Document:

Exhibit 4.2

 

[Form of Subordinated Indenture]

 

 

 

 

 

[NISKA GAS STORAGE PARTNERS LLC]

 

[NISKA GAS STORAGE US, LLC]

 

[NISKA GAS STORAGE US FINANCE CORP.]

 

[NISKA GAS STORAGE CANADA ULC]

 

[NISKA GAS STORAGE CANADA FINANCE CORP.]

 

 

Subsidiary Guarantors party hereto,

 

and

 

[                                        ],

 

as Trustee

 

INDENTURE

 

 

Dated as of                  

 

Debt Securities

 

 

 

 

CROSS-REFERENCE TABLE

 

	
TIA Section
    	
 
    	
Indenture Section
    
	
310   
    	
(a)
    	
 
    	
7.10
    
	
 
    	
(b)
    	
 
    	
7.10
    
	
 
    	
(c)
    	
 
    	
N.A.
    
	
311   
    	
(a)
    	
 
    	
7.11
    
	
 
    	
(b)
    	
 
    	
7.11
    
	
 
    	
(c)
    	
 
    	
N.A.
    
	
312   
    	
(a)
    	
 
    	
5.01
    
	
 
    	
(b)
    	
 
    	
5.02
    
	
 
    	
(c)
    	
 
    	
5.02
    
	
313   
    	
(a)
    	
 
    	
5.03
    
	
 
    	
(b)
    	
 
    	
5.03
    
	
 
    	
(c)
    	
 
    	
13.03
    
	
 
    	
(d)
    	
 
    	
5.03
    
	
314   
    	
(a)
    	
 
    	
4.05
    
	
 
    	
(b)
    	
 
    	
N.A.
    
	
 
    	
(c)(1)
    	
 
    	
13.05
    
	
 
    	
(c)(2)
    	
 
    	
13.05
    
	
 
    	
(c)(3)
    	
 
    	
N.A.
    
	
 
    	
(d)
    	
 
    	
N.A.
    
	
 
    	
(e)
    	
 
    	
13.05
    
	
 
    	
(f)
    	
 
    	
N.A.
    
	
315   
    	
(a)
    	
 
    	
7.01
    
	
 
    	
(b)
    	
 
    	
6.07 &   13.03
    
	
 
    	
(c)
    	
 
    	
7.01
    
	
 
    	
(d)
    	
 
    	
7.01
    
	
 
    	
(e)
    	
 
    	
6.08
    
	
316   
    	
(a) (last   sentence)
    	
 
    	
1.01
    
	
 
    	
(a)(1)(A)
    	
 
    	
6.06
    
	
 
    	
(a)(1)(B)
    	
 
    	
6.06
    
	
 
    	
(a)(2)
    	
 
    	
9.01(d)
    
	
 
    	
(b)
    	
 
    	
6.04
    
	
 
    	
(c)
    	
 
    	
5.04
    
	
317   
    	
(a)(1)
    	
 
    	
6.02
    
	
 
    	
(a)(2)
    	
 
    	
6.02
    
	
 
    	
(b)
    	
 
    	
4.04
    
	
318   
    	
(a)
    	
 
    	
13.07
    

 

N.A. means Not Applicable

 

NOTE:  This Cross-Reference table shall not, for any purpose, be deemed part of this Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
ARTICLE I
    	
 
    
	
DEFINITIONS AND INCORPORATION BY REFERENCE
    	
 
    
	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
1
    
	
Section 1.02
    	
Other Definitions
    	
7
    
	
Section 1.03
    	
Incorporation by Reference of   Trust Indenture Act
    	
7
    
	
Section 1.04
    	
Rules of Construction
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
 
    
	
DEBT SECURITIES
    	
 
    
	
 
    	
 
    
	
Section 2.01
    	
Forms Generally
    	
8
    
	
Section 2.02
    	
Form of Trustee’s   Certificate of Authentication
    	
8
    
	
Section 2.03
    	
Principal Amount; Issuable in   Series
    	
8
    
	
Section 2.04
    	
Execution of Debt Securities
    	
11
    
	
Section 2.05
    	
Authentication and Delivery of   Debt Securities
    	
11
    
	
Section 2.06
    	
Denomination of Debt Securities
    	
13
    
	
Section 2.07
    	
Registration of Transfer and   Exchange
    	
13
    
	
Section 2.08
    	
Temporary Debt Securities
    	
14
    
	
Section 2.09
    	
Mutilated, Destroyed, Lost or   Stolen Debt Securities
    	
15
    
	
Section 2.10
    	
Cancellation of Surrendered Debt   Securities
    	
15
    
	
Section 2.11
    	
Provisions of the Indenture and   Debt Securities for the Sole Benefit of the Parties and the Holders
    	
16
    
	
Section 2.12
    	
Payment of Interest; Interest   Rights Preserved
    	
16
    
	
Section 2.13
    	
Securities Denominated in   Dollars
    	
16
    
	
Section 2.14
    	
Wire Transfers
    	
16
    
	
Section 2.15
    	
Securities Issuable in the   Form of a Global Security
    	
17
    
	
Section 2.16
    	
Medium Term Securities
    	
19
    
	
Section 2.17
    	
Defaulted Interest
    	
20
    
	
Section 2.18
    	
CUSIP Numbers
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
 
    
	
REDEMPTION OF DEBT SECURITIES
    	
 
    
	
 
    	
 
    
	
Section 3.01
    	
Applicability of Article
    	
21
    
	
Section 3.02
    	
Notice of Redemption; Selection   of Debt Securities
    	
21
    
	
Section 3.03
    	
Payment of Debt Securities   Called for Redemption
    	
22
    
	
Section 3.04
    	
Mandatory and Optional Sinking   Funds
    	
23
    
	
Section 3.05
    	
Redemption of Debt Securities   for Sinking Fund
    	
23
    

 

ii

 

	
ARTICLE IV
    	
 
    
	
PARTICULAR COVENANTS OF THE ISSUERS
    	
 
    
	
 
    	
 
    
	
Section 4.01
    	
Payment of Principal of, and   Premium, If Any, and Interest on, Debt Securities
    	
25
    
	
Section 4.02
    	
Maintenance of Offices or   Agencies for Registration of Transfer, Exchange and Payment of Debt   Securities
    	
25
    
	
Section 4.03
    	
Appointment to Fill a Vacancy in   the Office of Trustee
    	
26
    
	
Section 4.04
    	
Duties of Paying Agents, etc.
    	
26
    
	
Section 4.05
    	
SEC Reports; Financial   Statements
    	
27
    
	
Section 4.06
    	
Compliance Certificate
    	
27
    
	
Section 4.07
    	
Further Instruments and Acts
    	
28
    
	
Section 4.08
    	
Existence
    	
28
    
	
Section 4.09
    	
Maintenance of Properties
    	
28
    
	
Section 4.10
    	
Payment of Taxes and Other   Claims
    	
28
    
	
Section 4.11
    	
Waiver of Certain Covenants
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
 
    
	
HOLDERS’ LISTS AND REPORTS BY THE TRUSTEE
    	
 
    
	
 
    	
 
    
	
Section 5.01
    	
Issuers to Furnish Trustee   Information as to Names and Addresses of Holders; Preservation of Information
    	
28
    
	
Section 5.02
    	
Communications to Holders
    	
29
    
	
Section 5.03
    	
Reports by Trustee
    	
29
    
	
Section 5.04
    	
Record Dates for Action by   Holders
    	
29
    
	
 
    	
 
    
	
ARTICLE VI
    	
 
    
	
REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT
    	
 
    
	
 
    	
 
    
	
Section 6.01
    	
Events of Default
    	
30
    
	
Section 6.02
    	
Collection of Debt by Trustee,   etc.
    	
