Document:

EX-4.3

 EXHIBIT 4.3 

PENNSYLVANIA REAL ESTATE INVESTMENT TRUST 
  

 
 SUBORDINATED

 INDENTURE 
 Dated as of
            , 2014 
 Providing for Issuance of Subordinated Debt Securities in
Series 
  
  

 
  

 

	
	                                   
                                         
                                         
            ,

 as Trustee 
  

 

 TABLE OF CONTENTS 
  

							
	 Article 1. DEFINITIONS AND INCORPORATION BY REFERENCE
	  	 	1	  
			
	 Section 1.01.
	    	Definitions	  	 	1	  
			
	 Section 1.02
	    	Other Definitions	  	 	4	  
			
	 Section 1.03.
	    	Incorporation by Reference of Trust Indenture Act	  	 	5	  
			
	 Section 1.04.
	    	Rules of Construction	  	 	5	  
			
	 Section 1.05.
	    	Acts of Holders	  	 	5	  
		
	 Article 2. THE SECURITIES
	  	 	6	  
			
	 Section 2.01.
	    	Form and Dating	  	 	6	  
			
	 Section 2.02.
	    	Amount Unlimited; Issuable in Series	  	 	7	  
			
	 Section 2.03.
	    	Denominations	  	 	9	  
			
	 Section 2.04.
	    	Execution and Authentication	  	 	9	  
			
	 Section 2.05.
	    	Registrar and Paying Agent; Appointment of Depositary	  	 	10	  
			
	 Section 2.06.
	    	Paying Agent to Hold Money in Trust	  	 	10	  
			
	 Section 2.07.
	    	Holder Lists	  	 	10	  
			
	 Section 2.08.
	    	Transfer and Exchange	  	 	11	  
			
	 Section 2.09.
	    	Replacement Securities	  	 	13	  
			
	 Section 2.10.
	    	Outstanding Securities	  	 	13	  
			
	 Section 2.11.
	    	Treasury Securities	  	 	14	  
			
	 Section 2.12.
	    	Temporary Securities	  	 	14	  
			
	 Section 2.13.
	    	Cancellation	  	 	14	  
			
	 Section 2.14.
	    	Defaulted Interest	  	 	14	  
		
	 Article 3. REDEMPTION AND PREPAYMENT
	  	 	14	  
			
	 Section 3.01.
	    	Applicability of Article	  	 	14	  
			
	 Section 3.02.
	    	Selection of Securities to Be Redeemed	  	 	15	  
			
	 Section 3.03.
	    	Notice of Redemption	  	 	15	  
			
	 Section 3.04.
	    	Effect of Notice of Redemption	  	 	16	  
			
	 Section 3.05.
	    	Deposit of Redemption or Purchase Price	  	 	16	  
			
	 Section 3.06.
	    	Securities Redeemed or Purchased in Part	  	 	16	  
			
	 Section 3.07.
	    	Mandatory Redemption; Sinking Fund	  	 	16	  
		
	 Article 4. COVENANTS
	  	 	17	  
			
	 Section 4.01.
	    	Payment of Securities	  	 	17	  
			
	 Section 4.02.
	    	Maintenance of Office or Agency	  	 	18	  
			
	 Section 4.03
	    	Reports	  	 	18	  
			
	 Section 4.04.
	    	Compliance Certificate	  	 	18	  
			
	 Section 4.05.
	    	Continued Existence	  	 	19	  
			
	 Section 4.06.
	    	Stay, Extension and Usury Laws	  	 	19	  

							
		
	 Article 5. SUCCESSORS
	  	 	19	  
			
	 Section 5.01.
	    	Merger, Consolidation, or Sale of Assets	  	 	19	  
			
	 Section 5.02.
	    	Successor Person Substituted	  	 	20	  
		
	 Article 6. DEFAULTS AND REMEDIES
	  	 	20	  
			
	 Section 6.01.
	    	Events of Default	  	 	20	  
			
	 Section 6.02.
	    	Acceleration	  	 	21	  
			
	 Section 6.03.
	    	Other Remedies	  	 	21	  
			
	 Section 6.04.
	    	Waiver of Past Defaults; Recission of Acceleration	  	 	21	  
			
	 Section 6.05.
	    	Control by Majority	  	 	22	  
			
	 Section 6.06.
	    	Limitation on Suits	  	 	22	  
			
	 Section 6.07.
	    	Rights of Holders of Securities to Receive Payment	  	 	22	  
			
	 Section 6.08.
	    	Collection Suit by Trustee	  	 	22	  
			
	 Section 6.09.
	    	Trustee May File Proofs of Claim	  	 	23	  
			
	 Section 6.10.
	    	Priorities	  	 	23	  
			
	 Section 6.11.
	    	Undertaking for Costs	  	 	23	  
		
	 Article 7. TRUSTEE
	  	 	23	  
			
	 Section 7.01.
	    	Duties of Trustee	  	 	23	  
			
	 Section 7.02.
	    	Rights of Trustee	  	 	24	  
			
	 Section 7.03.
	    	Individual Rights of Trustee	  	 	25	  
			
	 Section 7.04.
	    	Trustee’s Disclaimer	  	 	25	  
			
	 Section 7.05.
	    	Notice of Defaults	  	 	25	  
			
	 Section 7.06.
	    	Reports by Trustee to Holders of the Securities	  	 	25	  
			
	 Section 7.07.
	    	Compensation and Indemnity	  	 	25	  
			
	 Section 7.08.
	    	Replacement of Trustee	  	 	26	  
			
	 Section 7.09.
	    	Successor Trustee by Merger, etc.	  	 	27	  
			
	 Section 7.10.
	    	Eligibility; Disqualification	  	 	27	  
			
	 Section 7.11.
	    	Preferential Collection of Claims Against Company	  	 	27	  
		
	 Article 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE
	  	 	27	  
			
	 Section 8.01.
	    	Option to Effect Legal Defeasance or Covenant Defeasance; Alternative Satisfaction and Discharge	  	 	27	  
			
	 Section 8.02.
	    	Legal Defeasance and Discharge	  	 	28	  
			
	 Section 8.03.
	    	Covenant Defeasance	  	 	29	  
			
	 Section 8.04.
	    	Conditions to Legal or Covenant Defeasance	  	 	29	  
			
	 Section 8.05.
	    	Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions	  	 	30	  
			
	 Section 8.06.
	    	Repayment to Company	  	 	31	  
			
	 Section 8.07.
	    	Reinstatement	  	 	31	  

							
		
	 Article 9. AMENDMENT, SUPPLEMENT AND WAIVER
	  	 	31	  
			
	 Section 9.01.
	    	Without Consent of Holders of Securities	  	 	31	  
			
	 Section 9.02.
	    	With Consent of Holders of Securities	  	 	32	  
			
	 Section 9.03.
	    	Compliance with Trust Indenture Act	  	 	33	  
			
	 Section 9.04.
	    	Revocation and Effect of Consents	  	 	33	  
			
	 Section 9.05.
	    	Notation on or Exchange of Securities	  	 	33	  
			
	 Section 9.06.
	    	Trustee to Sign Amendments, etc.	  	 	34	  
		
	 Article 10. SUBORDINATION
	  	 	34	  
			
	 Section 10.01.
	    	Agreement to subordinate	  	 	34	  
			
	 Section 10.02.
	    	Certain definitions	  	 	34	  
			
	 Section 10.03.
	    	Liquidation; Dissolution; Bankruptcy	  	 	34	  
			
	 Section 10.04.
	    	Default on Designated Senior Debt	  	 	35	  
			
	 Section 10.05.
	    	Acceleration of Securities	  	 	35	  
			
	 Section 10.06.
	    	When Distribution Must Be Paid Over	  	 	35	  
			
	 Section 10.07.
	    	Notice by Company	  	 	36	  
			
	 Section 10.08.
	    	Subrogation	  	 	36	  
			
	 Section 10.09.
	    	Relative Rights	  	 	36	  
			
	 Section 10.10.
	    	Subordination May Not Be Impaired By Company	  	 	36	  
			
	 Section 10.11.
	    	Distribution or Notice to Representative	  	 	36	  
			
	 Section 10.12.
	    	Rights of Trustee and Paying Agent	  	 	37	  
			
	 Section 10.13.
	    	Authorization to Effect Subordination	  	 	37	  
		
	 Article 11. MEETINGS OF HOLDERS
	  	 	37	  
			
	 Section 11.01.
	    	Purposes for Which Meeting May Be Called	  	 	37	  
			
	 Section 11.02.
	    	Call, Notice and Place of Meetings	  	 	37	  
			
	 Section 11.03.
	    	Persons Entitled to Vote at Meetings	  	 	38	  
			
	 Section 11.04.
	    	Quorum; Action	  	 	38	  
			
	 Section 11.05.
	    	Determination of Voting Rights; Conduct and Adjournment of Meetings	  	 	39	  
			
	 Section 11.06.
	    	Counting Votes and Recording Action of Meetings	  	 	39	  
			
	 Section 11.07.
	    	Article Subject to Other Provisions	  	 	40	  
		
	 Article 12. MISCELLANEOUS
	  	 	40	  
			
	 Section 12.01.
	    	Trust Indenture Act Controls	  	 	40	  
			
	 Section 12.02.
	    	Notices	  	 	40	  
			
	 Section 12.03.
	    	Communication by Holders of Securities with Other Holders of Securities	  	 	41	  
			
	 Section 12.04.
	    	Certificate and Opinion as to Conditions Precedent	  	 	41	  
			
	 Section 12.05.
	    	Statements Required in Certificate or Opinion	  	 	41	  
			
	 Section 12.06.
	    	Rules by Trustee and Agents	  	 	41	  

							
			
	 Section 12.07.
	    	No Personal Liability of Trustees, Officers, Employees and Stockholders	  	 	41	  
			
	 Section 12.08.
	    	Governing Law	  	 	41	  
			
	 Section 12.09.
	    	No Adverse Interpretation of Other Agreements	  	 	41	  
			
	 Section 12.10.
	    	Successors	  	 	42	  
			
	 Section 12.11.
	    	Severability	  	 	42	  
			
	 Section 12.12.
	    	Counterpart Originals	  	 	42	  
			
	 Section 12.13.
	    	Table of Contents, Headings, etc.	  	 	42	  

  

 Reconciliation and Tie Between the Trust Indenture Act of 1939 and Indenture dated as of
            , between Pennsylvania Real Estate Investment Trust and             , as Trustee 

 

			
	 TIA Section
	  	Indenture Section
	310(a)(1)	  	7.10
	310(a)(2)	  	7.10
	310(a)(3)	  	N/A
	310(a)(4)	  	N/A
	310(a)(5)	  	7.10
	310(b)	  	7.03, 7.08, 7.10
	310(c)	  	N/A
	311(a)	  	7.11
	311(b)	  	7.11
	311(c)	  	N/A
	312(a)	  	2.07
	312(b)	  	13.03
	312(c)	  	13.03
	313(a)	  	7.06
	313(b)	  	7.06
	313(c)	  	7.06, 13.02
	313(d)	  	7.06
	314(a)	  	4.03
	314(b)	  	N/A
	314(c)	  	4.04, 13.05
	314(d)	  	N/A
	314(e)	  	13.05
	314(f)	  	N/A
	315(a)	  	7.01
	315(b)	  	7.05
	315(c)	  	7.01
	315(d)	  	7.01
	315(e)	  	6.11
	316(a)(1)	  	6.04, 6.05
	316(a)(2)	  	N/A
	316(a) last sentence	  	2.11
	316(b)	  	6.07
	317(a)	  	6.09, 6.09
	317(b)	  	2.06
	318(a)	  	13.01
	318(c)	  	13.01

  

	*	Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture 

 INDENTURE dated as of
                     between Pennsylvania Real Estate Investment Trust, a Pennsylvania business trust,
and             , as Trustee. 
 The Company has duly authorized the execution
and delivery of this Indenture to provide for the issuance from time to time of its secured or unsecured subordinated debentures, notes, bonds or other evidences of indebtedness (“Securities”) to be issued in one or more series as herein
provided. 
 All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed
as follows for the equal and ratable benefit of the Holders of the Securities: 
 ARTICLE 1. 

DEFINITIONS AND INCORPORATION 
 BY
REFERENCE 
 SECTION 1.01. DEFINITIONS. 

“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” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”),
as used with respect to any Person, shall mean 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; provided, however, that beneficial ownership of 10% or more of the voting securities of a Person shall be deemed to be control. 

“Agent” means any Registrar or Paying Agent. 

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

“Board” or “Board of Trustees” means the Board of Trustees of the Company or any authorized committee of the Board of
Trustees. 
 “Board Resolution” means a resolution of the Board of Trustees. 

“Business Day” means any day other than a Legal Holiday. 

“Capital Lease Obligation” means, at the time any determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP. 
 “Code” means
the Internal Revenue Code of 1986, as amended. 
 “Company” means Pennsylvania Real Estate Investment Trust, a Pennsylvania
business trust, and any and all successors thereto. 
 “Corporate Trust Office of the Trustee” shall be the address of the Trustee
specified in Section 13.02 hereof or such other address as to which the Trustee may give notice to the Company. 
 “Credit
Facility” means any principal bank or institutional credit facility of the Company identified in any supplemental indenture establishing a series of Securities, including any amendment, supplement, modification, restatement, replacement,
refunding or refinancing. 
 “Custodian” means the Trustee, as custodian with respect to Securities in global form, or any
successor entity thereto. 
 “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. 

  
 - 1 - 

 “Depositary” means, with respect to any series of Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.05 hereof as the Depositary with respect to the Global Securities of that series, and any and all successors thereto registered and in good standing as a clearing agency under
the Exchange Act, appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. 

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

“GAAP” means United States generally accepted accounting principles. 

“Global Securities” means, individually and collectively, the Securities issued in global form issued in accordance with Sections
2.01 and 2.08 hereof. 
 “Hedging Obligations” means, with respect to any Person, the obligations of such Person under
(i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. 

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

“Indebtedness” means, with respect to any Person, any indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, securities, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker’s acceptances or representing any Capital Lease Obligations or the balance deferred and
unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, as well as all indebtedness of others secured by a lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person) and, to the extent not otherwise included, the guarantee by such Person of any indebtedness of any other Person. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the full amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP. The amount of any
Indebtedness outstanding as of any date shall be (i) the accreted value thereof, in the case of any Indebtedness issued with original issue discount and (ii) the principal amount thereof, together with any interest thereon that is more
than 30 days past due, in the case of any other Indebtedness. 
 “Indenture” means this Subordinated Indenture, as amended, waived
or supplemented from time to time and shall include and incorporate by reference the forms and terms of particular series of Securities established as contemplated hereunder. 

“Indirect Participant” means a Person who holds a beneficial interest in a Global Security through a Participant. 

“Interest Payment Date” when used with respect to any Security, means the Stated Maturity of an installment of interest on such
Security. 
 “Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a
place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue on such payment for the intervening period. 
 “Obligations” means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable (1) under this Indenture or the applicable Securities, or (2) under Senior Debt. 

  
 - 2 - 

 “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, the Treasurer, any Assistant Treasurer, the Controller, the principal accounting officer, the Secretary, any Assistant Secretary, any Vice President or any
Assistant Vice President of such Person. 
 “Officers’ Certificate” means a certificate signed on behalf of the Company by
two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 13.05 hereof. 

“Opinion of Counsel” means an opinion from legal counsel that meets the requirements of Section 13.05 hereof. The counsel may
be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. 
 “Pari Passu Series” means, with
reference to any series of Securities, all series of Securities (including the referent series) that by their terms rank on a parity in right of payment with the referent series, except that no series that is convertible into equity securities of
the Company is a Pari Passu Series with reference to any series that is not so convertible. 
 “Participant” means, with respect
to the Depositary, a Person who has an account with the Depositary. 
 “Person” means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or agency or political subdivision thereof. 

“Responsible Officer” when used with respect to the Trustee, means any officer within the Corporate Trust Trustee Administration
department of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. 

“SEC” means the Securities and Exchange Commission. 

“Securities” has the meaning assigned to it in the preamble to this Indenture. 

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

“Senior Bank Debt” means the Indebtedness (including letters of credit) outstanding under the Credit Facility as such agreement may
be restated, further amended, supplemented or otherwise modified or replaced from time to time hereafter, together with any refunding or replacement of such Indebtedness. 

“Senior Debt” means any Indebtedness unless the instrument under which such Indebtedness is incurred expressly provides that it is
on a parity with or subordinated in right of payment to the Securities. Without limiting the generality of the foregoing, Senior Debt includes Obligations under the Credit Facility, Obligations under the Senior Indenture, Obligations under the
Senior Subordinated Indenture, and Obligations under any securities issued under the Senior Indenture or the Senior Subordinated Indenture. Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include (a) any
liability for federal, state, local or other taxes owed or owing by the Company, (b) Indebtedness of the Company to any of its Subsidiaries or other Affiliates, (c) any trade payables or (d) any Indebtedness that is incurred in
violation of this Indenture. 
 “Senior Indenture” means the Senior Indenture dated the date hereof between the Company and
                    , as Trustee, as amended, modified or supplemented from time to time. 

“Senior Subordinated Indenture” means the Senior Subordinated Indenture dated the date hereof between the Company and
                    , as Trustee, as amended, modified or supplemented from time to time. 

  
 - 3 - 

 “Significant Subsidiary” means any Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture. 

“Stated Maturity” means, with respect to any interest or principal on any series of Securities, the date on which such payment of
interest or principal is scheduled to be paid thereon by its terms as in effect from time to time, and does not include any contingent obligation to repay, redeem or repurchase any such interest or principal prior to the date scheduled for the
payment thereof. 
 “Subsidiary” means, with respect to any Person, (i) any corporation, association or other business entity
of which more than 50% of the total voting power of shares of capital stock or other equity interests entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person (or a combination thereof) and (ii) any partnership (a) the sole general partner or the managing general partner of which
is such a Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof.) 

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb as amended) as in effect on the date on which this
Indenture is qualified under the TIA. 
 “Trustee” means the party named as such above until a successor replaces it in accordance
with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. 
 “U.S. Government
Obligations” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case under clauses (i) or (ii), are not
callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of interest on or principal of the U.S. Government Obligation evidenced by such depository
receipt. 
 SECTION 1.02. OTHER DEFINITIONS 
  

					
	 Term
	  	Defined in
Section	 
	 “Act”
	  	 	1.05	  
	 “Authentication Order”
	  	 	2.04	  
	 “Covenant Defeasance”
	  	 	8.03	  
	 “custodian”
	  	 	6.01	  
	 “Designated Senior Debt”
	  	 	10.02	  
	 “distribution”
	  	 	10.02	  
	 “Event of Default”
	  	 	6.01	  
	 “Legal Defeasance”
	  	 	8.02	  
	 “mandatory sinking fund payment”
	  	 	3.07	  
	 “Notice of Default”
	  	 	6.01	  
	 “optional sinking fund payment”
	  	 	3.07	  
	 “Outstanding”
	  	 	8.02	  
	 “Paying Agent”
	  	 	2.05	  
	 “Payment Blockage Notice”
	  	 	10.04	  
	 “Registrar”
	  	 	2.05	  
	 “Representative”
	  	 	10.02	  
	 “sinking fund payment date”
	  	 	3.07	  

  
 - 4 - 

 SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. 

The following TIA terms used in this Indenture have the following meanings: 

“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 the Securities means the Company and any successor obligor upon the Securities. 

All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA and not otherwise defined herein have the meanings so assigned to them. 
 SECTION 1.04. RULES OF CONSTRUCTION. 

For the purposes of this Indenture, 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 United States generally accepted accounting
principles; 
 (3) “or” is not exclusive; 

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

(5) provisions apply to successive events and transactions; and 

(6) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time. 
 SECTION 1.05. ACTS OF HOLDERS. 

(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders, in person or by an agent duly appointed in writing or may be embodied in and evidenced by the record of Holders voting in
favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders duly called and held in accordance with the provisions of Article 11, or a combination of such instruments or record and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of Holders signing such instrument or instruments and so voting at any such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent or proxy shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section and Section 11.06. The record of any meeting
of Holders shall be proved in the manner provided in Section 11.06. 
 (b) Without limiting the generality of this Section, unless
otherwise provided in or pursuant to this Indenture, a Holder, including a Depositary that is a Holder of a Global Security, may make, give or take, by a proxy, or proxies, duly appointed in writing, any request, demand, authorization, 

 

  
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direction, notice, consent, waiver or other action provided in or pursuant to this Indenture to be made, given or taken by Holders, and a Depositary that is a Holder of a Global Security may
provide its proxy or proxies to the beneficial owners of interests in any such Global Security through such Depositary’s standing instructions and customary practices. 

(c) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee deems
sufficient. 
 (d) The ownership of Securities shall be proved by the Register. 

