstanding and interest on them ceases to accrue. 

19 

     Section 2.11. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and dispose of such Securities in accordance with its internal
policies (subject to the record retention requirements of the Exchange Act), and
certification of their cancellation shall be delivered to the Company promptly
upon receipt by the Trustee of a Company Request. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation for any reason other than in connection with a transfer or
exchange. 

     Section 2.12. Payment of Interest; Defaulted Interest. Unless otherwise provided as contemplated by
Section 2.1 with respect to the Securities of any series,
interest and Additional Amounts, if any, on any Security of such series 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 such Security (or one or more
predecessor Securities) is registered at the close of business on the regular
record date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 2.8. 

     Unless otherwise provided as contemplated
by Section 2.1 with respect to the Securities of any series, any
interest and Additional Amounts, if any, on any Security of such series which is
payable, but is not paid when the same becomes due and payable and such
nonpayment continues for a period of 30 days shall forthwith cease to be payable
to the Holder on the regular record date, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate provided for
in the Securities therefor (such defaulted interest and interest thereon herein
collectively called “Defaulted
Interest”) shall be paid by the
Company, at its election in each case, as provided in clause (a) or (b) below:

     (a) The Company may elect to make
payment of any Defaulted Interest to the Persons in whose names the Securities
(or their respective predecessor Securities) are registered at the close of
business on a Special Record Date (as defined below) for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date (not less than 30 days after such
notice) of the proposed payment (the “Special Interest Payment Date”), and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest,
which date shall be not more than 15 days and not less than 10 days prior to the
Special Interest Payment Date 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 and Special Interest Payment Date therefor
to be given in the manner provided for in Section 11.2, 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 and Special Interest
Payment Date therefor having been so given, such Defaulted Interest shall be
paid on the Special Interest Payment Date to the Persons in whose names the
Securities (or their respective predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b). 

20 

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

     (c) The Trustee shall not at any
time be under any duty or responsibility to any Holder to determine the
Defaulted Interest, or with respect to the nature, extent, or calculation of the
amount of Defaulted Interest owed, or with respect to the method employed in
such calculation of the Defaulted Interest. 

     Subject to the foregoing provisions of
this Section 2.12, 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 and Additional Amounts, if any, each
as accrued and unpaid, and to accrue, which were carried by such other Security.

     Section 2.13. Temporary Securities.
Until definitive Securities of any series are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities of such
series. Temporary Securities shall be substantially in the form of definitive
Securities, but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until so exchanged, the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.

     Section 2.14. Persons Deemed Owners. The
Company, the Trustee, any Agent and any authenticating agent may treat the
Person in whose name any Security is registered as the owner of that Security
for the purpose of receiving payments of principal of, premium (if any) or
interest on, or any Additional Amounts with respect to, that Security and for
all other purposes. None of the Company, the Trustee, any Agent or any
authenticating agent shall be affected by any notice to the contrary.

     Section 2.15. Computation of Interest.
Except as otherwise provided as contemplated by Section 2.1 with respect to the Securities of any series, interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.

21 

    
Section 2.16. Global Securities; Book-Entry Provisions. If Securities of a
series are issuable in global form as a Global Security, as contemplated by
Section 2.1, then, notwithstanding clause (11) of Section 2.1 and the provisions
of Section 2.2, any such Global Security shall represent those of the
outstanding Securities of that series as shall be specified therein and may
provide that it shall represent the aggregate amount of outstanding Securities
of that series from time to time endorsed thereon and that the aggregate amount
of outstanding Securities of that series represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, transfers or
redemptions. Any endorsement of a Global Security to reflect the amount, or any
increase or decrease in the amount, of outstanding Securities of that series
represented thereby shall be made by the Trustee (i) in such manner and upon
instructions given by such Person or Persons as shall be specified in that
Security or in a Company Order to be delivered to the Trustee pursuant to
Section 2.4 or (ii) otherwise in accordance with written
instructions or such other written form of instructions as is customary for the
Depositary for that Security, from that Depositary or its nominee on behalf of
any Person having a beneficial interest in that Global Security. Subject to the
provisions of Section
2.4 and, if applicable,
Section 2.13, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon written instructions
given by the Person or Persons specified in that Security or in the applicable
Company Order. With respect to the Securities of any series that are represented
by a Global Security, the Company authorizes the execution and delivery by the
Depositary appointed with respect to that Global Security. Any Global Security
may be deposited with the Depositary or its nominee, or may remain in the
custody of the Trustee or the Security Custodian therefor pursuant to a FAST
Balance Certificate Agreement or similar agreement between the Trustee and the
Depositary. If a Company Order has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 11.5 and need not be accompanied by an Opinion of
Counsel. 

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

     Notwithstanding Section 2.8, and except as otherwise provided pursuant to Section 2.1, transfers of a Global Security shall be limited to transfers of that
Global Security in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Security
may be transferred in accordance with the rules and procedures of the
Depositary. Securities of any series shall be transferred to all beneficial
owners of a Global Security of that series in exchange for their beneficial
interests in that Global Security if, and only if, either (1) the Depositary
notifies the Company that it is unwilling or unable to continue as depositary
for such Global Security or the Depositary ceases to be a clearing agency
registered under the Exchange Act, at a time when the Depositary is required to
be so registered in order to act as depositary, and, in either case, a successor
depositary is not appointed by the Company within 90 days of such notice, (2)
the Company, at its option, notifies the Trustee in writing that it elects to
cause the issuance of definitive Securities or (3) a Default or Event of Default
has occurred and is continuing with respect to the Securities. 

22 

     In
connection with any transfer of a portion of the beneficial interests in a
Global Security to beneficial owners pursuant to this Section 2.16, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the Global Security
in an amount equal to the principal amount of the beneficial interest in the
Global Security to be transferred, and the Company shall execute and the Trustee
on receipt of a Company Order for the authentication and delivery of Securities
shall authenticate and deliver, one or more Securities of the same series of
like tenor and amount. 

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

     Neither the Company, nor the Trustee will
have any responsibility or liability for any aspect of the records relating to,
or payments made on account of, Securities by the Depositary, or for
maintaining, supervising or reviewing any records of the Depositary relating to
those Securities, or for any other actions taken or not taken by the Depositary.
Neither the Company nor the Trustee shall be liable for any delay by the related
Global Security Holder or the Depositary in identifying the beneficial owners,
and each such Person may conclusively rely on, and shall be protected in
conclusively relying on, instructions from that Global Security Holder or the
Depositary for all purposes (including with respect to the registration and
delivery, and the respective principal amounts, of the Securities to be issued).

     The provisions of the last sentence of
the third paragraph of Section
2.4 shall apply to any Global
Security if that Global Security was never issued and sold by the Company and
the Company delivers to the Trustee the Global Security together with written
instructions (which need not comply with Section 11.5 and need not
be accompanied by an Opinion of Counsel) with regard to the cancellation or
reduction in the principal amount of Securities represented thereby, together
with the written statement contemplated by the last sentence of the third
paragraph of Section
2.4. 

     Notwithstanding the provisions of
Sections 2.3 and
2.12, unless otherwise specified
as contemplated by Section
2.1 with respect to Securities of
any series, payment of principal of and premium (if any) and interest on and any
Additional Amounts with respect to any Global Security shall be made to the
Person or Persons specified therein. 

     Section 2.17. CUSIP Numbers, Etc. The
Company in issuing the Securities of any series may use CUSIP numbers (if then
generally in use) and, if so, the Trustee shall use CUSIP, ISIN and Common Code
numbers in notices of redemption as a convenience to Holders of Securities of
such series; provided, however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities of such series
or as contained in any notice of a redemption and that reliance may be placed
only on the other identification numbers printed on the Securities of such
series, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee in
writing of any change in the CUSIP, ISIN and Common Code numbers. 

23 

     Section 2.18. Original Issue Discount and Foreign-Currency
Denominated Securities. In
determining whether the Holders of the required principal amount of outstanding
Securities have concurred in any direction, amendment, supplement, waiver or
consent, unless otherwise provided as contemplated by Section 2.1 with respect to the Securities of any series, (a) the principal amount
of an Original Issue Discount Security of such series shall be the principal
amount thereof that would be due and payable as of the date of that
determination upon acceleration of the Maturity thereof pursuant to
Section 6.2, and (b) the principal amount of a Security of
such series denominated in a foreign currency shall be the Dollar equivalent, as
determined by the Company by reference to the noon buying rate in The City of
New York for cable transfers for that currency, as that rate is certified for
customs purposes by the Federal Reserve Bank of New York (the “Exchange Rate”) on the date of original issuance of that
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent, as determined by the Company by reference to
the Exchange Rate on the date of original issuance of that Security, of the
amount determined as provided in (a) above), of that Security. 

ARTICLE III 

Covenants 

     Section 3.1. Payment of Securities. The Company shall promptly pay no later than
10:00 a.m. New York City time the principal of, premium, if any, on, and
interest and Additional Amounts, if any, on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal, premium,
if any, interest and Additional Amounts, if any, shall be considered paid on the
date due if on such date the Trustee or the Paying Agent holds in accordance
with this Indenture immediately available funds sufficient to pay all principal,
premium and interest and Additional Amounts, if any, then due and the Trustee or
Paying Agent, as the case may be, is not prohibited from paying money to the
Holders on that date pursuant to the terms of this Indenture. 

     The Company shall pay interest on overdue
principal at the rate specified therefor in the Securities, and it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful. 

     Notwithstanding anything to the contrary
contained in this Indenture, the Company may, to the extent it is required to do
so by law, deduct or withhold income or other similar taxes imposed by the
United States of America from principal or interest payments hereunder.

     Section 3.2. Reports. So long as the
Securities of any series are outstanding, the Company shall: 

     (1) furnish to the Trustee, within 15 days after the Company files the same
with the SEC, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the SEC may
from time to time by rules and regulations prescribe) which the Company files
with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act;
provided, however, that any such information, document or report filed with the
SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval (or EDGAR)
system or any successor thereto shall be deemed to be filed with the Trustee;
provided, however, that the Trustee shall have no responsibility whatsoever to
determine whether such filing has occurred; and 

     (2)
comply with the other provisions of
TIA § 314(a). 

24 

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

     Section 3.3. Maintenance of Office or Agency. The Company will maintain in the United States
of America an office or agency for any series of Securities where such
Securities may be presented or surrendered for payment, where, if applicable,
the 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 that series and this Indenture may be served. The designated
corporate trust office of the Trustee at the address of the Trustee specified in
Section 11.2 hereof, or such other address as the Trustee may
designate from time to time by notice to the Holders and the Company, or the
designated corporate trust office of any successor Trustee, or such other
address as such successor Trustee may designate from time to time by notice to
the Holders and the Company (the “Corporate Trust Office”)
shall be such office or agency of the Company, unless the Company shall
designate and maintain some other office or agency for one or more of such
purposes. The Company will give prompt written notice to the Trustee of any
change in the location of any 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 any such designation; 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 the United States of America for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and any
change in the location of any such other office or agency. 

     Section 3.4. Corporate Existence.
Subject to Article
IV, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence. This Section 3.4 shall not
prohibit or restrict the Company from converting into a different form of legal
entity. 

25 

     Section 3.5. Maintenance of Properties. The Company will cause all properties used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in
this Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.

     Section 3.6. Payment of Taxes and Other Claims. The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges in excess of $250,000 levied or imposed upon the Company or
any Subsidiary or upon the income, profits or property of the Company or any
Subsidiary, and (2) all lawful claims for labor, materials and supplies in
excess of $250,000 which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings. 

     Section 3.7. Limitation on Liens. (a)
The Company will not, and will not permit any Restricted Subsidiary to, issue,
assume or guarantee any Indebtedness secured by any mortgage, security interest,
pledge, lien or other encumbrance (such mortgages, security interests, pledges,
liens and other encumbrances being hereinafter called a “Mortgage” or
“Mortgages”) upon any Operating Property or Operating Asset of the Company or
any Restricted Subsidiary, whether such Operating Property or Operating Asset is
now owned or hereafter acquired, without in any such case effectively providing
concurrently with the issuance, assumption or guarantee of any such Indebtedness
that the Securities (together with, if the Company shall so determine, any other
Indebtedness ranking equally with such Securities other than Securities not
having the benefit of this provision) shall be secured equally and ratably with
such Indebtedness; provided, however, that the foregoing restrictions shall not prevent, restrict or apply
to: 

     (a) (A)
the giving, simultaneous with or within 180 days after the later of (1) the
acquisition or completion of construction or completion of substantial
reconstruction, renovation, remodeling, expansion or improvement (each a
“substantial improvement”) of such property, or (2) the placing in operation of
such property after the acquisition or completion of any such construction or
substantial improvement, of any purchase money Mortgage on such property
(including security for inventory financing in the ordinary course of business
and vendors’ rights under purchase contracts under an agreement whereby title is
retained for the purpose of securing the purchase price thereof) whether
occurring prior to or after the date of this Indenture, or (B) the acquiring
hereafter of property not theretofore owned by the Company or such Restricted
Subsidiary subject to any then existing Mortgage securing Indebtedness (whether
or not assumed), including, in each case, Indebtedness incurred for
reimbursement of funds previously expended for any such purpose; provided, however, that, in each case, (y) such Mortgage is limited
to any or all of (1) such acquired or constructed property or substantial
improvement (including accretions thereto), (2) the real property on which any
construction or substantial improvement occurs or (3) with respect to
distribution centers, any equipment used directly in the operation of, or the
business conducted on, the real property on which any construction or
substantial improvement occurs, and (z) the total amount of the Indebtedness
secured by such Mortgage, together with all other Indebtedness to Persons other
than the Company or a Restricted Subsidiary secured by Mortgages on such
Mortgaged property, shall not exceed the lesser of (A) the total cost of such
Mortgaged property, including any such construction or substantial improvement,
to the Company or a Restricted Subsidiary or (B) the fair market value thereof
immediately following the acquisition, construction or substantial improvement
thereof by the Company or a Restricted Subsidiary; 

26 

     (b)
the giving by the Company or a Restricted
Subsidiary of a Mortgage on real property or, with respect to distribution
centers, on equipment used directly in the operation of, or the business
conducted on, such real property which is the sole security for Indebtedness (1)
incurred within three years after the latest of (A) the date of issuance of the
first Series of Securities hereunder, (B) the date of acquisition of such real
property or (C) the date of completion of construction or substantial
improvement made thereon, (2) incurred for the purpose of reimbursing itself for
the cost of acquisition and/or cost of improvement of such real property and
equipment, (3) the amount of which does not exceed the lesser of the aggregate
cost of such real property, improvements and equipment or the fair market value
thereof, and (4) the holder of which shall be entitled to enforce payment of
such Indebtedness solely by resorting to the security therefor, without any
liability on the part of the Company or such Restricted Subsidiary for any
deficiency; 

     (c) Any
Mortgage (1) existing on the date of this Indenture, (2) on the assets of a
Restricted Subsidiary existing on the date it became a Subsidiary or (3) on the
assets of a Subsidiary that is newly designated as a Restricted Subsidiary, if
such Mortgage would have been permitted under this Section 3.7(a) if such
Mortgage was created while such Subsidiary was a Restricted
Subsidiary; 

     (d) Any
Mortgage given in favor of the Company or any Restricted
Subsidiary; 

     (e) Any
Mortgage given as security for the Indebtedness issued hereunder; or 

     (f) Any
Mortgage incurred in connection with any refinancing, extension, renewal or
replacement of Indebtedness secured by a Mortgage permitted under clauses (i) to
(v) above; provided, that the
principal amount of the extended, renewed, refinanced or replaced Indebtedness
does not exceed the principal amount of the Indebtedness so refinanced,
extended, renewed or replaced, plus transaction costs and fees, and that such
Mortgage applies only to the same property or assets subject to the prior
permitted Mortgage (and, in the case of real property improvements). 

27 

     (b) Notwithstanding the
provisions of subsection (a) of this Section 3.7, the Company or any Restricted
Subsidiary may, in addition to Mortgages permitted by subsection (a) of this
Section 3.7, create or assume and renew, extend or replace Mortgages which would
otherwise be subject to such subsection (a), provided that at the time of such
creation, assumption, renewal, extension or replacement, and after giving effect
thereto, Exempted Debt does not exceed 15% of Consolidated Net Tangible Assets.

     Section 3.8. Limitation on Sale and Leaseback Transactions. 

     (a) Without equally and ratably
securing the Securities (together with, if the Company so determines, any other
Indebtedness ranking equally with the Securities), the Company will not, nor
will it permit any Restricted Subsidiary to, enter into any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary of
any Operating Property or Operating Asset now owned or hereafter acquired that
has been or is to be sold or transferred by the Company or such Restricted
Subsidiary to such Person with the intention of taking back a lease of such
property (a “Sale and Leaseback Transaction”) unless the terms of such sale or
transfer have been determined by the Board of Directors to be fair and arms’
length and (i) within 180 days after the receipt of the proceeds of such sale or
transfer, the Company or such Restricted Subsidiary applies an amount equal to
the greater of the net proceeds of such sale or transfer or the fair value of
such Operating Property or Operating Asset at the time of such sale or transfer
to the prepayment or retirement (other than any mandatory prepayment or
retirement) of Senior Funded Debt of the Company or any Restricted Subsidiary,
or (ii) the Company or such Restricted Subsidiary would be entitled, at the
effective date of such sale or transfer, to incur Indebtedness secured by a
Mortgage on such Operating Property or Operating Asset, in an amount at least
equal to the Attributable Debt in respect thereof, without equally and ratably
securing the Securities pursuant to the provisions of Section 3.7, above. The
foregoing restriction shall not apply to any Sale and Leaseback Transaction for
a term of not more than three years including renewals, (x) any Sale and
Leaseback Transaction with respect to Operating Property and, with respect to
distribution centers, equipment used directly in the operation of, or the
business conducted on, such Operating Property) if a binding commitment is
entered into with respect to said Sale and Leaseback Transaction within three
years after the latest of (1) the date of issuance of the first Series of
Securities hereunder or (2) the date when such Operating Property was acquired
(as the term “acquired” is used in the definition of Operating Property), any
Sale and Leaseback Transaction with respect to Operating Assets if a binding
commitment with respect thereto is entered into within 180 days after the later
of the date such property was acquired and, if applicable, the date such
property was first placed in operation, or (z) any Sale and Leaseback
Transaction between the Company and any Restricted Subsidiary or between
Restricted Subsidiaries provided that the lessor shall be the Company or a
Wholly Owned Restricted Subsidiary.