32
    
	
Section 6.03
    	
Application of Moneys Collected   by Trustee
    	
33
    
	
Section 6.04
    	
Limitation on Suits by Holders
    	
34
    
	
Section 6.05
    	
Remedies Cumulative; Delay or   Omission in Exercise of Rights Not a Waiver of Default
    	
35
    
	
Section 6.06
    	
Rights of Holders of Majority in   Principal Amount of Debt Securities to Direct Trustee and to Waive Default
    	
35
    
	
Section 6.07
    	
Trustee to Give Notice of Events   of Defaults Known to It, but May Withhold Such Notice in Certain   Circumstances
    	
35
    
	
Section 6.08
    	
Requirement of an Undertaking to   Pay Costs in Certain Suits under the Indenture or Against the Trustee
    	
36
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
 
    
	
CONCERNING THE TRUSTEE
    	
 
    
	
 
    	
 
    
	
Section 7.01
    	
Certain Duties and   Responsibilities
    	
36
    
	
Section 7.02
    	
Certain Rights of Trustee
    	
37
    

 

iii

 

	
Section 7.03
    	
Trustee Not Liable for Recitals   in Indenture or in Debt Securities
    	
38
    
	
Section 7.04
    	
Trustee, Paying Agent or   Registrar May Own Debt Securities
    	
39
    
	
Section 7.05
    	
Moneys Received by Trustee to Be   Held in Trust
    	
39
    
	
Section 7.06
    	
Compensation and Reimbursement
    	
39
    
	
Section 7.07
    	
Right of Trustee to Rely on an   Officers’ Certificate Where No Other Evidence Specifically Prescribed
    	
39
    
	
Section 7.08
    	
Separate Trustee; Replacement of   Trustee
    	
40
    
	
Section 7.09
    	
Successor Trustee by Merger
    	
41
    
	
Section 7.10
    	
Eligibility; Disqualification
    	
41
    
	
Section 7.11
    	
Preferential Collection of   Claims Against Issuers
    	
41
    
	
Section 7.12
    	
Compliance with Tax Laws
    	
42
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    	
 
    
	
CONCERNING THE HOLDERS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Evidence of Action by Holders
    	
42
    
	
Section 8.02
    	
Proof of Execution of   Instruments and of Holding of Debt Securities
    	
42
    
	
Section 8.03
    	
Who May Be Deemed Owner of   Debt Securities
    	
42
    
	
Section 8.04
    	
Instruments Executed by Holders   Bind Future Holders
    	
43
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    	
 
    
	
SUPPLEMENTAL INDENTURES
    	
 
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Purposes for Which Supplemental   Indenture May Be Entered into Without Consent of Holders
    	
43
    
	
Section 9.02
    	
Modification of Indenture with   Consent of Holders of Debt Securities
    	
45
    
	
Section 9.03
    	
Effect of Supplemental   Indentures
    	
46
    
	
Section 9.04
    	
Debt Securities May Bear   Notation of Changes by Supplemental Indentures
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    	
 
    
	
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
    	
 
    
	
 
    	
 
    
	
Section 10.01
    	
Consolidations and Mergers of   the Issuers
    	
47
    
	
Section 10.02
    	
Rights and Duties of Successor   Company
    	
47
    
	
 
    	
 
    	
 
    
	
ARTICLE XI
    	
 
    
	
SATISFACTION AND DISCHARGE OF
    	
 
    
	
INDENTURE; DEFEASANCE; UNCLAIMED MONEYS
    	
 
    
	
 
    	
 
    
	
Section 11.01
    	
Applicability of Article
    	
48
    
	
Section 11.02
    	
Satisfaction and Discharge of   Indenture; Defeasance
    	
48
    
	
Section 11.03
    	
Conditions of Defeasance
    	
49
    
	
Section 11.04
    	
Application of Trust Money
    	
50
    
	
Section 11.05
    	
Repayment to Issuers
    	
50
    
	
Section 11.06
    	
Indemnity for U.S. Government   Obligations
    	
51
    
	
Section 11.07
    	
Reinstatement
    	
51
    

 

iv

 

	
ARTICLE XII
    	
 
    
	
SUBORDINATION OF DEBT SECURITIES AND GUARANTEE
    	
 
    
	
 
    	
 
    
	
Section 12.01
    	
Applicability of Article;   Agreement to Subordinate
    	
51
    
	
Section 12.02
    	
Liquidation, Dissolution,   Bankruptcy
    	
51
    
	
Section 12.03
    	
Default on Senior Indebtedness
    	
52
    
	
Section 12.04
    	
Acceleration of Payment of Debt   Securities
    	
53
    
	
Section 12.05
    	
When Distribution Must Be Paid   Over
    	
53
    
	
Section 12.06
    	
Subrogation
    	
53
    
	
Section 12.07
    	
Relative Rights
    	
53
    
	
Section 12.08
    	
Subordination May Not Be   Impaired by Issuers
    	
53
    
	
Section 12.09
    	
Rights of Trustee and Paying   Agent
    	
53
    
	
Section 12.10
    	
Distribution or Notice to   Representative
    	
54
    
	
Section 12.11
    	
Article XII Not to Prevent   Defaults or Limit Right to Accelerate
    	
54
    
	
Section 12.12
    	
Trust Moneys Not Subordinated
    	
54
    
	
Section 12.13
    	
Trustee Entitled to Rely
    	
54
    
	
Section 12.14
    	
Trustee to Effectuate   Subordination
    	
55
    
	
Section 12.15
    	
Trustee Not Fiduciary for   Holders of Senior Indebtedness
    	
55
    
	
Section 12.16
    	
Reliance by Holders of Senior   Indebtedness on Subordination Provisions
    	
55
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII MISCELLANEOUS PROVISIONS
    	
 
    
	
 
    	
 
    	
 
    
	
Section 13.01
    	
Successors and Assigns of   Issuers Bound by Indenture
    	
55
    
	
Section 13.02
    	
Acts of Board, Committee or   Officer of Successor Issuer Valid
    	
55
    
	
Section 13.03
    	
Required Notices or Demands
    	
55
    
	
Section 13.04
    	
Indenture and Debt Securities to   Be Construed in Accordance with the Laws of the State of New York
    	
56
    
	
Section 13.05
    	
Officers’ Certificate and   Opinion of Counsel to Be Furnished upon Application or Demand by the Issuers
    	