ARTICLE 2. 
 THE SECURITIES 

SECTION 2.01. FORM AND DATING. 
 (a) General. The
Securities of each series shall be in substantially such form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any applicable
securities exchange, organizational document, governing instrument or law or as may, consistently herewith, be determined by the officers executing such Securities as evidenced by their execution of the Securities. If temporary Securities of any
series are issued as permitted by Section 2.12, the form thereof also shall be established as provided in the preceding sentence. If the forms of Securities of any series are established by, or by action taken pursuant to, a Board Resolution, a
copy of the Board Resolution, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Trustees and to be in full force and effect on the date of the certificate, together with an appropriate
record of any such action taken pursuant thereto, including a copy of the approved form of Securities, shall be delivered to the Trustee at or prior to the delivery of the Authentication Order contemplated by Section 2.04 for the authentication
and delivery of such Securities. The Trustee’s certificate of authentication shall be in substantially the following form: 
 This is
one of the Securities of the series described in the within-mentioned Indenture. 
  

							
		 	  
	 	,                                    
		 	 as Trustee
	 	
				
		 	 By:
	  		 	
		 		  	  

            Authorized Signatory        
    
	 	

 (b) Global Securities. If Securities of or within a series are issuable in whole or in part in global form,
any such Security may provide that it shall represent the aggregate or specified amount of outstanding Securities from time to time endorsed thereon and may also provide that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced or increased to reflect exchanges. Any endorsement of a Security in global form to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders, of outstanding Securities represented
thereby, shall be made in such manner and by such Person or Persons as shall be specified therein or upon the written order of the Company signed by an Officer to be delivered to the Trustee pursuant to Section 2.04 or 2.12. Subject to the
provisions of Section 2.04, Section 2.12, if applicable, and Section 2.08, the Trustee shall deliver and redeliver any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified
therein or in the applicable written order of the Company signed by an Officer. Any instructions by the Company with respect to endorsement or delivery or redelivery of a Security in global form shall be in writing. 

The provisions of the last paragraph of Section 2.04 shall apply to any Security in global form if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Security in global form together with a written instructions with regard to the reduction in the principal amount of Securities represented thereby, together with the written statement
contemplated by the last paragraph of Section 2.04. 

  
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 Notwithstanding the provisions of this Section 2.01, unless otherwise specified as
contemplated by Section 2.02, payment of principal of, premium, if any, and interest on any Security in permanent global form shall be made to the Holder thereof. 

SECTION 2.02. AMOUNT UNLIMITED; ISSUABLE IN SERIES 

(a) The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may
be issued from time to time in one or more series. 
 (b) The following matters shall be established with respect to each series of
Securities issued hereunder (i) by a Board Resolution, (ii) by action taken pursuant to a Board Resolution and set forth, or determined in the manner provided, in an Officers’ Certificate or (iii) in one or more indentures
supplemental hereto: 
 (1) the title of the Securities of the series (which title shall distinguish the Securities of the series from all
other series of Securities); 
 (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated
and delivered under this Indenture (which limit shall not pertain to 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 2.08, 2.09,
2.12, 3.06 or 9.05 or any Securities that, pursuant to Section 2.04, are deemed never to have been authenticated and delivered hereunder); 

(3) the date or dates on which the principal of and premium, if any, on the Securities of the series is payable or the method or methods of
determination thereof; 
 (4) the rate or rates at which the Securities of the series shall bear interest, if any, or the method or methods
of calculating such rate or rates of interest, the date or dates from which such interest shall accrue or the method or methods by which such date or dates shall be determined, the Interest Payment Dates on which any such interest shall be payable,
the right, if any, of the Company to defer or extend an Interest Payment Date, the record date, if any, for the interest payable on any Security on any Interest Payment Date, and the basis upon which interest shall be calculated if other than that
of a 360-day year of twelve 30-day months; 
 (5) the place or places where the principal of, premium, if any, and interest, if any, on
Securities of the series shall be payable, any Securities of the series may be surrendered for registration of transfer, Securities of the series may be surrendered for exchange and notices and demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served and notices to Holders pursuant to Section 12.02 will be published; 
 (6) the
period or periods within which, the price or prices at which, the currency or currencies (including currency unit or units) in which, and the other terms and conditions upon which, Securities of the series may be redeemed, in whole or in part, at
the option of the Company and, if other than as provided in Section 3.03, the manner in which the particular Securities of such series (if less than all Securities of such series are to be redeemed) are to be selected for redemption; 

(7) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions
or upon the happening of a specified event or at the option of a Holder thereof and the period or periods within which, the price or prices at which, the currency or currencies (including currency unit or units) in which, and the other terms and
conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; 
 (8) if
other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable; 

  
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 (9) if other than U.S. dollars, the currency or currencies (including currency unit or units) in
which the principal of, premium, if any, and interest, if any, on the Securities of the series shall be payable, or in which the Securities of the series shall be denominated, and the particular provisions applicable; 

(10) if the payments of principal of, premium, if any, or interest, if any, on the Securities of the series are to be made, at the election of
the Company or a Holder, in a currency or currencies (including currency unit or units) other than that in which such Securities are denominated or designated to be payable, the currency or currencies (including currency unit or units) in which such
payments are to be made, the terms and conditions of such payments and the manner in which the exchange rate with respect to such payments shall be determined, and the particular provisions applicable thereto; 

(11) if the amount of payments of principal of, premium, if any, and interest, if any, on the Securities of the series shall be determined with
reference to an index, formula or other method (which index, formula or method may be based, without limitation, on a currency or currencies (including currency unit or units) other than that in which the Securities of the series are denominated or
designated to be payable), the index, formula or other method by which such amounts shall be determined and any special voting or defeasance provisions in connection therewith; 

(12) if other than the principal amount thereof, the portion of the principal amount of such Securities of the series which shall be payable
upon declaration of acceleration thereof pursuant to Section 6.02 or the method by which such portion shall be determined; 
 (13) the
Person to whom any interest on any Security of the series shall be payable; 
 (14) provisions, if any, granting special rights to the
Holders of Securities of the series upon the occurrence of such events as may be specified; 
 (15) any deletions from, modifications of or
additions to the Events of Default set forth in Section 6.01 or covenants of the Company set forth in Article 4 pertaining to the Securities of the series; 

(16) under what circumstances, if any, and with what procedures and documentation the Company will pay additional amounts on the Securities of
that series held by a Person who is not a U.S. Person (including any definition of such term) in respect of taxes, assessments or similar charges withheld or deducted and, if so, whether the Company will have the option to redeem such Securities
rather than pay such additional amounts (and the terms of any such option); 
 (17) the forms of the Securities of the series; 

(18) the applicability, if any, to the Securities of the series of Sections 8.02 and 8.03, or such other means of defeasance or covenant
defeasance as may be specified for the Securities of such series; 
 (19) if other than the Trustee, the identity of the Registrar and any
Paying Agent; 
 (20) if the Securities of the series shall be issued in whole or in part in global form, (A) the Depositary for such
Global Securities, (B) whether beneficial owners of interests in any Securities of the series in global form may exchange such interests for certificated Securities of such series, to be registered in the names of or to be held by such
beneficial owners or their nominees and to be of like tenor of any authorized form and denomination, and (C) if other than as provided in Section 2.08, the circumstances under which any such exchange may occur; 

(21) the designation of the Depositary; 

(22) any restrictions on the registration, transfer or exchange of the Securities; 

  
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 (23) if the Securities of the series may be issued or delivered (whether upon original issuance
or upon exchange of a temporary Security of such series or otherwise), or any installment of principal or interest is payable, only upon receipt of certain certificates or other documents or satisfaction of other conditions in addition to those
specified in this Indenture, the form and terms of such certificates, documents or conditions; 
 (24) the terms and conditions of any right
to convert or exchange Securities of the series into or for other securities or property of the Company; 
 (25) whether the Securities are
secured or unsecured, and if secured, the security and related terms in connection therewith; 
 (26) the relative degree, if any, to which
the Securities of the series shall be senior to or be subordinated to other series of Securities in right of payment, whether such other series of Securities are outstanding or not; 

(27) any modification of the subordination provisions of this Indenture (including applicable definitions) that are to apply to Securities of
the series; and 
 (28) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture) including
any terms which may be required by or advisable under United States laws or regulations or advisable (as determined by the Company) in connection with the marketing of Securities of the series. 

(c) All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided
(i) by a Board Resolution, (ii) by action taken pursuant to a Board Resolution and set forth, or determined in the manner provided, in the related Officers’ Certificate or (iii) in an indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and, unless otherwise provided, a series may be reopened, without the consent of the Holders, for issuances of additional Securities of such series. 

(d) If any of the terms of the Securities of any series are established by action taken pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth, or providing the manner for determining, the terms of the Securities of such series, and an appropriate record of any action
taken pursuant thereto in connection with the issuance of any Securities of such series shall be delivered to the Trustee prior to the authentication and delivery thereof. 

SECTION 2.03. DENOMINATIONS. 
 Unless otherwise
provided as contemplated by Section 2.02, Securities of a series denominated in Dollars shall be issuable in denominations of U.S. $1,000 and any integral multiple thereof. Securities denominated in a foreign currency shall be issuable in such
denominations as are established with respect to such Securities in or pursuant to this Indenture. 
 SECTION 2.04. EXECUTION AND AUTHENTICATION. 

An Officer shall sign the Securities for the Company by manual or facsimile signature. 

If an Officer whose signature is on a Security no longer holds that office at the time a Security is authenticated, the Security shall
nevertheless be valid. 
 A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this Indenture. 
 The Trustee shall, upon a written order of the Company
signed by an Officer (an “Authentication Order”), together with an Officer’s Certificate and an Opinion of Counsel, authenticate Securities for original issue in the aggregate principal amount stated in the Authentication Order. The
Officer’s Certificate and Opinion of Counsel shall each state that all conditions precedent provided for or relating to the issuance of such Securities have been complied with. 

  
 - 9 - 

 The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Securities. An 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 Holders or an Affiliate of the Company. 
 Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 2.13 together with a written statement 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 not be entitled to the benefits of this Indenture. 

SECTION 2.05. REGISTRAR AND PAYING AGENT; APPOINTMENT OF DEPOSITARY. 

The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange
(“Registrar”) and an office or agency where Securities may be presented for payment (“Paying Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall promptly notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. 
 The Company initially appoints The
Depository Trust Company to act as Depositary with respect to the Global Securities. 
 The Company initially appoints the Trustee to act as
the Registrar and Paying Agent with respect to the Securities and to act as Custodian with respect to the Global Securities. 
 SECTION 2.06. PAYING AGENT
TO HOLD MONEY IN TRUST. 
 The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will
hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or interest on the Securities or other payment in respect of the Securities or otherwise held by it as Paying Agent, and
will notify the Trustee of any default by the Company in making any such payment when due. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Securities. 
 SECTION 2.07. HOLDER LISTS. 

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

  
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 SECTION 2.08. TRANSFER AND EXCHANGE. 

(a) Upon surrender for registration of transfer of any certificated Security of any series at the office or agency maintained pursuant to
Section 4.02 in a place of payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new certificated Securities of the same series,
of any authorized denominations and of a same aggregate principal amount and like tenor and containing identical terms and provisions. 
 (b)
At the option of the Holder, Securities of any series (except a Security in global form) may be exchanged for other Securities of the same series, of any authorized denominations, of a same aggregate principal amount and like tenor and containing
identical terms and provisions, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive. 
 (c) Notwithstanding any other provision of this Section, unless
and until it is exchanged in whole or in part for Securities in certificated form, a Security in global form representing all or a portion of the Securities of a series may not be transferred except as a whole by the Depositary for such series to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor Depositary for such series or a nominee of such successor Depositary.

 (d) If at any time the Depositary for the Securities of a series notifies the Company that it is unwilling or unable to continue as
Depositary for the Securities of such series or if at any time the Depositary for the Securities of such series shall no longer be registered and in good standing as a clearing agency under the Exchange Act, the Company shall appoint a successor
Depositary with respect to the Securities of such series. If a successor Depositary for the Securities of such series is not appointed by the Company prior to the resignation of the Depositary and, in any event, within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company’s designation of the Depositary pursuant to Section 2.02(b)(21) shall no longer be effective with respect to the Securities of such series and the Company shall
execute, and the Trustee, upon receipt of an Authentication Order for the authentication and delivery of certificated Securities of such series of like tenor, shall authenticate and deliver, Securities of such series of like tenor in certificated
form, in authorized denominations and in an aggregate principal amount equal to the principal amount of the Security or Securities of such series of like tenor in global form in exchange for such Security or Securities in global form. 

(e) The Company may at any time in its sole discretion determine that all (but not less than all) Securities of a series issued in global form
shall no longer be represented by such a Security or Securities in global form. In such event the Company shall execute, and the Trustee, upon receipt of an Authentication Order for the authentication and delivery of certificated Securities of such
series of like tenor, shall authenticate and deliver, Securities of such series of like tenor in certificated form, in authorized denominations and in an aggregate principal amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities in global form. 
 (f) If specified by the Company pursuant
to Section 2.02 with respect to a series of Securities, the Depositary for such series may surrender a Security in global form of such series in exchange in whole or in part for Securities of such series in certificated form on such terms as
are acceptable to the Company and the Depositary. Thereupon, the Company shall execute, and the Trustee shall authenticate and deliver, without service charge, 
  

	 	(i)	to each Person specified by the Depositary a new certificated Security or Securities of the same series of like tenor, of any authorized denomination as requested by such Person in aggregate principal amount equal to
and in exchange for such Person’s beneficial interest in the Security in global form; and 

  
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	 	(ii)	to the Depositary a new Security in global form of like tenor in a denomination equal to the difference, if any, between the principal amount of the surrendered Security in global form and the aggregate principal amount
of certificated Securities delivered to Holders thereof. 

 (g) Upon the exchange of a Security in global form for Securities
in certificated form, such Security in global form shall be canceled by the Trustee. Securities in certificated form issued in exchange for a Security in global form pursuant to this Section shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to instructions from its direct or Indirect Participants or otherwise, shall instruct the Trustee in writing. The Trustee shall deliver such Securities to the Persons in
whose names such Securities are so registered. 
 (h) Whenever any Securities are surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. 
 (i) All Securities
issued upon any registration of transfer or upon any exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange. 
 (j) Every Security presented or surrendered for registration of transfer or for exchange shall (if
so required by the Company, the Registrar or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company, the Registrar and the Trustee duly executed by the Holder thereof or his attorney
duly authorized in writing. 
 (k) No service charge shall be made for any registration of transfer or for any exchange of Securities, but
the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration or transfer or exchange of Securities, other than exchanges pursuant to Section 2.12 or
3.06 not involving any transfer. 
 (l) The Company shall not be required (i) to issue, register the transfer of, or exchange any
Securities for a period beginning at the opening of business 15 days before any selection for redemption of Securities of like tenor and of the series of which such Security is a part and ending at the close of business on the earliest date on which
the relevant notice of redemption is deemed to have been given to all Holders of Securities of like tenor and of such series to be redeemed; or (ii) to register the transfer of or exchange any Security so selected for redemption, in whole or in
part, except the unredeemed portion of any Security being redeemed in part. 
 (m) The foregoing provisions relating to registration,
transfer and exchange may be modified, supplemented or superseded with respect to any series of Securities by a Board Resolution or in one or more indentures supplemental hereto. 

(n) The following legend shall appear on the face of all Global Securities unless specifically stated otherwise in the applicable provision of
this Indenture: 
 “THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE
IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND, UNLESS AND UNTIL IT IS EXCHANGED FOR SECURITIES IN CERTIFICATED FORM IN ACCORDANCE WITH THE INDENTURE, (I) IS NOT TRANSFERABLE EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR SUCCESSOR NOMINEE, AND (II) MAY NOT BE EXCHANGED OR CANCELLED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.” 

  
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 (o) At such time as all beneficial interests in a particular Global Security have been exchanged
for certificated Securities or a particular Global Security has been redeemed, repurchased or canceled in whole and not in part, each such Global Security shall be returned to or retained and canceled by the Trustee in accordance with
Section 2.13 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global
Security or for certificated Securities, the principal amount of Securities represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depositary at the
direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global
Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. 

(p) Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Securities and for all other purposes, and neither the Trustee, any Agent nor the
Company shall be affected by notice to the contrary. Notwithstanding the foregoing, with respect to any Global Security, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by any Depositary, as a Holder, with respect to such Global Security or impair, as between such Depositary and owners of beneficial interests in such Global Security, the operation of
customary practices governing the exercise of the rights of such Depositary (or its nominee) as Holder of such Global Security. 
 SECTION 2.09. REPLACEMENT
SECURITIES. 
 If any mutilated Security is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Security, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Security if the Trustee’s requirements are met. If required by the Trustee or
the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if
a Security is replaced. The Company may charge for its expenses in replacing a Security. 
 Every replacement Security is an additional
obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Securities duly issued hereunder. 

SECTION 2.10. OUTSTANDING SECURITIES. 
 The
Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Security effected by the Trustee in
accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.11 hereof, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the
Security. 
 If a Security is replaced pursuant to Section 2.09 hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a “protected purchaser” (within the meaning of Article 8 of the Uniform Commercial Code) or a Person with comparable status under other applicable law. 

If the principal amount of any Security is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue. 
 If the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of any thereof) holds, on a
redemption date or maturity date, money sufficient to pay Securities payable on that date, then on and after that date such Securities shall be deemed to be no longer outstanding and shall cease to accrue interest. 

  
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 SECTION 2.11. TREASURY SECURITIES. 

In determining whether the Holders of the required principal amount of Securities 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 considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities that the Trustee knows are so owned shall be so disregarded. 

SECTION 2.12. TEMPORARY SECURITIES. 
 Until
certificates representing Securities are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers appropriate for temporary Securities and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities. 
 Holders of temporary Securities shall be entitled to all of the
benefits of this Indenture. 
 SECTION 2.13. CANCELLATION. 

The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and 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, replacement or cancellation and shall destroy
canceled Securities (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Securities shall be delivered to the Company. The Company may not issue new Securities to replace Securities that
it has paid or that have been delivered to the Trustee for cancellation. 
 SECTION 2.14. DEFAULTED INTEREST. 

If the Company defaults in a payment of interest on the Securities, it shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Securities. The Company shall notify the Trustee in writing of the amount of
defaulted interest proposed to be paid on each Security and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10
days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or
cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. 

ARTICLE 3. 
 REDEMPTION AND
PREPAYMENT 
 SECTION 3.01. APPLICABILITY OF ARTICLE. 

The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking
fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 2.02 for Securities of such series. 

  
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 SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. 

If less than all of the Securities of any series are to be redeemed at any time, the Trustee shall select the Securities of such series to be
redeemed among the Holders of the Securities of such series in compliance with the requirements of the principal national securities exchange, if any, on which the Securities of such series are listed or, if the Securities of such series are not so
listed, to be redeemed among the Holders of Securities of such series on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate; provided that no Securities of $1,000 or less shall be redeemed in part. In the event of
partial redemption by lot, the particular Securities of such series to be redeemed shall be selected, unless otherwise provided herein, not less than 45 nor more than 60 days prior to the redemption date by the Trustee from the outstanding
Securities of the series not previously called for redemption. 
 The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial redemption, the principal amount thereof to be redeemed. Securities and portions of Securities selected shall be in amounts of $1,000 or whole multiples of $1,000; except
that if all of the Securities of a series of a Holder are to be redeemed, the entire outstanding amount of Securities of such series held by such Holder, even if not a multiple of $1,000, shall be redeemed. A new Security of the same series in
principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Security. Securities called for redemption shall become due on the redemption date. On and after the
redemption date, interest will cease to accrue on the Securities or portions of them called for redemption. Except as provided in this Section 3.02, provisions of this Indenture that apply to Securities called for redemption shall also apply to
portions of Securities called for redemption. 
 SECTION 3.03. NOTICE OF REDEMPTION. 

At least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Securities are to be redeemed at its registered address. 
 The notice shall identify the
Securities to be redeemed, including the series thereof, and shall state: 
 (a) the redemption date; 

(b) the redemption price; 
 (c)
the name and address of the Paying Agent; 
 (d) that Securities called for redemption must be surrendered to the Paying Agent to collect the
redemption price; 
 (e) that, unless the Company defaults in making such redemption payment, interest on Securities called for redemption
will cease to accrue on and after the redemption date; 
 (f) that any Security being redeemed in part, the portion of the principal amount
of such Security to be redeemed and that, after the redemption date upon surrender of such Security, a new Security or Securities of the same series in principal amount equal to the unredeemed portion shall be issued upon cancellation of the
original; 
 (g) the paragraph of the Securities and/or Section of this Indenture pursuant to which the Securities called for redemption are
being redeemed; and 
 (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such
notice or printed on the Securities. 
 At the Company’s request, the Trustee shall give the notice of redemption in the Company’s name and at the
Company’s expense; provided, however, that the Company shall have delivered to the Trustee, at least 30 days prior to the redemption date, an Officers’ Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the preceding paragraph. 

  
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 SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. 