28 

     (b) Notwithstanding the provisions of subsection (a)
of this Section 3.8, the Company or any Restricted Subsidiary may, in addition
to Sale and Leaseback Transactions permitted by subsection (a) of this Section
3.8, enter into Sale and Leaseback Transactions without any obligation to retire
any Senior Funded Debt of the Company or a Restricted Subsidiary; provided that,
at the time of entering into such Sale and Leaseback Transactions, and after
giving effect thereto, Exempted Debt does not exceed 10% of Consolidated Net
Tangible Assets. 

     Section 3.9. Limitations Upon Permitting Restricted Subsidiaries to
become Unrestricted Subsidiaries and Unrestricted
Subsidiaries to become Restricted Subsidiaries.

     (a) The Company will not permit
any Restricted Subsidiary to be designated as or otherwise to become an
Unrestricted Subsidiary unless immediately after such Restricted Subsidiary
becomes an Unrestricted Subsidiary, such Unrestricted Subsidiary will not own,
directly or indirectly, any capital stock of any other Restricted Subsidiary or
any Mortgage on property of any other Restricted Subsidiary. 

     (b) The Company will not permit
any Unrestricted Subsidiary that has previously been a Restricted Subsidiary to
be designated as a Restricted Subsidiary unless such Unrestricted Subsidiary
shall not, at any time after it ceased to be a Restricted Subsidiary, have
participated in any Sale and Leaseback Transaction involving any Operating
Property or Operating Asset owned by such Subsidiary, the Company or any
Restricted Subsidiary (other than in a transaction permitted under Section 3.8
for such Subsidiary if it had been a Restricted Subsidiary at the time), unless
the Operating Property or Operating Asset involved in such transaction shall no
longer be leased by the Company or any Restricted Subsidiary or such Subsidiary
or shall be owned by the Company or a Wholly Owned Restricted Subsidiary;

     (c) Promptly after the adoption
of any Board Resolution designating a Restricted Subsidiary as an Unrestricted
Subsidiary or an Unrestricted Subsidiary as a Restricted Subsidiary, or the
making of an election by duly authorized Officers of the Company to effect any
such designation, a copy of such Board Resolution or a written statement as to
such designation signed by such Officers shall be filed with the Trustee,
together with an Officers’ Certificate stating that the provisions of this
Section 3.9 have been complied with in connection with such designation, and, in
case of the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary, setting forth the name of each other Subsidiary (if any) that has
become an Unrestricted Subsidiary as a result of such designation. 

     Section 3.10. Compliance Certificate.
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 signatories of
which shall be the principal executive officer, the principal financial officer
or the principal accounting officer of the Company, stating that in the course
of the performance by the signers of their duties as Officers of the Company
they would normally have knowledge of any Default or Event of Default and
whether or not the signers know of any Default or Event of Default that occurred
during such period. If they do, the certificate shall describe the Default or
Event of Default, its status and what action the Company is taking or proposes
to take with respect thereto. The Company also shall comply with TIA §
314(a)(4). 

29 

     Section 3.11. Statement by Officers as to
Default. So long as Securities of
any series are outstanding, the Company shall deliver to the Trustee, as soon as
possible and in any event within 5 Business Days after the Company becomes aware
of the occurrence of any Event of Default or Default with respect to that series
an Officers’ Certificate setting forth the details of such Event of Default or
Default and the action which the Company is taking or proposes to take in
respect thereof. 

     Section 3.12. Additional Amounts. If the
Securities of a series expressly provide for the payment of Additional Amounts,
the Company will pay to the Holder of any Security of that series Additional
Amounts as expressly provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or the net proceeds
received from the sale or exchange of any Security of any series, that mention
shall be deemed to include mention of the payment of Additional Amounts provided
for in this Section
3.7 to the extent that, in that
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section 3.7, and express
mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where that express mention is not made. 

     Unless otherwise provided pursuant to
Section 2.1 with respect to Securities of any series, if the
Securities of a series provide for the payment of Additional Amounts, at least
ten days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least ten days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers’ Certificate, the Company shall furnish
the Trustee and the Company’s principal Paying Agent or Paying Agents, if other
than the Trustee, with an Officers’ Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether that payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series who are United States Aliens without withholding for
or on account of any tax, assessment or other governmental charge described in
the Securities of that series. If any such withholding shall be required, then
that Officers’ Certificate shall specify by country the amount, if any, required
to be withheld on those payments to those Holders of Securities, and the Company
will pay to that Paying Agent the Additional Amounts required by this Section.
The Company covenants to indemnify the Trustee and any Paying Agent for and to
hold them harmless against any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them in reliance on any Officers’
Certificate furnished pursuant to this Section 3.7. 

     Section 3.13. Calculation of Original Issue Discount. If the Securities are issued with original issue
discount, the Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time. 

30 

ARTICLE IV 

Successors 

     Section 4.1. Merger, Consolidation or Sale of
Assets. The Company shall not
consolidate or combine with or merge with or into or, directly or indirectly,
sell, assign (excluding any
assignment solely as collateral for security purposes under a credit facility
but not any outright assignment upon the foreclosure of any such collateral),
convey, lease, transfer or otherwise dispose of all or substantially all of its
assets to any Person or Persons in a single transaction or through a series of
related transactions, unless: 

     (1) the
Company shall be the successor or continuing Person or, if the Company is not
the successor or continuing Person, the resulting, surviving or transferee
Person (the “Surviving
Entity”) is a company organized
and existing under the laws of the United States, any State thereof or the
District of Columbia that expressly assumes all of the Company’s obligations
under the Securities and this Indenture pursuant to a supplement hereto executed
and delivered to the Trustee; 

     (2) immediately after giving effect to such transaction or series of related
transactions, no Event of Default has occurred and is continuing;
and 

     (3) the
Company or the Surviving Entity shall have delivered to the Trustee an Officers’
Certificate and Opinion of Counsel stating that the transaction or series of
related transactions and any supplement hereto complies with the terms of this
Indenture and constitutes the legal, valid and binding obligation of the Company
or the Surviving Entity, enforceable against it in accordance with its terms.

     If any consolidation or merger or any
sale, assignment, conveyance, lease, transfer or other disposition of all or
substantially all of its assets occurs in accordance with the terms hereof, the
Surviving Entity shall succeed to, and be substituted for, and may exercise
every right and power of the Company under this Indenture with the same effect
as if such Surviving Entity had been named as the Company. The Company shall
(except in the case of a lease) be discharged from all obligations and covenants
under this Indenture and any Securities issued hereunder, and may be liquidated
and dissolved. 

ARTICLE V 

Redemption of
Securities 

     Section 5.1. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and (except as otherwise provided as contemplated
by Section 2.1 with respect to the Securities of any series)
this Article V. 

31 

     Section 5.2. Election to Redeem; Notice to
Trustee. In case of any
redemption of any series of Securities at the election of the Company, the
Company shall notify the Trustee in writing at least 45 days prior to such
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee)
and of the principal amount of Securities to be redeemed and shall deliver to
the Trustee such documentation and records as shall enable the Trustee to select
the Securities of such series to be redeemed pursuant to Section 5.3. 

     Section 5.3. Selection by Trustee of Securities to Be Redeemed. If fewer than all of the Securities of any
series are to be redeemed at any time, the Trustee will, subject to applicable
law, select Securities of any series for redemption as follows: 

     (1) if the
Securities are listed on any national securities exchange, in compliance with
the requirements of the principal national securities exchange on which the
Securities are listed; or 

     (2) if the
Securities are not listed on any national securities exchange, in accordance
with the procedures of DTC. 

     Section 5.4. Notice of Redemption.
Notice of redemption shall be given in the manner provided for in
Section 11.2 not less than 30 nor more than 60 days prior to
the Redemption Date, to each Holder of Securities to be redeemed, except that
redemption notices may be given more than 60 days prior to a Redemption Date if
such notice is issued in connection with a defeasance of the Securities or a
satisfaction and discharge of this Indenture. Notice of any redemption may, at
the Company’s discretion, be subject to one or more conditions precedent. The
Trustee shall give notice of redemption in the Company’s name and at the
Company’s expense; provided, however, that the Company shall deliver to the Trustee, at least 45 days prior
to the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee), an Officers’ Certificate requesting that the Trustee give such notice
at the Company’s expense and setting forth the information to be stated in such
notice as provided in the following items. 

     All notices of redemption shall state:

     (1) the
Redemption Date; 

     (2) the
redemption price and the amount of accrued interest and Additional Amounts, if
any, to the Redemption Date payable as provided in Section 5.6; 

     (3) if
less than all outstanding Securities are to be redeemed, the identification of
the particular Securities (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities to be outstanding after such partial
redemption; 

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

32 

     (5)
that on the Redemption Date the
redemption price (and accrued interest, if any, to the Redemption Date payable
as provided in Section
5.6) will become due and payable
upon each such Security, or the portion thereof, to be redeemed, and, unless the
Company defaults in making the redemption payment, that interest and Additional
Amounts, if any, on Securities (or the portions thereof) called for redemption
will cease to accrue on and after said date; 

     (6) the
place or places where such Securities are to be surrendered for payment of the
Redemption Price and accrued interest, if any; 

     (7) the
name and address of the Paying Agent; 

     (8) that
Securities called for redemption (other than a Global Security) must be
surrendered to the Paying Agent to collect the redemption
price; 

     (9) the
CUSIP, ISIN or Common Code number, and may state that no representation is made
as to the accuracy or correctness of the CUSIP, ISIN or Common Code number, if
any, listed in such notice or printed on the Securities; and 

     (10) the
section of this Indenture and the paragraph of the Securities pursuant to which
the Securities are to be redeemed. 

Any redemption and notice
thereof pursuant to this Indenture may, in the Company’s discretion, be subject
to the satisfaction of one or more conditions. 

     Section 5.5. Deposit of Redemption Price. Not later than 10:00 a.m. New York City time on
the 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
2.6) an amount of money
sufficient to pay the redemption price of, and accrued interest and Additional
Amounts, if any, on, all the Securities which are to be redeemed on that date.

     Section 5.6. Securities Payable on Redemption Date. Notice of redemption having been given as
aforesaid, unless the notice of redemption is subject to one or more conditions
precedent which have not been satisfied, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the redemption price therein
specified (together with accrued and unpaid interest and Additional Amounts, if
any, to the Redemption Date), and from and after such date (unless the Company
shall default in the payment of the redemption price and accrued interest and
Additional Amounts, if any) such Securities shall cease to bear interest and
Additional Amounts, if any. 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 and unpaid interest and Additional
Amounts, if any, to the Redemption Date (subject to the rights of Holders of
record on the relevant record date to receive interest and Additional Amounts,
if any, due on an interest payment date that is on or prior to the Redemption
Date). 

33 

     If
any Security called for redemption shall not be so paid upon surrender thereof
for redemption, the principal (and premium, if any) shall, until paid, bear
interest and Additional Amounts, if any, from the Redemption Date at the rate
borne by the Securities. 

     Section 5.7. Securities Redeemed in Part. Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article
V) shall be surrendered at the
office or agency of the Company maintained for such purpose pursuant to
Section 2.5 (with, if the Company or the Trustee so require,
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 such
Holder’s attorney duly authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and make available for delivery to the Holder
of such Security at the expense of the Company, a new Security or Securities, of
any authorized denomination as requested by such Holder, in an aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered, provided that each such
new Security will be in a principal amount of $1,000 or integral multiple
thereof. No Securities of $1,000 or less may be redeemed in part. 

ARTICLE VI 

Defaults and
Remedies 

     Section 6.1. Events of Default. Unless
either inapplicable to a particular series or specifically deleted or modified
in or pursuant to the supplemental indenture, Board Resolution, Officers’
Certificate or Company Order establishing such series of Securities or in the
form of Security for such series, each of the following constitutes an
“Event of Default,” wherever used herein with respect to Securities
of any series: 

     (1) the
failure to pay any installment of interest or any Additional Amounts on any
Security of that series when the same becomes due and payable and the default
continues for a period of 30 days; 

     (2) the
failure to pay the principal of or any premium on any Security of that series,
when such principal becomes due and payable, at maturity, upon redemption or
otherwise; 

     (3) a
default in the observance or performance of any other covenant or agreement
contained in this Indenture applicable to the Securities of that series or in
the Securities of that series which default continues for a period of 60 days
after the Company receives written notice specifying the default (and demanding
that such default be remedied) from the Trustee or the Holders of at least 25%
of the outstanding principal amount of the Securities of that series (except in
the case of a default with respect to Section 4.1, which will constitute an
Event of Default with such notice requirement but without such passage of time
requirement); 

34 

     (4)
the failure to pay at final maturity
(giving effect to any applicable grace periods and any extensions thereof) the
stated principal amount of any Indebtedness of the Company or any Restricted
Subsidiary of the Company, or the acceleration of the final stated maturity of
any such Indebtedness (which acceleration is not rescinded, annulled or
otherwise cured within 30 days of receipt by the Company or such Restricted
Subsidiary of notice of any such acceleration) if the aggregate principal amount
of such Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at final stated maturity or
which has been accelerated (in each case with respect to which the 30-day period
described above has elapsed), aggregates $25.0 million or more at any
time; 

     (5) one or
more judgments in an aggregate amount in excess of $25.0 million shall have been
rendered against the Company or any of its Restricted Subsidiaries and such
judgments remain undischarged, unpaid or unstayed for a period of 30 days after
such judgment or judgments become final and non-appealable; 

     (6) the
Company or any Subsidiary of the Company: 

     (i) commences a voluntary case under any Bankruptcy Law, 

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

     (iii) consents to the appointment of a custodian or receiver of it or for all
or substantially all of its property, 

     (iv) makes
a general assignment for the benefit of its creditors, or 

     (v) admits
in writing its inability to pay its debts as they become due;
or 

     (7) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that: 

     (i) is for
relief in an involuntary case against the Company or any Subsidiary of the
Company; 

     (ii) appoints a custodian or receiver of the Company or any Subsidiary or for
all or substantially all of the property of any of the
foregoing; 

     (iii) orders
the liquidation of the Company or any of its Subsidiaries; and the order or
decree remains unstayed and in effect for 60 consecutive days; 

35 

     (8)
the Company fails to deposit any
sinking fund payment, when due, in respect of any Security of that series;
or 

     (9) any
other Event of Default provided in or pursuant to this Indenture with respect to
Securities of that series. 

     Section 6.2. Acceleration. Except as
otherwise provided as contemplated by Section 2.1
with respect to the Securities of such series, if any Event of Default with
respect to any Securities of such series at the time outstanding (other than
those of the type described in clause (6) or (7) of Section 6.1) occurs and is
continuing, the Trustee may, and at the written direction of the Holders of at
least 25% in aggregate principal amount of outstanding Securities of such series
shall, declare the principal of all the Securities of that series, together with
all accrued and unpaid interest and Additional Amounts, if any, and premium, if
any, to be due and payable immediately by notice in writing to the Company and
the Trustee specifying the respective Event of Default and that such notice is a
notice of acceleration, and the same shall become immediately due and payable.

     Except as otherwise provided as
contemplated by Section
2.1 with respect to the
Securities of any series, in the case
of an Event of Default with respect to such series specified in clause (6) or (7) of Section 6.1 hereof, all
outstanding Securities of such series shall become due and payable immediately
without further action or notice by the Trustee or the Holders. Holders may not
enforce this Indenture or the Securities except as provided in this Indenture.

     Except as otherwise provided as
contemplated by Section
2.1 with respect to the
Securities of any series, at any time after a declaration of acceleration with
respect to the Securities of such series, the Holders of a majority in principal
amount of the Securities of that series then outstanding (by written notice to
the Trustee) may, on behalf of the Holders of all the Securities of that series,
rescind and cancel such declaration and its consequences if: 

     (1) the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction; 

     (2) all
existing Defaults and Events of Default with respect to Securities of that
series have been cured or waived except nonpayment of principal of or interest
on the Securities of that series that has become due solely by reason of such
declaration of acceleration; 

     (3) to the
extent the payment of such interest is lawful, interest (at the same rate
specified in the Securities of such series) on overdue installments of interest
and Additional Amounts, if any, and overdue payments of principal which has
become due otherwise than by such declaration of acceleration has been
paid; 

     (4) the
Company has paid the Trustee its compensation and reimbursed the Trustee for its
expenses, disbursements and advances; and 

     (5) in the
event of the cure or waiver of an Event of Default of the type described in
clause (6) or (7) of
Section 6.1, the Trustee has received an Officers’
Certificate and Opinion of Counsel that such Event of Default has been cured or
waived. 

36 

     Section 6.3. Other Remedies. If an Event of Default with respect to any
series occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal of (or premium, if any) or interest or
Additional Amounts, if any, on the Securities of such series or to enforce the
performance of any provision of the Securities of such series or this Indenture
with respect to such series. 

     The Trustee may maintain a proceeding
even if it does not possess any of the Securities or does not produce any of
them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative. 

     Section 6.4. Waiver of Past Defaults.
Except as otherwise provided as contemplated by Section 2.1 with respect to the Securities of any series, the Holders of a majority
in principal amount of the then outstanding Securities of such series by written
notice to the Trustee may, on behalf of the Holders of all the Securities of
such series, (a) waive, by their consent (including, without limitation consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Securities of such series), an existing Default or Event of Default, with
respect to such series and its consequences or compliance with any provisions
except (i) a Default or Event of Default in the payment of the principal of, or
premium, if any, or interest or Additional Amounts, if any, on a Security of
such series or (ii) a Default or Event of Default in respect of a provision that
under Section 9.2 cannot be amended without the consent of each
Holder affected and (b) rescind any such acceleration with respect to the
Securities of such series and its consequences if rescission would not conflict
with any judgment or decree of a court of competent jurisdiction. When a Default
or Event of Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
consequent right. 