57
    
	
Section 13.06
    	
Payments Due on Legal Holidays
    	
57
    
	
Section 13.07
    	
Provisions Required by TIA to   Control
    	
57
    
	
Section 13.08
    	
Computation of Interest on Debt   Securities
    	
57
    
	
Section 13.09
    	
Rules by Trustee, Paying   Agent and Registrar
    	
57
    
	
Section 13.10
    	
No Recourse Against Others
    	
58
    
	
Section 13.11
    	
Severability
    	
58
    
	
Section 13.12
    	
Effect of Headings
    	
58
    
	
Section 13.13
    	
Indenture May Be Executed   in Counterparts
    	
58
    
	
 
    	
 
    	
 
    
	
ARTICLE XIV
    	
 
    
	
GUARANTEE
    	
 
    
	
 
    	
 
    
	
Section 14.01
    	
Unconditional Guarantee
    	
58
    
	
Section 14.02
    	
Execution and Delivery of   Guarantee
    	
60
    
	
Section 14.03
    	
Limitation on Guarantors’   Liability
    	
60
    
	
Section 14.04
    	
Release of Guarantors from   Guarantee
    	
61
    
	
Section 14.05
    	
Subsidiary Guarantor   Contribution
    	
61
    

 

v

 

	
Notation of Guarantee
    	
Annex A
    

 

vi

 

THIS INDENTURE dated as of                        is among, [Niska Gas Storage Partners LLC (the “Parent Guarantor”)] [Niska Gas Storage US, LLC, a Delaware limited liability company,] [Niska Gas Storage US Finance Corp., a Delaware Corporation,] [Niska Gas Storage Canada ULC, an Alberta unlimited liability corporation,] and [Niska Gas Storage Canada Finance Corp.], (each an “Issuer” and collectively, the “Issuers”), any Subsidiary Guarantors (as defined herein) party hereto and [                                        ], a                                     , as trustee (the “Trustee”).

 

RECITALS OF THE ISSUERS AND THE GUARANTORS

 

The Issuers, the Parent Guarantor and any Subsidiary Guarantors have duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of the Issuers’ debentures, notes, bonds or other evidences of indebtedness to be issued in one or more series unlimited as to principal amount (herein called the “Debt Securities”), which Debt Securities may be guaranteed by each of the Guarantors and may be subordinated in right of payment to Senior Indebtedness, as in this Indenture provided.

 

All things necessary to make this Indenture a valid agreement of the Issuers, the Parent Guarantor and any Subsidiary Guarantors, in accordance with its terms, have been done.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH

 

That in order to declare the terms and conditions upon which the Debt Securities are authenticated, issued and delivered, and in consideration of the premises, and of the purchase and acceptance of the Debt Securities by the Holders thereof, the Issuers, the Parent Guarantor, any Subsidiary Guarantors and the Trustee covenant and agree with each other, for the benefit of the respective Holders from time to time of the Debt Securities or any series thereof, as follows:

 

ARTICLE I
 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 the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. The Trustee may request and may conclusively rely upon an Officers’ Certificate to determine whether any Person is an Affiliate of any specified Person.

 

“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.

 

1

 

“Board of Directors” means, (i) with respect to a corporation, the board of directors of such corporation or any committee thereof duly authorized to act on behalf of such board, and (ii) with respect to a limited liability company, the board of directors of such limited liability company, managing member or members of such limited liability company or any controlling committee of managing members or managers of such limited liability company.

 

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

 

“capital stock” of any Person means and includes any and all shares, rights to purchase, warrants or options (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) the equity (which includes, but is not limited to, common stock, preferred stock and partnership and joint venture interests) of such Person (excluding any debt securities that are convertible into, or exchangeable for, such equity).

 

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

 

“Debt” of any Person at any date means any obligation created or assumed by such Person for the repayment of borrowed money and any guarantee thereof.

 

“Debt Security” or “Debt Securities” has the meaning stated in the first recital of this Indenture and more particularly means any debt security or debt securities, as the case may be, of any series authenticated and delivered under this Indenture.

 

“Default” means any event, act or condition that is, or after notice or the passage of time or both would be, an Event of Default.

 

“Depositary” means, unless otherwise specified by the Issuers pursuant to either Section 2.03 or 2.15, with respect to Debt Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, The Depository Trust Company, New York, New York, or any successor thereto registered as a clearing agency under the Exchange Act or other applicable statute or regulations.

 

“Designated Senior Indebtedness” means any Senior Indebtedness designated, as provided in Section 2.03, in respect of any series of Debt Securities.

 

“Dollar” or “$” means such currency of the United States as at the time of payment is legal tender for the payment of public and private debts.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute.

 

“Floating Rate Security” means a Debt Security that provides for the payment of interest at a variable rate determined periodically by reference to an interest rate index specified pursuant to Section 2.03.

 

“GAAP” means generally accepted accounting principles in the United States, as in effect from time to time.

 

2

 

“Global Security” means with respect to any series of Debt Securities issued hereunder, a Debt Security which is executed by the Issuers and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with this Indenture and any Indentures supplemental hereto, or resolution of the Board of Directors and set forth in an Officers’ Certificate, which shall be registered in the name of the Depositary or its nominee and which shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all the Outstanding Debt Securities of such series or any portion thereof, in either case having the same terms, including, without limitation, the same original issue date, date or dates on which principal is due and interest rate or method of determining interest.

 

“guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Debt or other obligation of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise) or (b) entered into for purposes of assuring in any other manner the obligee of such Debt or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “guarantee” shall not include endorsements for collection or deposit in the ordinary course of business.  The term “guarantee” used as a verb has a corresponding meaning.

 

“Guarantors” means each of the Parent Guarantor and the Subsidiary Guarantors.

 

“Holder,” “Holder of Debt Securities” or other similar terms means, a Person in whose name a Debt Security is registered in the Debt Security Register (as defined in Section 2.07(a)).

 

“Indenture” means this instrument as originally executed, or, if amended or supplemented as herein provided, as so amended or supplemented and shall include the form and terms of particular series of Debt Securities as contemplated hereunder, whether or not a supplemental Indenture is entered into with respect thereto.

 

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

 

“Issuer Order” means a written request or order signed on behalf of each of the Issuers by one of its Officers and delivered to the Trustee.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of Houston, Texas, City of New York, 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 for the intervening period.

 

3

 

“Lien” means, with respect to any asset, any mortgage, lien, security interest, pledge, charge or other encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law.

 

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

 

“Officers’ Certificate” means a certificate signed on behalf of each Issuer by any two of its Officers, one of whom must be the principal executive officer, the principal financial officer or the principal accounting officer of such Issuer, that meets the requirements of Section 13.05 hereof.

 

“Opinion of Counsel” means an opinion reasonably acceptable to the Trustee from legal counsel.  The counsel may be an employee of or counsel to the Parent Guarantor, any Issuer or any Subsidiary of the Parent Guarantor.

 

“Original Issue Discount Debt Security” means any Debt Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 6.01.