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Securities called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption may not be conditional. 
 SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE
PRICE. 
 Not later than 10:00 a.m., Eastern Time, on the Business Day immediately preceding any redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money in immediately available funds sufficient to pay the redemption or purchase price of and accrued interest, if any, on all Securities to be redeemed or purchased on that date. The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on, all Securities to be redeemed
or purchased. 
 SECTION 3.06. SECURITIES REDEEMED OR PURCHASED IN PART. 

Upon surrender of a Security that is redeemed or purchased in part, the Company shall issue and, upon the Company’s written request, the
Trustee shall authenticate for the Holder at the expense of the Company a new Security of the same series equal in principal amount to the unredeemed or unpurchased portion of the Security surrendered. 

SECTION 3.07. MANDATORY REDEMPTION; SINKING FUND. 

The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Securities, unless otherwise
specified in the terms of a particular series of Securities. If a mandatory or optional sinking fund is specified in the terms of a particular series of Securities, the following provisions will apply thereto (unless otherwise specified): 

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a
“mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment.” The last date on which any such
payment may be made is herein referred to as a “sinking fund payment date.” 
 In lieu of making all or any part of any mandatory
sinking fund payment with respect to any Securities of a series in cash, the Company may at its option (a) deliver to the Trustee Securities of that series theretofore purchased by the Company and (b) may apply as a credit Securities of
that series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of optional sinking fund payments pursuant to the next succeeding paragraph, in each case in satisfaction
of all or any part of any mandatory sinking fund payment, provided that such Securities have not been previously so credited. Each such Security so delivered or applied as a credit shall be credited at the sinking fund redemption price for such
Securities and the amount of any mandatory sinking fund shall be reduced accordingly. If the Company intends so to deliver or credit such Securities with respect to any mandatory sinking fund payment it shall deliver to the Trustee at least 30 days
prior to the next succeeding sinking fund payment date for such series (a) a certificate signed by any Officer specifying the portion of such sinking fund payment, if any, to be satisfied by payment of cash and the portion of such sinking fund
payment, if any, which is to be satisfied by delivering and crediting such Securities and (b) any Securities to be so delivered. All Securities so delivered to the Trustee shall be cancelled by the Trustee and no Securities shall be
authenticated in lieu thereof. If the Company fails to deliver such certificate and Securities at or before the time provided above, the Company shall not be permitted to satisfy any portion of such mandatory sinking fund payment by delivery or
credit of Securities. 
 At its option the Company may pay into the sinking fund for the retirement of Securities of any particular series,
on or before each sinking fund payment date for such series, any additional sum in cash as specified by the terms of such series of Securities. If the Company intends to exercise its 

  
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right to make any such optional sinking fund payment, it shall deliver to the Trustee at least 30 days prior to the next succeeding sinking fund payment date for such series of Securities a
certificate signed by any Officer stating that the Company intends to exercise such optional right and specifying the amount which the Company intends to pay on such sinking fund payment date. If the Company fails to deliver such certificate at or
before the time provided above, the Company shall not be permitted to make any optional sinking fund payment with respect to such sinking fund payment date. To the extent that such right is not exercised in any year it shall not be cumulative or
carried forward to any subsequent year. 
 If the sinking fund payment or payments (mandatory or optional) made in cash plus any unused
balance of any preceding sinking fund payments made in cash shall exceed $50,000 (or a lesser sum if the Company shall so request) with respect to the Securities of any particular series, it shall be applied by the Trustee or one or more Paying
Agents on the next succeeding sinking fund payment date to the redemption of Securities of such series at the sinking fund redemption price together with accrued interest to the date fixed for redemption. The Trustee shall select, in the manner
provided in Section 3.02, for redemption on such sinking fund payment date a sufficient principal amount of Securities of such series to exhaust said cash, as nearly as may be, and the Trustee shall, at the expense and in the name of the
Company, thereupon cause notice of redemption of Securities of such series to be given in substantially the manner and with the effect provided in Sections 3.02 and 3.03 for the redemption of Securities of that series in part at the option of the
Company, except that the notice of redemption shall also state that the Securities of such series are being redeemed for the sinking fund. Any sinking fund moneys not so applied or allocated by the Trustee or any Paying Agent to the redemption of
Securities of that series shall be added to the next cash sinking fund payment received by the Trustee or the Paying Agent and, together with such payment, shall be applied in accordance with the provisions of this Section 3.07. Any and all
sinking fund moneys held by the Trustee or any Paying Agent on the maturity date of the Securities of any particular series, and not held for the payment or redemption of particular Securities of such series, shall be applied by the Trustee or such
Paying Agent, together with other moneys, if necessary, to be deposited sufficient for the purpose, to the payment of the principal of the Securities of that series at maturity. On or before each sinking fund payment date, the Company shall pay to
the Trustee or to one or more Paying Agents in cash a sum equal to all interest accrued to the date fixed for redemption on Securities to be redeemed on the next following sinking fund payment date pursuant to this Section. Neither the Trustee nor
any Paying Agent shall redeem any Securities of a series with sinking fund moneys, and the Trustee shall not mail any notice of redemption of Securities for such series by operation of the sinking fund, during the continuance of a default in payment
of interest on such Securities or of any Event of Default (other than an Event of Default occurring as a consequence of this paragraph), except that if the notice of redemption of any Securities shall theretofore have been mailed in accordance with
the provisions hereof, the Trustee or any Paying Agent shall redeem such Securities if cash sufficient for that purpose shall be deposited with the Trustee or such paying agent for that purpose in accordance with the terms of this Article 3. Except
as aforesaid, any moneys in the sinking fund for such series at the time when any such default or Event of Default shall occur and any moneys thereafter paid into the sinking fund shall, during the continuance of such default or Event of Default, be
held as security for the payment of all such Securities; provided, however, that in case such Event of Default or default shall have been cured or waived as provided herein, such moneys shall thereafter be applied on the next succeeding sinking fund
payment date on which such moneys may be applied pursuant to the provisions of this Section 3.07. 
 ARTICLE 4. 

COVENANTS 
 SECTION 4.01. PAYMENT OF SECURITIES.

 The Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Securities on the dates and in the manner
provided in the Securities. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m., Eastern Time, on the due date money
deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. 

  
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 SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. 

The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-Registrar) where Securities may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served.
The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Trustee’s principal agency in the Borough of Manhattan, the City of New York, which currently is located at . 

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

SECTION 4.03. REPORTS. 
 (a) Whether or not the
Company is subject to Section 13 or 15(d) of the Exchange Act, the Company covenants and agrees to file with the Trustee, and to provide by mail to each Holder, within 15 days after the Company is or would be required to file the same with the
SEC, copies of the annual reports, quarterly reports and the information, documents and other reports which the Company is or would be required to file with the SEC pursuant to Section 13 or Section 15(d) of the Exchange Act. 

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

(c) The Company covenants and agrees to furnish to the Trustee within 120 days of the end of each fiscal year, the compliance certificate
required by Section 314(a)(4) of the Trust Indenture Act. 
 (d) 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 4.04. COMPLIANCE
CERTIFICATE. 
 (a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ Certificate
stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained
in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default, Event of Default or other instance of non-compliance with any of the terms of this Indenture
shall have occurred, describing all such Defaults, Events of Default or instances of non-compliance of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of, premium, if any, or interest on the Securities is prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. 

  
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 (b) The Company shall, so long as any of the Securities are outstanding, deliver to the Trustee,
forthwith upon any Officer of the Company becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto.

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

SECTION 4.05. CONTINUED EXISTENCE. 
 Subject to
Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its existence as a business trust, and the corporate, partnership or other existence of each of its Significant
Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Significant Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of
the Company and any of its Significant Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Significant Subsidiaries,
if the Board of Trustees shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Significant Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Securities. 
 SECTION 4.06. STAY, EXTENSION AND USURY LAWS. 

The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted. 
 Article 5 

SUCCESSORS 
 SECTION 5.01. MERGER, CONSOLIDATION,
OR SALE OF ASSETS. 
 The Company may consolidate or merge with or into, convert itself into, or sell, assign, transfer, lease, convey or
otherwise dispose of (including any such disposition that might be deemed to occur as a result of the conversion of the Company into another form of organization) all or substantially all of its properties or assets in one or more related
transactions, to another Person (other than an individual, a government or an agency or political subdivision of a government), but only if (a) either (i) the Company is the surviving entity or (ii) the Person formed by or surviving
any such consolidation, merger or conversion (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a Person organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (b) the Person formed by or surviving any such consolidation, merger or conversion (if other than the Company) or the Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company under the Securities and this Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee; and (c) immediately after such
transaction no Default or Event of Default exists. If the Company requests the Trustee to enter into any supplemental indenture, or to take any other action, as a result of such consolidation, merger, sale, assignment, transfer, lease, conveyance or
other disposition, the Company will also furnish to the Trustee an Officer’s Certificate and an Opinion of Counsel, each to the effect that the conditions precedent set forth in this Section 5.01 have been complied with. 

  
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 SECTION 5.02. SUCCESSOR PERSON SUBSTITUTED. 

Upon any consolidation, merger or conversion, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially
all of the assets of the Company in accordance with Section 5.01 hereof, the successor Person formed by such consolidation or into or with which the Company is merged or converted or to which such sale, assignment, transfer, lease, conveyance
or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, conversion, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the
“Company” shall refer instead to the successor Person and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company
herein; provided, however, that the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Securities except in the case of a sale of all of the Company’s assets that meets the requirements of
Section 5.01 hereof. 
 Article 6. 

DEFAULTS AND REMEDIES 
 SECTION 6.01. EVENTS OF
DEFAULT. 
 An “Event of Default,” with respect to Securities of any series shall have occurred if: 

(a) the Company defaults in the payment when due of interest on, with respect to, any Security of that series and such default continues for a
period of 30 days; 
 (b) the Company defaults in the payment when due of principal of or premium, if any, on, or sinking fund payment with
respect to, any Security of that series when the same becomes due and payable at maturity, upon redemption or otherwise; 
 (c) the Company
fails to observe or perform any other covenant, representation, warranty or other agreement in this Indenture, with respect to any Security of that series for 60 days after notice to comply; 

(d) the Company, pursuant to or within the meaning of any Bankruptcy Law: 

 

	 	(i)	commences a voluntary case, 

  

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

  

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

  

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

  

	 	(v)	generally is not paying its debts as they become due; 

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

	 	(i)	is for relief against the Company in an involuntary case; 

  

	 	(ii)	appoints a custodian of the Company for all or substantially all of the property of the Company; or 

  

	 	(iii)	orders the liquidation of the Company; 

 and the order or decree remains unstayed and in effect for 60
consecutive days; 

  
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 (f) any other event provided with respect to Securities of that series in the terms thereof as
contemplated by Section 2.02 hereof shall occur. 
 The term “custodian” as used in this Article 6 means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law. 
 A Default under clause (c) with respect to the
Securities of any series is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal amount of the then outstanding Securities of such series and of all Pari Passu Series with respect to which such
Default shall have occurred (treating such series and all Pari Passu Series as a single class) notify the Company and the Trustee, of the Default and the Company does not cure the Default within 60 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a “Notice of Default.” 
 SECTION 6.02. ACCELERATION. 

If any Event of Default with respect to any series of Securities (other than an Event of Default specified in clause (d) or (e) of
Section 6.01 hereof) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities of such series and of all Pari Passu Series with respect to which such Event of Default shall have
occurred and be continuing (treating such series and all such Pari Passu Series as a single class) may declare all the Securities of such series and all such Pari Passu Securities to be due and payable immediately. Upon any such declaration, the
principal of, premium, if any, and accrued and unpaid interest with respect to the Securities of all such series shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in clause (d) or
(e) of Section 6.01 hereof occurs with respect to the Company, all outstanding Securities of all series shall be due and payable immediately without further action or notice, provided that the payment of principal and interest on such
Securities shall remain subordinated to the extent provided in Article 10. 
 SECTION 6.03. OTHER REMEDIES. 

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. 
 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 of a Security 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. All remedies are cumulative to the extent permitted by law. 

SECTION 6.04. WAIVER OF PAST DEFAULTS; RECISSION OF ACCELERATION. 

Holders of a majority in aggregate principal amount of the then outstanding Securities of a series and of all Pari Passu Series affected
(treating all such series as a single class) may, by notice to the Trustee on behalf of the Holders of all of the Securities of all such series, waive an existing Default or Event of Default and its consequences hereunder (including in connection
with an offer to purchase or exchange), except a continuing Default or Event of Default in the payment of the principal of, premium, if any, interest on, or any sinking fund payment with respect to, the Securities of such series, and except a
continuing Default or Event of Default under any provision of this Indenture that, under Section 9.02, cannot be modified or waived without the consent of a greater number of Holders or of each Holder affected. Upon any such waiver, such
Default or Event of Default shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. The Holders of a
majority in aggregate principal amount of the then outstanding Securities of a series and of all Pari Passu Series affected (treating all such series as a single class) may also rescind an acceleration and its consequences with respect to all such
series, including any related payment default that resulted from such acceleration, but not including any other payment default. 

  
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 SECTION 6.05. CONTROL BY MAJORITY. 

Holders of a majority in principal amount of the then outstanding Securities of all Pari Passu Series with respect to which an Event of Default
shall have occurred and be continuing (treating all such series as a single class) may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on
it; provided that 
  

	 	(i)	such direction shall not be in conflict with any law or with this Indenture; 

  

	 	(ii)	the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction; and 

  

	 	(iii)	the Trustee need not take any action which might involve it in personal liability or be unduly prejudicial to the Holders of Securities of such series not joining therein. 

SECTION 6.06. LIMITATION ON SUITS. 
 A Holder of
a Security of any series may pursue a remedy with respect to this Indenture or the Securities of such series only if: 
 (a) the Holder of a
Security of any or all such series affected gives to the Trustee written notice of a continuing Event of Default; 
 (b) the Holders of at
least 25% in principal amount of the then outstanding Securities of such series and of all Pari Passu Series affected (treating all such series as a single class) make a written request to the Trustee to pursue the remedy; 

(c) such Holder or Holders offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense; 
 (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and 
 (e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Securities
of such series and of all Pari Passu Series affected (treating all such series as a single class) do not give the Trustee a direction inconsistent with the request. 

A Holder of a Security may not use this Indenture to prejudice the rights of another Holder of a Security or to obtain a preference or
priority over another Holder of a Security. 
 SECTION 6.07. RIGHTS OF HOLDERS OF SECURITIES TO RECEIVE PAYMENT. 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Security of any series to receive payment of principal,
premium, if any, and interest on such Security, on or after the respective due dates expressed in such Security (including in connection with an offer to purchase), 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 6.08. COLLECTION SUIT BY TRUSTEE. 

If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing with respect to any series of Securities, the
Trustee is authorized to recover judgment in its own name and as Trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on such Securities and interest on overdue
principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel. 

  
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 SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. 

The Trustee is authorized to 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 (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Securities of any series allowed in any judicial proceedings relative to
the Company (or any other obligor upon the Securities), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. 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 7.07 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 or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the
Securities of any series 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. 

SECTION 6.10. PRIORITIES. 
 If the Trustee
collects any money or other property pursuant to this Article, it shall pay out the money or other property in the following order: 

First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; 
 Second: to Holders of
Securities for amounts due and unpaid on the Securities for principal, premium, if any, interest and any other amounts, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal,
premium, if any, interest and other amounts, respectively; and 
 Third: to the Company or to such party as a court of competent
jurisdiction shall direct. 
 The Trustee may fix a record date and payment date for any payment to Holders of Securities pursuant to this
Section 6.10. 
 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 a 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, 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 does not apply to a suit by the Trustee, a suit by a Holder of a Security pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Securities of any series. 

ARTICLE 7. 
 TRUSTEE 

SECTION 7.01. DUTIES OF TRUSTEE. 
 (a) If an
Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture or an indenture supplemental hereto, and use the same degree of care and skill in its exercise, as a prudent
person would exercise or use under the circumstances in the conduct of its own affairs. 

  
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 (b) Except during the continuance of an Event of Default: 

 

	 	(i)	the duties of the Trustee shall be determined solely by the express provisions of this Indenture or an indenture supplemental hereto, and the Trustee need perform only those duties that are specifically set forth in
this Indenture or an indenture supplemental hereto and no others, and no implied covenants or obligations shall be read into this Indenture or an indenture supplemental hereto against the Trustee; and 

 

	 	(ii)	in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. 

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

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

  

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

 

	 	(iii)	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 6.05 hereof. 

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section. 
 (e) No provision of this Indenture shall require the Trustee to expend or risk its own
funds or incur any liability. 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 and indemnity satisfactory to it against any losses, costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. 

(f) 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. Money
held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 
 SECTION 7.02. RIGHTS OF TRUSTEE. 

(a) The Trustee may conclusively rely upon any document 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 or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel. The Trustee may
consult with counsel, and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon. 
 (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. 

  
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 (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within the rights or powers conferred upon it by this Indenture. 
 (e) 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. 
 SECTION
7.03. 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 any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (within the meaning of TIA ss. 310(b)) it must
eliminate such conflicting interest within 90 days after the default referred to in such § 310(b), apply to the SEC for permission to continue as trustee, or resign. Any Agent may do the same with like rights and duties. The Trustee is also
subject to Sections 7.10 and 7.11 hereof. 
 SECTION 7.04. 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 or any money paid to the Company or upon the Company’s direction under any provision of this Indenture; it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee; and it shall not be responsible for any statement or recital herein or any statement in the Securities or any other document in connection with the sale of the Securities
or pursuant to this Indenture other than its certificate of authentication. 
 SECTION 7.05. NOTICE OF DEFAULTS. 

If a Default or Event of Default occurs and is continuing and if a Responsible Officer of the Trustee has actual knowledge of such Default or
Event of Default, the Trustee shall mail to Holders of Securities a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, or interest on, any
Security, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Securities. 

SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SECURITIES. 

On or before July 31 of each year, beginning with the July 31 following the date on which Securities are first issued under this
Indenture, and for so long as Securities remain outstanding, the Trustee shall mail to the Holders of the Securities a brief report dated as of such reporting date that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA ss. 313(c). A copy of each
report at the time of its mailing to the Holders of Securities shall be mailed to the Company and filed with the SEC and each stock exchange on which the Securities are listed in accordance with TIA ss. 313(d). The Company shall promptly notify the
Trustee when the Securities are listed on any stock exchange. 
 SECTION 7.07. 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 Trustee have separately agreed. 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 promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel. 

  
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 The Company shall indemnify the Trustee against any and all losses, liabilities or expenses
incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and
defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss,
liability or expense may be attributable to its negligence or willful misconduct. 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 cooperate in the defense. The Trustee may have separate counsel, and the Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. 
 The obligations of the
Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. 
 To secure the Company’s payment
obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay principal of, premium, if any, and interest on particular Securities. Such
lien shall survive the satisfaction and discharge of this Indenture. 
 When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(e) or (f) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law. 
 SECTION 7.08. REPLACEMENT OF TRUSTEE. 

A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section. 
 The Trustee may resign with respect to one or more or all series of Securities at
any time and be discharged from the trust hereby created by so notifying the Company in writing. The Holders of a majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to such series by so
notifying the Trustee and the Company in writing. The Company may remove the Trustee if: 
 (a) the Trustee ceases to be eligible in
accordance with Section 7.10 hereof; 
 (b) the Trustee is adjudged bankrupt or insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law; 
 (c) a custodian or public officer takes charge of the Trustee or its property; or 

(d) the Trustee becomes incapable of acting. 

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Securities of a series may appoint a successor Trustee to replace the successor Trustee appointed by
the Company with respect to that series of Securities. 
 If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. 

  
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 If the Trustee, after written request by any Holder of a Security who has been a Holder of a
Security for at least six months, ceases to be eligible in accordance with Section 7.10, such Holder of a Security may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A
successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Securities. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor
Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations
under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. 
 If a successor Trustee is appointed 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 any applicable series shall execute and deliver an indenture supplemental hereto which shall
contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of any series as to which the predecessor Trustee is not retiring
shall continue to be vested in the predecessor Trustee, and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it
being understood that nothing herein or in such supplemental indenture shall constitute such Trustees as co-trustees of the same trust and that 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. 
 SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. 

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the successor Trustee. 
 SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. 

There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise corporate trust powers, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition. 
 This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b). 
 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY. 
 The Trustee is subject to TIA ss. 311(a), excluding any creditor relationship described in TIA ss. 311(b). A Trustee who has
resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated therein. 
 Article 8. 

LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE 

SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE; ALTERNATIVE SATISFACTION AND DISCHARGE. 

(a) The Company may, at the option of its Board of Trustees evidenced by a resolution set forth in an Officers’ Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof, with such modifications thereto as may be specified pursuant to Section 2.02 in the Board Resolution, Officer’s Certificate or supplemental indenture establishing a particular series
of Securities, be applied to all outstanding Securities of one or more series upon compliance with the conditions set forth below in this Article 8. 