     Section 6.5. Control by Majority. With
respect to Securities of any series, the Holders of a majority in principal
amount of the outstanding Securities of such series may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Sections
7.1 and 7.2, that the Trustee determines is unduly prejudicial to the rights of the
other Holders or would involve the Trustee in personal liability. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action. 

37 

     Section 6.6. Limitation on Suits.
Subject to Section
6.7, a Holder of a Security of
any series may not pursue any remedy with respect to this Indenture or the
Securities of such series unless: 

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

     (2)
Holders of at least 25% in aggregate
principal amount of the outstanding Securities of such series have requested in
writing that the Trustee pursue the remedy; 

     (3) such
Holders have offered to the Trustee security or indemnity satisfactory to it
against any loss, liability or expense; 

     (4) the
Trustee has not complied with such request within 60 days after receipt of the
request and the offer of security or indemnity; and 

     (5) the
Holders of a majority in principal amount of the outstanding Securities of such
series have not given the Trustee a direction that, in the opinion of the
Trustee, is inconsistent with such request within such 60-day period.

     A Holder may not use this Indenture to
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder (it being understood that the Trustee does not have an
affirmative duty to ascertain whether or not such actions or forbearances are
unduly prejudicial to such Holders). 

     Section 6.7. Rights of Holders to Receive Payment. Notwithstanding any other provision of this
Indenture (including, without limitation, Section 6.6), the right of
any Holder to receive payment of principal of, premium (if any) or interest or
Additional Amounts, if any, when due on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder. 

     Section 6.8. Collection Suit by Trustee. If an Event of Default specified in clauses (1) or (2) of Section 6.1 occurs and is
continuing with respect to Securities of any series, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together with interest on any unpaid
interest to the extent lawful) with respect to such series and the amounts
provided for in Section
7.7. 

     Section 6.9. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
the Holders allowed in any judicial proceedings relative to the Company, its
Subsidiaries or its or their respective creditors or properties and, unless
prohibited by law or applicable regulations, may vote on behalf of the Holders
in any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the compensation, expenses,
disbursements and advances of the Trustee, its agents and its counsel, and any
other amounts due the Trustee under Section 7.7. To the extent
that the payment of any such compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.7 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.

38 

     Section 6.10. Priorities. If the Trustee collects any money or property pursuant to this
Article VI, it shall pay out the money or property in the
following order:

     FIRST: to the Trustee and its counsel for amounts due
under this Indenture, including payment of all compensation, expenses and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;

     SECOND: to Holders for amounts due and unpaid on the
Securities in respect of which or for the benefit of which such money has been
collected, for principal, premium, if any, and interest and Additional Amounts,
if any, 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 and Additional Amounts, if any, respectively; and

     THIRD: to the Company or to such other party as a court
of competent jurisdiction may direct.

     The Trustee may fix a record date and
payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the
Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.

     Section 6.11. Undertaking for Costs. In
any suit for the enforcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion
may assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit
by the Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal amount of
the Securities of any series.

ARTICLE VII 

Trustee 

     Section 7.1. Duties
of Trustee. (a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person’s
own affairs; provided that if an Event of Default occurs and is continuing, the
Trustee will be under no obligation to exercise the rights or powers under this
Indenture at the request or direction of any of the Holders unless such Holders
have offered to the Trustee indemnity
or security against loss, liability or expense satisfactory to the Trustee in
its sole discretion.

39 

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

     (1) the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no others,
and no implied covenants or obligations shall be read into this Indenture
against the Trustee; and

     (2) in the
absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon certificates, opinions or orders furnished to the Trustee and conforming to
the requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine such
certificates and opinions to determine whether or not they conform on their face
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 may 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 7.1;

     (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 6.5.

     (d) Every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section
7.1.

     (e) The Trustee shall not be
liable for interest on any money received by it except as the Trustee may agree
in writing with the Company.

     (f) Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.

     (g) No provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its duties hereunder or
in the exercise of any of its rights or powers.

40

     (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 7.1 and to the provisions of the TIA.

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

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

     (k) In the absence of written
investment direction form the Company, all cash received by the Trustee shall be
placed in a non-interest bearing account and in no event shall Trustee be liable
for the selection of investments or for investment losses incurred thereon or
for losses incurred as a result of the liquidation of any such investment prior
to its maturity date or the failure of the party directing such investments
prior to its maturity date or the failure of the party directing such investment
to provide timely written investment direction, and the Trustee shall have no
obligation to invest or reinvest any amount held hereunder in the abase of such
written investment direction from the Company.

     (l) In the event Trustee is also
acting as Registrar, Paying Agent, or transfer agent hereunder, the rights and
protections afforded to the Trustee under this Indenture shall also be afforded
to such Registrar, Paying Agent or transfer agent.

     Section 7.2. Rights of Trustee. Subject
to Section 7.1:

     (a) The Trustee may conclusively
rely on any document (whether in its original or facsimile form) 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 the
document.

     (b) Before the Trustee acts or
refrains from acting, it may require an Officers’ Certificate and/or an Opinion
of Counsel. The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officers’ Certificate and/or Opinion 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 takes or omits to take in good faith which it believes
to be authorized or within the rights or powers conferred upon it by this
Indenture.

     (e) The Trustee may consult with
counsel of its selection, and the advice or opinion of counsel with respect to
legal matters relating to this Indenture and the Securities shall be full and
complete authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance with
the advice or opinion of such counsel.

41

     (f) The Trustee is not required to make any inquiry or
investigation into facts or matters stated in any document but the Trustee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit and, if the Trustee determines to make such further
inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company personally or by agent, in which case the Company shall
be responsible for the reasonable expenses of such investigation, or if
paid by Trustee then the Trustee shall be reimbursed by the Company upon
demand.

     (g) The Trustee is not required
to take notice and shall not be deemed to have notice of any Default or Event of
Default hereunder with respect to any series of Securities, unless a Trust
Officer of the Trustee has actual knowledge thereof or has received notice in
writing of such Default or Event of Default from the Company or the Holders of
at least 25% in aggregate principal amount of the Securities of such series then
outstanding and such notice references the Securities and this Indenture, and in
the absence of any such notice, the Trustee may conclusively assume that no such
Default or Event of Default exists.

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

     (i) In the event the Trustee
receives inconsistent or conflicting requests and indemnity from two or more
groups of Holders of Securities, each representing less than the aggregate
principal amount of Securities outstanding required to take any action
thereunder, the Trustee, in its sole discretion may determine what action, if
any, shall be taken.

     (j) The Trustee’s immunities and
protections from liability and its right to indemnification in connection with
the performance of its duties under this Indenture shall extend to the Trustee’s
officers, directors, agents, attorneys and employees and to the Trustee in each
of its capacities hereunder. Such immunities and protections and right to
indemnification, together with the Trustee’s right to compensation, shall
survive the Trustee’s resignation or removal, the discharge of this Indenture
and final payments of the Securities.

     (k) The permissive right of the
Trustee to take actions permitted by this Indenture shall not be construed as an
obligation or duty to do so.

     (l) The Trustee shall have no
duty to inquire as to the performance of the Company’s covenants
herein.

     (m) Any request or direction of
the Company mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution.

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

42

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

     Section 7.3. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.

     Section 7.4. 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, 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 this Indenture or
in any document issued in connection with the sale of the Securities or in the
Securities other than the Trustee’s certificate of authentication.

     Section 7.5. Notice of Defaults. If a
Default or Event of Default with respect to the Securities of any series occurs
and is continuing and if a Trust Officer has actual knowledge thereof, the
Trustee shall mail to each Holder of a Security of such series notice of the
Default or Event of Default within the later of 30 days after obtaining such
knowledge and 90 days after it occurs, unless the Default was already cured or
waived. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest or Additional Amounts, if any, on any
Security of any series, the Trustee may withhold the notice if it in good faith
determines that withholding the notice is in the interests of Holders of such
series.

     Section 7.6. Reports by Trustee to Holders. Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture and for so long as the Securities of any series
remain outstanding, the Trustee shall mail to each Holder of Securities of such
series a brief report dated as of such reporting date that complies with TIA §
313(a). The Trustee also shall comply with TIA § 313(b). The Trustee shall also
transmit by mail all reports required by TIA § 313(c).

     A copy of each report at the time of its
mailing to Holders of Securities of any series shall be filed with the SEC and
each stock exchange (if any) on which the Securities of such series are listed.
The Company agrees to notify promptly the Trustee in writing whenever the
Securities of any series become listed on any stock exchange and of any
delisting thereof.

43

     Section
7.7. Compensation and Indemnity. The Company shall pay to the Trustee from time to time such compensation for its acceptance
of this Indenture and services hereunder as the Company and the Trustee shall from time to time agree in writing. The Trustee’s
compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, costs of
preparing and reviewing reports, certificates and other documents, costs of mailing of notices to Holders, in addition to the
compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances
of the Trustee’s agents, counsel, accountants and experts. The Company shall indemnify the Trustee (and its agents, officers
and employees) against any and all losses, liabilities, damages, claims, penalties, fines or expenses (including reasonable
attorneys’ and agents’ fees and expenses) (for purposes of this Section 7.7, “losses”) incurred by
it in connection with the administration of this trust and the performance of its duties hereunder, including the costs and expenses
of enforcing this Indenture (including this Section 7.7) and of defending itself
against any claims (whether asserted by any Holder, the Company or otherwise), except to the extent such losses may be attributable
to its negligence or willful misconduct as determined by a court of competent jurisdiction. The
indemnification herein shall extend to settlements. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its 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 shall not be required to pay such fees and expenses if it assumes the Trustee’s defense, and, in the reasonable
judgment of outside counsel to the Trustee, there is no conflict of interest between the Company and the Trustee in connection
with such defense. The Company shall not be under any obligation to pay for any written settlement without its consent, which
consent shall not be unreasonably delayed, conditioned or withheld. The Company need not reimburse any expense incurred by the
Trustee through the Trustee’s own willful misconduct or gross negligence.

     To secure the Company’s payment
obligations in this Section
7.7, the Trustee shall have a
lien prior to the Securities on all money or property held or collected by the
Trustee other than money or property held in trust to pay principal of, interest
and Additional Amounts, if any, on particular Securities.

     The Company’s payment obligations
pursuant to this Section
7.7 shall survive the discharge
of this Indenture, the resignation or removal of the Trustee and payment in full
of the Securities. When the Trustee incurs expenses after the occurrence of a
Default specified in clauses (6)
or (7) of Section 6.1 with respect to the Company, the expenses are intended to constitute
expenses of administration under any Bankruptcy Law.

     Section 7.8. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company. The Holders of a
majority in principal amount of the then outstanding Securities of any series
may remove the Trustee with respect to the Securities of such series by so
notifying the Trustee and may appoint a successor Trustee. The Company shall
remove the Trustee if:

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

     (2) the
Trustee is adjudged bankrupt or insolvent;

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

     (4) the
Trustee otherwise becomes incapable of acting.

44

     If
the Trustee resigns or is removed by the Company or by the Holders of a majority
in principal amount of the then outstanding Securities of any series and such
Holders of such series do not reasonably promptly appoint a successor Trustee,
or if a vacancy exists in the office of the Trustee for any reason (the Trustee
in such event being referred to herein as the retiring Trustee), the Company
shall promptly appoint a successor Trustee with respect to such
series.

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

     If the Trustee with respect to the
Securities of a series fails to comply with Section 7.10, unless the Trustee’s duty to resign is stayed as
provided in TIA § 310(b), any Holder who has been a bona fide Holder of a
Security of such series for at least six months may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to such series.

     In case of the appointment of a successor
Trustee with respect to all Securities, each such successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee, to the
Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, power and
duties of the retiring Trustee under this Indenture. The successor Trustee shall
mail a notice of its succession to Holders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section
7.7.

     In case of the appointment of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more (but not all) series shall execute and deliver an
indenture supplemental hereto in which each successor Trustee shall accept such
appointment and that (1) shall confer to each successor Trustee all the rights,
powers and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
confirm that all the rights, powers and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee. Nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust, and each
such Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee. Upon
the execution and delivery of such supplemental indenture, the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee shall have all the rights, powers and
duties of the retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates. On request of
the Company or any successor Trustee, such retiring Trustee shall transfer to
such successor Trustee all property held by such retiring Trustee as Trustee
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates. Such retiring Trustees shall, however, have the right to deduct its unpaid fees and expenses,
including, without limitation, reasonable attorneys’ fees and expenses.

45

     Notwithstanding the replacement of the Trustee pursuant to this
Section 7.8, the Company’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

     So long as no Event of Default, or no
event which is, or after notice or lapse of time, or both, would become, an
Event of Default, shall have occurred and be continuing, and except with respect
to a Trustee appointed by the act of the Holders of a majority in principal
amount of then outstanding Securities of any series, if the Company shall have
delivered to the Trustee (1) a Board Resolution appointing a successor Trustee,
effective as of a date specified therein, and (2) an instrument of acceptance of
such appointment, effective as of such date, by such successor Trustee, then the
Trustee shall be deemed removed, the successor Trustee shall be deemed to have
been appointed by the Company and such appointment shall be deemed to have been
accepted as contemplated, all as of such date, and all other provisions of this
Section 7.8 shall be applicable to such removal, appointment
and acceptance except to the extent inconsistent with this
subsection.

     Section 7.9. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee. The
predecessor Trustee shall have no liability for any action or inaction by any
successor Trustee.

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

     Section 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA §
310(a). The Trustee shall have a combined capital and surplus of at least $50.0
million as set forth in its most recent published annual report of condition.
The Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation
of TIA § 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1)
are met.

     Section 7.11. 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.

46

ARTICLE VIII 

Legal Defeasance and
Covenant Defeasance 

     Section 8.1. Option to Effect Legal Defeasance or Covenant
Defeasance. Unless otherwise
designated pursuant to Section
2.1(20), the Securities of any
series shall be subject to defeasance or covenant defeasance pursuant to
Section 8.2 or 8.3, in accordance with
any applicable requirements provided pursuant to Section 2.1 and upon compliance with the conditions set forth in this
Article VIII. The Company may, at its option and at any time,
elect to have either Section
8.2 or 8.3
hereof be applied to all outstanding Securities of any series so subject to
defeasance or covenant defeasance. Any such election shall be evidenced by a
Board Resolution of the Company or in another manner specified as contemplated
by Section 2.1 for such Securities.

     Section 8.2. Legal Defeasance and Discharge. Upon the Company’s exercise under Section 8.1 hereof of the option applicable to this Section 8.2 with respect to Securities of any series, the Company shall, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to have been discharged from its Obligations with
respect to all outstanding Securities of such series on the date the conditions
set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Securities with respect to such series, which
shall thereafter be deemed to be “outstanding” only for the purposes of
Section 8.5 hereof and the other Sections of this Indenture
referred to in clauses (a) through (e) below, and to have satisfied all its
other obligations under the Securities with respect to such series and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Securities with
respect to such series to receive, solely from the trust fund described in
Sections 8.4 and 8.5 hereof, and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest and Additional Amounts, if any, on such Securities
when such payments are due, (b) the Company’s Obligations with respect to such
Securities under Article
II and Sections 3.1 hereof, (c)
the rights, powers, trusts, duties and immunities of the Trustee hereunder and
the Company’s obligations in connection therewith, (d) the optional redemption
provisions, if any, with respect to such Securities, and (e) this
Article VIII. If the Company exercises under Section 8.1 hereof the option applicable to this Section 8.2, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, payment of the Securities with respect to
such series may not be accelerated because of an Event of Default. Subject to
compliance with this Article
VIII, the Company may exercise
its option under this Section
8.2 notwithstanding the prior
exercise of its option under Section 8.3
hereof.

47

     Section 8.3. Covenant
Defeasance. Upon the Company’s
exercise under Section
8.1 hereof of the option
applicable to this Section
8.3 with respect to Securities of
any series, the Company shall, with respect to such series of Securities,
subject to the satisfaction of the conditions set forth in Section 8.4 hereof, be released from its obligations under
the covenants contained in Sections 3.2 and
3.3, with respect to the outstanding Securities of
such series on and after the date the conditions set forth in Section 8.4 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Securities of such series shall thereafter be deemed not
“outstanding” for the purposes of any direction, waiver, consent or declaration
or act of Holders of such series (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Securities shall
not be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect
to the outstanding Securities of such series, the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, 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 6.1 hereof, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby. If the Company
exercises under Section
8.1 hereof the option applicable
to this Section
8.3, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof,
payment of the Securities of such series may not be accelerated because of an
Event of Default specified in clauses (4) (with respect
to Sections 3.2 and
3.3), (6) and (7) of such Section
6.1.

     Section 8.4. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the
application of either Section
8.2 or 8.3
hereof to the outstanding Securities of any series.

     In order to exercise Legal Defeasance or
Covenant Defeasance with respect to the Securities of any series:

     (1) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders of the Securities of such series, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars, and
non-callable Government Securities, in amounts as will be sufficient, in the
written opinion of a nationally recognized investment bank, appraisal firm or
firm of independent public accountants, to pay the principal of, and interest
and Additional Amounts, if any, and premium, if any, on the outstanding
Securities of such series on the stated date for payment or on the applicable
Redemption Date, as the case may be, and the Company must specify whether the
Securities of such series are being defeased to such stated date for payment or
to a particular Redemption Date;

     (2) in the
case of Legal Defeasance, the Company must deliver to the Trustee an Opinion of
Counsel 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 will confirm that, the Holders of the
outstanding Securities of such series will not recognize income, gain or loss
for federal income tax law purposes as a result of such Legal Defeasance and
shall be subject to federal income tax law in 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;

48

     (3)
in the case of Covenant Defeasance,
the Company must deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that Holders of the outstanding Securities
of such series shall not recognize income, gain or loss for federal income tax
law purposes as a result of such Covenant Defeasance and shall be subject to
federal income tax in 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;

     (4) no
Default or Event of Default has occurred and be continuing with respect to the
Securities of such series on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit);

     (5) such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under, any material agreement or instrument (other
than this Indenture) to which the Company or any of its Subsidiaries is a party
or by which the Company or any of its Subsidiaries is bound;

     (6) the
Company must deliver to the Trustee an Officers’ Certificate stating that such
deposit was not made by the Company with the intent of preferring the Holders of
Securities of such series over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding creditors of the Company
or others; and

     (7) the
Company must deliver to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.