 

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

 

(a)           Debt Securities of that series theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

 

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

 

(c)            Debt Securities of that series which have been paid pursuant to Section 2.09 or in exchange for or in lieu of which other Debt Securities have been authenticated and delivered pursuant to this Indenture, other than any such Debt Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Debt Securities are held by a protected purchaser in whose hands such Debt Securities are valid obligations of the Issuers;

 

provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Debt Securities of any series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Debt Securities owned by an Issuer or any other obligor upon the Debt Securities or any Affiliate of the Parent Guarantor or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the

 

4

 

Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Debt Securities which a Trust Officer actually knows to be so owned shall be so disregarded.  Debt Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Debt Securities and that the pledgee is not an Issuer or any other obligor upon the Debt Securities or an Affiliate of an Issuer or such other obligor.  In determining whether the Holders of the requisite principal amount of Outstanding Debt Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Debt Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 6.01.

 

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

 

“Person” means any individual, corporation, partnership, joint venture, limited liability company, incorporated or unincorporated association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof or other entity of any kind.

 

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

 

“Representative” means the trustee, agent or representative (if any) for an issue of Senior Debt.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and any successor statute.

 

“Senior Indebtedness,” unless otherwise provided with respect to the Debt Securities of a series as contemplated by Section 2.03, means (1) all Debt of the Guarantors or the Issuers, whether currently outstanding or hereafter issued, unless, by the terms of the instrument creating or evidencing such Debt, it is provided that such Debt is subordinate or not superior in right of payment to the Debt Securities, in the case of the Issuers, or the Guarantee, in the case of the Guarantors, or to other Debt which is pari passu with or subordinated to the Debt Securities, in the case of the Issuers, or the Guarantee, in the case of the Guarantors, and (2) any modifications, refunding, deferrals, renewals, or extensions of any such Debt or securities, notes or other evidence of Debt issued in exchange for such Debt; provided that in no event shall “Senior Indebtedness” include (a) Debt evidenced by the Debt Securities or any Guarantee, (b) Debt of any of the Guarantors or the Issuers owed or owing to any Subsidiary of the Issuers, (c) Debt of any of the Guarantors owed or owing to the Issuers, (d) Debt to trade creditors, (e) any liability for taxes owed or owing by the Guarantors or the Issuers or (f) Debt of any Guarantor in the

 

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event there is no series of Debt Securities Outstanding that is entitled to the benefits of a Guarantee.

 

“Stated Maturity” means, with respect to any security, the date specified in such security as the fixed date on which the payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred).

 

“Subsidiary” of any Person means:

 

(1)           any corporation, association or other business entity of which more than 50% of the total voting power of equity interests entitled, without regard to the occurrence of any contingency, to vote in the election of directors, managers, trustees or equivalent Persons thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or combination thereof; or

 

(2)           in the case of a partnership, more than 50% of the partners’ equity interests, considering all partners’ equity interests as a single class, is at such time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person or combination thereof.

 

“Subsidiary Guarantors” means any Subsidiary of the Parent Guarantor (except an Issuer) who may execute this Indenture, or a supplement hereto, for the purpose of providing a Guarantee of Debt Securities pursuant to this Indenture until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Subsidiary Guarantors” shall mean such successor Person.

 

“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb), as in effect on the date of this Indenture as originally executed and, to the extent required by law, as amended.

 

“Trustee” initially means [                                        ] and any other Person or Persons appointed as such from time to time pursuant to Section 7.08, and, subject to the provisions of Article VII, includes its or their successors and assigns.  If at any time there is more than one such Person, “Trustee” as used with respect to the Debt Securities of any series shall mean the Trustee with respect to the Debt Securities of that series.

 

“Trust Officer” means any officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters.

 

“United States” means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction.

 

“U.S. Government Obligations” means direct obligations of the United States of America, obligations on which the payment of principal and interest is fully guaranteed by the

 

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United States of America or obligations or guarantees for the payment of which the full faith and credit of the United States of America is pledged.

 

“Yield to Maturity” means the yield to maturity, calculated at the time of issuance of a series of Debt Securities, or, if applicable, at the most recent redetermination of interest on such series and calculated in accordance with accepted financial practice.

 

Section 1.02          Other Definitions.

 

	
Term
    	
 
    	
Defined in Section
    
	
“Debt   Security Register”
    	
 
    	
2.07
    	
 
    
	
“Defaulted   Interest”
    	
 
    	
2.17
    	
 
    
	
“Event   of Default”
    	
 
    	
6.01
    	
 
    
	
“Funding   Guarantor”
    	
 
    	
14.05
    	
 
    
	
“Guarantee”
    	
 
    	
14.01
    	
 
    
	
“Place   of Payment”
    	
 
    	
2.03
    	
 
    
	
“Registrar”
    	
 
    	
2.07
    	
 
    
	
“Subordinated   Debt Securities”
    	
 
    	
[12.01
    	
]
    
	
“Successor   Company”
    	
 
    	
10.01
    	
 
    

 

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.

 

All 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 have the meanings so assigned to them.

 

Section 1.04          Rules of Construction.  Unless the context otherwise requires:

 

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

 

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

 

(c)           “or” is not exclusive;

 

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

 

(e)           provisions apply to successive events and transactions;

 

(f)            if the applicable series of Debt Securities are subordinated pursuant to Article XII, unsecured Debt shall not be deemed to be subordinate or junior to secured Debt merely by virtue of its nature as unsecured Debt; and

 

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

 

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ARTICLE II
 DEBT SECURITIES

 

Section 2.01          Forms Generally.  The Debt Securities of each series shall be in substantially the form established without the approval of any Holder by or pursuant to a resolution of the Board of Directors of each Issuer 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 the Issuers may deem appropriate (and, if not contained in a supplemental Indenture entered into in accordance with Article IX, as are not prohibited by the provisions of this Indenture) or as may be required or appropriate to comply with any law or with any rules made pursuant thereto or with any rules of any securities exchange on which such series of Debt Securities may be listed, or to conform to general usage, or as may, consistently herewith, be determined by the officers executing such Debt Securities as evidenced by their execution of the Debt Securities.

 

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

 

Section 2.02          Form of Trustee’s Certificate of Authentication.  The Trustee’s certificate of authentication on all Debt Securities authenticated by the Trustee shall be in substantially the following form:

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
 
    	
[                                        ],
    
	
 
    	
As   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Authorized Signatory
    

 

Section 2.03          Principal Amount; Issuable in Series.  The aggregate principal amount of Debt Securities which may be issued, executed, authenticated, delivered and outstanding under this Indenture is unlimited.