  
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 (b) As an alternative to having Section 8.02 or 8.03 be applied to all outstanding
Securities of one or more series, the Company may terminate its obligations under the Securities of one or more series and its obligations under this Indenture in respect of such series of Securities (except those obligations referred to in the
penultimate paragraph of this Section 8.01(b), and any obligation of the Company to convert or exchange Securities of such series as expressly provided for in the Board Resolution, Officer’s Certificate or indenture supplemental hereto
establishing such Series) (1) if (i) all Securities of such series theretofore authenticated and delivered (except lost, stolen or destroyed Securities that have been replaced or paid and Securities for whose payment cash in United States
dollars has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust as provided in Section 8.06) have been delivered to the Trustee for cancellation;
(ii) the Company has paid all sums payable by it hereunder or under the applicable Board Resolution, Officer’s Certificate or indenture supplemental hereto in respect of such series of Securities; and (iii) the Company shall have
delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the satisfaction and discharge of this Indenture have been complied with; or (2) if (i) either
(A) in the case of a series of Securities redeemable prior to its Stated Maturity, the Company shall, pursuant to Article 3, have given notice to the Trustee and mailed a notice of redemption to each Holder of Securities of such series of the
redemption of all of such Securities under arrangements satisfactory to the Trustee for the giving of such notice or (B) all Securities of such series have otherwise become due and payable hereunder or will become due and payable within one
year; (ii) the Company shall have irrevocably deposited or caused to be deposited with the Trustee (or a trustee satisfactory to the Trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee),
as trust funds in trust solely for the benefit of the Holders of Securities of such series for that purpose, cash in United States dollars in such amount as is sufficient without consideration of reinvestment of interest or other earnings on such
cash, to pay the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for the principal of, premium, if any, and interest on the outstanding Securities of such series to the date of such deposit (in the
case of Securities which have become due and payable) or to the stated maturity or redemption date, as the case may be; (iii) no Default or Event of Default with respect to this Indenture or the Securities shall have occurred and be continuing
on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company is bound; (iv) the Company shall have
paid all other sums payable by it hereunder in respect of Securities of such series; and (v) the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent
relating to the satisfaction and discharge of this Indenture have been complied with. 
 Notwithstanding the foregoing paragraph, the
Company’s obligations in Sections 2.07, 2.08, 2.09, 2.10, 4.01, including any provision of the applicable Board Resolution, Officer’s Certificate or indenture supplemental hereto relating to the payment of principal, premium or interest,
4.02, 7.07, 8.06 and 8.07 shall survive with respect to the Securities of the applicable series until they are no longer outstanding pursuant to the last paragraph of Section 2.10. After the Securities of the applicable series are no longer
outstanding, the Company’s obligations in Sections 7.07, 8.06 and 8.07 shall survive in respect of Securities of the applicable series. 

After such delivery or irrevocable deposit, the Trustee upon request shall acknowledge in writing the discharge of the Company’s
obligations under the Securities of the applicable series and the Company’s obligations under this Indenture with respect to the Securities of such series, except for those surviving obligations specified above. 

SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE. 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02 relating to one or more
series of Securities, the Company shall, upon the satisfaction of the conditions set forth in Section 8.04 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 

  
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forth in Section 8.04 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 of the applicable series, which shall thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all of its other obligations under the Securities of the applicable series and under the provisions of this Indenture applicable to such series (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 of the applicable series to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest, on such Securities
when such payments are due, (b) the Company’s obligations with respect to such Securities under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder, and the
Company’s obligations in connection therewith and (d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof. 
 SECTION 8.03. COVENANT DEFEASANCE. 

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03 relating to one or more
series of Securities, the Company shall, upon the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.03, 4.04, 4.05 and 4.06 hereof with respect to the
outstanding Securities of the applicable series, and under any other covenants specified in the Board Resolution, Officer’s Certificate supplemental indenture or other terms of the applicable series as covenants to which this Section 8.03
applies, on and after the date the conditions set forth Section 8.04 are satisfied (hereinafter, “Covenant Defeasance”), and the Securities of the applicable series shall thereafter be deemed not “outstanding” for the
purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed “outstanding” for all other purposes hereunder. For this
purpose, Covenant Defeasance means that, with respect to the “outstanding” Securities of the applicable 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 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Securities shall be unaffected thereby. 

SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. 

The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Securities of one or
more series: 
 In order to exercise either Legal Defeasance or Covenant Defeasance: 

(a) the Company must irrevocably deposit with the Trustee, (or another trustee satisfying the requirements of Section 7.10, who shall
agree to comply with the provisions of this Article 8 applicable to it) in trust, for the benefit of the Holders of the Securities of the applicable series, (i) an amount of cash in United States dollars, (ii) non-callable U.S. Government
Obligations which, through scheduled payment of principal and interest in respect thereof in accordance with their terms, will provide, not later than one Business Day before the due date of any payment of principal of, premium, if any, or interest
on the Securities of such series, cash in an amount, or (iii) a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, interest and premium, if any, on the
outstanding Securities of the applicable series on the Stated Maturity or on the applicable redemption date, as the case may be, and any mandatory sinking fund payments applicable to the Securities of such series on the day on which such payments
are due, and the Company must specify whether the Securities of the applicable series are being defeased to maturity or to a particular redemption date; 

  
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 (b) in the case of an election under Section 8.02 hereof, the Company shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) since the date
of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Securities of the applicable series
will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred; 
 (c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the
Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Securities of the applicable series will not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; 

(d) no Default or Event of Default shall have occurred and be continuing 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) or insofar as Sections 6.01(e) or (f) hereof are concerned, at any time in the period ending on the 91st day after the date of deposit (or greater period of time in which any
such deposit of trust funds may remain subject to Bankruptcy Law insofar as those apply to the deposit by the Company); and 
 (e) the
Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. 

SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. 

Subject to Section 8.06 hereof, all money and non-callable U.S. Government Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Securities of the applicable series shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities 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 such Securities of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. 

The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable
U.S. Government Obligations deposited pursuant to Section 8.04 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 the applicable series. 
 Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the request of the Company any money or non-callable U.S. Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance of the applicable series. 

  
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 SECTION 8.06. REPAYMENT TO COMPANY. 

Any money and U.S. Government Obligations deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment
of the principal of, premium or interest on any Security and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such money and U.S. Government
Obligations, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company. 
 SECTION 8.07. REINSTATEMENT. 

If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable U.S. Government Obligations deposited pursuant to
Section 8.02 or 8.03 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 obligations of the Company under this
Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium or interest on any Security following the reinstatement of its obligations, the Company shall be subrogated to
the rights of the Holder of such Security to receive such payment from the money held by the Trustee or Paying Agent. 
 ARTICLE 9. 

AMENDMENT, SUPPLEMENT AND WAIVER 
 SECTION 9.01.
WITHOUT CONSENT OF HOLDERS OF SECURITIES. 
 Notwithstanding Section 9.02 of this Indenture, the Company and the Trustee may amend or
supplement this Indenture or the Securities without the consent of any Holder of a Security: 
 (a) to evidence the succession of another
Person to the Company, or successive successions, and the assumption by the successor Person of the covenants, agreements and obligations of the Company pursuant to Article 5 hereof; 

(b) to add to the covenants of the Company such further covenants, restrictions or conditions for the protection 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 for the benefit of such series) as the Board of Trustees and the Trustee shall
consider to be for the protection of the Holders of such Securities, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions or conditions a Default or an Event of Default
permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for
a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon
such default; 
 (c) to provide for the issuance under this Indenture of Securities in coupon form (including Securities registrable as to
principal only) and to provide for exchangeability of such Securities with the Securities issued hereunder in fully registered form and to make all appropriate changes for such purpose; 

  
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 (d) to cure any ambiguity or to correct or supplement any provision contained herein or in any
supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture; provided that
any such action shall not adversely affect the interests of the Holders of the Securities; 
 (e) to evidence and provide for the acceptance
of appointment hereunder by a successor trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section 7.08; 
 (f) to make any change that does not adversely
affect the rights of any Holder; or 
 (g) to provide for the issuance of and establish the form and terms and conditions of the Securities
of any series, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the Holders of any series of Securities. 

Upon the request of the Company accompanied by a copy of a Board Resolution, certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Trustees and to be in full force and effect on the date of the certificate, authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise. 

SECTION 9.02. WITH CONSENT OF HOLDERS OF SECURITIES. 

Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture, or the Securities of
any series may be amended or supplemented, with the consent of the Holders of a majority in principal amount of the Securities then outstanding of all series affected by such supplemental indenture (including, without limitation, consents obtained
in connection with a purchase of, or tender offer or exchange offer for, Securities), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal
of, premium or interest on the Securities) or compliance with any provision of this Indenture or the Securities of such series may be waived with the consent of the Holders of a majority in principal amount of the Securities then outstanding of all
series affected by such waiver (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for the Securities). Any amendment to the provisions of Article 10 hereof will require the consent
of the Holders of at least 75% in aggregate principal amount of the Securities then outstanding of all series affected by such amendment (treating all series that are Pari Passu Series with respect to each other as a single class) if such amendment
would adversely affect the rights of Holders of such Securities. 
 For purposes of determining the consent required under this
Section 9.02 all Pari Passu Series shall be treated as a single class. 
 Upon the request of the Company accompanied by a copy of a
Board Resolution, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Trustees and to be in full force and effect on the date of the certificate, authorizing the execution of any such amended
or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Securities of each such series as aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02(b) hereof, the Trustee shall join with the Company in the execution of such amended or supplemental indenture unless such amended or supplemental indenture affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental indenture. 

  
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 It shall not be necessary for the consent of the Holders of Securities under this
Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. 

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders of Securities
of such series affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended
or supplemental indenture or waiver. 
 However, without the consent of each Holder of Securities affected an amendment or waiver may not
(with respect to any Securities held by a non-consenting Holder): 
 (a) reduce the principal amount of the Securities whose Holders must
consent to an amendment, supplement or waiver; 
 (b) reduce the principal of or change the fixed maturity of the principal of, premium, if
any, or mandatory sinking fund obligation, if any, with respect to any Securities of any series or alter the provisions with respect to the redemption of the Securities; 

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

(d) waive a Default or Event of Default in the payment of principal of or interest or premium on the Securities of any series (except a
rescission of acceleration of maturity of the Securities by the Holders of a majority in aggregate principal amount of the Securities of one or more affected series and a waiver of the payment default that resulted from such acceleration); 

(e) make any Security of any series payable in currency other than that stated in the Securities of such series; 

(f) 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 on the Securities; 
 (g) waive a redemption payment with respect to any Security; or 

(h) make any change in Section 6.04 or 6.07 hereof or in the amendment and waiver provisions of Section 9.01 or this
Section 9.02. 
 SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. 

Every amendment or supplement to this Indenture or the Securities shall be set forth in an amended or supplemental indenture that complies with
the TIA as then in effect. 
 SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder of
a Security and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Securities, even if notation of the consent is not made on any Securities. However, any such Holder of a
Security or subsequent Holder of a Security may revoke the consent as to its Securities if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every Holder. 
 SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Securities thereafter authenticated. The Company
in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment, supplement or waiver. 

  
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 Failure to make the appropriate notation or to issue new Securities shall not affect the validity
and effect of such amendment, supplement or waiver. 
 SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. 

The Company may not sign an amendment or supplemental indenture until its Board of Trustees approves it. The Trustee shall sign any amendment
or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement 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 or
refusing to sign such amendment or supplemental indenture, the Trustee shall be entitled to receive and, subject to Section 7.01 hereof, shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel as
conclusive evidence that such amendment or supplemental indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. 

ARTICLE 10. 
 SUBORDINATION 

SECTION 10.01. AGREEMENT TO SUBORDINATE. 
 (a) The
Company agrees, and each Holder by accepting a Security agrees, that the Indebtedness evidenced by the Securities is subordinated in right of payment, to the extent and in the manner provided in this Article, to the prior payment in full of all
Senior Debt (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Debt. 

(b) If any holder of Senior Debt is required by any court or otherwise to return to the Company, or any custodian, trustee, or similar official
acting in relation to the Company, any amount paid by the Company to such holder of Senior Debt, the provisions of this Article 10, to the extent theretofore discharged, shall be reinstated in full force and effect; provided, however, that any
amounts paid pursuant to this Indenture to Holders of Securities shall not be subject to disgorgement pursuant to the provisions of this paragraph (b). 

SECTION 10.02. CERTAIN DEFINITIONS. 

“Designated Senior Debt” means (i) the Senior Bank Debt and (ii) any other Senior Debt permitted under this Indenture the
principal amount of which at least the amount specified in the applicable supplemental indenture and that has been designated by the Company as “Designated Senior Debt.” 

“Representative” means the indenture trustee or other trustee, agent or representative for the holders of any Senior Debt. 

A “distribution” may consist of cash, securities or other property, by set-off or otherwise. 

SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY. 

Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its property, an assignment for the benefit of creditors or any marshalling of the Company’s assets and liabilities: 

(1) holders of Senior Debt shall be entitled to receive payment in full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate specified in the applicable Senior Debt) before the Holders of Securities shall be entitled to receive any payment with respect to the Securities (except that Holders may receive
(i) securities that are subordinated to at least the same extent as the Securities to (a) Senior Debt and (b) any securities issued in exchange for Senior Debt and (ii) payments and other distributions made from any defeasance
trust created pursuant to Section 8.05 hereof); and 

  
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 (2) until all Obligations with respect to Senior Debt (as provided in subsection
(1) above) are paid in full, any distribution to which the Holders of Securities would be entitled but for this Article shall be made to holders of Senior Debt (except that Holders may receive (i) securities that are subordinated to
at least the same extent as the Securities to (a) Senior Debt and (b) any securities issued in exchange for Senior Debt and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 8.05
hereof), as their interests may appear. 
 SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT. 

(a) The Company may not make any payment or distribution to the Trustee or any Holder in respect of the Securities and may not acquire from the
Trustee or any Holder any Securities for cash or property (other than (1) securities that are subordinated to at least the same extent as the Securities to (A) Senior Debt and (B) any securities issued in exchange for Senior Debt and
(2) payments and other distributions made from any defeasance trust created pursuant to Section 8.05 hereof) until all principal and other Obligations with respect to the Senior Debt have been paid in full if: 

(1) a default in the payment of the principal of, premium, if any, or interest on Designated Senior Debt occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document governing such Designated Senior Debt; or 
 (2) a default, other than
a default specified in Section 10.04(a)(1), on Designated Senior Debt occurs and is continuing with respect to Designated Senior Debt that then permits holders of the Designated Senior Debt to which such default relates to accelerate its
maturity and the Trustee receives a notice of the default (a “Payment Blockage Notice”) from a Person who may give it pursuant to Section 10.12 hereof. If the Trustee receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section unless and until (I) at least 360 days shall have elapsed since the effectiveness of the immediately prior Payment Blockage Notice and (II) all scheduled payments of principal and
premium, if any, and interest on the Securities that have come due (other than by reason of acceleration) have been paid in full in cash. No default described in this paragraph (2) that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice. 
 (b) The Company may and
shall resume payments on and distributions in respect of the Securities and may acquire them: 
  

	 	(i)	in the case of a default described in Section 10.04(a)(1), upon the date on which the default is cured or waived, and 

  

	 	(ii)	in the case of a default referred to in Section 10.04(a)(2) hereof, the earlier of the date on which such default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Designated Senior Debt has been accelerated, 

 if this Article otherwise permits the
payment, distribution or acquisition at the time of such payment or acquisition. 
 SECTION 10.05. ACCELERATION OF SECURITIES. 

If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of the
acceleration. 
 SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER. 

In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Securities at a time when the Trustee
or such Holder, as applicable, has actual knowledge that such payment is prohibited by Section 10.04 hereof, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt as their interests may appear or their Representative under the indenture or other agreement (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear,
for application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Debt. 

  
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 With respect to the holders of Senior Debt, the Trustee undertakes to perform only such
obligations on the part of the Trustee as are specifically set forth in this Article 10, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not
be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders or the Company or any other Person money or assets to which any
holders of Senior Debt shall be entitled by virtue of this Article 10, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. 

SECTION 10.07. NOTICE BY COMPANY. 
 The Company
shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Securities to violate this Article, but failure to give such notice shall not affect the
subordination of the Securities to the Senior Debt as provided in this Article. 
 SECTION 10.08. SUBROGATION. 

After all Senior Debt is paid in full and until the Securities are paid in full, Holders of the Securities shall be subrogated (equally and
ratably with all other Indebtedness pari passu with such Securities) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders have been applied to
the payment of Senior Debt. A distribution made under this Article to holders of Senior Debt that otherwise would have been made to Holders is not, as between the Company and Holders, a payment by the Company on the Senior Debt. 

SECTION 10.09. RELATIVE RIGHTS. 
 This Article
defines the relative rights of Holders and holders of Senior Debt. Nothing in this Indenture shall: 
  

	 	(i)	impair, as between the Company and Holders, the obligation of the Company, which is absolute and unconditional, to pay principal of, premium, if any, and interest on the Securities in accordance with their terms;

  

	 	(ii)	affect the relative rights of Holders and creditors of the Company other than the rights of Holders of the Securities in relation to holders of Senior Debt; or 

 

	 	(iii)	prevent the Trustee or any Holder from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders of Senior Debt to receive distributions and payments otherwise payable to
Holders. 

 If the Company fails because of this Article to pay principal of or interest on a Security on the due date, the
failure is still a Default or Event of Default. 
 SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. 

No right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by the Securities shall be impaired by any act
or failure to act by the Company or any Holder or by the failure of the Company or any Holder to comply with this Indenture. 
 SECTION 10.11. DISTRIBUTION
OR NOTICE TO REPRESENTATIVE. 
 Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be
made and the notice given to their Representative. 

  
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 Upon any payment or distribution of assets of the Company referred to in this Article 10, the
Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to
the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. 
 SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT. 

Notwithstanding the provisions of this Article 10 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and any Paying Agent may continue to make payments on the Securities, unless the Trustee shall have received at the Corporate
Trust Office of the Trustee at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Securities to violate this Article or otherwise has actual
knowledge of such facts. Only the Company or a Representative may give the notice. A Payment Blockage Notice may be given only by a Representative of holders of Designated Senior Debt or by a holder of Designated Senior Debt for which there is no
representative. Nothing in this Article 10 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. 

The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. 
 SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION. 

Each Holder of a Security by the Holder’s acceptance thereof authorizes and directs the Trustee on the Holder’s behalf to take such
action as may be necessary or appropriate to effectuate the subordination as provided in this Article 10, and appoints the Trustee to act as the Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper
proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of the time to file such claim, the Representative under any Credit Facility (or in the absence of
such a Representative, the lender) is hereby authorized to file an appropriate claim for and on behalf of the Holders of the Securities. 

ARTICLE 11. 
 MEETINGS OF HOLDERS

 SECTION 11.01. PURPOSES FOR WHICH MEETING MAY BE CALLED. 

A meeting of Holders of Securities of any series may be called at any time and from time to time pursuant to this Article 11 to make, give or
take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by Holders of Securities of such series. 

SECTION 11.02. CALL, NOTICE AND PLACE OF MEETINGS. 

(a) The Trustee may at any time call a meeting of Holders of Securities of any one or more series for any purpose specified in
Section 11.01, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or in such other place as the Trustee shall determine. Notice of every meeting of Holders of Securities of any one or more series,
setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 12.02, not less than 20 nor more than 180 days prior to the date fixed
for the meeting. 

  
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 (b) In case at any time the Company, by or pursuant to a Board Resolution, or the Holders of at
least 25% in principal amount of the outstanding Securities of any one or more series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose specified in Section 11.01 by written request
setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of such meeting within 20 days after receipt of such request or shall not thereafter proceed to cause the meeting to be
held as provided herein, then the Company or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in clause (a) of this Section. 
 SECTION 11.03. PERSONS ENTITLED TO VOTE AT MEETINGS. 

To be entitled to vote at any meeting of Holders of Securities of any one or more series, a Person shall be (a) a Holder of one or more
outstanding Securities of such a series, or (b) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more outstanding Securities of such series by such Holder or Holders. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the
Company and its counsel. 
 SECTION 11.04. QUORUM; ACTION. 

The Persons entitled to vote a majority in principal amount of the outstanding Securities of a series shall constitute a quorum for a meeting
of Holders of Securities of such series; provided, however, that if the meeting is of the Holders of more than one series of Securities, a quorum shall consist of Persons entitled to vote a majority in principal amount of the outstanding Securities
of all such series (voting as a single class); and provided further that if any action is to be taken at such meeting with respect to a consent or waiver which this Indenture (or any Board Resolution, Officer’s Certificate or indenture
supplemental hereto establishing a series of Securities hereunder) expressly provides may be given by the Holders of more or less than a majority in principal amount of the outstanding Securities of a series, the Persons entitled to vote such
percentage in principal amount of the outstanding Securities of such series shall constitute a quorum. In the absence of a quorum within 30 minutes after the time appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting. Notice of the reconvening of
any such adjourned meeting shall be given as provided in Section 11.02(a), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening
of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the outstanding Securities of such series which shall constitute a quorum. 