     Section 8.5. Deposited Cash and Government Securities to be Held in Trust;
Other Miscellaneous Provisions. Subject to Section 8.6 hereof, all cash and non-callable Government Securities (including the
proceeds thereof) deposited with the Trustee (or other qualifying trustee),
collectively for purposes of this Section 8.5, the
“Trustee”) pursuant to Section
8.4 hereof in respect of the
outstanding Securities of such series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities of such series and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of Securities of such series of all sums due and to become due
thereon in respect of principal, premium, if any, interest and Additional
Amounts, if any, but such cash and securities 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
cash or non-callable Government Securities deposited pursuant to Section 8.4 hereof 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 the outstanding Securities of such series.

49

     Anything in this Article
VIII to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the request of the Company any cash or non-callable Government
Securities held by it as provided in Section 8.4 hereof which,
in the opinion of a nationally recognized independent registered public
accounting firm expressed in a written certification thereof delivered to the
Trustee (which may be the certification delivered under clause (1) of
Section 8.4 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.

     Section 8.6. Repayment to Company. Any
cash or non-callable Government Securities 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, on, or interest or Additional Amounts, if any,
on, any Security of any series and remaining unclaimed for one year after such
principal, premium, if any, or interest or Additional Amounts, if any, has
become due and payable shall be paid to the Company on its request (unless an
abandoned property law designates another Person) or (if then held by the
Company) shall be discharged from such trust; and such Holder shall thereafter,
as an unsecured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such cash and
securities, and all liability of the Company as Trustee thereof, shall thereupon
cease.

     Section 8.7. Reinstatement. If the
Trustee or Paying Agent is unable to apply any cash or non-callable Government
Securities in accordance with Section 8.2,
8.3 or 8.5 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 and the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.4 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such cash and securities in accordance with
Section 8.2, 8.3 or 8.5
hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if
any, on, or interest or Additional Amounts, if any, on, any Security of such
series following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such series to receive such payment
from the cash and securities held by the Trustee or Paying Agent.

ARTICLE IX

Amendments

     Section 9.1. Without Consent of Holders. Except as otherwise provided as contemplated by Section 2.1 with respect to the Securities of any series, the Company and the
Trustee may amend or supplement this Indenture or the Securities without notice
to or consent of any Holder:

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

     (2) to
provide for uncertificated Securities in addition to or in place of certificated
Securities;

50

     (3)
to establish the form or terms of
Securities of any series as permitted by Section 2.1;

     (4) to
provide for the assumption of the Company’s obligations to Holders of Securities
of any series in the case of a merger or consolidation or sale of all or
substantially all of the Company’s properties or assets, as
applicable;

     (5) to
comply with requirements of the SEC in order to maintain the qualification of
this Indenture under the Trust Indenture Act;

     (6) to
make any change that would provide any additional rights or benefits to the
Holders of Securities of any series or that does not materially adversely affect
the legal rights under this Indenture of any such Holder;

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

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

     (9) to
change or eliminate any of the provisions of this Indenture; provided that any such change or elimination shall become effective only when
there is no outstanding Security of any series created prior to the execution of
such amendment or supplemental indenture that is adversely affected in any
material respect by such change in or elimination of such provision;

     (10) to
supplement any of the provisions of this Indenture to such extent as shall be
necessary to permit or facilitate the defeasance and discharge of any series of
Securities pursuant to Section
8.1; provided, however, that any such action shall not adversely affect
the interest of the Holders of Securities of such series or any other series of
Securities in any material respect;

     (11) to
secure the Securities of any series;

     (12) to
evidence and provide for the acceptance under this Indenture of a successor
trustee; or

     (13) to
conform the text of this Indenture or any Securities to the description thereof
in any prospectus or prospectus supplement of the Company with respect to the
offer and sale of Securities of any series, to the extent that such provision is
inconsistent with a provision of this Indenture or the Securities, as provided
in an Officers’ Certificate.

51

     After
an amendment under this Indenture becomes effective, the Company is required to
mail to the Holders of each Security affected thereby a notice briefly
describing such amendment. However, the failure to give such notice to all the
Holders of each Security affected thereof, or any defect therein, will not
impair or affect the validity of the amendment or supplemental indenture under
this Section 9.1.

     Section 9.2. With Consent of Holders.
Except as otherwise provided as contemplated by Section 2.1 with respect to the Securities of any series, except as provided below
in this Section
9.2, the Company, and the Trustee
may amend or supplement this Indenture with the consent (including consents
obtained in connection with a purchase of, or a tender offer or exchange offer
for, Securities) of the Holders of a majority in principal amount of the then
outstanding Securities of each series affected by such amendment or supplement
(acting as separate classes).

     Upon the request of the Company,
accompanied by a Board Resolution, and upon the filing with the Trustee of
evidence of the consent of the Holders as aforesaid, and upon receipt by the
Trustee of the documents described in Section 9.5, the Trustee
shall, subject to Section
9.6, join with the Company in the
execution of such amendment or supplemental indenture.

     Except as otherwise provided as
contemplated by Section
2.1 with respect to the
Securities of any series, the Holders of a majority in principal amount of the
then outstanding Securities of one or more series or of all series affected by
such waiver (acting as separate classes) may waive compliance in a particular
instance by the Company with any provision of this Indenture with respect to
Securities of such series (including waivers obtained in connection with a
purchase of, or a tender offer or exchange offer for, Securities of such
series).

     However, except as otherwise provided as
contemplated by Section
2.1 with respect to the
Securities of any series, without the consent of each Holder affected, an
amendment, supplement or waiver may not (with respect to any Securities held by
a non-consenting Holder):

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

     (2) reduce
the principal of or change the fixed maturity of any Security or alter the
provisions with respect to the redemption or repurchase of the
Securities;

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

     (4) waive
a Default or Event of Default in the payment of principal of, or interest or
premium, or Additional Amounts, if any, on the Securities (except a rescission
of acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities and a waiver of
the payment default that resulted from such acceleration);

     (5) make
any Security payable in currency other than that stated in the
Securities;

52

     (6)
make any change in the provisions of
this Indenture relating to waivers of past Defaults or the rights of Holders of
Securities to receive payments of principal of, or interest or premium, if any,
on the Securities (other than as permitted in clause (7) below);

     (7) waive
a redemption payment with respect to any Security;

     (8) impair
the right of a Holder of Securities to institute suit for the enforcement of any
payment on the Securities; or

     (9) make
any change in the preceding amendment, supplement and waiver
provisions.

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

     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 such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of any other series.

     A consent to any amendment or waiver
under this Indenture by any Holder of the Securities given in connection with a
tender of such Holder’s Securities will not be rendered invalid by such tender.
After an amendment under this Section becomes effective, the Company shall
promptly mail to Holders of each Security affected thereby a notice briefly
describing such amendment. The failure to give such notice to all Holders of
each Security affected thereby, or any defect therein, shall not impair or
affect the validity of an amendment, supplemental indenture or waiver under this
Section 9.2.

     Section 9.3. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture
or the Securities shall comply with the Trust Indenture Act of 1939 as then in
effect.

     Section 9.4. Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a
Holder of a Security shall be in writing and bind the Holder and every
subsequent Holder of that Security or portion of the Security that evidences the
same debt as the consenting Holder’s Security, even if notation of the consent
or waiver is not made on the Security. However, any such Holder or subsequent
Holder may revoke the consent or waiver as to such Holder’s Security or portion
of the Security if the Trustee receives the notice of revocation before the date
the amendment or waiver becomes effective. After an amendment or waiver becomes
effective with respect to a series of Securities, it shall bind every Holder of
Securities of such series.

     For purposes of this Indenture, the
written consent of the Holder of a Global Security shall be deemed to include
any consent delivered by an Agent Member by electronic means in accordance with the Automated Tender Offer
Procedures system or other customary procedures of, and pursuant to
authorization by, DTC.

53

     The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to give their consent or take any other action
described above or required or permitted to be taken pursuant to this Indenture.
The Trustee may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders of Securities of any series entitled to join
in the giving, making or taking of (i) any notice permit to Section 6.1(4) or otherwise of any Default, (ii) any declaration
of acceleration pursuant to Section 6.2, (iii) any
request to institute proceedings pursuant to Section 6.6(2), or (iv) any direction referred to in
Section 6.5, in each case with respect to such series. If a
record date is so fixed, then notwithstanding the second preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to give such consent or to
revoke any consent previously given or to take any such action, whether or not
such Persons continue to be Holders after such record date. No such consent
shall become valid or effective more than 180 days after such record
date.

     Section 9.5. Notation on or Exchange of Securities. If an amendment changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security regarding the
changed terms and return it to the Holder. Alternatively, if the Company so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.

     Section 9.6. Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this
Article IX if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing such amendment the Trustee shall
receive indemnity satisfactory to it and shall receive, and (subject to
Sections 7.1 and 7.2) shall be fully
protected in conclusively relying upon an Officers’ Certificate and an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Indenture, that such amendment is the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to customary exceptions, and that such amendment complies with
the provisions hereof (including Section 9.3).

ARTICLE X

Satisfaction and
Discharge

     Section 10.1. Satisfaction and Discharge. This Indenture will be discharged and will cease to be of further
effect as to all Securities of any series issued hereunder (except as to
surviving rights of registration of transfer or exchange of such Securities and
as otherwise specified hereunder), when:

     (1) either:

     (a)
all Securities of such series that have been
authenticated, except lost, stolen or destroyed Securities that have been
replaced or paid and Securities of such series for whose payment money has been
deposited in trust and thereafter repaid to the Company, have been delivered to
the Trustee for cancellation; or

54

     (b)
all Securities of such series that
have not been delivered to the Trustee for cancellation have become due and
payable or will become due and payable within one year by reason of the mailing
of a notice of redemption or otherwise and the Company has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders of Securities of such series, cash in U.S. dollars,
non-callable Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the entire
indebtedness on such Securities not delivered to the Trustee for cancellation
for principal, premium, if any, and accrued interest and Additional Amounts, if
any, to the date of maturity or redemption;

     (2) no
Default or Event of Default with respect to such series has occurred and is
continuing on the date of the deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) and the
deposit will not result in a breach or violation of, or constitute a default
under, any other 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;

     (3) the
Company has paid or caused to be paid all sums payable by it hereunder with
respect to such series and pursuant to Section 7.7;

     (4) the
Company has delivered irrevocable instructions to the Trustee hereunder to apply
the deposited money toward the payment of such Securities at fixed maturity or
the Redemption Date, as the case may be; and

     (5) the
Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, which state that all conditions precedent under this Indenture relating
to the satisfaction and discharge of this Indenture with respect to such series
have been satisfied.

ARTICLE XI

Miscellaneous

     Section 11.1. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the provision required by the TIA shall control.

55

     Section 11.2. Notices. Any notice or communication shall be in writing (including facsimile
and electronic transmission in PDF format) and delivered in person, by
telecopier or overnight air courier guaranteeing next day delivery or mailed by
first-class mail addressed as follows:

if
to the Company:

Ross Stores, Inc. 
5130 Hacienda Drive 
Dublin, California 94568

Attn: 
Fax No.: 
Email:

if
to the Trustee:

U.S. Bank National Association 
Global Corporate Trust Services

One California Street, Suite 1000 
San Francisco, CA 94111 
Attn:
Myrna Presto-Choroski 
Fax No: (415) 677-3768

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

     Any notice or communication mailed to a
registered Holder shall be mailed to the Holder at the Holder’s address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed. The Registrar shall provide the
Company with address information with respect to the Holders as promptly as
practicable following the Company’s request therefor. Any notice or
communication shall also be mailed to any Person described in TIA § 3.13(c), to
the extent required by the TIA.

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

     Section 11.4. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company
to the Trustee to take or refrain from taking 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 (which shall include the statements set forth in Section 11.5 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 fully complied with and
satisfied; and

56

     (2)
an Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section
11.5 hereof) stating that, in the opinion of such
counsel, all such conditions precedent have been fully complied with and
satisfied.

     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 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 Counsel may be based, and may state that it is so 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 known to the Company, unless such counsel knows
that the certificate or opinion or representations with respect to such matters
are erroneous.

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

     Section 11.5. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to
compliance with a covenant or condition provided for in this Indenture (except
for the Certificate specified in Section 3.5) shall
include:

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

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

57

     Section 11.6. When Securities Disregarded. In determining whether the Holders of the
required principal amount of Securities of any series have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Trust Officer of the Trustee actually knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such
determination.

     Section 11.7. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action
by, or a meeting of, Holders. The Registrar and the Paying Agent may make
reasonable rules for their functions.

     Section 11.8. Legal Holidays. A
“Legal Holiday” is a Saturday, a Sunday or other day on which
commercial banking institutions are authorized or required to be closed in New
York, New York and Los Angeles, California. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be
affected.

     Section 11.9. GOVERNING LAW; WAIVER OF JURY TRIAL.

     THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. EACH OF THE COMPANY, THE TRUSTEE AND THE HOLDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE SECURITIES OR THE
TRANSACTION CONTEMPLATED HEREBY.

     Section 11.10. No
Recourse Against Others. No
director, manager, officer, employee, incorporator, member, partner, stockholder
or other owner of Capital Stock of the Company, as such, will have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder of Securities by accepting a Security waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Securities.

     Section 11.11. Successors. All agreements
of the Company in this Indenture and the Securities shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its
successors.

     Section 11.12. Multiple Originals. The
parties may sign any number of copies of this Indenture. Each signed copy shall
be an original, but all of them together represent the same agreement. One
signed copy is enough to prove this Indenture. The exchange of copies of this
Indenture and of signature pages by facsimile or PDF transmission shall
constitute effective execution and delivery of this Indenture as to the parties
hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto
transmitted by facsimile or PDF shall be deemed to be their original signatures
for all purposes.

58

     Section 11.13. Severability. In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

     Section 11.14. No
Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any
other indenture, loan or debt agreement of the Company or any Subsidiary or any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

     Section 11.15. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.

     Section 11.16. Force Majeure. In no event
shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly
or indirectly, forces beyond its control, including, without limitation,
strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and interruptions,
loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable
efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.

     Section 11.17. U.S.A. Patriot Act. The
parties hereto acknowledge that in accordance with Section 326 of the U.S.A.
Patriot Act, the Trustee, like all financial institutions and in order to help
fight the funding of terrorism and money laundering, is required to obtain,
verify, and record information that identifies each person or legal entity that
establishes a relationship or opens an account with the Trustee. The parties to
this Indenture agree that they will provide the Trustee with such information as
it may request in order for the Trustee to satisfy the requirements of the
U.S.A. Patriot Act.

59

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

	ROSS STORES, INC., as Issuer
		  
		  
	By:  	
		Name:
		Title:
		  
		    
	U.S. BANK, NATIONAL ASSOCIATION,
as
	Trustee
		  
		  
	By:  	
		Name:
	 	Title:namg_ex101.htm

EXHIBIT 10.1

 

INVESTMENT AGREEMENT

 

THIS AGREEMENT dated as of the 25th day of August 2014 (the “Agreement”) is by and between Beaufort Ventures PLC (the “Investor”), and North American Oil & Gas Corp. (the “Company”).

 

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company up to Five Million Dollars ($5,000,000) of the Company’s fully registered, freely tradable common stock (the “Common Stock”); and

 

WHEREAS, such investments will be made in reliance upon the provisions of the Securities Act of 1933, as amended, and the regulations promulgated thereunder (the “Securities Act”), and or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the investments to be made hereunder.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I.

Certain Definitions

 

Section 1.1. “Advance” shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.

 

Section 1.2. “Advance Date” shall mean the fifth Trading Day after expiration of the applicable Pricing Period for each Advance.

 

Section 1.3. “Advance Notice” shall mean a written notice in the form of Exhibit A attached hereto to the Investor executed by an officer of the Company and setting forth the Advance amount that the Company requests from the Investor. An Advance Notice cannot be sent if a prior Advance has not yet been completed. No Advance Notice can be delivered by the Company on a day which is not a Trading Day.

 

Section 1.4. [Intentionally Blank]

 

Section 1.5. “Advance Shares” shall mean the shares of Common Stock issued and sold to the Investor pursuant to an Advance Notice under the terms and conditions hereof.

 

Section 1.6. “Average Daily Trading Volume” means the average trading volume of the Common Stock of the ten Trading Days prior to the date of delivery of the Advance.

 

Section 1.7 Reserved.

 

Section 1.8. “Closing Daily Price” means, as related to the Common Stock as of any date, the last closing price for such security during normal trading on the OTCQB, or, if the OTCQB is not the principal securities exchange or trading market for such security, the last closing bid price during normal trading of such security on the principal securities exchange or trading market where such security is listed or traded as reported by such principal securities exchange or trading market, or if the foregoing do not apply, the last closing bid price during normal trading of such security in the over-the-counter market on the electronic bulletin board for such security.

 

 Section 1.9. “Closing” shall mean one of the closings of a purchase and sale of Common Stock pursuant to Section 2.3.

 

Section 1.10. “Commitment Amount” shall mean the aggregate amount of Five Million Dollars ($5,000,000) which the Investor has agreed to provide to the Company in order to purchase the Common Stock pursuant to the terms and conditions of this Agreement.

 

Section 1.11. “Commitment Period” shall mean the period commencing on the Effective Date, and expiring upon the termination of this Agreement in accordance with Section 10.2.