 

The Debt Securities may be issued in one or more series in fully registered form.  There shall be established, without the approval of any Holders, in or pursuant to a resolution of the Board of Directors of each Issuer and set forth in an Officers’ Certificate, or established in one or more Indentures supplemental hereto, prior to the issuance of Debt Securities of any series any or all of the following:

 

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

 

(b)           whether the Debt Securities of the series will be combined into or issued as a unit or units with other Debt Securities or other securities;

 

(c)           any limit upon the aggregate principal amount of the Debt Securities of the series which may be authenticated and delivered under this Indenture (except for Debt Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Debt Securities of the series pursuant to this Article II);

 

(d)           the date or dates on which the principal of and premium, if any, on the Debt Securities of the series are payable;

 

(e)           the rate or rates (which may be fixed or variable) at which the Debt Securities of the series shall bear interest, if any, or the method of determining such rate or rates, the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable, or the method by which such date will be determined, the record dates for the determination of Holders thereof to whom such interest is payable; and the basis upon which interest will be calculated if other than that of a 360-day year of twelve thirty-day months;

 

(f)            the place or places, if any, in addition to or instead of the corporate trust office of the Trustee, where the principal of, and premium, if any, and interest on, Debt Securities of the series shall be payable (“Place of Payment”);

 

(g)           the price or prices at which, the period or periods within which and the terms and conditions upon which Debt Securities of the series may be redeemed, in whole or in part, at the option of the Issuers or otherwise;

 

(h)           whether Debt Securities of the series are entitled to the benefits of any Guarantee of any Subsidiary Guarantors pursuant to this Indenture;

 

(i)            whether Debt Securities of the series are entitled to the benefits of any Guarantee of the Parent Guarantor pursuant to this Indenture;

 

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

 

(k)           the terms, if any, upon which the Debt Securities of the series may be convertible into or exchanged for capital stock (which may be represented by depositary shares), other Debt Securities or warrants for capital stock or Debt or other securities of any kind of any Issuer or any other obligor and the terms and conditions upon which such conversion or exchange shall be effected, including the initial conversion or exchange price or rate, the conversion or exchange period and any other provision in addition to or in lieu of those described herein;

 

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

 

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

 

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

 

(o)           any changes or additions to Article XI, including the addition of additional covenants that may be subject to the covenant defeasance option pursuant to Section 11.02(b);

 

(p)           if other than the principal amount thereof, the portion of the principal amount of Debt Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01 or provable in bankruptcy pursuant to Section 6.02;

 

(q)           the terms, if any, of the transfer, mortgage, pledge or assignment as security for the Debt Securities of the series of any properties, assets, moneys, proceeds, securities or other collateral, including whether certain provisions of the TIA are applicable and any corresponding changes to provisions of this Indenture as currently in effect;

 

(r)            any addition to or change in the Events of Default with respect to the Debt Securities of the series and any change in the right of the Trustee or the Holders to declare the principal of, and premium and interest on, such Debt Securities due and payable;

 

(s)            if the Debt Securities of the series shall be issued in whole or in part in the form of a Global Security or Securities, the terms and conditions, if any, upon which such Global Security or Securities may be exchanged in whole or in part for other individual Debt Securities in definitive registered form; and the Depositary for such Global Security or Securities and the form of any legend or legends to be borne by any such Global Security or Securities in addition to or in lieu of the legend referred to in Section 2.15(a);

 

(t)            any trustees, authenticating or paying agents, transfer agents or registrars;

 

(u)           the applicability of, and any addition to or change in the covenants and definitions currently set forth in this Indenture or in the terms currently set forth in Article X, including conditioning any merger, conveyance, transfer or lease permitted by Article X upon the satisfaction of any Debt coverage standard by the Issuers and Successor Company (as defined in Article X);

 

(v)           with regard to Debt Securities of the series that do not bear interest, the dates for certain required reports to the Trustee;

 

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(w)          the subordination, if any, of the Debt Securities of the series pursuant to Article XII and any changes or additions to Article XII or designation of any Designated Senior Indebtedness; and

 

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

 

All Debt Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to such resolution of the Board of Directors and as set forth in such Officers’ Certificate or in any such Indenture supplemental hereto.

 

Section 2.04          Execution of Debt Securities.  The Debt Securities shall be signed on behalf of each of the Issuers by at least one of its Officers.  Such signatures upon the Debt Securities may be the manual or facsimile signatures of the present or any future such authorized officers and may be imprinted or otherwise reproduced on the Debt Securities.

 

Only such Debt Securities as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, signed manually by the Trustee, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose.  Such certificate by the Trustee upon any Debt Security executed on behalf of each of the Issuers by at least one of its Officers shall be conclusive evidence that the Debt Security so authenticated has been duly authenticated and delivered hereunder.

 

In case any Officer of any Issuer who shall have signed any of the Debt Securities shall cease to be such Officer before the Debt Securities so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Issuers, such Debt Securities nevertheless may be authenticated and delivered or disposed of as though the Person who signed such Debt Securities had not ceased to be such Officer; and any Debt Security may be signed on behalf of any Issuer by such Persons as, at the actual date of the execution of such Debt Security, shall be the proper Officers of such Issuer, although at the date of such Debt Security or of the execution of this Indenture any such Person was not such Officer.

 

Section 2.05          Authentication and Delivery of Debt Securities.  At any time and from time to time after the execution and delivery of this Indenture, the Issuers may deliver to the Trustee for authentication Debt Securities of any series executed by the Issuers, and the Trustee shall thereupon authenticate and deliver said Debt Securities to or upon an Issuer Order.  In authenticating such Debt Securities, and accepting the additional responsibilities under this Indenture in relation to such Debt Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon:

 

(a)           a copy of any resolution or resolutions of the Board of Directors of each Issuer, certified by its Secretary or Assistant Secretary, authorizing the terms of issuance of any series of Debt Securities;

 

(b)           an executed supplemental Indenture, if any;

 

(c)           an Officers’ Certificate; and

 

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(d)           an Opinion of Counsel prepared in accordance with Section 13.05 which shall also state:

 

(i)            that the form of such Debt Securities has been established by or pursuant to a resolution of the Board of Directors of each Issuer or by a supplemental Indenture as permitted by Section 2.01 in conformity with the provisions of this Indenture;

 

(ii)           that the terms of such Debt Securities have been established by or pursuant to a resolution of the Board of Directors or by a supplemental Indenture as permitted by Section 2.03 in conformity with the provisions of this Indenture;

 

(iii)          that such Debt Securities, when authenticated and delivered by the Trustee and issued by the Issuers in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Issuers, enforceable in accordance with their terms except as  the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and  rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability;

 

(iv)          that the Issuers have the corporate or limited liability power, as applicable, to issue such Debt Securities and has duly taken all necessary corporate or limited liability power action, as applicable, with respect to such issuance;

 

(v)           that the issuance of such Debt Securities will not contravene the organizational documents of the Issuers or result in any material violation of any of the terms or provisions of any law or regulation or of any material indenture, mortgage or other agreement known to such counsel by which the Issuers are bound;

 

(vi)          that authentication and delivery of such Debt Securities and the execution and delivery of any supplemental Indenture will not violate the terms of this Indenture; and

 

(vii)         such other matters as the Trustee may reasonably request.

 

Such Opinion of Counsel need express no opinion as to whether a court in the United States would render a money judgment in a currency other than that of the United States.

 

The Trustee shall have the right to decline to authenticate and deliver any Debt Securities under this Section 2.05 if the Trustee, being advised by counsel, determines that such action may not lawfully be taken or if the Trustee in good faith by its board of directors or trustees, executive committee or a trust committee of directors, trustees or Officers (or any combination thereof) shall determine that such action would expose the Trustee to personal liability to existing Holders.

 

The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to authenticate Debt Securities of any series.  Unless limited by the terms of such appointment, an authenticating agent may authenticate Debt Securities whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.

 

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An authenticating agent has the same rights as any Registrar, paying agent or agent for service of notices and demands.

 

Unless otherwise provided in the form of Debt Security for any series, each Debt Security shall be dated the date of its authentication.