Except as otherwise provided in Section 6.02 or 9.02 (or in any Board Resolution, Officer’s Certificate or indenture supplemental
hereto establishing a series of Securities hereunder), any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in
principal amount of the outstanding Securities of that series (or, if applicable, of all Pari Passu Securities participating in the meeting (voting as a single class)); provided, however, that, except as otherwise provided in Section 6.02 or
9.02 (or in any Board Resolution, Officer’s Certificate or indenture supplemental hereto establishing a series of Securities hereunder), any resolution with respect to any request, demand, authorization, direction, notice, consent, waiver or
other action which this Indenture or any supplemental indenture expressly provides may be made, given or taken by the Holders of a specified percentage in principal amount of the outstanding Securities of a series (or, if applicable, of all Pari
Passu Securities participating in the meeting (voting as a single class)) may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified
percentage in principal amount of the outstanding Securities of such series (or, if applicable, of all Pari Passu Securities participating in the meeting (voting as a single class)). 

  
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 Any resolution passed or decision taken at any meeting of Holders of Securities of any series
duly held in accordance with this Section shall be binding on all the Holders of Securities of such series, whether or not such Holders were present or represented at the meeting. 

SECTION 11.05. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF MEETINGS. 

(a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of one or more series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 1.05 and the appointment of any proxy shall be proved in the manner specified in Section 1.05. Such regulations may provide that written instruments appointing proxies,
regular on their face, may be presumed valid and genuine without the proof specified in Section 1.05 or other proof. 
 (b) The Trustee
shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 11.02(b), in which case the Company or the Holders of
Securities of the series calling the meeting (or, if applicable, of all Pari Passu Securities participating in the meeting (voting as a single class)), as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote at least a majority in principal amount of the outstanding Securities of such series (or, if applicable, of all Pari Passu Securities participating in the
meeting (voting as a single class)) represented at the meeting. 
 (c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $25 principal amount of the outstanding Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy. 

(d) Any meeting of Holders of Securities of any series duly called pursuant to Section 11.02 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote at least a majority in principal amount of the outstanding Securities of such series (or, if applicable, of all Pari Passu Securities participating in the meeting (voting as a single class)) represented
at the meeting; and the meeting may be held as so adjourned without further notice. 
 SECTION 11.06. COUNTING VOTES AND RECORDING ACTION OF MEETINGS. 

(a) The vote upon any resolution submitted to any meeting of Holders of Securities of any one or more series shall be by written ballots on
which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of Holders of Securities of any one or more series shall be prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given
as provided in Section 11.02 and, if applicable, Section 11.04. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company, and
another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. 

  
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 SECTION 11.07. ARTICLE SUBJECT TO OTHER PROVISIONS. 

Each provision of this Article 11 (whether or not expressly so stated) is subject to any other provision of this Indenture (or any Board
Resolution, Officer’s Certificate or supplemental indenture establishing a series of Securities hereunder) that provides that Securities of different series constitute a single class. 

ARTICLE 12. 
 MISCELLANEOUS 

SECTION 12.01. TRUST INDENTURE ACT CONTROLS. 

This Indenture is subject to the provisions of the TIA that are required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions. 
 SECTION 12.02. NOTICES. 

Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others’ address: 

If to the Company: 
 Pennsylvania
Real Estate Investment Trust 
 The Bellevue 

200 S. Broad Street 

Philadelphia, PA 19103 
 Facsimile
No. (215) 546-7311 
 Attention: General Counsel 

If to the Trustee: 
 The Company
or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. 
 All
notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when
receipt acknowledged or confirmed, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. 

Any notice or communication to a Holder shall be mailed by first class mail or by overnight courier guaranteeing next day delivery to its
address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA ss. 313(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 within the time prescribed, it is duly given, whether or not the addressee receives it. 
 If the Company mails a notice or
communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. 

  
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 SECTION 12.03. COMMUNICATION BY HOLDERS OF SECURITIES WITH OTHER HOLDERS OF SECURITIES. 

Holders may communicate pursuant to TIA ss. 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 ss. 312(c). 
 SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT. 
 Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall
furnish to the Trustee: 
 (a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which shall
include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and 

(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 
 SECTION 12.05.
STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. 
 Each certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss. 314(e) and shall include: 

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

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such
certificate or opinion are based; 
 (c) a statement that, in the opinion of such Person, he or she 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 satisfied; and 

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. 

SECTION 12.06. RULES BY TRUSTEE AND AGENTS. 
 The
Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. 

SECTION 12.07. NO PERSONAL LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES AND STOCKHOLDERS. 

No past, present or future trustee, officer, employee, incorporator or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Securities, 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 12.08. GOVERNING LAW. 

THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE AND ENFORCE THIS INDENTURE AND THE SECURITIES. 

SECTION 12.09. 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 its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. 

  
 - 41 - 

 SECTION 12.10. 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 12.11. 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 12.12. COUNTERPART 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. This Indenture will be effective when each party shall have signed and delivered (including delivery by facsimile transmission), one or more counterparts to the other, but it shall not be necessary for both parties to sign the same
counterpart. 
 SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC. 

The Table of Contents and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not
to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. 
 [Signature Page
Follows] 

  
 - 42 - 

 SIGNATURES 

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

 

			
	 PENNSYLVANIA REAL ESTATE

INVESTMENT TRUST

		
	By	 	 
	Name:	 	
	 Title:
	 	

  

					
	  
	 	,        
	 as Trustee
	 	
		
	By	 	  

	Name:	 		 	
	 Title:
	 		 	

  
 - 43 - 

 EXHIBIT A-1 

(Face of Note) 

    % [Series      ] Subordinated Note due
[            ] 
 [Insert the Global Note Legend, if applicable pursuant
to the provisions of the Indenture] 
 CUSIP: 
  

			
	No:	  	$

 PENNSYLVANIA REAL ESTATE INVESTMENT TRUST 

promises to pay to
                                         
    or registered assigns, the principal sum of                  

Dollars on             . 

Interest Payment Dates:                     . 

Record Dates:                     . 

 

			
	 PENNSYLVANIA REAL ESTATE

INVESTMENT TRUST

		
	By:	 	 
	Name:	 	
	 Title:
	 	

  

							
	This is one of the Notes referred to in the within-mentioned Indenture:
	  
	 	,        	  	
	 as Trustee
	 		  	
			
	By:	  	  
	  	
	 Authorized Officer
	 		  	

  
 - 44 - 

 (Back of Note) 

    % [Series      ] Subordinated Note due
[            ] 
 Capitalized terms used herein have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated. 
 1. INTEREST. Pennsylvania Real Estate Investment Trust, a Pennsylvania
business trust (the “Company”), promises to pay interest on the principal amount of this Note at     % per annum from [            ] until maturity. The
Company will pay interest [            ] on                      and
                     of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment
Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment
Date shall be                     . The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 

2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the                      or
                     next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.14 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and interest at the office or agency of the Company maintained for such purpose within or
without the City and State of New York, provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on, all Global Notes and all other Notes the Holders of which shall
have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 

3. PAYING AGENT AND REGISTRAR. Initially,
                    , the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company may act in any such capacity. 
 4. INDENTURE. The Company issued the Notes under an Indenture
dated as of                      (the “Indenture”) between the Company and the Trustee. The terms of the Notes include those stated in the
Indenture and in [a Supplemental Indenture] [resolutions of [the [            ] Committee of ] [an Officer’s Certificate the Company’s Board of Trustees] dated
                    , and those terms made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss.
77aaa-77bbbb) (the “TIA”). The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. The Notes are general obligations of the Company. “Notes” means this Note
and all other Notes of the series of which this Note is a part. The Notes are “Securities” within the meaning of the Indenture, and references in the Indenture to “Securities” (including terms such as “Global
Securities”) include the Notes (and any “Global Notes” as used herein). 
 5. Optional Redemption. 

[(a)] The Notes will not be redeemable at the Company’s option prior to
                    . The Notes may be redeemed, in whole or in part, at the option of the Company on or after
                    , at the redemption prices specified below (expressed as percentages of the principal amount thereof), in each case, together
with accrued and unpaid interest thereon to the date of redemption, upon not less than 30 nor more than 60 days’ notice, if redeemed during the twelve-month period beginning on of the years indicated below: 

 

			
	 Year
	  	Redemption
Price
		  	

  
 - 45 - 

 [(b) Notwithstanding the foregoing, prior to
                    , the Company may, on any one or more occasions, use the net proceeds of one or more offerings of its capital stock to redeem up
to                     % of the aggregate principal amount of all notes that had been issued under the Indenture up to the time of redemption at a
redemption price of % the principal amount of the Notes redeemed, plus accrued and unpaid interest, to the date of redemption; provided that, after any such redemption, the aggregate principal amount of the Notes outstanding (excluding Notes held by
the Company and its Subsidiaries) must equal at least % of the Notes that had been issued under the Indenture up to the time of redemption; and provided further, that any such redemption shall occur within 90 days of the date of closing of such
offering of Capital Stock of the Company.] 
 6. MANDATORY REDEMPTION. [The Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.] or [Describe mandatory redemption or sinking fund provisions.] 
 7. NOTICE OF REDEMPTION.
Notice of Redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 

8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in all appropriate denominations. The transfer of Notes
may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay
any taxes and fees required by law or permitted by the Indenture. The Company need not transfer or exchange any Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, it need not transfer or
exchange any Note for a period of 15 days before a selection of Notes to be redeemed. 
 9. PERSONS DEEMED OWNERS. The registered Holder of a
Note will be treated as its owner for all purposes. 
 10. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or
the Notes may be amended or supplemented with the consent of the Holders of a majority in principal amount of the then outstanding Notes and other series of Securities affected (treating the Notes and such other series as a single class), and any
existing default or compliance with any provision of the Indenture, the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes and other series of Securities affected (treating the Notes
and such other series as a single class). Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for Notes in coupon form, to provide for a successor Trustee to provide for the assumption of the Company’s obligations to Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the rights under the Indenture of any such Holder, or to comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA. 

  
 - 46 - 

 11. DEFAULTS AND REMEDIES. Each of the following constitutes an Event of Default:
(i) default by the Company in the payment of interest on the Notes when the same becomes due and payable and default continues for a period of 30 days; (ii) default by the Company in the payment of the principal of or premium, if any, on
the Notes when the same becomes due and payable at maturity, upon redemption or otherwise; (iii) failure by the Company for 60 days after notice to comply with any of its other agreements in the Indenture or the Notes and (iv) certain
events of bankruptcy or insolvency with respect to the Company. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes and other series of Securities affected
(treating the Notes and such other series as a single class) may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency with
respect to the Company, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then outstanding Notes and other series of Securities affected (treating the Notes and such other series as a single class) may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes and other series of Securities affected (treating the Notes and such other series as a single class) then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of principal, interest or premium on the Notes. The Company is required to deliver to
the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 

12. SUBORDINATION. Each Holder by accepting a Note agrees that the payment of principal of, premium and interest on each Note is subordinated
in right of payment, to the extent and in the manner provided in the Indenture, to the prior payment in full of all Senior Debt (whether outstanding on the date of the Indenture or thereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt. 
 13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 

14. NO RECOURSE AGAINST OTHERS. No trustee, officer, employee, incorporator or stockholder of the Company shall have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes. 
 15. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent. 
 16. ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act). 
 17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures,
the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes
or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 
 The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: 
 Pennsylvania
Real Estate Investment Trust 
 The Bellevue 

200 S. Broad Street 

Philadelphia, PA 19102 

Attention: General Counsel 

  
 - 47 - 

 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to 
  
  

(Insert assignee’s soc. sec. or tax I.D. no.) 
  

 
  

 
  

 
  

 
 (Print or type
assignee’s name, address and zip code) 
 and irrevocably appoint
                                 to transfer this Note on the books of the
Company. The agent may substitute another to act for him. 
  

					
	Date:                     	  		  	
		  	Your Signature:	  	 
		  	(Sign exactly as your name appears on the face of this Note)

 Signature Guarantee. 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a
part of another Global Note or Certificated Note for an interest in this Global Note, have been made: 
  

									
	 Date of Exchange
	  	Amount of
decrease in
Principal
Amount of this
Global Note	  	Amount of
increase in
Principal
Amount of this
Global Note	  	Amount of
this Global Note
following such
decrease
(or increase)	  	Signature of
authorized
officer of
Trustee or
Note Custodian
		  		  		  		  	

  

  
 - 48 -Exhibit 4.1

 

Rights Agreement

 

by and between

 

AMERICAN APPAREL, INC.

 

and

 

CONTINENTAL STOCK TRANSFER & TRUST COMPANY,

 

as Rights Agent

 

Dated as of December 21, 2014

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
Section 1.
    	
Certain Definitions
    	
1
    
	
Section 2.
    	
Appointment of Rights   Agent
    	
7
    
	
Section 3.
    	
Issuance of Rights   Certificates
    	
7
    
	
Section 4.
    	
Form of Rights   Certificates
    	
9
    
	
Section 5.
    	
Countersignature and Registration
    	
10
    
	
Section 6.
    	
Transfer, Split-Up,   Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost   or Stolen Rights Certificates
    	
11
    
	
Section 7.
    	
Exercise of Rights;   Purchase Price; Expiration Date of Rights
    	
11
    
	
Section 8.
    	
Cancellation and   Destruction of Rights Certificates
    	
13
    
	
Section 9.
    	
Reservation and   Availability of Capital Stock
    	
14
    
	
Section 10.
    	
Preferred Stock Record   Date
    	
15
    
	
Section 11.
    	
Adjustment of Purchase   Price, Number and Kind of Shares or Number of Rights
    	
15
    
	
Section 12.
    	
Certificate of Adjusted   Purchase Price or Number of Shares
    	
23
    
	
Section 13.
    	
Consolidation, Merger   or Sale or Transfer of Assets, Cash Flow or Earning Power
    	
23
    
	
Section 14.
    	
Fractional Rights and   Fractional Shares
    	
26
    
	
Section 15.
    	
Rights of Action
    	
27
    
	
Section 16.
    	
Agreement of Rights   Holders
    	
27
    
	
Section 17.
    	
Rights Certificate   Holder Not Deemed a Stockholder
    	
28
    
	
Section 18.
    	
Concerning the Rights   Agent
    	
28
    
	
Section 19.
    	
Merger or Consolidation   or Change of Name of Rights Agent
    	
28
    
	
Section 20.
    	
Duties of Rights Agent
    	
29
    
	
Section 21.
    	
Change of Rights Agent
    	
31
    
	
Section 22.
    	
Issuance of New Rights   Certificates
    	
32
    
	
Section 23.
    	
Redemption and   Termination
    	
32
    
	
Section 24.
    	
Exchange
    	
33
    
	
Section 25.
    	
Notice of Certain   Events
    	
34
    
	
Section 26.
    	
Notices
    	
35
    
	
Section 27.
    	
Supplements and   Amendments
    	
36
    
	
Section 28.
    	
Successors
    	
36
    
	
Section 29.
    	
Determinations and   Actions by the Board of Directors, etc.
    	
36
    
	
Section 30.
    	
Benefits of this   Agreement
    	
36
    
	
Section 31.
    	
Severability
    	
37
    
	
Section 32.
    	
Governing Law
    	
37
    
	
Section 33.
    	
Counterparts
    	
37
    
	
Section 34.
    	
Descriptive Headings
    	
37
    
	
 
    	
 
    	
 
    
	
EXHIBITS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Exhibit A —
    	
Form of   Certificate of Designation, Preferences and Rights
    	
 
    
	
Exhibit B —
    	
Form of Rights   Certificates
    	
 
    
	
Exhibit C —
    	
Form of Summary of   Rights
    	
 
    

 

i

 

RIGHTS AGREEMENT

 

RIGHTS AGREEMENT, dated as of December 21, 2014 (the “Agreement”), between AMERICAN APPAREL, INC., a Delaware corporation (the “Company”), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (the “Rights Agent”).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, on December 21, 2014 (the “Rights Dividend Declaration Date”), the Board of Directors of the Company (the “Board”) authorized and declared a dividend distribution of one Right (as hereinafter defined) for each share of Common Stock (as hereinafter defined) of the Company outstanding at the close of business on January 2, 2015; (the “Record Date”), and has authorized the issuance of one Right (as such number may hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) for each share of Common Stock of the Company issued (whether as an original issuance or from the Company’s treasury) between the Record Date and the Distribution Date (as hereinafter defined) and in certain other circumstances provided herein, each Right initially representing the right to purchase one ten-thousandth of a share of Preferred Stock (as hereinafter defined), having the rights, powers and preferences set forth in the form of Certificate of Designation, Preferences and Rights attached hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth (the “Rights”);

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

 

Section 1.                                           Certain Definitions.  For purposes of this Agreement, the following terms have the meanings indicated:

 

(a)                                 “Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of ten percent (10%) or more of the shares of Common Stock then outstanding, but shall not include:

 

(i)                                               the Company;

 

(ii)                                            any Subsidiary of the Company;

 

(iii)                                         any employee benefit plan of the Company, or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan;

 

(iv)                                        any Person who is the Beneficial Owner, as of the time of the public announcement of this Agreement (including any shares Beneficial Ownership of which is acquired on the date of announcement pursuant to orders placed prior to becoming aware of such announcement), of ten percent (10%) or more of the shares of Common Stock then outstanding, unless and until such Person shall, after the

 

1

 

time of such public announcement of this Agreement, become the Beneficial Owner of additional shares of Common Stock (other than for shares referenced in the parenthetical above) representing one tenth of one percent (0.1%) or more of the shares of Common Stock then outstanding, other than at a time when such Person is the Beneficial Owner of less than ten percent (10%) of the outstanding shares of Common Stock provided that such acquisition does not cause such Person to then become the Beneficial Owner of ten percent (10%) or more of the shares of Common Stock then outstanding;

 

(v)                                           any Person who becomes the Beneficial Owner of ten percent (10%) or more of the shares of Common Stock then outstanding as a result of a reduction in the number of shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company (or any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) unless and until such Person, after becoming aware that such Person has become the Beneficial Owner of ten percent (10%) or more of the then outstanding shares of Common Stock, acquires beneficial ownership of additional shares of Common Stock representing one tenth of one percent (0.1%) or more of the shares of Common Stock then outstanding, or

 

(vi)                                        any such Person who has reported or is required to report such ownership (but less than 20%) on Schedule 13G under the Exchange Act (or any comparable or successor report) or on Schedule 13D under the Exchange Act (or any comparable or successor report) which Schedule 13D does not state any intention to or reserve the right to control or influence the management or policies of the Company or engage in any of the actions specified in Item 4 of such schedule (other than the disposition of the Common Stock) and, within 10 Business Days of being requested by the Company to advise it regarding the same, certifies to the Company that such Person acquired shares of Common Stock in excess of 9.9% inadvertently or without knowledge of the terms of the Rights and who or which, together with all Affiliates and Associates, thereafter does not acquire additional shares of Common Stock while the Beneficial Owner of 10% or more of the shares of Common Stock then outstanding; provided, however, that if the Person requested to so certify fails to do so within 10 Business Days or breaches or violates such certification, then such Person shall become an Acquiring Person immediately after such 10-Business-Day period or such breach or violation.

 

provided, however, that notwithstanding any of the foregoing, each of Dov Charney, Standard General L.P., Standard General Master Fund L.P. and P STANDARD GENERAL LTD. (collectively, the “Standard General Group”) shall be deemed to be an Acquiring Person if any member of the Standard General Group or any of their respective Affiliates (i) acquires beneficial ownership of any additional shares of Common Stock prior to the completion of the 2015 annual meeting of stockholders of the Company, or (ii) acquires beneficial ownership of additional shares of Common Stock representing one tenth of one percent (0.1%) or more of the shares of Common Stock then outstanding anytime after the completion of the 2015 annual meeting of stockholders of the Company (in the case of (i) and (ii) determined by reference to the number of shares of 

 

2

 

Common Stock reported to be beneficially owned on Amendment No. 15 to the Schedule 13D dated December 12, 2007 filed by Mr. Charney on July 11, 2014 and Amendment No. 2 to the Schedule 13D dated July 7, 2014 filed by Standard General L.P. on July 11, 2014).

 

(b)                                 “Act” shall mean the Securities Act of 1933, as amended.

 

(c)                                  “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) hereof.

 

(d)                                 “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

 

(e)                                  “Agreement” shall have the meaning set forth in the preamble to this Agreement.