 

Section 1.12. “Common Stock” shall mean the Company’s freely tradable, fully registered and unencumbered common stock.

 

Section 1.13. “Condition Satisfaction Date” shall have the meaning set forth in Section 7.2.

 

Section 1.14. “Damages” shall mean any loss, claim, damage, liability, costs and expenses (including, without limitation, reasonable attorney’s fees and disbursements and costs and expenses of expert witnesses and investigation).

 

Section 1.15. “Effective Date” shall mean the date on which the SEC first declares effective a Registration Statement registering the resale of the Registrable Securities as set forth in Section 7.2(a).

 

Section 1.16. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

  

1

  

 

Section 1.17. “Environmental Laws” shall have the meaning set forth in Section 4.11.

 

Section 1.18. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

Section 1.19. “Evaluation Date” shall have the meaning set forth in Section 4.30.

 

Section 1.20. “Event of Default” shall have the meaning set forth in Section 7.2.

 

Section 1.21. “Indemnified Liabilities” shall have the meaning set forth in Section 5.1(a).

 

Section 1.22. “Indemnified Party” and “Indemnifying Party” shall have the meaning set forth in Section 5.2.

 

Section 1.23. “Investor Indemnitees” shall have the meaning set forth in Section 5.1(a).

 

Section 1.24. “Losses” shall have the meaning set forth in Section 5.1(b).

 

Section 1.25. “Material Adverse Effect” shall mean any condition, circumstance, or situation that may result in, or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of the Agreement, including on the legal status of the Advance Shares as free trading, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company, taken as a whole, (iii) a material adverse effect on the Company’s ability to perform its obligations hereunder in any material respect on a timely basis its obligations under the Agreement, or (iv) shares of the Company cease to be listed or trading of the Common Stock is suspended continuously for more than five (5) trading days.

 

Section 1.26. “Market Price” shall mean the average of the 3 lowest Closing Daily Prices of the Company’s Common Stock during the Pricing Period.

 

Section 1.27. “Maximum Advance Amount” The number of Advance Shares sold in each Advance shall not be greater than the number of shares of Common Stock which would cause the aggregate holdings of the Investor’s shares of common stock of the Company to be greater than 4.99% of the issued and outstanding shares of common stock of the Company (including Common Stock and shares of restricted common stock).

 

Section 1.28. “Maximum Common Stock Issuance” shall have the meaning set forth in Section 2.8.

 

Section 1.29. “Ownership Limitation” shall have the meaning set forth in Section 2.2.

 

Section 1.30. “Person” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumenta/lity thereof.

 

Section 1.31. “Pricing Period” shall mean the five (5) consecutive Trading Days prior to the Advance Date.

 

Section 1.32. “Principal Market” shall mean the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the American Stock Exchange, the OTCQB, or the New York Stock Exchange, whichever is at the time the principal trading exchange or market for the Common Stock.

 

Section 1.33. “Purchase Price” shall mean eighty five percent (85%) of the Market Price during the Pricing Period.

 

Section 1.34. “Registrable Securities” shall mean the Advance Shares to be issued hereunder (i) in respect of which a Registration Statement has not been declared effective by the SEC, (ii) which have not been sold under circumstances meeting all of the applicable conditions of Rule 144 or (iii) which have not been otherwise transferred to a holder who may trade such Advance Shares without restriction under the Securities Act, and the Company has delivered a new certificate or other evidence of ownership for such securities not bearing a restrictive legend.

 

Section 1.35. “Registration Limitation” shall have the meaning set forth in Section 2.2.

 

Section 1.36. “Registration Rights Agreement” shall mean the Registration Rights Agreement dated the date hereof, regarding the filing of the Registration Statement for the resale of the Registrable Securities, entered into between the Company and the Investor.

 

Section 1.37. “Registration Statement” shall mean a registration statement on Form S-1 or Form S-3 (if use of such form is then available to the Company pursuant to the rules of the SEC and, if not, on such other form promulgated by the SEC for which the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for the resale of the Registrable Securities to be registered thereunder in accordance with the provisions of this Agreement and the Registration Rights Agreement, and in accordance with the intended method of distribution of such securities), for the registration of the resale by the Investor of the Registrable Securities under the Securities Act.

 

  

2

  

 

Section 1.38. “Regulation D” shall mean Regulation D under the Securities Act.

 

Section 1.39. “Related Party” shall have the meaning set forth in Section 6.15.

 

Section 1.40. “Rule 144” shall mean Rule 144 (or any similar provision then in force) promulgated under the Securities Act.

 

Section 1.41. “SEC” shall mean the United States Securities and Exchange Commission.

 

Section 1.42. “Securities Act” shall have the meaning set forth in the recitals.

 

Section 1.43. “Third Party Claim” shall have the meaning set forth in Section 5.2(b).

 

Section 1.44. “Trading Day” shall mean any day during which the New York Stock Exchange shall be open for business.

 

Section 1.45. “Valuation Event” shall have the meaning set forth in Section 2.10.

 

Section 1.46. “Trading Day” shall mean any day during which the New York Stock Exchange shall be open for business.

 

Section 1.47. “VWAP” means, as of any date, the daily dollar volume-weighted average price for such security as reported by Bloomberg, LP through its “Historical Price Table Screen (HP)” with Market: Weighted Ave function selected (or comparable financial news service (U.S market only)), or, if no dollar volume-weighted average price is reported for such security by Bloomberg, LP (or comparable financial news service (U.S market only)), the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported on OTC Markets.

 

ARTICLE II.

Advances

Section 2.1. Advances

 

Subject to the terms and conditions of this Agreement (including, without limitation, the provisions of Article VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase from the Company, Advance Shares, by the delivery, in the Company’s sole discretion, of Advance Notices. Each Advance shall be in multiples of $100,000. The aggregate maximum amount of all Advances that the Investor shall be obligated to make under this Agreement shall not exceed the Commitment Amount. Once an Advance Notice is received by the Investor, it shall not be terminated, withdrawn or otherwise revoked by the Company except as set forth in this Agreement.

 

Section 2.2. Mechanics.

 

(a) Advance Notice. At any time during the Commitment Period, the Company may require the Investor to purchase Advance Shares by delivering an Advance Notice to the Investor, subject to the conditions set forth in Article VII; provided, however, that (i) the aggregate amount of the Advances pursuant to this Agreement shall not exceed the Commitment Amount, (ii) in no event shall the number of Advance Shares issuable to the Investor pursuant to an Advance cause the aggregate number of shares of Common Stock beneficially owned by the Investor and its affiliates to exceed 4.99% of the then outstanding Common Stock (the “Ownership Limitation”) (as of the date of this Agreement, Investor and its affiliates held zero (0%) percent of the outstanding Common Stock), (iii) under no circumstances shall the aggregate offering price or number of Advance Shares, as the case may be, exceed the aggregate offering price or number of shares of Common Stock available for issuance under a Registration Statement (the “Registration Limitation”) and (iv) the Common Stock must be DWAC eligible and sent to the Investor in electronic form, instead of certificate form. In the event that the Investor sends written acceptance of accepting a physical certificate, all fees and expenses for this certificate will be paid by the Company.

 

(b) Date of Delivery of Advance Notice. An Advance Notice shall be deemed delivered on (i) the Trading Day it is received by email (to the address set forth in Section 11.1 herein) by the Investor if such notice is received prior to 5:00 pm Eastern Time, or (ii) the immediately succeeding Trading Day if it is received by email after 5:00 pm Eastern Time on a Trading Day or at any time on a day which is not a Trading Day. No Advance Notice may be deemed delivered on a day that is not a Trading Day. The Company acknowledges and agrees that the Investor shall be entitled to treat any email it receives from officers whose email addresses are identified by the Company purporting to be an Advance Notice as a duly executed and authorized Advance Notice from the Company.

 

Section 2.3. Closings.

 

(a) On the Advance Date, the Company shall deliver to the Investor’s brokerage account in electronic form, such number of Advance Shares of the DWAC eligible Common Stock registered in the name of the Investor in accordance with the Advance Notice and pursuant to this Agreement. Once such Advance Shares have been accepted by the Investor, the Investor shall immediately deliver to the Company the amount of the Advance by wire transfer of immediately available funds as determined by the Purchase Price. On or prior to the Advance Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings required to be delivered by either of them pursuant to Section 2.3(b) below in order to implement and effect the transactions contemplated herein.

 

  

3

  

 

(b) Obligations Upon Closing. The Investor agrees to advance the amount corresponding to the Advance Notice to the Company upon completion of each of the following conditions:

 

(i) The Company shall have delivered via electronic delivery to the Investor the Advance Shares applicable to the Advance in accordance with Section 2.3(a).

 

(ii) A Registration Statement filed pursuant to the Registration Rights Agreement shall be effective and available for the resale of all applicable Advance Shares to be issued in connection with the Advance and any certificates evidencing such shares shall be free of restrictive legends.

 

(iii) the Company shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of the Registrable Securities, or shall have the availability of exemptions therefrom. The sale and issuance of the Registrable Securities shall be legally permitted by all laws and regulations to which the Company is subject;

 

(iv) the Company shall have filed with the SEC in a timely manner all reports, notices and other documents required of a “reporting company” under the Exchange Act and applicable SEC regulations; and

 

(v) the Company’s transfer agent shall be DWAC eligible.

 

Section 2.4. [Intentionally Omitted]

 

Section 2.5. Hardship. In the event the Investor sells shares of the Advance Shares after receipt of an Advance Notice and the Company fails to perform its obligations as mandated in Section 2.3, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company and acknowledges that irreparable damage would occur in the event of any such default. It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce, without the posting of a bond or other security, the terms and provisions of this Agreement.

 

Section 2.6. Removal of Restricted Legends. If the Company is fully reporting six months after the issuance of any restricted stock to Investor as a break fee (as described in Section 12.4 below), and rejects the Investors request to direct the Company’s transfer agent to remove the restricted legend from the Investor’s stock certificate five trading days after the Investor’s request to remove such restricted legend, then the Company shall pay the Investor $1,000.00 for each day beyond the five trading days the company fails to remove such restricted legend. Company covenants that, except as set forth below, there shall be no justifiable reason not to remove the restricted legend from the stock certificates and in the event that Company attempts to offer such justification, the Company shall pay the Investor $$2,000.00 for each day beyond the five trading days the company fails to remove such restricted legend. Notwithstanding the foregoing, the Company shall not be liable to pay the Investor either of the above fees if the Investor is not in full compliance with the applicable rules and regulations used to remove any restricted legend or fails reasonably comply with requests by the Company or its transfer agent related to the removal of the restricted legend.

 

Section 2.7 [Intentionally Omitted]

 

Section 2.8 Reimbursement. If (I) the Investor becomes involved in any capacity in any action, proceeding or investigation brought by any shareholder of the Company, in connection with or as a result of the consummation of the transactions contemplated by this Agreement, or if the Investor is impleaded in any such action, proceeding or investigation by any person (other than as a result of a breach of the Investor’s representations and warranties set forth in this Agreement); or (II) the Investor becomes involved in any capacity in any action, proceeding or investigation brought by the SEC against or involving the Company or in connection with or as a result of the consummation of the transactions contemplated by this Agreement (other than as a result of a breach of the Investor’s representations and warranties set forth in this Agreement), or if this Investor is impleaded in any such action, proceeding or investigation by any person, then in any such case, the Company will reimburse the Investor for its reasonable legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith, as such expenses are incurred. In addition, other than with respect to any matter in which the Investor is a named party, the Company will pay to the Investor the charges, as reasonably determined by the Investor, for the time of any officers or employees of the Investor devoted to appearing and preparing to appear as witnesses, assisting in preparation for hearings, trials or pretrial matters, or otherwise with respect to inquiries, hearing, trials, and other proceedings relating to the subject matter of this Agreement. The reimbursement obligations of the Company under this section shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any affiliates of the Investor that are actually named in such action, proceeding or investigation, and partners, directors, agents, employees, attorneys, accountants, auditors and controlling persons (if any), as the case may be, of Investor and any such affiliate, and shall be binding upon and inure to the benefit of any successors of the Company, the Investor and any such affiliate and any such person. Any and all costs that Investor pays for relating to clearing and processing stock certificates shall be deducted from any payment the Company receives from Investor.

 

Section 2.9 Overall Limit on Issuable Common Stock. Notwithstanding anything contained herein to the contrary, if during the Commitment Period the Company becomes listed on an exchange that limits the number of shares of Common Stock that may be issued without shareholder approval, then the total number of Advance Shares issuable by the Company and purchasable by the Investor pursuant to this Agreement shall not exceed that number of shares of Common Stock that may be issuable without shareholder approval (the “Maximum Common Stock Issuance”). If such issuance of Advance Shares could cause a delisting on the Principal Market, then the Maximum Common Stock Issuance shall first be approved by the Company's shareholders in accordance with applicable law and the By-laws and Amended and Restated Articles of Incorporation of the Company. The parties understand and agree that the Company's failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization of the issuance and sale of Advance Shares in accordance with the terms and conditions hereof to the Investor or the Investor's obligation in accordance with the terms and conditions hereof to purchase a number of Advance Shares in the aggregate up to the Maximum Common Stock Issuance limitation, and that such approval pertains only to the applicability of the Maximum Common Stock Issuance limitation provided in this Section 2.9.

 

  

4

  

 

Section 2.10. Valuation Event. The Company agrees that it shall not take any action that would result in a Valuation Event occurring during a Pricing Period. Valuation Event shall mean an event in which the Company at any time during a Pricing Period takes any of the following actions: (i) subdivides or combines its Common Stock or (ii) pays a dividend in Ordinary Shares or makes any other purchase of its Ordinary Shares, (iii) .

 

ARTICLE III.

Representations of Investor

 

Investor hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and as of each Advance Date:

 

Section 3.1. Organization and Authorization. The Investor is duly incorporated or organized and validly existing in the jurisdiction of its incorporation or organization and has all requisite power and authority to purchase and hold the securities issuable hereunder. The decision to invest and the execution and delivery of this Agreement by such Investor, the performance by such Investor of its obligations hereunder and the consummation by such Investor of the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments (including, without limitations, the Registration Rights Agreement), on behalf of the Investor. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.

 

Section 3.2. Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with this transaction. It recognizes that its investment in the Company involves a high degree of risk.

 

Section 3.3. No Legal Advice from the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with his or its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

 

Section 3.4. Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to the business, finances and operations of the Company and information it deemed material to making an informed investment decision. The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and has either done so or has waived its opportunity to do so. Neither such inquiries nor any other due diligence investigations conducted by such Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely on the Company’s representations and warranties contained in this Agreement. The Investor understands that its investment involves a high degree of risk. The Investor is in a position regarding the Company, which, based upon employment, family relationship or economic bargaining power, enabled and enables such Investor to obtain information from the Company in order to evaluate the merits and risks of this investment.

 

Section 3.5. Receipt of Documents. The Investor and its counsel have received and read in their entirety: (i) this Agreement and the Exhibits annexed hereto; (ii) all due diligence and other information necessary to verify the accuracy and completeness of such representations, warranties and covenants; and (iii) answers to all questions the Investor submitted to the Company regarding an investment in the Company; and the Investor has relied on the information contained therein and has not been furnished any other documents, literature, memorandum or prospectus.

 

Section 3.6. Not an Affiliate. The Investor is not an officer, director or a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any “Affiliate” of the Company (as that term is defined in Rule 405 of the Securities Act).

 

Section 3.7. Trading Activities. The Investor’s trading activities with respect to the Common Stock shall be in compliance with all applicable securities laws, rules and regulations and the rules and regulations of the Principal Market on which the Common Stock is listed or traded. Investor makes no representations or covenants that it will not engage in trading in the securities of the Company, other than the Investor will not engage in any short sales of the Common Stock, or other similar activity that profits on the decline in the price of Common Stock, at any time during the Agreement. Nothing contained in this Agreement shall be deemed a representation or warrant by the Investor to hold any Stock for any period of time. The Company acknowledges and agrees that transactions in its securities by the Investor may impact the market price of the Stock, including during periods when the prices at which the Company may be required to issue Investor’s stock are determined.

 

ARTICLE IV.

Representations and Warranties of the Company

Except as stated below, on the disclosure schedules attached hereto the Company hereby represents and warrants to, and covenants with, the Investor that the following are true and correct as of the date hereof:

 

  

5

  

 

Section 4.1. Organization and Qualification. The Company is duly incorporated or organized and validly existing in the jurisdiction of its incorporation or organization and has all requisite corporate power to own its properties and to carry on its business as now being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect on the Company and its subsidiaries taken as a whole.

 

Section 4.2. Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into and perform this Agreement, the Registration Rights Agreement and any related agreements, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Registration Rights Agreement and any related agreements by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors or its stockholders, (iii) this Agreement, the Registration Rights Agreement and any related agreements have been duly executed and delivered by the Company, (iv) this Agreement, the Registration Rights Agreement and assuming the execution and delivery thereof and acceptance by the Investor and any related agreements constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

 

Section 4.3. Capitalization. The authorized capital stock of the Company consists of 200,000,000 shares of Common Stock, of which 62,864,337 shares of Common Stock are issued and outstanding, and 25,000,000 shares of authorized Preferred Stock, of which 0 shares are issued and outstanding All of such outstanding shares have been validly issued and are fully paid and nonassessable. No shares of Common Stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. Except as disclosed on Schedule 4.3, as of the date hereof, (i) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, (ii) there are no outstanding debt securities (iii) there are no outstanding registration statements; and (iv) there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities under the Securities Act (except pursuant to the Registration Rights Agreement), except pursuant to the terms of an agreement between the Company and the Investor. There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement or any related agreement or the consummation of the transactions described herein or therein. The Company has furnished to the Investor true and correct copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.