 

Section 2.06          Denomination of Debt Securities.  Unless otherwise provided in the form of Debt Security for any series, the Debt Securities of each series shall be issuable only as fully registered Debt Securities in such Dollar denominations as shall be specified or contemplated by Section 2.03.  In the absence of any such specification with respect to the Debt Securities of any series, the Debt Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof.

 

Section 2.07          Registration of Transfer and Exchange.

 

(a)           The Issuers shall keep or cause to be kept a register for each series of Debt Securities issued hereunder (hereinafter collectively referred to as the “Debt Security Register”), in which, subject to such reasonable regulations as it may prescribe, the Issuers shall provide for the registration of all Debt Securities and the transfer of Debt Securities as in this Article II provided.  At all reasonable times the Debt Security Register shall be open for inspection by the Trustee.  Subject to Section 2.15, upon due presentment for registration of transfer of any Debt Security at any office or agency to be maintained by the Issuers in accordance with the provisions of Section 4.02, the Issuers shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Debt Security or Debt Securities of authorized denominations for a like aggregate principal amount.  In no event may Debt Securities be issued as, or exchanged for, bearer securities.

 

Unless and until otherwise determined by the Issuers by resolutions of each Issuer’s  Board of Directors, the Debt Security Register shall be kept at the principal corporate trust office of the Trustee and, for this purpose, the Trustee shall be designated “Registrar.”

 

Debt Securities of any series (other than a Global Security, except as set forth below) may be exchanged for a like aggregate principal amount of Debt Securities of the same series of other authorized denominations.  Subject to Section 2.15, Debt Securities to be exchanged shall be surrendered at the office or agency to be maintained by the Issuers as provided in Section 4.02, and the Issuers shall execute and the Trustee shall authenticate and deliver in exchange therefor the Debt Security or Debt Securities which the Holder making the exchange shall be entitled to receive.

 

(b)           All Debt Securities presented or surrendered for registration of transfer, exchange or payment shall (if so required by the Issuers, the Trustee or the Registrar) be duly endorsed or be accompanied by a written instrument or instruments of transfer, in form satisfactory to the Issuers, the Trustee and the Registrar, duly executed by the Holder or his attorney duly authorized in writing.

 

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

 

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No service charge shall be made for any exchange or registration of transfer of Debt Securities (except as provided by Section 2.09), but the Issuers may require payment of a sum sufficient to cover any tax, fee, assessment or other governmental charge that may be imposed in relation thereto, other than those expressly provided in this Indenture to be made at the Issuers’ own expense or without expense or without charge to the Holders.

 

The Issuers shall not be required (i) to issue, register the transfer of or exchange any Debt Securities for a period of 15 days next preceding any mailing of notice of redemption of Debt Securities of such series or (ii) to register the transfer of or exchange any Debt Securities selected, called or being called for redemption.

 

Prior to the due presentation for registration of transfer of any Debt Security, the Issuers, the Guarantors, the Trustee, any paying agent or any Registrar may deem and treat the Person in whose name a Debt Security is registered as the absolute owner of such Debt Security for the purpose of receiving payment of or on account of the principal of, and premium, if any, and (subject to Section 2.12) interest on, such Debt Security and for all other purposes whatsoever, whether or not such Debt Security is overdue, and none of the Issuers, the Guarantors, the Trustee, any paying agent or any Registrar shall be affected by notice to the contrary.

 

None of the Issuers, the Guarantors, the Trustee, any agent of the Trustee, any paying agent or any Registrar will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests of a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

Section 2.08          Temporary Debt Securities.  Pending the preparation of definitive Debt Securities of any series, the Issuers may execute and the Trustee shall authenticate and deliver temporary Debt Securities (printed, lithographed, photocopied, typewritten or otherwise produced) of any authorized denomination, and substantially in the form of the definitive Debt Securities in lieu of which they are issued, in registered form with such omissions, insertions and variations as may be appropriate for temporary Debt Securities, all as may be determined by the Issuers with the concurrence of the Trustee.  Temporary Debt Securities may contain such reference to any provisions of this Indenture as may be appropriate.  Every temporary Debt Security shall be executed by the Issuers and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Debt Securities.

 

If temporary Debt Securities of any series are issued, the Issuers will cause definitive Debt Securities of such series to be prepared without unreasonable delay.  After the preparation of definitive Debt Securities of such series, the temporary Debt Securities of such series shall be exchangeable for definitive Debt Securities of such series upon surrender of the temporary Debt Securities of such series at the office or agency of the Issuers at a Place of Payment for such series, without charge to the Holder thereof, except as provided in Section 2.07 in connection with a transfer. Upon surrender for cancellation of any one or more temporary Debt Securities of any series, the Issuers shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Debt Securities of the same series of authorized denominations and of like tenor.  Until so exchanged, temporary Debt Securities of any series

 

14

 

shall in all respects be entitled to the same benefits under this Indenture as definitive Debt Securities of such series.

 

Upon any exchange of a portion of a temporary Global Security for a definitive Global Security or for the individual Debt Securities represented thereby pursuant to Section 2.07 or this Section 2.08, the temporary Global Security shall be endorsed by the Trustee to reflect the reduction of the principal amount evidenced thereby, whereupon the principal amount of such temporary Global Security shall be reduced for all purposes by the amount to be exchanged and endorsed.

 

Section 2.09          Mutilated, Destroyed, Lost or Stolen Debt Securities.  If  (a) any mutilated Debt Security is surrendered to the Trustee at its corporate trust office or (b) the Issuers and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Debt Security, and there is delivered to the Issuers and the Trustee such security or indemnity as may be required by them to save each of them and any paying agent harmless, and neither the Issuers nor the Trustee receives notice that such Debt Security has been acquired by a protected purchaser, then the Issuers shall execute and, upon an Issuer Order, the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Debt Security, a new Debt Security of the same series of like tenor, form, terms and principal amount, bearing a number not contemporaneously Outstanding.  Upon the issuance of any substituted Debt Security, the Issuers or the Trustee may require the payment of a sum sufficient to cover any tax, fee, assessment or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith.  In case any Debt Security which has matured or is about to mature or which has been called for redemption shall become mutilated or be destroyed, lost or stolen, the Issuers may, instead of issuing a substituted Debt Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Debt Security) if the applicant for such payment shall furnish the Issuers and the Trustee with such security or indemnity as either may require to save it harmless from all risk, however remote, and, in case of destruction, loss or theft, evidence to the satisfaction of the Issuers and the Trustee of the destruction, loss or theft of such Debt Security and of the ownership thereof.