 

(f)                                   A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially own,” any securities:

 

(i)                                               which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, owns or has the right to acquire (whether such right is exercisable immediately or only after the passage of time or upon the satisfaction of one or more conditions (whether or not within the control of such Person), compliance with regulatory requirements or otherwise) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, other rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” (A) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange, (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event (as hereinafter defined), or (C) securities issuable upon exercise of Rights from and after the occurrence of a Triggering Event which Rights were acquired by such Person or any of such Person’s Affiliates or Associates prior to the Distribution Date (as hereinafter defined) or pursuant to Section 3(a) or Section 22 hereof (the “Original Rights”) or pursuant to Section 11(i) hereof in connection with an adjustment made with respect to any Original Rights; or

 

(ii)                                            which such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding:  (A) arises solely from a revocable proxy given in response to a public proxy or consent solicitation filed on Schedule 14A and made pursuant to, and in accordance with, the 

 

3

 

applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

 

(iii)                                         which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the proviso to subparagraph (ii) of this paragraph (f)) or disposing of any voting securities of the Company; or

 

(iv)                                        that are the subject of a derivative transaction entered into by such Person or any of such Person’s Affiliates or Associates, including, for these purposes, any derivative instrument (whether or not presently exercisable) acquired by such Person or any of such Person’s Affiliates or Associates, that gives such Person or any of such Person’s Affiliates or Associates the economic equivalent of direct or indirect ownership of, or opportunity to obtain ownership of, an amount of such securities where the value of the derivative is determined in whole or in part with reference to, or derived in whole or in part from, the price or value of such securities, or which provides such Person or any of such Person’s Affiliates or Associates an opportunity, directly or indirectly, to profit, or to share in any profit, derived from any change in the value of such securities, in any case without regard to whether (a) such derivative conveys any voting rights in such securities to such Person or any of such Person’s Affiliates or Associates, (b) the derivative is required to be, or capable of being, settled through delivery of such securities, or (c) such Person or any of such Person’s Affiliates or Associates may have entered into other transactions that hedge the economic effect of such derivative.  In determining the number of shares of Common Stock of the Company “beneficially owned” by virtue of the operation of this Section 1(f)(iv), the subject Person shall be deemed to “beneficially own” (without duplication) the notional or other number of shares of Common Stock of the Company specified in the documentation evidencing the derivative position as being subject to be acquired upon the exercise or settlement of the applicable right or as the basis upon which the value or settlement amount of such right, or the opportunity of the holder of such right to profit or share in any profit, is to be calculated in whole or in part, and in any case (or if no such number of shares of Common Stock of the Company is specified in such documentation or otherwise), as determined by the Board of Directors of the Company in good faith to be the number of shares of Common Stock of the Company to which the derivative position relates;

 

provided, further, that nothing in this paragraph (f) shall cause a Person engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to “beneficially own,” any securities acquired through such Person’s participation in good faith in a firm commitment underwriting until the expiration of forty days after the date of such acquisition, and then only if such securities continue to be owned by such Person at such expiration of forty days.

 

(g)                                  “Board” shall have the meaning set forth in the recitals of this Agreement.

 

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(h)                                 “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

 

(i)                                     “Close of business” on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date is not a Business Day, it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.

 

(j)                                    “Common Stock” shall mean the common stock, par value $0.0001 per share, of the Company, except that “Common Stock” when used with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power, or the equity securities or other equity interest having power to control or direct the management, of such Person.

 

(k)                                 “Company” shall have the meaning set forth in the preamble to this Agreement.

 

(l)                                     “Current Market Price” shall have the meaning set forth in Section 11(d)(i) hereof.

 

(m)                             “Current Value” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(n)                                 “Distribution Date” shall have the meaning set forth in Section 3(a) hereof.

 

(o)                                 “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b) hereof.

 

(p)                                 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(q)                                 “Exchange Ratio” shall have the meaning set forth in Section 24 hereof.

 

(r)                                    “Expiration Date” shall have the meaning set forth in Section 7(a) hereof.

 

(s)                                   “Final Expiration Date” shall mean 5:00 P.M., New York City time, on December 21, 2015.

 

(t)                                    “NASDAQ” shall have the meaning set forth in Section 11(d)(i) hereof.

 

(u)                                 “Original Rights” shall have the meaning set forth in Section 1(f)(i) hereof.

 

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(v)                                 “Person” shall mean any individual, firm, corporation, partnership, limited liability company, trust, association, syndicate or other entity and includes, without limitation, an unincorporated group of persons who, by formal or informal agreement or arrangement, have embarked on a common purpose or act.

 

(w)                               “Preferred Stock” shall mean shares of Series B Junior Participating Preferred Stock, par value $0.0001 per share, of the Company, and, to the extent that there are not a sufficient number of shares of Series B Junior Participating Preferred Stock authorized to permit the full exercise of the Rights, any other series of preferred stock of the Company designated for such purpose containing terms substantially similar to the terms of the Series B Junior Participating Preferred Stock.

 

(x)                                 “Principal Party” shall have the meaning set forth in Section 13(b) hereof.

 

(y)                                 “Purchase Price” shall have the meaning set forth in Section 4(a) hereof.

 

(z)                                  “Qualified Offer” shall have the meaning set forth in Section 11(a)(ii) hereof.

 

(aa)                          “Record Date” shall have the meaning set forth in the recitals of this Agreement.

 

(bb)                          “Redemption Price” shall have the meaning set forth in Section 23(a) hereof.

 

(cc)                            “Rights” shall have the meaning set forth in the recitals of this Agreement.

 

(dd)                          “Rights Agent” shall have the meaning set forth in the preamble of this Agreement.

 

(ee)                            “Rights Certificate” shall have the meaning set forth in Section 3(a) hereof.

 

(ff)                              “Rights Dividend Declaration Date” shall have the meaning set forth in the recitals of this Agreement.

 

(gg)                            “Section 11(a)(ii) Event” shall mean any event described in Section 11(a)(ii) hereof.

 

(hh)                          “Section 11(a)(ii) Trigger Date” shall mean any event described in Section 11(a)(iii) hereof.

 

(ii)                                  “Section 13 Event” shall mean any event described in clauses (x), (y) or (z) of Section 13(a) hereof.

 

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(jj)                                “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(kk)                          “Stock Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed or amended pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become such other than pursuant to a Qualified Offer.

 

(ll)                                  “Subsidiary” shall mean, with reference to any Person, any corporation or other entity of which an amount of securities or other ownership interests having ordinary voting power sufficient to elect at least a majority of the directors or other Persons having similar functions of such corporation or other entity are at the time, directly or indirectly, beneficially owned, or otherwise controlled by such Person.

 

(mm)                  “Substituted Property” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(nn)                          “Substitution Period” shall have the meaning set forth in Section 11(a)(iii) hereof.

 

(oo)                          “Summary of Rights” shall have the meaning set forth in Section 3(b) hereof.

 

(pp)                          “Trading Day” shall have the meaning set forth in Section 11(d)(i) hereof.

 

(qq)                          “Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13 Event.

 

Section 2.                                           Appointment of Rights Agent.  The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of the Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment.  The Company may from time to time appoint such co-rights agents as it may deem necessary or desirable.

 

Section 3.                                           Issuance of Rights Certificates.

 

(a)                                 Until the earlier of (i) the close of business on the tenth Business Day after the Stock Acquisition Date (or, if the tenth Business Day after the Stock Acquisition Date occurs before the Record Date, the close of business on the Record Date), or (ii) the close of business on the tenth Business Day (or such later date as the Board shall determine) after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, 

 

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such Person would become an Acquiring Person, in either instance other than pursuant to a Qualified Offer (the earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) the Rights will be evidenced (subject to the provisions of paragraph (b) and (c) of this Section 3) by the certificates for the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates (or, for shares participating in the direct registration system, by notations in the respective book entry accounts for the Common Stock), and (y) the Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the Company).  As soon as practicable after the Distribution Date, but subject to the following sentence, the Rights Agent will send by such means as may be selected by the Company, to each record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more rights certificates, in substantially the form of Exhibit B hereto (the “Rights Certificates”), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein.  To the extent that a Triggering Event under Section 11(a)(ii) hereof has also occurred, the Company may implement such procedures, as it deems appropriate in its sole discretion, to minimize the possibility that Rights are received by Persons whom Rights would be void under Section 7(e) hereof.  In the event that an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(p) hereof, at the time of distribution of the Rights Certificates, the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights.  As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates.

 

(b)                                 The Company will make available, as promptly as practicable following the Record Date, a copy of a Summary of Rights, in substantially the form attached hereto as Exhibit C (the “Summary of Rights”) to any holder of Rights who may so request from time to time prior to the Expiration Date.  With respect to certificates for the Common Stock outstanding as of the Record Date, or issued subsequent to the Record Date, unless and until the Distribution Date shall occur, the Rights will be evidenced by such certificates for the Common Stock (or, in the case of shares reflected on the direct registration system, the notations in the book entry account) and the registered holders of the Common Stock shall also be the registered holders of the associated Rights.  Until the earlier of the Distribution Date or the Expiration Date, the transfer of any shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the Rights associated with such shares of Common Stock.  Notwithstanding anything to the contrary set forth in this Agreement, upon the effectiveness of a redemption pursuant to Section 23 hereof or an exchange pursuant to Section 24 hereof, the Company shall not thereafter issue any additional Rights and, for the avoidance of doubt, no Rights shall be attached to or shall be issued with any shares of Common Stock (including any shares of Common Stock issued pursuant to an exchange) at any time thereafter.

 

(c)                                  Rights shall be issued in respect of all shares of Common Stock which are issued (whether originally issued or from the Company’s treasury) after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date.  Certificates representing such shares of Common Stock shall also be deemed to be certificates for Rights, and shall bear the following legend if such certificates are issued after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date:

 

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This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Rights Agreement between American Apparel, Inc. (the “Company”) and the Rights Agent thereunder, as originally executed on December 21, 2014 and as it may be amended or restated from time to time (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company.  Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate.  The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge, promptly after receipt of a written request therefor.  Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void.

 

With respect to such certificates containing the foregoing legend, until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates.  Similarly, during such time periods, transfers of shares participating in the direct registration system shall also be deemed to be transfers of the associated Rights.  In the case of any shares participating in the direct registration system, the Company shall cause the transfer agent for the Common Stock to include on each direct registration account statement with respect thereto issued prior to the Distribution Date a notation to the effect that the Company will mail to the stockholder a copy of the Rights Agreement, as in effect on the date of mailing, without charge, promptly after receipt of a written request therefor and that the recipient of the statement, as a holder of shares of Common Stock, may have certain rights thereunder.  In the event that shares of the Common Stock are not represented by certificates, references in this Agreement to certificates shall be deemed to refer to the notations in the book entry accounts reflecting ownership of such shares.

 

Section 4.                                           Form of Rights Certificates.

 

(a)                                 The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage.  Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date and on their face shall entitle the holders thereof to purchase such number of one ten-thousandths of a share of Preferred Stock as shall be set forth therein at the price set forth therein (such exercise price per one ten-thousandth of a share, the “Purchase Price”), but the amount and type of securities 

 

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purchasable upon the exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein.

 

(b)                                 Any Rights Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof that represents Rights beneficially owned by:  (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain (to the extent feasible) the following legend:

 

The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement).  Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of the Rights Agreement.

 

Section 5.                                           Countersignature and Registration.

 

(a)                                 The Rights Certificates shall be executed on behalf of the Company by its Chairperson of the Board, its Chief Executive Officer (or Interim Chief Executive Officer, if applicable) or any Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company’s seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature.  The Rights Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature and shall not be valid for any purpose unless so countersigned.  In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who signed such Rights Certificates had not ceased to be such officer of the Company; and any Rights Certificates may be signed on behalf of the Company by any person who, at the actual date of the execution of such Rights Certificate, shall be a proper officer of the Company to sign such Rights Certificate, although at the date of the execution of this Agreement any such person was not such an officer.

 

(b)                                 Following the Distribution Date, the Rights Agent will keep, or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights 

 

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Certificates issued hereunder.  Such books shall show the names and addresses of the respective holders of the Rights Certificates, the number of Rights evidenced on its face by each of the Rights Certificates and the date of each of the Rights Certificates.

 

Section 6.                                           Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.

 

(a)                                 Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the close of business on the Distribution Date, and at or prior to the close of business on the Expiration Date, any Rights Certificate or Certificates (other than Rights Certificates representing Rights that may have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of one ten-thousandths of a share of Preferred Stock (or, following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitles such holder (or former holder in the case of a transfer) to purchase.  Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent designated for such purpose.  Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.  Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section 14 and Section 24 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested.  The Company may require payment from any holder of a Rights Certificate of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates.

 

(b)                                 Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate, if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.

 

Section 7.                                           Exercise of Rights; Purchase Price; Expiration Date of Rights.

 

(a)                                 Subject to Section 7(e) hereof, at any time after the Distribution Date the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in 

 

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part upon surrender of the Rights Certificate, with the form of election to purchase and the certificate on the reverse side thereof duly executed, to the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the total number of one ten-thousandths of a share of Preferred Stock (or other securities, cash or other assets, as the case may be) as to which such surrendered Rights are then exercisable, at or prior to (i) the Final Expiration Date or, if earlier, (ii) the time at which the Rights are redeemed or exchanged as provided in Section 23 and Section 24 hereof (the earlier of (i) and (ii) being herein referred to as the “Expiration Date”).

 

(b)                                 The Purchase Price for each one ten-thousandth of a share of Preferred Stock pursuant to the exercise of a Right initially shall be $3.25, shall be subject to adjustment from time to time as provided in Section 11 and Section 13(a) hereof and shall be payable in accordance with paragraph (c) below.

 

(c)                                  Upon receipt of a Rights Certificate representing exercisable Rights, with the form of election to purchase and the certificate duly executed, accompanied by payment, with respect to each Right so exercised, of the Purchase Price per one ten-thousandth of a share of Preferred Stock (or other shares, securities, cash or other assets, as the case may be) to be purchased as set forth below and an amount equal to any applicable transfer tax, the Rights Agent shall, subject to Section 7(f) and Section 20(k) hereof, thereupon promptly (i) (A) requisition from any transfer agent of the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent for such shares) certificates for the total number of one ten-thousandths of a share of Preferred Stock to be purchased and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to deposit the total number of shares of Preferred Stock issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one ten-thousandths of a share of Preferred Stock as are to be purchased (in which case certificates for the shares of Preferred Stock represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company will direct the depositary agent to comply with such request, (ii) requisition from the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with Section 14 hereof, (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or, upon the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights Certificate.  The payment of the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made by certified bank check or bank draft payable to the order of the Company.  In the event that the Company is obligated to issue other securities (including Common Stock) of the Company, pay cash and/or distribute other property pursuant to Section 11(a) hereof, the Company will make all arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when appropriate.  The Company reserves the right to require prior to the occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock would be issued.

 

(d)                                 In case the registered holder of any Rights Certificate shall exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing the 

 

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Rights remaining unexercised shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder, subject to the provisions of Section 14 hereof.

 

(e)                                  Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this Section 7(e), shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise.  The Company shall use all reasonable efforts to insure that the provisions of this Section 7(e) and Section 4(b) hereof are complied with, but shall have no liability to any holder of Rights Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any of its Affiliates, Associates or their respective transferees hereunder.  For purposes of this Section 7(e), a Person shall not be deemed to be an Acquiring Person if said Person became such as a result of a Qualified Offer.

 

(f)                                   Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form of election to purchase set forth on the reverse side of the Rights Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.

 

Section 8.                                           Cancellation and Destruction of Rights Certificates.  All Rights Certificates surrendered for the purpose of exercise, transfer, split-up, combination, redemption or exchange shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement.  The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent shall deliver all cancelled Rights Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

 

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Section 9.                                           Reservation and Availability of Capital Stock.

 

(a)                                 The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Preferred Stock (and, following the occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock (or Substituted Property) and/or other securities or out of its authorized and issued shares held in its treasury), the number of shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock (or Substituted Property) and/or other securities) that, as provided in this Agreement including Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of all outstanding Rights.

 

(b)                                 So long as the shares of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock, Substituted Property and/or other securities) issuable and deliverable upon the exercise of the Rights may be listed on any national securities exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all shares reserved for such issuance to be listed on such exchange upon official notice of issuance upon such exercise.

 

(c)                                  The Company shall use its best efforts to (i) file, as soon as practicable following the earliest date after the first occurrence of a Section 11(a)(ii) Event on which the consideration to be delivered by the Company upon exercise of the Rights has been determined in accordance with Section 11(a)(iii) hereof, a registration statement under the Act, with respect to the securities purchasable upon exercise of the Rights on an appropriate form, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and (B) the Expiration Date.  The Company will also take such action as may be appropriate under, or to ensure compliance with, the securities or “blue sky” laws of the various states in connection with the exercisability of the Rights.  The Company may temporarily suspend, for a period of time not to exceed ninety (90) days after the date set forth in clause (i) of the first sentence of this Section 9(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective.  Upon any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension has been rescinded.  In addition, if the Company shall determine that a registration statement is required following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights until such time as a registration statement has been declared effective.  Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted under applicable law, or a registration statement shall not have been declared effective.

 

(d)                                 The Company covenants and agrees that it will take all such action as may be necessary to ensure that all one ten-thousandths of a share of Preferred Stock (and, following the occurrence of a Triggering Event, Common Stock, Substituted Property and/or other securities) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable.

 

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(e)                                  The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Rights Certificates and of any certificates for a number of one ten-thousandths of a share of Preferred Stock (or Common Stock, Substituted Property and/or other securities, as the case may be) upon the exercise of Rights.  The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or the issuance or delivery of a number of one ten-thousandths of a share of Preferred Stock (or Common Stock, Substituted Property and/or other securities, as the case may be) in respect of a name other than that of the registered holder of the Rights Certificates evidencing Rights surrendered for exercise, nor shall the Company be required to issue or deliver any certificates for a number of one ten-thousandths of a share of Preferred Stock (or Common Stock, Substituted Property and/or other securities, as the case may be) in a name other than that of the registered holder upon the exercise of any Rights until such tax shall have been paid (any such tax being payable by the holder of such Rights Certificates at the time of surrender) or until it has been established to the Company’s satisfaction that no such tax is due.

 

Section 10.                                    Preferred Stock Record Date.  Each person in whose name any certificate for a number of one ten-thousandths of a share of Preferred Stock (or Common Stock, Substituted Property and/or other securities, as the case may be) is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of such fractional shares of Preferred Stock (or Common Stock, Substituted Property and/or other securities, as the case may be) represented thereby on, and such certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Stock (or Common Stock, Substituted Property and/or other securities, as the case may be) transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares (fractional or otherwise) on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Stock (or Common Stock, Substituted Property and/or other securities, as the case may be) transfer books of the Company are open.  Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate shall not be entitled to any rights of a stockholder of the Company with respect to shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

 

Section 11.                                    Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.  The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.

 

(a)

 

(i)                                               In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding shares of Preferred Stock, (C) 

 

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combine or consolidate the outstanding shares of Preferred Stock into a smaller number of shares, through a reverse stock split or otherwise, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, split, combination, consolidation or reclassification.  If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.

 

(ii)                                            Subject to Section 24 hereof, in the event that any Person shall, at any time after the Rights Dividend Declaration Date, become an Acquiring Person, unless the event causing such Person to become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the Board, after receiving advice from one or more investment banking firms, to be (a) at a price which is fair to stockholders and not inadequate (taking into account all factors which such members of the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the best interests of the Company and its stockholders (such an offer being referred to as a “Qualified Offer”), then promptly following the occurrence of such event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one ten-thousandths of a share of Preferred Stock, such number of shares of Common Stock (or Substituted Property in accordance with Section 11(a)(iii) below) of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one ten-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the “Adjustment Shares”).

 

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(iii)                                         In the event that the number of shares of Common Stock which is authorized by the Company’s Amended and Restated Certificate of Incorporation, as it may be amended from time to time, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights (such purposes including the exercise of any and all outstanding warrants to purchase Common Stock), is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall (A) determine the value of the Adjustment Shares issuable upon the exercise of a Right (the “Current Value”), and (B) with respect to each Right (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock, such as the Preferred Stock, which the Board has deemed to have essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to as “Substituted Property”)), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate value equal to the Current Value (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board based upon the advice of a nationally recognized investment banking firm selected by the Board; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread.  For purposes of the preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price.  If the Board determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the “Substitution Period”).  To the extent that the Company determines that action should be taken pursuant to the first and/or third sentences of this Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek such stockholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof.  In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect.  For purposes of 

 

17

 

this Section 11(a)(iii), the value of each Adjustment Share shall be the Current Market Price per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any Substituted Property shall be deemed to equal the Current Market Price per share of the Common Stock on such date.

 

(b)                                 In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of shares of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within  forty-five (45) calendar days after such record date) shares of Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock (“Equivalent Preferred Stock”)) or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or per share of Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or Equivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible).  In case such subscription price may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights.  Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation.  Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

 

(c)                                  In case the Company shall fix a record date for a distribution to all holders of shares of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend payable in stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock, and the denominator of which shall be such

 

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Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock.  Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.