 

Section 4.4. No Conflict. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby will not (i) result in a violation of the Certificate of Incorporation, any certificate of designations of any outstanding series of preferred stock of the Company or By-laws or (ii) conflict with or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market on which the Common Stock is quoted) applicable to the Company or any of its subsidiaries or by which any material property or asset of the Company or any of its subsidiaries is bound or affected and which would cause a Material Adverse Effect. Neither the Company nor its subsidiaries is in violation of any term of or in default under its Articles of Incorporation or By-laws or their organizational charter or by-laws, respectively, or any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its subsidiaries. The business of the Company and its subsidiaries is not being conducted in violation of any material law, ordinance, and regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement or the Registration Rights Agreement in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company and its subsidiaries are unaware of any fact or circumstance which might give rise to any of the foregoing.

 

Section 4.5. SEC Documents; Financial Statements. Since November 30, 2012, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC under the Securities Exchange Act (all of the foregoing filed prior to the date hereof or amended after the date hereof and all exhibits include therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to as the “SEC Documents”) on timely basis or has received a valid extension of such time of filing and has filed any such SEC Document prior to the expiration of any such extension. The Company has delivered to the Investor or its representatives, or made available through the SEC’s website at http://www.sec.gov., true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Buyers which is not included in the SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made and not misleading.

 

  

6

  

 

Section 4.6. No Misstatement or Omission. Each part of the Registration Statement, when such part became or becomes effective, and the related prospectus (“Prospectus”), on the date of filing thereof with the SEC and at each Advance Date and Closing Date, conformed or will conform in all material respects with the requirements of the Securities Act and the rules and regulations promulgated thereunder; each part of the Registration Statement, when such part became or becomes effective, did not or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, on the date of filing thereof with the SEC and at each Advance Date, did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; except that the foregoing shall not apply to statements or omissions in any such document made in reliance on information furnished in writing to the Company by the Investor expressly stating that such information is intended for use in the Registration Statement, the Prospectus, or any amendment or supplement thereto.

 

Section 4.7. No Default. The Company is not in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust or other material instrument or agreement to which it is a party or by which it is or its property is bound and neither the execution, nor the delivery by the Company, nor the performance by the Company of its obligations under this Agreement or any of the exhibits or attachments hereto will conflict with or result in the breach or violation of any of the terms or provisions of, or constitute a default or result in the creation or imposition of any lien or charge on any assets or properties of the Company under its Certificate of Incorporation, By-Laws, any material indenture, mortgage, deed of trust or other material agreement applicable to the Company or instrument to which the Company is a party or by which it is bound, or any statute, or any decree, judgment, order, rules or regulation of any court or governmental agency or body having jurisdiction over the Company or its properties, in each case which default, lien or charge is likely to cause a Material Adverse Effect on the Company’s business or financial condition.

 

Section 4.8. Absence of Events of Default. No Event of Default, as defined in the respective agreement to which the Company is a party, and no event which, with the giving of notice or the passage of time or both, would become an Event of Default (as so defined), has occurred and is continuing, which would have a Material Adverse Effect on the Company’s business, properties, prospects, financial condition or results of operations. The Company shall notify the Investor immediately upon any Event of Default, or anything that is likely to detrimentally affect the ability of the Company to perform its obligations under this Agreement, occurring, or becoming, to the Company’s knowledge, likely to occur, and include the specifics of such Event of Default or other event in its notice. At the Investor’s request, the Company shall provide the Investor with a certificate signed by two (2) of its directors or its Chief Executive Officer, which shall state whether an Event of Default has occurred or is continuing.

 

Section 4.9. Intellectual Property Rights. The Company and its subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. The Company and its subsidiaries do not have any knowledge of any infringement by the Company or its subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, and, to the knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company or its subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and the Company and its subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

 

Section 4.10. Employee Relations. Neither the Company nor any of its subsidiaries is involved in any labor dispute nor, to the knowledge of the Company or any of its subsidiaries, is any such dispute threatened. None of the Company’s or its subsidiaries’ employees is a member of a union and the Company and its subsidiaries believe that their relations with their employees are good.

 

Section 4.11. Environmental Laws. The Company and its subsidiaries are (i) in compliance with any and all applicable material foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval.

 

Section 4.12. Title. The Company has good and marketable title to its properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than such as are not material to the business of the Company. Any real property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries.

 

 Section 4.13. Insurance. Upon the Company generating revenue, the Company and each of its subsidiaries will become insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its subsidiaries are engaged. Neither the Company nor any such subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing liability insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not materially and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the Company and its subsidiaries, taken as a whole.

 

Section 4.14. Regulatory Permits. The Company and its subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses and neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

 

Section 4.15. Internal Accounting Controls. The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and the rules and regulations as promulgated by the SEC to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

  

7

  

 

Section 4.16. No Material Adverse Breaches, etc. Neither the Company nor any of its subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect on the business, properties, operations, financial condition, results of operations or prospects of the Company or its subsidiaries. Except as set forth in the SEC Documents, neither the Company nor any of its subsidiaries is in breach of any contract or agreement which breach, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect on the business, properties, operations, financial condition, results of operations or prospects of the Company or its subsidiaries.

 

Section 4.17. Absence of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable decision, ruling or finding would (i) have a Material Adverse Effect on the transactions contemplated hereby (ii) adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Agreement or any of the documents contemplated herein, or (iii) have a Material Adverse Effect on the business, operations, properties, financial condition or results of operation of the Company and its subsidiaries taken as a whole.

 

Section 4.18. Reserved.

 

Section 4.19. Tax Status. The Company and each of its subsidiaries has made or filed all federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company and each of its subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.

 

Section 4.20. Certain Transactions. None of the officers, directors, or employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

 

Section 4.21. Rights of First Refusal. The Company is not obligated to offer the securities offered hereunder on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties.

 

Section 4.22. Use of Proceeds. The Company shall use the net proceeds from this offering for working capital and other general corporate purposes including paying relevant fees and commissions incurred from this transaction. The Company will not provide any funding to or purchase an interest in any person listed by the United States Department of the Treasury’s Office of Foreign Assets Control as a Specially Designated National and Blocked Person.

 

Section 4.23. Maintenance of Listing or Quotation on Principal Market. For so long as any securities issuable hereunder held by the Investor remain outstanding, the Company acknowledges, represents, warrants and agrees that it will /maintain the listing or quotation, as applicable, of its Common Stock on a Principal Market.

 

Section 4.24. Opinion of Counsel. Investor shall receive opinions from counsel to the Company on the date hereof substantially in the form attached hereto as Exhibit B.

 

Section 4.25. [Intentionally Omitted]

 

Section 4.26. Dilutive Effect. The Company understands and acknowledges that the number of Advance Shares issuable upon purchases pursuant to this Agreement will increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the Pricing Period. The Company's executive officers and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business judgment, and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company specifically acknowledges that, subject to such limitations as are expressly set forth in the Agreement, its obligation to issue Advance Shares upon purchases pursuant to this Agreement is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

Section 4.27. Acknowledgment Regarding Investor’s Purchase of Shares. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm’s length investor with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges that the Investor is not acting as a financial advisor, partner or fiduciary of the Company or any of its affiliates or subsidiaries (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Investor’s purchase of the Common Stock hereunder. The Company is aware and acknowledges that it may not be able to request Advances under this Agreement if it cannot obtain an effective Registration Statement or if any issuances of Common Stock pursuant to any Advances would violate any rules of the Principal Market.

 

  

8

  

Section 4.28. No Advice from the Investor. The Company acknowledges that it has reviewed this Agreement and the transactions contemplated by this Agreement with his or its own legal counsel and investment and tax advisors. The Company is relying solely on such counsel and advisors and not on any statements or representations of the Investor or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction. The Company is not relying on any representation except for the representations of the Investor contained in this Agreement.

 

 Section 4.29. No Similar Transactions. Except as disclosed on Schedule 4.29, the Company has not entered into any transaction similar in nature to the one described in this Agreement.

 

Section 4.30. Sarbanes-Oxley; Internal Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the date hereof. The Company and its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 Section 4.31 [Intentionally Omitted].

 Section 4.32 The Advance Shares. The Advance Shares have been duly authorized and, when issued, delivered and paid for pursuant to this Agreement, will be validly issued and fully paid and non-assessable, free and clear of all encumbrances and will be issued in compliance with all applicable United States federal and state securities laws; the capital stock of the Company, including the Common Stock, conforms in all material respects to the description thereof contained in the Registration Statement and the Common Stock, including the Advance Shares, will conform to the description thereof contained in the Prospectus as amended or supplemented. Neither the stockholders of the Company, nor any other Person have any preemptive rights or rights of first refusal with respect to the Advance Shares or other rights to purchase or receive any of the Advance Shares or any other securities or assets of the Company, and no Person has the right, contractual or otherwise, to cause the Company to issue to it, or register pursuant to the Securities Act, any shares of capital stock or other securities or assets of the Company upon the issuance or sale of the Advance Shares. The Company is not obligated to offer the Advance Shares on a right of first refusal basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third parties.

 

Section 4.33 [Intentionally Omitted]

 

Section 4.34 Blue Sky. The Company shall, at its sole cost and expense, on or before each of the Closing Dates, take such action as the Company shall reasonably determine is necessary to qualify the Securities for, or obtain exemption for the Securities for, sale to the Investor at each of the Closings pursuant to this Agreement under applicable securities or "Blue Sky" laws of such states of the United States, as reasonably specified by the Investor, and shall provide evidence of any such action so taken to the Investor on or prior to the Closing Date.

 

Section 4.35 Reservation of Shares. The Company shall reserve fifty million (50,000,000) shares of Stock for the issuance of the Securities to the Investor as required hereunder. In the event that the Company determines that it does not have a sufficient number of authorized shares of Common Stock to reserve and keep available for issuance as described in this Section 5(F), the Company shall use all commercially reasonable efforts to increase the number of authorized shares of Common Stock by seeking shareholder approval for the authorization of such additional shares.

 

Section 4.36 Payment Set Aside. To the extent that the Company makes a payment or payments to the Investor hereunder or under the Registration Rights Agreement or the Investor enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be invalid or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

  

9

  

 

Section 4.37 Share Capital. There are no securities or instruments containing anti-dilution of similar provision that will be triggered by the issuance of shares of Common Stock pursuant to this Agreement. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement and there is no dispute as to the class of any shares of the Company.

 

Section 4.38 Acknowledgement of Terms. The Company acknowledges that: (i) it is voluntarily entering into this Agreement of its own freewill, (ii) it is not entering this Agreement under economic duress, (iii) the terms of this Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this Agreement.

 

ARTICLE V.

Indemnification

 

The Investor and the Company represent to the other the following with respect to itself:

 

Section 5.1. Indemnification.

 

(a) In consideration of the Investor’s execution and delivery of this Agreement, and in addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and hold harmless the Investor, and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Investor Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Investor Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement or the Registration Rights Agreement or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the Registration Rights Agreement or any other certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Investor Indemnitee not arising out of any action or inaction of an Investor Indemnitee, and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto by any of the Investor Indemnitees. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

(b) In consideration of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company , and all of its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities, incurred by the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or the Registration Rights Agreement or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement or the Registration Rights Agreement or any other certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Company Indemnitee arising out of any action or inaction of the Investor. To the extent that the foregoing undertaking by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

(c) Contribution. In the event that the indemnity provided in Section 5.1 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company severally agrees to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same) (collectively “Losses”) to which the Company may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand from transactions contemplated by this Agreement. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Investor severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Investor on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by it, and benefits received by the Investor shall be deemed to be equal to the total discounts received by the Investor or the profits, if any, made on the subsequent sale, whichever is greater. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Investor on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Investor agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this section shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. For purposes of this Article V, each person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each director, officer, employee and agent of the Investor shall have the same rights to contribution as the Investor, and each person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this section.

 

(d) Notwithstanding anything in this Agreement to the contrary, neither party to this Agreement shall be responsible or liable for any indirect, special, punitive, or consequential damages actually or allegedly suffered or incurred by the other party to this Agreement arising under, out of, or relating to this Agreement even if the other party has been advised or knew, or should have known, of the possibility thereof.

 

  

10

  

 

Section 5.2 Notification of Claims for Indemnification. Each party entitled to indemnification under this Article V (an “Indemnified Party”) shall, promptly after the receipt of notice of the commencement of any claim against such Indemnified Party in respect of which indemnity may be sought from the party obligated to indemnify such Indemnified Party under this Article V (the “Indemnifying Party”), notify the Indemnifying Party in writing of the commencement thereof. Any such notice shall describe the claim in reasonable detail. The failure of any Indemnified Party to so notify the Indemnifying Party of any such action shall not relieve the Indemnifying Party from any liability which it may have to such Indemnified Party (a) other than pursuant to this Article V or (b) under this Article V unless, and only to the extent that, such failure results in the Indemnifying Party’s forfeiture of substantive rights or defenses or the Indemnifying Party is prejudiced by such delay. The procedures listed below shall govern the procedures for the handling of indemnification claims.

 

(a) Any claim for indemnification for Indemnified Liabilities that do not result from a Third Party Claim as defined in the following paragraph, shall be asserted by written notice given by the Indemnified Party to the Indemnifying Party. Such Indemnifying Party shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such thirty (30) day period, such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment as set forth in Section 5.1. If such Indemnifying Party does not respond within such thirty (30) day period or rejects such claim in whole or in part, the Indemnified Party shall be free to pursue such remedies as specified in this Agreement.

 

(b) If an Indemnified Party shall receive notice or otherwise learn of the assertion by a person or entity not a party to this Agreement of any threatened legal action or claim (collectively a “Third Party Claim”), with respect to which an Indemnifying Party may be obligated to provide indemnification, the Indemnified Party shall give such Indemnifying Party written notice thereof within twenty (20) days after becoming aware of such Third Party Claim.

 

(c) An Indemnifying Party may elect to defend (and, unless the Indemnifying Party has specified any reservations or exceptions, to seek to settle or compromise) at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel, any Third Party Claim. Within thirty (30) days after the receipt of notice from an Indemnified Party (or sooner if the nature of such Third Party Claim so requires), the Indemnifying Party shall notify the Indemnified Party whether the Indemnifying Party will assume responsibility for defending such Third Party Claim, which election shall specify any reservations or exceptions. If such Indemnifying Party does not respond within such thirty (30) day period or rejects such claim in whole or in part, the Indemnified Party shall be free to pursue such remedies as specified in this Agreement. In case any such Third Party Claim shall be brought against any Indemnified Party, and it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to assume the defense thereof at its own expense, with counsel satisfactory to such Indemnified Party in its reasonable judgment; provided, however, that any Indemnified Party may, at its own expense, retain separate counsel to participate in such defense at its own expense. Notwithstanding the foregoing, in any Third Party Claim in which both the Indemnifying Party, on the one hand, and an Indemnified Party, on the other hand, are, or are reasonably likely to become, a party, such Indemnified Party shall have the right to employ separate counsel and to control its own defense of such claim if, in the reasonable opinion of counsel to such Indemnified Party, either (x) one or more significant defenses are available to the Indemnified Party that are not available to the Indemnifying Party or (y) a conflict or potential conflict exists between the Indemnifying Party, on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable; provided, however, that in such circumstances the Indemnifying Party (i) shall not be liable for the fees and expenses of more than one counsel to all Indemnified Parties and (ii) shall reimburse the Indemnified Parties for such reasonable fees and expenses of such counsel incurred in any such Third Party Claim, as such expenses are incurred, provided that the Indemnified Parties agree to repay such amounts if it is ultimately determined that the Indemnifying Party was not obligated to provide indemnification under this Article IX. The Indemnifying Party agrees that it shall not, without the prior written consent of the Indemnified Party, settle, compromise or consent to the entry of any judgment in any pending or threatened claim relating to the matters contemplated hereby (if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement, compromise or consent includes an unconditional release of such Indemnified Party from all liability arising or that may arise out of such claim. The Indemnifying Party shall not be liable for any settlement of any claim effected against an Indemnified Party without the Indemnifying Party’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed. The rights accorded to an Indemnified Party hereunder shall be in addition to any rights that any Indemnified Party may have at common law, by separate agreement or otherwise; provided, however, that notwithstanding the foregoing or anything to the contrary contained in this Agreement, nothing in this Article V shall restrict or limit any rights that any Indemnified Party may have to seek equitable relief.

 

ARTICLE VI.

Covenants

 

Section 6.1. Registration Rights. The Company shall cause the Registration Rights Agreement to remain in full force and effect and the Company shall comply in all material respects with the terms thereof. During the Commitment Period, the Company shall notify the Investor promptly if (i) the Registration Statement shall cease to be effective under the Securities Act, (ii) the Common Stock shall cease to be authorized for listing on the Principal Market, (iii) the Common Stock ceases to be registered under Section 12(g) of the Exchange Act or (iv) the Company fails to file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act.

 

Section 6.2. Quotation of Common Stock. The Company shall maintain the Common Stock’s authorization for quotation on the Principal Market and use its best efforts to file within any mandatory timeframe all reports required to be filed by the Company.

 

Section 6.3. Exchange Act Registration. The Company will cause its Common Stock to continue to be registered under Section 12(g) of the Exchange Act, will file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under said Exchange Act.

 

Section 6.4. Transfer Agent Instructions. On the Advance Date, the Company shall deliver instructions to its transfer agent to issue shares of Common Stock to the Investor free of restrictive legends.

 

Section 6.5. Corporate Existence. The Company will take all steps necessary to preserve and continue the corporate existence of the Company.

 

  

11

  

 

Section 6.6. Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company shall not deliver to the Investor any Advance Notice during the continuation of any of the following events: (i) receipt of any request for additional information by the SEC or any other Federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the registration statement or related prospectus; (ii) the issuance by the SEC or any other Federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus of any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) the Company’s reasonable determination that a post-effective amendment to the Registration Statement would be appropriate; and the Company will promptly make available to the Investor any such supplement or amendment to the related prospectus.

 

Section 6.7. Prohibited Transactions. During the term of this Agreement, the Company shall not enter into any Prohibited Transaction without the prior written consent of the Investor, which consent may be withheld at the sole discretion of the Investor. For the purposes of this Agreement, the term “Prohibited Transaction” shall refer to the issuance by the Company of Common Stock that is covered by a registration statement, including the Registratino Statement.