 

Every substituted Debt Security of any series issued pursuant to the provisions of this Section 2.09 by virtue of the fact that any Debt Security is destroyed, lost or stolen shall constitute an original additional contractual obligation of the Issuers, whether or not the destroyed, lost or stolen Debt Security shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Debt Securities of that series duly issued hereunder.  All Debt Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Debt Securities, and shall preclude any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

 

Section 2.10          Cancellation of Surrendered Debt Securities.  All Debt Securities surrendered for payment, redemption, registration of transfer or exchange shall, if surrendered to an Issuer or any paying agent or a Registrar, be delivered to the Trustee for cancellation by it, or if surrendered to the Trustee, shall be canceled by it, and no Debt Securities shall be issued in

 

15

 

lieu thereof except as expressly permitted by any of the provisions of this Indenture.  All canceled Debt Securities held by the Trustee shall be destroyed (subject to the record retention requirements of the Exchange Act) and certification of their destruction delivered to the Issuers, unless otherwise directed.  On request of the Issuers, the Trustee shall deliver to the Issuers canceled Debt Securities held by the Trustee.  If any Issuer shall acquire any of the Debt Securities, however, such acquisition shall not operate as a redemption or satisfaction of the Debt represented thereby unless and until the same are delivered or surrendered to the Trustee for cancellation.  The Issuers may not issue new Debt Securities to replace Debt Securities it has redeemed, paid or delivered to the Trustee for cancellation.

 

Section 2.11          Provisions of the Indenture and Debt Securities for the Sole Benefit of the Parties and the Holders.  Nothing in this Indenture or in the Debt Securities, expressed or implied, shall give or be construed to give to any Person, other than the parties hereto, the holders of any Senior Indebtedness, the Holders or any Registrar or paying agent, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all its covenants, conditions and provisions being for the sole benefit of the parties hereto, the Holders and any Registrar and paying agents.

 

Section 2.12          Payment of Interest; Interest Rights Preserved.

 

(a)           Interest on any Debt Security that is payable and is punctually paid or duly provided for on any interest payment date shall be paid to the Person in whose name such Debt Security is registered at the close of business on the regular record date for such interest notwithstanding the cancellation of such Debt Security upon any transfer or exchange subsequent to the regular record date.  Payment of interest on Debt Securities shall be made at the corporate trust office of the Trustee (except as otherwise specified pursuant to Section 2.03), or at the option of the Issuers, by check mailed to the address of the Person entitled thereto as such address shall appear in the Debt Security Register or, if provided pursuant to Section 2.03 and in accordance with arrangements satisfactory to the Trustee, at the option of the Holder by wire transfer to an account designated by the Holder.

 

(b)           Subject to the foregoing provisions of this Section 2.12 and Section 2.17, each Debt Security of a particular series delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Debt Security of the same series shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Debt Security.

 

Section 2.13          Securities Denominated in Dollars.  Except as otherwise specified pursuant to Section 2.03 for Debt Securities of any series, payment of the principal of, and premium, if any, and interest on, Debt Securities of such series will be made in Dollars.

 

Section 2.14          Wire Transfers.  Notwithstanding any other provision to the contrary in this Indenture, the Issuers may make any payment of moneys required to be deposited with the Trustee on account of principal of, or premium, if any, or interest on, the Debt Securities (whether pursuant to optional or mandatory redemption payments, interest payments or otherwise) by wire transfer in immediately available funds to an account designated by the Trustee before 11:00 a.m., New York City time, on the date such moneys are to be paid to the Holders of the Debt Securities in accordance with the terms hereof.

 

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Section 2.15          Securities Issuable in the Form of a Global Security.

 

(a)           If the Issuers shall establish pursuant to Sections 2.01 and 2.03 that the Debt Securities of a particular series are to be issued in whole or in part in the form of one or more Global Securities, then the Issuers shall execute and the Trustee or its agent shall, in accordance with Section 2.05, authenticate and deliver, such Global Security or Securities, which  shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding Debt Securities of such series to be represented by such Global Security or Securities, or such portion thereof as the Issuers shall specify in an Officers’ Certificate,  shall be registered in the name of the Depositary for such Global Security or Securities or its nominee,  shall be delivered by the Trustee or its agent to the Depositary or pursuant to the Depositary’s instruction and  shall bear a legend substantially to the following effect:

 

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

 

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO HEREIN.”

 

or such other legend as may then be required by the Depositary for such Global Security or Securities.

 

(b)           Notwithstanding any other provision of this Section 2.15 or of Section 2.07 to the contrary, and subject to the provisions of paragraph (c) below, unless the terms of a Global Security expressly permit such Global Security to be exchanged in whole or in part for definitive Debt Securities in registered form, a Global Security may be transferred, in whole but not in part and in the manner provided in Section 2.07, only by the Depositary to a nominee of the Depositary for such Global Security, or by a nominee of the Depositary to the Depositary or another nominee of the Depositary, or by the Depositary or a nominee of the Depositary to a successor Depositary for such Global Security selected or approved by the Issuers, or to a nominee of such successor Depositary.

 

(c)           (i)            If at any time the Depositary for a Global Security or Securities notifies the Issuers that it is unwilling or unable to continue as Depositary for such Global Security or

 

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Securities or if at any time the Depositary for the Debt Securities for such series shall no longer be eligible or in good standing under the Exchange Act or other applicable statute, rule or regulation, the Issuers shall appoint a successor Depositary with respect to such Global Security or Securities.  If a successor Depositary for such Global Security or Securities is not appointed by the Issuers within 90 days after the Issuers receive such notice or becomes aware of such ineligibility, the Issuers shall execute, and the Trustee or its agent, upon receipt of an Issuer Order for the authentication and delivery of such individual Debt Securities of such series in exchange for such Global Security or Securities, will authenticate and deliver, individual Debt Securities of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of the Global Security or Securities in exchange for such Global Security or Securities.

 

(ii)           If an Event of Default occurs and the Depositary for a Global Security or Securities notifies the Trustee of its decision to require that the Debt Securities of any series or portion thereof issued or issuable in the form of one or more Global Securities shall no longer be represented by such Global Security or Securities, the Issuers shall appoint a successor Depositary with respect to such Global Security or Securities.  In such event the Issuers will execute, and the Trustee, upon receipt of an Issuer Order for the authentication and delivery of individual Debt Securities of such series in exchange in whole or in part for such Global Security or Securities, will authenticate and deliver individual Debt Securities of such series of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of such series or portion thereof in exchange for such Global Security or Securities.

 

(iii)          If specified by the Issuers pursuant to Sections 2.01 and 2.03 with respect to Debt Securities issued or issuable in the form of a Global Security, the Depositary for such Global Security may surrender such Global Security in exchange in whole or in part for individual Debt Securities of such series of like tenor and terms in definitive form on such terms as are acceptable to the Issuers, the Trustee and such Depositary.  Thereupon the Issuers shall execute, and the Trustee or its agent upon receipt of an Issuer Order for the authentication and delivery of definitive Debt Securities of such series shall authenticate and deliver, without service charge,  to each Person specified by such Depositary a new Debt Security or Securities of the same series of like tenor and terms and 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 Global Security; and  to such Depositary a new Global Security of like tenor and terms and in an authorized denomination equal to the difference, if any, between the principal amount of the surrendered Global Security and the aggregate principal amount of Debt Securities delivered to Holders thereof.

 

(iv)          In any exchange provided for in any of the preceding three paragraphs, the Issuers will execute and the Trustee or its agent will authenticate and deliver individual Debt Securities. Upon the exchange of the entire principal amount of a Global Security for individual Debt Securities, such Global Security shall be canceled by the Trustee or its agent.  Except as provided in the preceding paragraph, Debt Securities issued in exchange for a Global Security pursuant to this Section 2.15 shall be registered in such names and in such authorized denominations as the Depositary for such Global Security,

 

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pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee or the Registrar.  The Trustee or the Registrar shall deliver such Debt Securities to the Persons in whose names such Debt Securities are so registered.