 

(d)

 

(i)                                               For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the thirty (30) consecutive Trading Days immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination, consolidation, reverse stock split or reclassification of such Common Stock, and the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination, consolidation, reverse stock split or reclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the Current Market Price shall be properly adjusted to take into account ex-dividend trading.  The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE MKT or, if the shares of Common Stock are not listed or admitted to trading on the NYSE MKT, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers Automated Quotations System (“NASDAQ”) or such other system then in use, or, if on any such date the shares of Common Stock are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board.  If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board shall be used.  The term “Trading Day” shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day.  If the Common Stock is not publicly 

 

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held or not so listed or traded, the Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

 

(ii)                                            For the purpose of any computation hereunder, the Current Market Price per share of Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in clause (i) of this Section 11(d) (other than the last sentence thereof).  If the Current Market Price per share of Preferred Stock cannot be determined in the manner provided above or if the Preferred Stock is not publicly held or listed or traded in a manner described in clause (i) of this Section 11(d), the Current Market Price per share of Preferred Stock shall be conclusively deemed to be an amount equal to 10,000 (as such number may be appropriately adjusted for such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock occurring after the date of this Agreement) multiplied by the Current Market Price per share of the Common Stock.  If neither the Common Stock nor the Preferred Stock is publicly held or so listed or traded, Current Market Price per share of the Preferred Stock shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.

 

(e)                                  Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of a share of Common Stock or other share or one-millionth of a share of Preferred Stock, as the case may be.  Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three (3) years from the date of the transaction which mandates such adjustment, or (ii) the Expiration Date.

 

(f)                                   If as a result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other shares.

 

(g)                                  All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one ten-thousandths of a share of Preferred Stock purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

 

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(h)                                 Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one ten-thousandths of a share of Preferred Stock (calculated to the nearest one-millionth) obtained by (i) multiplying (x) the number of one ten-thousandths of a share covered by a Right immediately prior to this adjustment, by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

 

(i)                                     The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in lieu of any adjustment in the number of one ten-thousandths of a share of Preferred Stock purchasable upon the exercise of a Right.  Each of the Rights outstanding after the adjustment in the number of Rights shall be exercisable for the number of one ten-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior to such adjustment.  Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one-ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price.  The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made.  This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement.  If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Rights Certificates on such record date Rights Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Rights Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment.  Rights Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record of Rights Certificates on the record date specified in the public announcement.

 

(j)                                    Irrespective of any adjustment or change in the Purchase Price or the number of one ten-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates theretofore and thereafter issued may continue to express the Purchase Price per one ten-thousandth of a share and the number of one ten-thousandths of a share which were expressed in the initial Rights Certificates issued hereunder.

 

(k)                                 Before taking any action that would cause an adjustment reducing the Purchase Price below the then stated value, if any, of the number of one ten-thousandths of a share of Preferred Stock issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the 

 

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Company may validly and legally issue fully paid and nonassessable such number of one ten-thousandths of a share of Preferred Stock at such adjusted Purchase Price.

 

(l)                                     In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of one ten-thousandths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the number of one ten-thousandths of a share of Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) or securities upon the occurrence of the event requiring such adjustment.

 

(m)                             Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that in their good faith judgment the Board shall determine to be advisable in order that any (i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less than the Current Market Price, (iii) issuance wholly for cash of shares of Preferred Stock or securities which by their terms are convertible into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.

 

(n)                                 The Company covenants and agrees that it shall not, at any time after the Distribution Date, (i) consolidate with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one transaction, or a series of related transactions, assets, cash flow or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the stockholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes of Section 13(a) hereof shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates.

 

(o)                                 The Company covenants and agrees that, after the Distribution Date, it will not, except as permitted by Section 23, Section 24 or Section 27 hereof, take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably 

 

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foreseeable that such action will diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

 

(p)                                 Anything in this Agreement to the contrary notwithstanding, in the event that the Company shall at any time after the Rights Dividend Declaration Date and prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the number of Rights associated with each share of Common Stock then outstanding, or issued or delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number of Rights thereafter associated with each share of Common Stock following any such event shall equal the result obtained by multiplying the number of Rights associated with each share of Common Stock immediately prior to such event by a fraction the numerator which shall be the total number of shares of Common Stock outstanding immediately prior to the occurrence of the event and the denominator of which shall be the total number of shares of Common Stock outstanding immediately following the occurrence of such event.

 

Section 12.                                    Certificate of Adjusted Purchase Price or Number of Shares.  Whenever an adjustment is made as provided in Section 11 and Section 13 hereof, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a copy of such certificate and (c) if a Distribution Date has occurred, mail a brief summary thereof to each holder of a Rights Certificate in accordance with Section 25 hereof.  The Rights Agent shall be fully protected in relying on any such certificate and on any adjustment therein contained.

 

Section 13.                                    Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power.

 

(a)                                 In the event that, following the Stock Acquisition Date, directly or indirectly, (x) the Company shall consolidate with, or merge with and into, any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), and the Company shall not be the continuing or surviving corporation of such consolidation or merger, (y) any Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the Company shall be the continuing or surviving corporation of such consolidation or merger and, in connection with such consolidation or merger, all or part of the outstanding shares of Common Stock shall be changed into or exchanged for stock or other securities of any other Person or cash or any other property, or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one transaction or a series of related transactions, assets, cash flow or earning power aggregating more than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the Company or any Subsidiary of the Company in one or more transactions each of which complies with Section 11(o) hereof), then, and in each such case (except as may be contemplated by Section 13(d) hereof), proper provision shall be made so that: (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter have the right to receive, upon the exercise thereof at the then current Purchase Price 

 

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in accordance with the terms of this Agreement, such number of validly authorized and issued, fully paid, non-assessable and freely tradeable shares of Common Stock of the Principal Party (as such term is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result obtained by (1) multiplying the then current Purchase Price by the number of one ten-thousandths of a share of Preferred Stock for which a Right is exercisable immediately prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13 Event, multiplying the number of such one ten-thousandths of a share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to such first occurrence of a Section 11(a)(ii) Event), and (2) dividing that product (which, following the first occurrence of a Section 13 Event, shall be referred to as the “Purchase Price” for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party on the date of consummation of such Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being specifically intended that the provisions of Section 11 hereof shall apply only to such Principal Party following the first occurrence of a Section 13 Event; (iv) such Principal Party shall take such steps (including, but not limited to, the reservation of a sufficient number of shares of its Common Stock) in connection with the consummation of any such transaction as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to its shares of Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect following the first occurrence of any Section 13 Event.

 

(b)                                 “Principal Party” shall mean:

 

(i)                                               in the case of any transaction described in clause (x) or (y) of the first sentence of Section 13(a) hereof, the Person that is the issuer of any securities into which shares of Common Stock of the Company are converted in such merger or consolidation, and if no securities are so issued, the Person that is the other party to such merger or consolidation; and

 

(ii)                                            in the case of any transaction described in clause (z) of the first sentence of Section 13(a) hereof, the Person that is the party receiving the greatest portion of the assets, cash flow or earning power transferred pursuant to such transaction or transactions;

 

provided, however, that in any such case, (1) if the Common Stock of such Person is not at such time and has not been continuously over the preceding twelve (12) month period registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary of another Person the Common Stock of which is and has been so registered, “Principal Party” shall refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, the Common Stock of two or more of which are and have been so registered, “Principal Party” shall refer to whichever 

 

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of such Persons is the issuer of the Common Stock having the greatest aggregate market value.

 

(c)                                  The Company shall not consummate any such consolidation, merger, sale or transfer unless the Principal Party shall have a sufficient number of authorized shares of its Common Stock which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13 and unless prior thereto the Company and such Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further providing that, as soon as practicable after the date of any consolidation, merger or sale of assets mentioned in paragraph (a) of this Section 13, the Principal Party will

 

(i)                                               prepare and file a registration statement under the Act, with respect to the Rights and the securities purchasable upon exercise of the Rights on an appropriate form, and will use its best efforts to cause such registration statement to (A) become effective as soon as practicable after such filing and (B) remain effective (with a prospectus at all times meeting the requirements of the Act) until the Expiration Date;

 

(ii)                                            take all such other action as may be necessary to enable the Principal Party to issue the securities purchasable upon exercise of the Rights, including but not limited to the registration or qualification of such securities under all requisite securities laws of jurisdictions of the various states and the listing of such securities on such exchanges and trading markets as may be necessary or appropriate; and

 

(iii)                                         will deliver to holders of the Rights historical financial statements for the Principal Party and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 (or any successor form) under the Exchange Act.

 

The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers.  In the event that a Section 13 Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised shall thereafter become exercisable in the manner described in Section 13(a).

 

(d)                                 Notwithstanding anything in this Agreement to the contrary, Section 13 shall not be applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is consummated with a Person or Persons who acquired shares of Common Stock pursuant to a tender offer or exchange offer for all outstanding shares of Common Stock which is a Qualified Offer as such term is defined in Section 11(a)(ii) hereof (or a wholly owned subsidiary of any such Person or Persons), (ii) the price per share of Common Stock offered in such transaction is not less than the price per share of Common Stock paid to all holders of shares of Common Stock whose shares were purchased pursuant to such tender offer or exchange offer and (iii) the form of consideration being offered to the remaining holders of shares of Common Stock pursuant to such transaction is the same as the form of consideration paid pursuant to such tender offer or exchange offer.  Upon consummation of any such transaction contemplated by this Section 13(d), all Rights hereunder shall expire.

 

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Section 14.                                    Fractional Rights and Fractional Shares.

 

(a)                                 The Company shall not be required to issue fractions of Rights, except prior to the Distribution Date as provided in Section 11(p) hereof, or to distribute Rights Certificates which evidence fractional Rights.  In lieu of such fractional Rights, the Company shall pay to the registered holders of the Rights Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right.  For purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable.  The closing price of the Rights for any Trading Day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading, or if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights, selected by the Board of the Company.  If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of the Company shall be used.

 

(b)                                 The Company shall not be required to issue fractions of shares of Preferred Stock (other than fractions which are integral multiples of one ten-thousandth of a share of Preferred Stock) upon exercise of the Rights or to distribute certificates which evidence fractional shares of Preferred Stock (other than fractions which are integral multiples of one ten-thousandth of a share of Preferred Stock).  In lieu of fractional shares of Preferred Stock that are not integral multiples of one ten-thousandth of a share of Preferred Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one ten-thousandth of a share of Preferred Stock.  For purposes of this Section 14(b), the current market value of one ten-thousandth of a share of Preferred Stock shall be one ten-thousandth of the closing price of a share of Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) on the Trading Day immediately prior to the date of such exercise.

 

(c)                                  Following the occurrence of a Triggering Event, the Company shall not be required to issue fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which evidence fractional shares of Common Stock.  In lieu of fractional shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one (1) share of Common Stock.  For purposes of this Section 14(c), the current market value of one share of Common Stock shall be the closing price 

 

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per share of Common Stock (as determined pursuant to Section 11(d)(i) hereof) on the Trading Day immediately prior to the date of such exercise.

 

(d)                                 The holder of a Right by the acceptance of the Rights expressly waives such holder’s right to receive any fractional Rights or any fractional shares upon exercise of a Right, except as permitted by this Section 14.

 

Section 15.                                    Rights of Action.  All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of the Common Stock); and any registered holder of any Rights Certificate (or, prior to the Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, on the holder’s own behalf and for the holder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, the holder’s right to exercise the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and in this Agreement.  Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of any Person subject to this Agreement.

 

Section 16.                                    Agreement of Rights Holders.  Every holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

 

(a)                                 prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of shares of Common Stock;

 

(b)                                 after the Distribution Date, the Rights Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office or offices of the Rights Agent designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the appropriate forms and certificates fully executed;

 

(c)                                  subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may deem and treat the person in whose name a Rights Certificate (or, prior to the Distribution Date, the associated Common Stock certificate (or book entry shares in respect of Common Stock)) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights Certificates or the associated Common Stock certificate (or notices provided to holders of book entry shares of Common Stock) made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be required to be affected by any notice to the contrary; and

 

(d)                                 notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other 

 

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Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible.

 

Section 17.                                    Rights Certificate Holder Not Deemed a Stockholder.  No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of one ten-thousandths of a share of Preferred Stock or any other securities of the Company which may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall anything contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised or exchanged in accordance with the provisions hereof.

 

Section 18.                                    Concerning the Rights Agent.

 

(a)                                 The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and disbursements and other disbursements incurred in the administration and execution of this Agreement and the exercise and performance of its duties hereunder.  The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, or expense, incurred without gross negligence, bad faith or willful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability in the premises.

 

(b)                                 The Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this Agreement in reliance upon any Rights Certificate or certificate for Common Stock or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.

 

Section 19.                                    Merger or Consolidation or Change of Name of Rights Agent.

 

(a)                                 Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a

 

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party, or any Person succeeding to the corporate trust, stock transfer or other stockholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; but only if such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof.  In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Rights Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

 

(b)                                 In case at any time the name of the Rights Agent shall be changed and at such time any of the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have the full force provided in the Rights Certificates and in this Agreement.

 

Section 20.                                    Duties of Rights Agent.  The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

 

(a)                                 The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

 

(b)                                 Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter (including, without limitation, the identity of any Acquiring Person and the determination of Current Market Price) be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by its Chairperson of the Board, its Chief Executive Officer (or Interim Chief Executive Officer, if applicable), any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

(c)                                  The Rights Agent shall be liable hereunder only for its and its directors’, officers’, employees’, affiliates’, agents’, advisors’, and representatives’ own gross negligence, bad faith or willful misconduct.

 

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(d)                                 The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Rights Certificates or be required to verify the same (except as to its countersignature on such Rights Certificates), but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

(e)                                  The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for any adjustment required under the provisions of Section 11, Section 13 or Section 24 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Rights Certificates after actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock or Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common Stock or Preferred Stock will, when so issued, be validly authorized and issued, fully paid and nonassessable.

 

(f)                                   The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement.

 

(g)                                  The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from its Chairperson of the Board, its Chief Executive Officer (or Interim Chief Executive Officer, if applicable), any Vice President, the Treasurer, any Assistant Treasurer, the Secretary or or any Assistant Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer.

 

(h)                                 The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement.  Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.

 

(i)                                     The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct; provided, however, reasonable care was exercised in the selection and continued employment thereof.

 

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(j)                                    No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder (other than internal costs incurred by the Rights Agent in providing services to the Company in the ordinary course of its business as Rights Agent) or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it.

 

(k)                                 If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or transfer, the certificate attached to the form of assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested exercise or transfer without first consulting with the Company.

 

Section 21.                                    Change of Rights Agent.  The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon thirty (30) days’ notice in writing mailed to the Company, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and, if such resignation occurs after the Distribution Date, to the registered holders of the Rights Certificates by first-class mail.  The Company may remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail, and, if such removal occurs after the Distribution Date, to the holders of the Rights Certificates by first-class mail.  If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent.  If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by the Company), then any registered holder of any Rights Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.  Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (a) a legal business entity organized and doing business under the laws of the United States or of the State of New York or of any other state of the United States, in good standing, having an office in the State of New York, which is authorized under such laws to exercise corporate trust, stock transfer or stockholder services powers and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $100,000,000 or (b) an affiliate of a legal business entity described in clause (a) of this sentence.  After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose.  Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock and the Preferred Stock, and, if such appointment occurs after the Distribution Date, mail a notice thereof in writing to the registered holders of the Rights Certificates.  Failure to give any notice provided for in this Section 21, however, or any 

 

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defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

 

Section 22.                                    Issuance of New Rights Certificates.  Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement.  In addition, in connection with the issuance or sale of shares of Common Stock following the Distribution Date and prior to the redemption, exchange or expiration of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, granted or awarded as of the Distribution Date, or upon the exercise, conversion or exchange of securities hereinafter issued by the Company (except as may otherwise be provided in the instrument(s) governing such securities), and (b) may, in any other case, if deemed necessary or appropriate by the Board, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however, that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

 

Section 23.                                    Redemption and Termination.

 

(a)                                 The Board of the Company may, at its option, at any time prior to the earlier of (i) the close of business on the tenth Business Day following the Stock Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to the Record Date, the close of business on the tenth Business Day following the Record Date), or (ii) the Final Expiration Date, redeem all but not less than all of the then outstanding Rights at a redemption price of $.001 per Right, as such amount may be appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the “Redemption Price”).  Notwithstanding anything contained in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event until such time as the Company’s right of redemption hereunder has expired.  The Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof, of the Common Stock at the time of redemption) or any other form of consideration deemed appropriate by the Board.

 

(b)                                 Immediately upon the action of the Board ordering the redemption of the Rights, evidence of which shall have been filed with the Rights Agent and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price for each Right so held.  Promptly after the action of the Board ordering the redemption of the Rights, the Company shall give notice of such redemption to the Rights Agent and the holders of the then outstanding Rights by mailing such notice to all such holders at each holder’s last address as it appears upon the registry books of the Rights Agent or, prior to the Distribution Date, on the 

 

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registry books of the transfer agent for the Common Stock.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.

 

(c)                                  Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 and other than in connection with the purchase or repurchase by any of them of Common Stock prior to the Distribution Date.

 

Section 24.                                    Exchange.

 

(a)                                 The Board may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common Stock per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”).  Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after (i) any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Stock then outstanding or (ii) the occurrence of an event specified in Section 13(a) hereof.

 

(b)                                 Immediately upon the action of the Board ordering the exchange of any Rights pursuant to subsection (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange Ratio.  The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange.  The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of exchange will state the method by which the exchange of the Common Stock for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged.  Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.

 

(c)                                  Following the action of the Board of Directors ordering the exchange of any Rights pursuant to subsection (a) of this Section 24, the Company may implement such procedures in its sole discretion as it deems appropriate for the purpose of ensuring that the Common Stock (or such other consideration) issuable upon an exchange pursuant to this Section 24 not be received by holders of Rights that have become void pursuant to Section 7(e) hereof.  In furtherance thereof, if so directed by the Company, shares of Common 

 

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Stock (or other consideration) potentially issuable to holders of Rights upon an exchange pursuant to this Section 24, who have not verified to the satisfaction of the Company, in its sole discretion, that they are not Acquiring Persons, may be deposited in a trust established by the Company pending receipt of appropriate verification.  To the extent that such trust is established, holders of Rights entitled to receive such shares of Common Stock (or other consideration) pursuant to an exchange pursuant to this Section 24 who have not previously received such shares of Common Stock (or other consideration) shall be entitled to receive such shares of Common Stock (or other consideration) (and any dividends paid or distributions made thereon after the date on which such Common Shares (or other consideration) are deposited in the trust) only from the trust and solely upon compliance with the relevant terms and provisions of the applicable trust agreement.

 

(d)                                 In any exchange pursuant to this Section 24, the Company, at its option, may substitute Preferred Stock (or Equivalent Preferred Stock, as such term is defined in paragraph (b) of Section 11 hereof) for Common Stock exchangeable for Rights, at the initial rate of one ten-thousandth of a share of Preferred Stock (or Equivalent Preferred Stock) for each share of Common Stock, as appropriately adjusted to reflect stock splits, stock dividends and other similar transactions after the date hereof.

 

(e)                                  The Company shall not be required to issue fractions of shares of Common Stock or to distribute certificates which evidence fractional shares of Common Stock.  In lieu of such fractional shares of Common Stock, there shall be paid to the registered holders of the Rights Certificates with regard to which such fractional shares of Common Stock would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole share of Common Stock.  For the purposes of this subsection (f), the current market value of a whole share of Common Stock shall be the closing price of a share of Common Stock (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

 

Section 25.                                    Notice of Certain Events.

 

(a)                                 In case the Company shall propose, at any time after the Distribution Date, (i) to pay any dividend payable in stock of any class to the holders of Preferred Stock or to make any other distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained earnings of the Company), or (ii) to offer to the holders of Preferred Stock rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or shares of stock of any class or any other securities, rights or options, or (iii) to effect any reclassification of its Preferred Stock (other than a reclassification involving only the subdivision of outstanding shares of Preferred Stock), or (iv) to effect any consolidation or merger into or with any other Person (other than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one transaction or a series of related transactions, of more than 50% of the assets, cash flow or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or more transactions each of which complies with Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of the Company, then, in each such case, the Company shall give to each holder of a 

 

34

 

Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the shares of Preferred Stock, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least twenty (20) days prior to the record date for determining holders of the shares of Preferred Stock for purposes of such action, and in the case of any such other action, at least twenty (20) days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the shares of Preferred Stock, whichever shall be the earlier.

 

(b)                                 In the event that any Section 11(a)(ii) Event shall occur, (i) the Company shall as soon as practicable thereafter give to each holder of a Rights Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of such event, which shall specify the event and the consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock and/or, if appropriate, other securities.