 

Section 6.8. Consolidation; Merger; Subdivision of Stock. The Company shall not, at any time after the delivery of an Advance Notice and before the Advance Date applicable to such Advance Notice, effect any merger or consolidation of the Company with or into, or a transfer of all or substantially all the assets of the Company to another entity (a “Consolidation Event”) unless the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligation to deliver to the Investor such shares of stock and/or securities as the Investor is entitled to receive pursuant to this Agreement.

 

Section 6.9. Issuance of the Company’s Common Stock. The sale of Advance Shares shall be made in accordance with the provisions and requirements of Regulation D and any applicable state securities law.

 

Section 6.10. [Intentionally Omitted].

 

Section 6.11. Listing of Shares. The Company will use commercially reasonable efforts to cause the Shares to be listed on the Principal Market and to qualify the Shares for sale under the securities laws of such jurisdictions as the Investor designates; provided that the Company shall not be required in connection therewith to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction.

 

Section 6.12. [Intentionally Omitted]

 

Section 6.13. No General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Common Stock to be offered as set forth in this Agreement.

 

Section 6.14. [Intentionally Omitted]

Section 6.15. Transactions With Affiliates. The Company shall not, and shall cause each of its Subsidiaries not to, enter into, amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment or arrangement with any of its or any Subsidiary's officers, directors, persons who were officers or directors at any time during the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any individual related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual owns a 5% or more beneficial interest (each a "Related Party"), except for (I) customary employment arrangements and benefit programs on reasonable terms, (II) any agreement, transaction, commitment or arrangement on an arms-length basis on terms no less favorable than terms which would have been obtainable from a disinterested third party other than such Related Party, or (III) any agreement, transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the Company. For purposes hereof, any director who is also an officer of the Company or any Subsidiary of the Company shall not be a disinterested director with respect to any such agreement, transaction, commitment or arrangement. "Affiliate" for purposes hereof means, with respect to any person or entity, another person or entity that, directly or indirectly, (I) has a 5% or more equity interest in that person or entity, (II) has 5% or more common ownership with that person or entity, (III) controls that person or entity, or (IV) is under common control with that person or entity. "Control" or "Controls" for purposes hereof means that a person or entity has the power, directly or indirectly, to conduct or govern the policies of another person or entity.

Section 6.16. Filing of Form 8-K. On or before the date which is four (4) Trading Days after the Execution Date, the Company shall file a Current Report on Form 8-K with the SEC describing the terms of the transaction contemplated by the Equity Line Transaction Documents in the form required by the 1934 Act, if such filing is required.

 

Section 6.17. Acknowledgement of Terms. The Company hereby represents and warrants to the Investor that: (i) it is voluntarily entering into this Agreement of its own freewill, (ii) it is not entering this Agreement under economic duress, (iii) the terms of this Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this Agreement.

 

  

12

  

Section 6.18. Stamp Duties. Without limiting anything else in this Agreement, the Company shall indemnify the Investor against any claim, action, damage, loss liability, cost charge, expense outgoing or payment, including ay penalty, fine or interest, which the Investor pays, suffers, incurs, or is liable for, in connection with (including any administration costs of the Investor in connection in the matters referred to in the preceding pat of this sentence, any legal costs and expenses and any professional consultants’ fees for any of the above on a full indemnity basis:

(a) the stamping of, or any stamp duty payable on, any of the following: (i) this Agreement; (ii) any contemplated transaction or Advance under this Agreement;

(b) any inquiry by a governmental authority or regulatory body in connection with the assessment for stamp duty of the documents referred to in this clause involving the Investor;

(c) any future, or any change in any present or future, stamp duty law or regulation or stamp duty or state or territory revenue office practice (with which, if not having the force of law, compliance is in accordance with the practice or responsible bankers and financial institutions in the jurisdiction concerned; and/or

(d) any litigation or administrative proceedings (including any objection made to a stamp duty or state or territory revenue office) taken against or involving the Investor in connection with the assessment for stamp duty of the documents or transactions referred to in this Agreement.

 

Section 6.19. Conduct of Business. The Company shall, and shall cause all of its subsidiaries to carry on and conduct its business and the business of each subsidiary in a proper and efficient manner in accordance with good commercial practice, and ensure that while the Investor holds any of the Stock, that the voting any other rights attached to the Stock are not altered in a manner which, in the opinion of the Investor, is materially prejudicial to the Investor.

Section 6.20. Miscellaneous Covenants. The Company shall not, and shall cause all of its subsidiaries not to, directly or indirectly, without the Investor’s written approval: (a) dispose, in a single transaction, or in a series of transactions, of all or any part of its assets unless such disposal is (i) in the ordinary course of business; (ii) for fair market value; and (iii) approved by the board of directors of the Company; (b) reduce its used share capital or any uncalled liability in respect of its issued capital, except by means of a purchase or redemption of the share capital that is permitted under law; (c) undertake any consolidation of its share capital; (d) change the nature of its business or the nature of the business of any subsidiary; (e) transfer the jurisdiction of incorporation of the Company or any of its Subsidiaries; (f) enter into any agreement with respect to any of the matters referred to in this section.

Section 6.21. [Intentionally Omitted].

Section 6.22. [Intentionally Omitted].

Section 6.23. Illegality and Impossibility. Without limiting the generality of the Investor’s rights set out elsewhere in this Agreement, if in the reasonable opinion of the Investor, at any time there exists a law which , or an official or reasonable interpretation of which, makes it , or may make it illegal or impossible in practice of the Investor to undertake any of the Advances, or render any of the contemplated Advances unenforceable, void or voidable, the Investor may, by giving a notice to the Company suspend or cancel some or all of its obligations under this Agreement, or terminate this Agreement.

Section 6.24. Costs of Registration Statement. The Investor covenants to pay all costs and expenses of the Company associated with the Registration Statement.

 

ARTICLE VII.

Conditions for Advance and Conditions to Closing

 

Section 7.1. Conditions Precedent to the Obligations of the Company. The obligation hereunder of the Company to issue and sell Advance Shares to the Investor incident to each Closing is subject to the satisfaction, or waiver by the Investor in writing, at or before each such Closing, of each of the conditions set forth below.

 

(a) Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor shall be true and correct in all material respects.

 

(b) Performance by the Investor. The Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Investor at or prior to such Closing.

 

Section 7.2. Conditions Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance Notice is subject to the fulfillment by the Company, on such Advance Date (a “Condition Satisfaction Date”), of each of the following conditions, any of which may be waived in writing by the Investor:

 

(a) Advance Shares to be issued with respect to the applicable Advance Notice will be freely trading.

 

(b) Authority. The Company shall have obtained all permits and qualifications required by any applicable state in accordance with the Registration Rights Agreement for the offer and sale of Advance Shares, or shall have the availability of exemptions there-from. The sale and issuance of Advance Shares shall be legally permitted by all laws and regulations to which the Company is subject.

 

(c) Fundamental Changes. There shall not exist any fundamental changes to the information set forth in a Registration Statement which would require the Company to file a post-effective amendment to a Registration Statement.

 

  

13

  

 

(d) Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied with by the Company at or prior to each Condition Satisfaction Date.

 

(e) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or directly and adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or adversely affecting any of the transactions contemplated by this Agreement.

 

(f) No Suspension of Trading in or Delisting of Common Stock. The Common Stock is trading on the Principal Market. The trading of Common Stock is not suspended by any government or the Principal Market. The issuance of Advance Shares with respect to the applicable Advance Notice will not violate the shareholder approval requirements of the Principal Market. The Company shall not have received any notice threatening the continued quotation of the Common Stock on the Principal Market and the Company shall have no knowledge of any event which would be more likely than not to have the effect of causing the Common Stock to not be trading or quoted on the Principal Market.

 

(g) Maximum Advance Amount In no event shall the Company issue such additional shares (i) in excess of the Maximum Advance Amount or (ii) if such issuance would result in non-compliance with any securities laws. If any of the Company’s representations in this Agreement are false, then no Advances shall be permitted. Any portion of an Advance that would cause the Investor to exceed the Ownership Limitation shall automatically be withdrawn.

 

(h) No Knowledge. The Company has no knowledge of any event which would be more likely than not to have the effect of causing the Advance Shares with respect to the applicable Advance Notice not to be freely tradable.

 

(i) Executed Advance Notice. The Investor shall have received the Advance Notice executed by an officer of the Company and the representations contained in such Advance Notice shall be true and correct as of each Condition Satisfaction Date.

 

(j) Failure to Deliver Shares. Company understands that a delay in the issuance of Common Stock could result in economic damage to the Investor. If the Company fails to cause the delivery of the Shares when due, the Company shall pay to the Investor on demand in cash by wire transfer of immediately available funds to an account designated by the Investor as liquidated damages for such failure and not as a penalty, an amount equal to five percent (5%) of the payment required to be paid by the Investor on such Settlement Date (i.e., the Advance Amount) for the initial 30 days following such date until the Shares have been delivered, and an additional 5% for each additional 30-day period thereafter until the Shares have been delivered.

 

(k) Fees Paid. The Company shall not be obligated to pay to Investor any fees and expenses related to this Agreement.

 

(l) No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from any federal or state governmental, administrative or self-regulatory authority during the Commitment Period, the response to which would require any amendments or supplements to any filings; (ii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

 

(m) No Right of First Refusal. No person is entitled or purports to be entitled, to any right of first refusal, pre-emptive right, right of participation, or any similar right, to participate in the transaction or otherwise with respect to any securities of the Company.

 

(n) No Security. The Company has not granted security with respected to any indebtedness or other equity of the Company.

 

(o) No Adjustment. The issuance and sale of any of the Investor’s stock will not obligate the Company to issue Stock or other securities to any other persona and will not result in the adjustment of the exercise, conversion, exchange, or reset price of any outstanding security.

 

(p) No Other Rights. There are no voting, buy-sell, outstanding or authorized stock appreciation, right of first purchase, phantom stock, profit participation or equity based compensation agreements, options or arrangement, or like rights relating to the securities of the Company or agreements of any kind among the Company and any person,

 

(q) Valid Issuance. When issued pursuant to this Agreement, all Investor’s stock will be validly issued and fully paid, and will be free and clear of any and all liens and restrictions, except for restrictions on transfer imposed by applicable laws.

 

(r) Regulatory Issues. No stop order, trading halt, suspension of trading, cessation of quotation, or removal of the company of the Stock from any exchange has been requested by the Company or imposed by any governmental authority or regulatory body. There is no fact or circumstance that may cause the Company to request, or any governmental authority or regulatory body to impose any stop order, trading halt, suspension of trading, cessation of quotation or removal of the Company or the Stock from any exchange.

 

(s) No Additional Material Adverse Effect. There has been no event or condition that has had or may have a Material Adverse Effect since the date of the Company’s latest audited financial statements:

 

(t) No Liabilities. The Company has not incurred any liabilities (contingent or otherwise) other than: (a) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice; and (b) liabilities not required to be reflected in the Company’s financial statements pursuant to the financial standards pursuant to which such financial statements are prepared, or required to be disclosed in the Company’s public filings;

 

  

14

  

 

(u) No Change in Accounting. The Company has not altered its method of accounting; and

 

(v) No Dividends. The Company has not declared or made any dividend or distribution of cash or other property to its shareholders, or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock.

 

(w) No Conflict, Breach, Violation or Default. The execution and delivery of, and the performance of the terms of, the Agreement or any Advance Notice or Advance will not: (i) result in the creation of any lien in respect of any property of the Company or any of its subsidiaries; or (ii) violate, conflict with, result in a breach of an provision of, require any notice or consent under, constitutes a default under, resulting in the termination of, or in a right of termination or cancellation of, accelerate the performance required by, result in the triggering of any payment or other material obligations pursuant to, ay of the terms, conditions or provisions of: (a) the Company’s constitution as in effect on the date of this Agreement; or (b) any law , governmental authorization, or order of any court, domestic or foreign, having jurisdiction over the Company, any subsidiary, or any of their respective assets or properties; or (c) any material agreement or instrument to which the Company or any subsidiary is a party or by which the Company or a subsidiary is bound or to which any their respective assets or properties is subject (or render any such agreement or instrument voidable or without further effect).

 

 (x) Litigation. (i) There are no pending actions, suits or proceedings against or affecting the Company, its subsidiaries or any of its or their properties, and to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated; (ii) Neither the Company nor any subsidiary, nor any director or officer is or has been the subject of any action, suit, proceeding, or investigation involving a claim of violation of or liability under securities laws or a claim of breach of fiduciary duty; (iii) There has not been, and to the knowledge of the Company there is no, pending or contemplated investigation by a governmental authority involving the Company or any current or former director or officer of the Company; and (iv) No regulatory body has issued any stop order or other order suspending the effectiveness of a Registration Statement or any related prospectus filed or lodged by the Company.

 

(y) Compliance. Neither the Company nor any subsidiary: (i) is in material default under, or in material violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any subsidiary under), nor has the Company or any subsidiary received notice of a claim that is in default under or that is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived); (ii) is in violation of nay order of any court, arbitrator or governmental authority or regulatory body; (iii) is or has been in violation of any law; (iv) Neither the Company nor to is knowledge, any persona acting on its behalf, has conducted any general solicitation or general advertising (as those terms are used in Regulation D, in connection with the offering of the Securities to the Investor; (v) Neither the Company nor any of its affiliates, nor any person action on its or their behalf has, directly or indirectly, sold, offered for sale or solicited offers to buy or otherwise negotiated in respect of any security, in a manner, or under circumstances, that: (a) would adversely affect reliance by the Company on the provisions of Rule 506 of Regulation D for the exemption from registration for the sale and offer of the Securities to the Investor; (b) would require registration of the sale of the Securities under the Securities Act; or (c) would cause such offer or solicitation to be deemed integrated with the offering of the Securities. (iii) The offer and sale of the Securities to the Investor, as contemplated by this Agreement, is exempt from: (a) the registration requirements of the Securities Act by virtue of Rule 506 of Regulation D; and (b) the registration and/ or qualification provisions of all applicable U.S state securities laws.

 

(z) Tax Returns. Without limiting anything else in this Agreement, the Company has filed, or caused to be filed, in a timely manner, all tax returns, business activity statements and other tax filings which were required to be filed by the execution date under applicable tax law, and has paid all taxes that became due and payable by it on or before the execution date when those taxes became due and payable. No claims have been, or are reasonably likely to be, asserted against it with respect to those filings or payment of taxes, that, if adversely determined, would have the potential to have a Material Adverse Effect.

 

(aa) Disclosures.

 

(i) The materials delivered, and statements made, by the Company and its representatives to the Investor in connection with the contemplated Advances do not: (a) contain any untrue statement of a material fact or misleading statement; or (b) omit to state a material fact necessary in order to make the statements contained in those materials, in light of the circumstances under which they were made, not misleading.

 

(ii) The Company had disclosed to the Investor in writing all facts relating to the Company, its business, the documents, the contemplated transactions and Advances, and all other matters which are material to the assessment of the nature and amount of the risk inherent in an investment in the Company.

 

(iii) Neither the Company nor any of its subsidiaries has made any agreement, offer, tender or quotation which remains outstanding and currently capable of acceptance relating to the purchase or sale of any business or assets of the Company or any of its subsidiaries.

 

(bb) Solvency.

 

(i) The Company and each of its subsidiaries is able, and is not aware of anything which would render the Company or any of its subsidiaries unable, to pay all its debts as and when they become due and payable.

 

(ii) No judicial order has been made or obtained against the Company or any of its subsidiaries which is unpaid or unsatisfied.

 

(iii) No attachment in in the process of being levied or enforced against any asset of the Company or its subsidiaries.

 

  

15

  

 

(iv) No administrator, liquidator, provisional liquidator, controller or receiver of, or in connection with, the Company or any of its subsidiaries has been appointed, and the Company is not aware of such appointment pending, threatened, or being likely.

 

(v) No person has entered into, proposed, sanctioned, approved, or commenced, legal action relating to a scheme of arrangement of the affairs of the Company or any of its subsidiaries, or between any of those people and any of its shareholders or creditors.

 

(vi) Neither the Company nor any of its subsidiaries is in default under any security interest over, or in relation to, any asset.

 

(vii) The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect to the contemplated transactions and Advances, does not anticipate or know of any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year.

 

(cc) Intellectual Property.

 

(i) The Company and its subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses and now conducted.

 

(ii) The Company has no knowledge of any infringement by the Company or its subsidiaries of trademarks, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secrets or other similar rights of others.

 

(iii) To the knowledge of the Company, there is no claim, action or proceeding made, brought, or threatened, against the Company or its subsidiaries regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement, and the Company and its subsidiaries are unaware of any facts or circumstances which might give rise to a claim, action or proceeding.

 

(dd) Non-public information. Neither the Company nor any person acting on its behalf has provided the Investor or its agents, representative or counsel with any information that constitutes inside information or material non-public information, and to the Company’s knowledge, the Investor does not possess any inside information or material non-public information.

 

(ee) Prohibited Transactions. The Company has not entered or agreed to enter into a Prohibited Transaction.

 

(ff) Default. Neither the Company or any subsidiary is in default under a document or agreement binding on it or its assets which relates to financial indebtedness or it otherwise material.

 

(gg) Absence of Events of Default. No Event of Default and no event which, with notice, lapse of time or both, would constitute an Event of Default, has occurred and is continuing.

 

(hh) Brokers and finders. No person will have, as a result of the contemplated transactions and Advances, any valid right, interest or claim against or upon the Company, any subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of the Company.

 

(ii) No Event of Default. The Investor is of the opinion that (i) no Event of Default has occurred, (ii) no Remediable Event of Default has occurred and is continuing and no Event of Default would result from an Advance being effected. Any of the following shall constitute an Event of Default:

 

(a) Any of the representations, warranties, or covenants made by the Company or any of its agents, officers, directors, employees or representatives in an document, materials or public filing are inaccurate, false or misleading in any material respect, as of the date as of which it is made or deemed to be made, or any certificate or financial or other written statements furnished by or on behalf of the Company to the Investor, any of its representatives, or the company’s shareholders, is inaccurate, false or misleading, in any material respect, as of the date as of which it is made or deemed to be made, or on any Advance Date.

(b) The Company or any subsidiary of the Company is or becomes insolvent.

(c) An administrator is appointed over all or any of the assets or undertaking of the Company or any subsidiary or any step preliminary to the appointment to an administrator has been taken.

(d) A controller or similar officer is appointed to all or any of the assets or undertaking of the Company or any subsidiary.

(e) An application or order is made, a proceeding is commenced, a resolution is passed or proposed, or an application to a court or other steps are taken for the winding up or dissolution of the Company or any subsidiary , or for the Company or any subsidiary to enter an arrangement, compromise or composition with, or assignment for the benefit of, its creditors, a class of them, or any of them.

(f) The Company or any of its subsidiaries ceases, suspends or threatens to cease or suspend, the conduct of all or a substantial part of its business, or dispose of, or threaten to dispose of, a substantial part of its assets or to reduce its capital.

 

  

16

  

(g) There exists a fact or circumstance that may cause the Company to request, or the Principal Market or any other governmental authority or regulatory body to impose a stop order, trading halt, suspension of trading, cessation of quotation, or removal of the Company or the Common Stock for the Principal Market.

(h) Any of the following has occurred: (i) trading in securities have been suspended or limited, (ii) minimum prices have been established on the securities, (iii) a banking moratorium has been declared by the authorities in New York or the jurisdiction where the Company is incorporated or where the Common Stock is trading, (iv) a material outbreak or escalation of hostilities or another national or international calamity of such magnitude in its effect on, or adverse change in the markets in the United States or the market where the Common Stock trades, makes it impracticable or inadvisable for the Investor to close on an Advance or accept an Advance Notice.

(i) Any agreement entered into by the Company or contemplated transaction by the Company is claimed (other than in a frivolous proceeding) by any person that is not the Investor or its affiliate to be, wholly or partly void, voidable or unenforceable.

(j) Any person has commenced any action, claim, proceeding, suit, or action against any other person or otherwise asserted any claim before any governmental authority, which seeks to restrain, challenge, deny, enjoin, limit, modify, delay, or dispute, the right of the Investor or the Company to enter into this Agreement or contemplated transactions under this Agreement.

(k) The Company challenges, disputes or denies the right of the Investor to receive any shares of the Common Stock, or otherwise dishonors or rejects any action taken, or document delivered, in furtherance of the Investor’s rights to receive any Common Stock.

(l)  A stop order, trading halt, suspension of trading, cessation of quotation, or removal of the Company or the Stock from an exchange has been requested by the Company or imposed on the Company.

(m)  A Material Adverse Effect, or an event, development or condition which, in the reasonable judgment of the Investor would be likely to have a Material Adverse Effect occurs.

(n) There exists a law which, or an official or reasonable interpretation of which, in the Investor’s reasonable opinion, makes it, or is more likely than not to make it, illegal or impossible for the Investor or the Company to undertake any of the Advances in accordance with this Agreement, or renders, or is more likely than not to render, consummation of any of the Advances in accordance with this Agreement unenforceable, void, voidable or unlawful, or contrary to or inconsistent with any law.

(o)  If: (i) a change in an interpretation or administration of a law or a proposed law introduced or proposed to be introduced to any governing body of law; (ii) compliance by the Investor or any of its Affiliates with a law or an interpretation or administration of a law, has, or is more likely than not to have, in the reasonable opinion of the Investor, directly or indirectly, the effect of (iv) varying the duties, obligation or liabilities of the Company or the Investor in connection with this Agreement or any Advance so that the Investor’s rights, powers, benefits, remedies or economic burden (including any tax treatment in the hands of the Investor) are adversely affected (including by way of delay or postponement); (v) otherwise adversely affecting rights, powers, benefits, remedies or the economic burden of the Investor (including by way of delay or postponement); (vi) otherwise making it impracticable for the Investor to undertake any of the Advances or contemplated Advances.

(p) A securities registrar or similar entity refuses to comply with a direction to issue, or record an issuance of securities to the Investor.

(q) Any consent, permit, approval, registration or waiver necessary or appropriate for the consummation of an Advance that remains to be consummated at the applicable time, has not been issued or received, or does not remain in full force or effect.

(r) The Investor has not received all those items required to be delivered to it in connection with an Advance in accordance with this Agreement.

(s) The Company fails to perform, comply with, or observe any other term, covenant, undertaking, obligation or agreement under this Agreement.

(t) A default judgment of an amount of $500,000 or greater is entered against the Company or any of its subsidiaries.

(u) Any present or future liabilities, including contingent liabilities, of the Company or any of its subsidiaries for an amount or amounts totaling more than $500,000 have not been satisfied on time, or have become prematurely payable.

7.3 Investor Right to Investigate an Event of Default.

If in the Investor’s reasonable opinion, an Event of Default has occurred, or is or may be continuing: (a) the Investor may investigate such purported Event of Default; (b) the Company shall co-operate with the Investor in such investigation; and (c) the Company shall comply with all reasonable requests made by the Investor of the Company in connection with any investigation by the Investor.

 

  

17

  

 

7. 4 Rights of the Investor upon Default.

 

(a) Upon the occurrence of existence of any Default at any time during the continuance of such Event of Default, the Investor may: (i) declare, by notice to the Company, effective immediately, that the break fee described in Section 12.4 under the Agreement to be immediately due and payable in the shares held in escrow, as described below, without presentment, demand, protest or any other notice of any kind (other than notice to the applicable escrow agent), all of which are expressly waived by the Company, anything to the contrary contained in this Agreement; (ii) terminate this Agreement by notice to the Company, effective as of the date set out in the Investor’s notice.

 

(b) Where an Event of Default has occurred, the Investor shall have: (i) no obligation to accept an Advance Notice or to consummate a closing under this Agreement; and (ii) the right to postpone the Advance accordingly.

 

(c) In addition to the remedies set out elsewhere, upon the occurrence or existence of any Event of Default, the Investor may exercise any other right, power or remedy granted to it by the Agreement or otherwise permitted by law, including any suit in equity and/or by action at law.

ARTICLE VIII.

Due Diligence Review; Non-Disclosure of Non-Public Information

 

Section 8.1. Non-Disclosure of Non-Public Information.

 

 (a) Subject to Section 6.6 and except as otherwise provided in this Agreement or the Registration Rights Agreement, the Company covenants and agrees that it has not in the past and will refrain in the future from disclosing, and shall cause its officers, directors, employees and agents to refrain from disclosing, any material non-public information to the Investor without also disseminating such information to the public at the same time.

 

(b) Nothing herein shall require the Company to disclose material, non-public information to the Investor or its advisors or representatives, and the Company represents that it does not disseminate material, non-public information to any Investors who purchase stock in the Company in a public offering, to money managers or to securities analysts in violation of Regulation FD of the Exchange Act, provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided and subject to compliance with Regulation FD, immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting material, non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements, therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Section 8.1 shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain material, non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.

 

ARTICLE IX.

Choice of Law/Jurisdiction

 

Section 9. Governing Law. This Agreement shall be governed by and interpreted solely in accordance with the laws of the State of New York without regard to the principles of conflict of laws. Any dispute arising out of or in connection with this Agreement or otherwise relating to the parties relationship shall be settled only by litigation and exclusively in the State of New York, City of New York. The Company and the Investor further agree that no demand for punitive or exemplary damages shall be made. The parties hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with this Agreement. The parties agree that in the event of any action, litigation or proceeding between the parties arising out of or in relation to this Agreement, the prevailing party in a final judgment after the appeal period has passed shall be awarded, in addition to any damages, injunctions or other relief, such party’s costs and expenses, including but not limited to all related costs and reasonable attorneys’, accountants’ and experts’ fees incurred in bringing such action, litigation or proceeding and/or enforcing any judgment or order granted therein. No party to this Agreement will challenge the jurisdiction or venue provisions as provided in this section. The section shall survive termination of the Agreement.

 

  

18

  

 

ARTICLE X.

Assignment; Termination

 

Section 10.1. Assignment. Neither this Agreement nor any rights or obligations of the Company or the Investor hereunder may be assigned to any other Person.

 

Section 10.2. Termination.

 

(a) Unless earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest of (i) the first day of the month next following the 36-month anniversary of the Effective Date, (ii) the date on which the Investor shall have made payment of Advances pursuant to this Agreement in the aggregate amount of the Commitment Amount or (iii) the Registration Statement is no longer effective.

 

(b) The obligation of the Investor to make an Advance to the Company pursuant to this Agreement shall terminate permanently (including with respect to an Advance Date that has not yet occurred) in the event that (i) there shall occur any stop order or suspension of the effectiveness of the Registration Statement for an aggregate of fifty (50) Trading Days, during the Commitment Period, or (ii) the Company shall at any time fail materially to comply with the requirements of Article VI and such failure is not cured within thirty (30) days after receipt of written notice from the Investor, provided, however, that this paragraph (c) shall not apply to any period commencing upon the filing of a post-effective amendment to such Registration Statement and ending upon the date on which such post effective amendment is declared effective by the SEC. The Investor may terminate this Agreement by sending email notice to the Company declaring a Material Adverse Effect.

 

(c) Nothing in this Section 10.2 shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement, or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under this Agreement. The indemnification provisions contained in Sections 5.1 and 5.2 shall survive termination hereunder.

 

ARTICLE XI.

Notices

 

Section 11.1. Notices. Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered upon being sent to the following email addresses:

 

If to the Company: bob.rosenthal@me.com

 

If to the Investor: rmarino@beaufortcp.com

 

Each party shall provide five (5) days’ prior written notice to the other party of any change in email address.

 

ARTICLE XII.

Miscellaneous

 

Section 12.1. Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

 

Section 12.2 Entire Agreement; Amendments. This Agreement supersedes all other prior agreements, negotiations or discussions both oral or written between the Investor, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement. The provisions of this Agreement shall be construed in favor of the Investor. Except as specifically set out in this Agreement, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with respect to any subject matter regarding this Agreement or otherwise.

 

Section 12.3. Reporting Entity for the Common Stock. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.

 

  

19

  

 

Section 12.4. Break Fee and Expenses. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants, appraisers or others engaged by such party) in connection with this Agreement and the transactions contemplated hereby. In consideration for entering into this Agreement, the Company is required to issue an initial 300,000 shares of common stock to an escrow agent mutually agreed upon by the parties hereto. Upon effectiveness of the Registration Statement, such shares shall immediately be returned to the Company by the applicable escrow agent. In the event the Registration Statement is not declared effective within one (1) year of the initial filing thereof, such shares shall be issued to the Investor by such escrow agent.

 

Section 12.5. Confidentiality. Each of the parties hereto shall keep confidential the terms of this Agreement and any and all transactions and dealings under this Agreement as well as any information obtained from any other party. The Company and the Investor agree that in addition to and in no way limiting the rights and obligations set forth in Section 12.5 hereto and in addition to any other remedy to which the Investor or Company is entitled at law or in equity, including, without limitation, specific performance, it will hold the other party harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such breach of confidentiality and acknowledges that irreparable damage would occur in the event of any such breach. It is accordingly agreed that both the Investor and Company shall be entitled to an injunction or injunctions to prevent such breaches of this Agreement and to specifically enforce, without the posting of a bond or other security, the confidentiality, terms and provisions of this Agreement.

 

Section 12.6 Publicity. Prior to issuing any public statements, the Company shall send to the Investor for approval any press releases or public statement with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement without the prior written consent of the other party. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Investor unless the Investor provides written approval to do so.

 

 Section 12.7 Placement Agent. If so required by the SEC, the Company agrees to pay a registered broker dealer, to act as placement agent, a percentage of the Put Amount on each draw toward the fee. The Investor shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other persons or entities for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement. The Company shall indemnify and hold harmless the Investor, their employees, officers, directors, agents, and partners, and their respective affiliates, from and against all claims, losses, damages, costs (including the costs of preparation and attorney's fees) and expenses incurred in respect of any such claimed or existing fees, as such fees and expenses are incurred.

 

Section 12.8 No Third Party Beneficiaries. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement (including without limitation any partner, member, shareholder, director, officer, employee or other beneficial owner of any party hereto, in its own capacity as such or in bringing a derivative action on behalf of a party hereto) shall have any standing as third party beneficiary with respect to this Agreement or the transactions contemplated hereby.

 

Section 12.9 No Personal Liability of Directors, Officers, Owners, Etc. No director, officer, employee, incorporator, shareholder, managing member, member, general partner, limited partner, principal or other agent of any of the Investor or the Company shall have any liability for any obligations of the Investor or the Company under this Agreement or for any claim based on, in respect of, or by reason of, the respective obligations of the Investor or the Company hereunder. Each party hereto hereby waives and releases all such liability. This waiver and release is a material inducement to each party’s entry into this Agreement.

 

Section 12.10. Delay. The Investor shall not be obligated to perform and shall not be deemed to be in default hereunder, if the performance of an obligation required hereunder is prevented by the occurrence of any of the following, acts of God, strikes, lock-outs, other industrial disturbances, acts of a public enemy, war or war-like action (whether actual, impending or expected and whether de jure or de facto), acts of terrorists, arrest or other restraint of government (civil or military), blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, sink holes, civil disturbances, explosions, breakage or accident to equipment or machinery, confiscation or seizure by any government or public authority, nuclear reaction or radiation, radioactive contamination or other causes, whether of the kind herein enumerated or otherwise, that are not reasonably within the control of the party claiming the right to delay performance on account of such occurrence.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

  

20

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Investment Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

 

	 	
COMPANY:

	 
	 	 	 
	 	
North American Oil & Gas Corp.

	 
	 	 	 	 
	 	
By:

	
/s/ Robert Rosenthal

	 
	 	Name:	
Robert Rosenthal

	 
	 	Title:	
President

	 
	 	 	 	 
	 	
INVESTOR:

	 
	 	 	 
	 	
Beaufort Ventures PLC

	 
	 	 	 	 
	 	
By:

	
/s/ Tunvir Malik

	 
	 	Name: 	
Tunvir Malik

	 
	 	Title:	
Managing Member

	 

 

  

21

  

 

EXHIBIT A

 

ADVANCE NOTICE

 

North American Oil & Gas Corp. (the “Company”)

 

The undersigned, __________________________hereby certifies, with respect to the sale of shares of Common Stock of ­­­­­­­­­­­­­­­­­­­the Company issuable in connection with this Advance Notice, delivered pursuant to the Investment Agreement (the “Agreement”), as follows:

 

 1. The undersigned is the duly elected Officer of the Company, its Chief Executive, President or Chief Financial Officer.

 

2. There are no fundamental changes to (a) the covenants in Article IV of the Investment Financing Agreement and (b) the information set forth in the Registration Statement which would require the Company to file a post effective amendment to the Registration Statement.

 

3. The Company has performed in all material respects all covenants and agreements to be performed by the Company and has complied in all material respects with all obligations and conditions contained in the Agreement on or prior to the Advance Date, and shall continue to perform in all material respects all covenants and agreements to be performed by the Company through the applicable Advance Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.

 

4. The undersigned hereby represents, warrants and covenants that it has made all filings (“SEC Filings”) required to be made by it pursuant to applicable securities laws (including, without limitation, all filings required under the Securities Exchange Act of 1934, which include Forms 10-Q or, 10-K or, 8-K, etc.). All SEC Filings and other public disclosures made by the Company, including, without limitation, all press releases, analysts meetings and calls, etc. (collectively, the “Public Disclosures”), have been reviewed and approved for release by the Company’s attorneys and, if containing financial information, the Company’s independent certified public accountants. None of the Company’s Public Disclosures contain, as of their respective dates, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

5. The Advance requested is ________________shares.

 

6. There are currently _______________________ amount of shares outstanding on a fully diluted basis.

 

The undersigned has executed this Certificate this _____ day of _____.

 

	  	
By:

	  	  
	  	  	
Name:

	  
	  	  	
Title:

	  

 

Please email this Advance Notice to: rmarino@beaufortcp.com

 

  

22

  

 

EXHIBIT B

 

FORM OF OPINION

 

1. The Company is a corporation validly existing and in good standing under the laws of the State of __________, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Company’s latest Form 10-K or 10-Q filed by the Company under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and the rules and regulations of the Commission thereunder (the “Public Filings”) and to enter into and perform its obligations under the Investment Agreement.

 

2. The Company has the requisite corporate power and authority to enter into and perform its obligations under the Investment Agreement and to issue the Common Shares in accordance with their terms. The execution and delivery of the Investment Agreement by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary corporate action, and no further consent or authorization of the Company or its Board of Directors or stockholders is required. The Investment Agreement has been duly executed and delivered and the Investment Agreement constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its respective terms, except as my be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

 

3. The Common Shares are duly authorized and, upon issuance in accordance with the terms of the Investment Agreement, will be duly and validly issued, fully paid and nonassessable, free of any liens, encumbrances and preemptive or similar rights contained, to our knowledge, in any agreement filed by the Company as an exhibit to the Company’s Public Filings.

 

4. The execution, delivery and performance of the Investment Agreement by the Company (other than performance by the Company of its obligations under the indemnification sections of such agreements, as to which no opinion need be rendered) will not (i) result in a violation of the Company’s Articles of Incorporation or By-Laws; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement or, indenture filed by the Company as an exhibit to the Company’s Public Filings; or (iii) to our knowledge, result in a violation of any federal or state law, rule or regulation, order, judgment or decree applicable to the Company.

 

 5. To our knowledge without independent investigation and other then as set forth in the Public Filings, there are no legal or governmental proceedings pending to which the Company is a party or of which any property or assets of the Company is subject which is required to be disclosed in any Public Filings.

 

 

23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00235-of-00352.parquet"}]]