 

Section 26.                                    Notices.  Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if sent or delivered by recognized national overnight delivery service or by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent by the Company) as follows:

 

American Apparel, Inc.
 747 Warehouse Street
 Los Angeles, CA 90021-1106
 Attention:  Corporate Secretary

 

Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent shall be sufficiently given or made if sent or delivered by recognized national overnight delivery service or by first-class mail, postage prepaid, addressed (until another address is filed in writing by the Rights Agent with the Company) as follows:

 

Continental Stock Transfer & Trust Company

Attn: Administration Department - Margaret Villani

17 Battery Place 8th Floor

New York, NY 10004

Facsimile No.: 212-616-7608/7616

 

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder of certificates representing shares of Common Stock) shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

 

35

 

Section 27.                                    Supplements and Amendments.  Prior to the Distribution Date, the Company and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement without the approval of any holders of certificates representing shares of Common Stock.  From and after the Distribution Date, the Company and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any time period hereunder or (iv) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person).  Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment.  Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident with the interests of the holders of Common Stock.  Notwithstanding anything herein to the contrary, this Agreement may not be amended (other than pursuant to clauses (i) or (ii) of the second sentence of this Section 27) at a time when the Rights are not redeemable.

 

Section 28.                                    Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 29.                                    Determinations and Actions by the Board of Directors, etc.  For all purposes of this Agreement, any calculation of the number of shares of Common Stock or any other class of capital stock outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.  The Board shall have the exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement, and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including a determination to redeem or not redeem the Rights or to amend the Agreement).  All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith, shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other parties, and (y) not subject the Board or any of the directors on the Board to any liability to the holders of the Rights.

 

Section 30.                                    Benefits of this Agreement.  Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the 

 

36

 

registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock).

 

Section 31.                                    Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement to the contrary, if any such term, provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid language from this Agreement would adversely affect the purpose or effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of business on the tenth Business Day following the date of such determination by the Board of Directors.  Without limiting the foregoing, if any provision requiring a specific group of directors of the Company to act is held by any court of competent jurisdiction or other authority to be invalid, void or unenforceable, such determination shall then be made by the Board in accordance with applicable law and the Company’s Amended and Restated Certificate of Incorporation and Bylaws.

 

Section 32.                                    Governing Law.  This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State.

 

Section 33.                                    Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

Section 34.                                    Descriptive Headings.  Descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

37

 

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

 

	
Attest: 
    	
AMERICAN   APPAREL, INC.
    
	
 
    	
 
    
	
By 
    	
/s/ Chelsea A. Grayson
    	
 
    	
By
    	
/s/ Colleen B. Brown
    
	
 
    	
Name:
    	
Chelsea A. Grayson
    	
 
    	
 
    	
Name:
    	
Colleen B. Brown
    
	
 
    	
Title:
    	
General Counsel, Executive
    	
 
    	
 
    	
Title:
    	
Chairperson of the   Board
    
	
 
    	
 
    	
Vice President and Secretary
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
Attest: 
    	
CONTINENTAL STOCK   TRANSFER & TRUST COMPANY
    
	
 
    	
 
    
	
By 
    	
/s/ Chelsea A. Grayson
    	
 
    	
By
    	
/s/ Margaret Villani
    
	
 
    	
Name: 
    	
Chelsea A. Grayson
    	
 
    	
 
    	
Name:
    	
Margaret Villani
    
	
 
    	
Title:
    	
General Counsel, Executive
    	
 
    	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
Vice President and Secretary
    	
 
    	
 
    	
 
    

 

[Signature Page to the Rights Agreement]

 

 

Exhibit A

 

FORM OF
 CERTIFICATE OF DESIGNATION, PREFERENCES AND
 RIGHTS OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

 

Of

 

AMERICAN APPAREL, INC.

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware

 

I, the undersigned officer of AMERICAN APPAREL, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:

 

That pursuant to the authority vested in the Board of Directors by the Amended and Restated Certificate of Incorporation of the Corporation (as may be amended from time to time, the “Certificate of Incorporation”), the Board of Directors on December 21, 2014, duly adopted the following resolution creating a series of shares of Preferred Stock designated as Series B Junior Participating Preferred Stock:

 

RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of the Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby is created, and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

 

Section 1.                                           Designation and Amount.  The shares of such series shall be designated as “Series B Junior Participating Preferred Stock” and the number of shares constituting such series shall be 200,000.  Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series B Junior Participating Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the exercise of any options, rights or warrants issuable upon conversion of any outstanding securities issued by the Corporation convertible into Series B Junior Participating Preferred Stock.

 

Section 2.                                           Dividends and Distributions.

 

(A)                               Subject to the superior rights of the holders of any shares of any series of Preferred Stock ranking senior to the shares of Series B Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series B Junior Participating Preferred Stock, in preference to the holders of common stock, par value $0.0001 per share, of the Corporation (“Common Stock”), and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly

 

 

dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 10,000 times the aggregate per share amount of all cash dividends, and 10,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Junior Participating Preferred Stock.  In the event the Corporation shall at any time after December 21, 2014 (the “Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series B Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

(B)                               The Corporation shall declare a dividend or distribution on the Series B Junior Participating Preferred Stock as provided in Paragraph (A) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series B Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

 

(C)                               Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series B Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall not bear interest.  Dividends paid on the shares of Series B Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.  The Board of Directors may fix a record date for the determination of holders of shares of Series B Junior Participating Preferred Stock entitled to receive payment of a dividend

 

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or distribution declared thereon, which record date shall be no more than thirty (30) days prior to the date fixed for the payment thereof.

 

Section 3.                                           Voting Rights.  The holders of shares of Series B Junior Participating Preferred Stock shall have the following voting rights:

 

(A)                               Subject to the provision for adjustment hereinafter set forth, each share of Series B Junior Participating Preferred Stock shall entitle the holder thereof to 10,000 votes on all matters submitted to a vote of the stockholders of the Corporation.  In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series B Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

(B)                               Except as otherwise provided herein or by law, the holders of shares of Series B Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

 

(C)

 

(i)                                     If at any time dividends on any Series B Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a “default period”) which shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series B Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment.  During each default period, all holders of Preferred Stock (including holders of the Series B Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) directors.

 

(ii)                                  During any default period, such voting right of the holders of Series B Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy.  The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right.  At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) directors or, if such right is

 

A-3

 

exercised at an annual meeting, to elect two (2) directors.  If the number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of directors as shall be necessary to permit the election by them of the required number.  After the holders of the Preferred Stock shall have exercised their right to elect directors in any default period and during the continuance of such period, the number of directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series B Junior Participating Preferred Stock.

 

(iii)                               Unless the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the President, a Vice-President or the Secretary of the Corporation.  Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation.  Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding.  Notwithstanding the provisions of this Paragraph (C)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.

 

(iv)                              In any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of directors until the holders of Preferred Stock shall have exercised their right to elect two (2) directors voting as a class, after the exercise of which right (x) the directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in Paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock which elected the director whose office shall have become vacant.  References in this Paragraph (C) to directors elected by the holders of a particular class of stock shall include directors elected by such directors to fill vacancies as provided in clause (y) of the foregoing sentence.

 

(v)                                 Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect directors shall cease, (y) the term of any directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of directors shall be such number as may be provided for in the Certificate of Incorporation or bylaws of the Corporation (as may be amended from time to time, the

 

A-4

 

“Bylaws”) irrespective of any increase made pursuant to the provisions of Paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Certificate of Incorporation or Bylaws).  Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.

 

(D)                               Except as set forth herein, holders of Series B Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

 

Section 4.                                           Certain Restrictions.

 

(A)                               Whenever quarterly dividends or other dividends or distributions payable on the Series B Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not

 

(i)                                     declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock;

 

(ii)                                  declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Participating Preferred Stock, except dividends paid ratably on the Series B Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

 

(iii)                               redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series B Junior Participating Preferred Stock; or

 

(iv)                              purchase or otherwise acquire for consideration any shares of Series B Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series B Junior Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

 

A-5

 

(B)                               The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

 

Section 5.                                           Reacquired Shares.  Any shares of Series B Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof.  All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

 

Section 6.                                           Liquidation, Dissolution or Winding Up.  (A)  Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series B Junior Participating Preferred Stock shall have received an amount equal to $10,000 per share of Series B Junior Participating Preferred Stock, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the “Series A Liquidation Preference”).  Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the “Common Adjustment”) equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth in subparagraph (C) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the “Adjustment Number”).  Following the payment of the full amount of the Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series B Junior Participating Preferred Stock and Common Stock, respectively, holders of Series B Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.

 

(B)                               In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of preferred stock, if any, which rank on a parity with the Series B Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences.  In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

 

(C)                               In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a

 

A-6

 

smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

Section 7.                                           Consolidation, Merger, etc.  In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series B Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 10,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.  In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 

Section 8.                                           No Redemption.  The shares of Series B Junior Participating Preferred Stock shall not be redeemable.

 

Section 9.                                           Ranking.  The Series B Junior Participating Preferred Stock shall rank junior to any and all other series of the Corporation’s Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.

 

Section 10.                                    Amendment.  At any time when any shares of Series B Junior Participating Preferred Stock are outstanding, neither the Certificate of Incorporation nor this Certificate of Designation shall be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series B Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series B Junior Participating Preferred Stock, voting separately as a class.

 

Section 11.                                    Fractional Shares.  Series B Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B Junior Participating Preferred Stock.

 

A-7

 

IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 21st day of December, 2014.

 

	
 
    	
 
    
	
 
    	
Colleen B. Brown
    
	
 
    	
Chairperson of the Board
    
	
 
    	
 
    
	
Attest:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Chelsea A. Grayson
    	
 
    	
 
    
	
General Counsel, Executive Vice President and   Secretary
    	
 
    	
 
    

 

A-8

 

Exhibit B

 

[Form of Rights Certificate]

 

	
Certificate No. R-
    	
               Rights
    

 

NOT EXERCISABLE AFTER DECEMBER 21, 2015 OR SUCH EARLIER DATE AS THE RIGHTS ARE REDEEMED, EXCHANGED OR TERMINATED.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.  [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).  ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1)

 

	
 
    	
Rights Certificate
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
AMERICAN APPAREL, INC.
    

 

(1)         The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence.

 

 

This certifies that                                        , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of December 21, 2014 (the “Rights Agreement”), between AMERICAN APPAREL, INC., a Delaware corporation (the “Company”), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York corporation (the “Rights Agent”), to purchase from the Company at any time prior to 5:00 P.M. (New York City time) on December 21, 2015 or the Rights are earlier redeemed, exchanged or terminated, at the office or offices of the Rights Agent designated for such purpose, or its successors as Rights Agent, one ten-thousandth of a fully paid, non-assessable share of Series B Junior Participating Preferred Stock (the “Preferred Stock”) of the Company, at a purchase price of $3,25 per one ten-thousandth of a share (the “Purchase Price”), upon presentation and surrender of this Rights Certificate with the Form of Election to Purchase and related Certificate duly executed.  The number of Rights evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise thereof) set forth above, and the Purchase Price per share set forth above, are the number and Purchase Price as of December 21, 2014.  The Company reserves the right to require prior to the occurrence of a Triggering Event (as such term is defined in the Rights Agreement) that a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.  Capitalized terms used in this Rights Certificate without definition shall have the meanings ascribed to them in the Rights Agreement.

 

Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances specified in the Rights Agreement, a transferee of a person who, after such transfer, became an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right with respect to such Rights from and after the occurrence of such Section 11(a)(ii) Event.  For purposes of this paragraph, a person shall not be deemed an Acquiring Person if such Person became so as a result of a Qualified Offer.

 

As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of Preferred Stock or other securities, which may be purchased upon the exercise of the Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the happening of certain events, including Triggering Events.

 

This Rights Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Rights Certificates, which limitations of rights include the temporary suspension of the exercisability of such Rights under the specific circumstances set forth in the Rights Agreement.  Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and are also available upon written request to the Company.

 

B-2

 

This Rights Certificate, with or without other Rights Certificates, upon surrender at the principal office or offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of one ten-thousandths of a share of Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates surrendered shall have entitled such holder to purchase.  If this Rights Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

 

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.001 per Right at any time prior to the earlier of the close of business on (i) the tenth Business Day following the Stock Acquisition Date, and (ii) the Final Expiration Date.  In addition, under certain circumstances following the Stock Acquisition Date, the Rights may be exchanged, in whole or in part, for shares of the Common Stock, or shares of preferred stock of the Company having essentially the same value or economic rights as such shares.  Immediately upon the action of the Board of Directors of the Company authorizing any such exchange, and without any further action or any notice, the Rights (other than Rights which are not subject to such exchange) will terminate and the Rights will only enable holders to receive the shares issuable upon such exchange.

 

No fractional shares of Preferred Stock will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one ten-thousandth of a share of Preferred Stock, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. The Company, at its election, may require that a number of Rights be exercised so that only whole shares of Preferred Stock would be issued.

 

No holder of this Rights Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give consent to or withhold consent from any corporate action, or, to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights Agreement.

 

This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

 

B-3

 

WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.

 

Dated as of             ,              

 

	
ATTEST:
    	
 
    	
AMERICAN   APPAREL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Countersigned:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CONTINENTAL STOCK   TRANSFER & TRUST COMPANY
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
 
    	
 
    	
 
    
	
 
    	
Authorized   Signature
    	
 
    	
 
    

 

B-4

 

[Form of Reverse Side of Rights Certificate]

 

FORM OF ASSIGNMENT

 

(To be executed by the registered holder if such
 holder desires to transfer the Rights Certificate.)

 

FOR VALUE RECEIVED                                      hereby sells, assigns and transfers unto                                                   

 

(Please print name and address of transferee)

 

this Rights Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                                Attorney, to transfer the within Rights Certificate on the books of the within named Company, with full power of substitution.

 

Dated:                   ,             

 

	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
Signature Guaranteed:
    	
 
    

 

B-5

 

Certificate

 

The undersigned hereby certifies by checking the appropriate boxes that:

 

(1)  this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

 

(2)  after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

 

	
Dated:                     ,             
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
Signature Guaranteed:
    	
 
    

 

B-6

 

NOTICE

 

The signature to the foregoing Assignment and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

 

B-7

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise Rights represented by the Rights Certificate.)

 

To:  CONTINENTAL STOCK TRANSFER & TRUST COMPANY:

 

The undersigned hereby irrevocably elects to exercise            Rights represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the Rights (or such other securities of the Company or of any other person which may be issuable upon the exercise of the Rights) and requests that certificates for such shares be issued in the name of and delivered to:

 

Please insert social security
 or other identifying number

 

(Please print name and address)

 

If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

 

Please insert social security
 or other identifying number

 

(Please print name and address)

 

 

Dated:                   ,        

 

	
 
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
Signature Guaranteed:
    	
 
    

 

B-8

 

Certificate

 

The undersigned hereby certifies by checking the appropriate boxes that:

 

(1)  the Rights evidenced by this Rights Certificate [  ] are [  ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as such terms are defined pursuant to the Rights Agreement);

 

(2)  after due inquiry and to the best knowledge of the undersigned, it [  ] did [  ] did not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.

 

	
Dated:                     ,             
    	
 
    
	
 
    	
Signature
    
	
 
    	
 
    
	
Signature Guaranteed:
    	
 
    

 

B-9

 

NOTICE

 

The signature to the foregoing Election to Purchase and Certificate must correspond to the name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.

 

B-10

 

Exhibit C

 

FORM OF

 

SUMMARY OF RIGHTS TO PURCHASE
 PREFERRED STOCK

 

On December 21, 2014, the Board of Directors of AMERICAN APPAREL, INC. (the “Company”) declared a dividend distribution of one right (a “Right”) for each outstanding share of common stock, par value $0.0001 per share, of the Company (the “Common Stock”), to stockholders of record at the close of business on January 2, 2015 (the “Record Date”).  Each Right entitles the registered holder to purchase from the Company a unit consisting of one ten-thousandth of a share (a “Unit”) of Series B Junior Participating Preferred Stock, par value $0.0001 per share (the “Preferred Stock”) at a purchase price of $3.25 per Unit, subject to adjustment (the “Purchase Price”).  The description and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”) between the Company and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Rights Agent.

 

Rights Certificates; Exercise Period.

 

Initially, the Rights will be attached to all Common Stock certificates representing shares then outstanding, and no separate rights certificates (“Rights Certificates”) will be distributed.  Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the Common Stock and a distribution date (“Distribution Date”) will occur upon the earlier of (i) 10 business days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 10% or more of the outstanding shares of Common Stock (the “Stock Acquisition Date”), other than as a result of (a) existing holdings, (b) repurchases of stock by the Company, (c) certain inadvertent actions by institutional or certain other stockholders or (d) the acquisition of stock pursuant to a Qualified Offer (as defined below), and (ii) 10 business days (or such later date as the Board shall determine) following the commencement of a tender offer or exchange offer (other than a Qualified Offer) that would result in a person or group becoming an Acquiring Person.  Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock certificates (or, in the case of shares reflected on the direct registration system, by the notations in the book entry accounts) and will be transferred with and only with such Common Stock, (ii) new Common Stock certificates issued after the Record Date will contain a notation incorporating the Rights Agreement by reference and (iii) the surrender for transfer of any certificates for Common Stock outstanding will also constitute the transfer of the Rights associated with the Common Stock represented by such certificates.  Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence of a Triggering Event (as defined below) that, upon any exercise of Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be issued.

 

The Rights are not exercisable until the Distribution Date and will expire at 5:00 P.M. (New York City time) on December 21, 2015 (the “Final Expiration Date”), unless such date is extended or the Rights are earlier redeemed, exchanged or terminated.

 

 

As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of the Common Stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights.  Except as otherwise determined by the Board of Directors, only shares of Common Stock issued prior to the Distribution Date will be issued with the Rights.

 

Flip-in Trigger.

 

In the event that a person or group of affiliated or associated persons becomes an Acquiring Person, except pursuant to an offer for all outstanding shares of Common Stock which the Board determines to be fair and not inadequate and to otherwise be in the best interests of the Company and its stockholders, after receiving advice from one or more investment banking firms (such an offer being referred to as a “Qualified Offer”), each holder of a Right will thereafter have the right to receive, upon exercise, Common Stock (or cash, property, Preferred Stock or other securities of the Company) having a value equal to two times the exercise price of the Right.  Notwithstanding any of the foregoing, following the occurrence of any of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void.  However, Rights are not exercisable following the occurrence of the event set forth above until such time as the Rights are no longer redeemable by the Company as set forth below.

 

For example, at an exercise price of $[A] per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event set forth in the preceding paragraph would entitle its holder to purchase $[2A] worth of Common Stock (or other consideration, as noted above) for $[A].

 

Flip-over Trigger.

 

In the event that, at any time following the Stock Acquisition Date, (i) the Company engages in a merger or other business combination transaction in which the Company is not the surviving corporation (other than with an entity which acquired the shares pursuant to a Qualified Offer), (ii) the Company engages in a merger or other business combination transaction in which the Company is the surviving corporation and the Common Stock of the Company is changed or exchanged, or (iii) 50% or more of the Company’s assets, cash flow or earning power is sold or transferred, each holder of a Right (except Rights which have previously been voided as set forth above) shall thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right.  The events set forth in this paragraph and in the second preceding paragraph are referred to as the “Triggering Events.”

 

Exchange Feature.

 

At any time after a person becomes an Acquiring Person and prior to the acquisition by such person or group of fifty percent (50%) or more of the outstanding Common Stock, the Board may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of Common Stock, or one ten-thousandth of a share of Preferred Stock (or of a share of a class or series of the

 

C-2

 

Company’s preferred stock having equivalent rights, preferences and privileges), per Right (subject to adjustment).

 

Equitable Adjustments.

 

The Purchase Price payable, and the number of Units of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock, (ii) if holders of the Preferred Stock are granted certain rights or warrants to subscribe for Preferred Stock or convertible securities at less than the current market price of the Preferred Stock, or (iii) upon the distribution to holders of the Preferred Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above).

 

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments amount to at least 1% of the Purchase Price.  No fractional Units will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise.

 

Redemption Rights.

 

At any time prior to the earlier to occur of (i) 10 business days following the Stock Acquisition Date (as such time period may be extended pursuant to the Rights Agreement) or (ii) the Final Expiration Date, the Company may redeem the Rights in whole, but not in part, at a price of $.001 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the Board of Directors).  Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $.001 redemption price.

 

Amendment of Rights.

 

Any of the provisions of the Rights Agreement may be amended by the Board of Directors of the Company prior to the Distribution Date.  After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board in order to cure any ambiguity, to make changes which do not adversely affect the interests of holders of Rights, or to shorten or lengthen any time period under the Rights Agreement.  The foregoing notwithstanding, no amendment may be made at such time as the Rights are not redeemable, except to cure any ambiguity or correct or supplement any provision contained in the Rights Agreement which may be defective or inconsistent with any other provision therein.

 

Miscellaneous.

 

Until a Right is exercised, the holder thereof, as such, will have no separate rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends in respect of the Rights.  While the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Stock (or other

 

C-3

 

consideration) of the Company or for common stock of the acquiring company or in the event of the redemption of the Rights as set forth above.

 

A copy of the Rights Agreement has been or will be filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A or a Current Report on Form 8-K.  A copy of the Rights Agreement is available free of charge from the Rights Agent.  This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is incorporated herein by reference.

 

C-4

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