 

(v)           Payments in respect of the principal of and interest on any Debt Securities registered in the name of the Depositary or its nominee will be payable to the Depositary or such nominee in its capacity as the registered owner of such Global Security.  The Issuers, any Guarantors and the Trustee may treat the Person in whose name the Debt Securities, including the Global Security, are registered as the owner thereof for the purpose of receiving such payments and for any and all other purposes whatsoever.  None of the Issuers, any Guarantors, the Trustee, any Registrar, the paying agent or any agent of the Issuers, any Guarantors or the Trustee will have any responsibility or liability for  any aspect of the records relating to or payments made on account of the beneficial ownership interests of the Global Security by the Depositary or its nominee or any of the Depositary’s direct or indirect participants, or for maintaining, supervising or reviewing any records of the Depositary, its nominee or any of its direct or indirect participants relating to the beneficial ownership interests of the Global Security,  the payments to the beneficial owners of the Global Security of amounts paid to the Depositary or its nominee, or  any other matter relating to the actions and practices of the Depositary, its nominee or any of its direct or indirect participants.  None of the Issuers, any Guarantors, the Trustee or any such agent will be liable for any delay by the Depositary, its nominee, or any of its direct or indirect participants in identifying the beneficial owners of the Debt Securities, and the Issuers, any Guarantors and the Trustee may conclusively rely on, and will be protected in relying on, instructions from the Depositary or its nominee for all purposes (including with respect to the registration and delivery, and the respective principal amounts, of the Debt Securities to be issued).

 

Section 2.16          Medium Term Securities.  Notwithstanding any contrary provision herein, if all Debt Securities of a series are not to be originally issued at one time, it shall not be necessary for each of the Issuers to deliver to the Trustee an Officers’ Certificate, resolutions of each such Issuer’s Board of Directors, supplemental Indenture, Opinion of Counsel or written order or any other document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or prior to the time of authentication of each Debt Security of such series if such documents are delivered to the Trustee or its agent at or prior to the authentication upon original issuance of the first such Debt Security of such series to be issued; provided, that any subsequent request by the Issuers to the Trustee to authenticate Debt Securities of such series upon original issuance shall constitute a representation and warranty by the Issuers that, as of the date of such request, the statements made in the Officers’ Certificate delivered pursuant to Section 2.05 or 13.05 shall be true and correct as if made on such date and that the Opinion of Counsel delivered at or prior to such time of authentication of an original issuance of Debt Securities shall specifically state that it shall relate to all subsequent issuances of Debt Securities of such series that are identical to the Debt Securities issued in the first issuance of Debt Securities of such series.

 

An Issuer Order delivered by the Issuers to the Trustee in the circumstances set forth in the preceding paragraph, may provide that Debt Securities which are the subject thereof will be authenticated and delivered by the Trustee or its agent on original issue from time to time upon the telephonic or written order of Persons designated in such written order (any such telephonic

 

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instructions to be promptly confirmed in writing by such Person) and that such Persons are authorized to determine, consistent with the Officers’ Certificate, supplemental Indenture or resolution of the Board of Directors relating to such written order, such terms and conditions of such Debt Securities as are specified in such Officers’ Certificate, supplemental Indenture or such resolution.

 

Section 2.17          Defaulted Interest.  Any interest on any Debt Security of a particular series which is payable, but is not punctually paid or duly provided for, on the dates and in the manner provided in the Debt Securities of such series and in this Indenture (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder thereof on the relevant record date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Issuers, at their election in each case, as provided in clause (i) or (ii) below:

 

(i)            The Issuers may elect to make payment of any Defaulted Interest to the Persons in whose names the Debt Securities of such series are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Issuers shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Debt Security of such series and the date of the proposed payment, and at the same time the Issuers shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Issuers of such special record date and, in the name and at the expense of the Issuers, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage pre-paid, to each Holder thereof at its address as it appears in the Debt Security Register, not less than 10 days prior to such special record date.  Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Debt Securities of such series are registered at the close of business on such special record date.

 

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

 

Section 2.18          CUSIP Numbers.  The Issuers in issuing the Debt Securities may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the accuracy of such numbers either as printed on the Debt

 

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Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Debt Securities, and any such redemption shall not be affected by any defect in or omission of such numbers.  The Issuers will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

 

ARTICLE III
 REDEMPTION OF DEBT SECURITIES

 

Section 3.01          Applicability of Article.  The provisions of this Article shall be applicable to the Debt Securities of any series which are redeemable before their Stated Maturity except as otherwise specified as contemplated by Section 2.03 for Debt Securities of such series.

 

Section 3.02          Notice of Redemption; Selection of Debt Securities.  In case the Issuers shall desire to exercise the right to redeem all or, as the case may be, any part of the Debt Securities of any series in accordance with their terms, by resolution of the Board of Directors of each Issuer or a supplemental Indenture, the Issuers shall fix a date for redemption and shall give notice of such redemption at least 30 and not more than 60 days prior to the date fixed for redemption to the Holders of Debt Securities of such series so to be redeemed as a whole or in part, in the manner provided in Section 13.03.  The notice if given in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice.  In any case, failure to give such notice or any defect in the notice to the Holder of any Debt Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Debt Security of such series.

 

Each such notice of redemption shall specify (i) the date fixed for redemption, (ii) the redemption price at which Debt Securities of such series are to be redeemed (or the method of calculating such redemption price), (iii) the Place or Places of Payment that payment will be made upon presentation and surrender of such Debt Securities, (iv) that any interest accrued to the date fixed for redemption will be paid as specified in said notice, (v) that the redemption is for a sinking fund payment (if applicable), (vi) that, unless otherwise specified in such notice, if the Issuers default in making such redemption payment or if the Debt Securities of that series are subordinated pursuant to the terms of Article XII, the paying agent is prohibited from making such payment pursuant to the terms of this Indenture, (vii) that on and after said date any interest thereon or on the portions thereof to be redeemed will cease to accrue, (viii) that in the case of Original Issue Discount Securities original issue discount accrued after the date fixed for redemption will cease to accrue, (ix) the terms of the Debt Securities of that series pursuant to which the Debt Securities of that series are being redeemed and (x) 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 Debt Securities of that series.  If less than all the Debt Securities of a series are to be redeemed the notice of redemption shall specify the certificate numbers of any Debt Securities of that series to be redeemed that are not in global form.  In case any Debt Security of a series is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the date fixed for redemption, upon surrender of such Debt Security, a new Debt Security or Debt Securities of that series in principal amount equal to the unredeemed portion thereof, will be issued.

 

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At least five days before the giving of any notice of redemption, unless the Trustee consents to a shorter period, the Issuers shall give written notice to the Trustee of the Redemption Date, the principal amount of Debt Securities to be redeemed and the series and terms of the Debt Securities pursuant to which such redemption will occur.  Such notice shall be accompanied by an Officers’ Certificate and an Opinion of Counsel from the Issuers to the effect that such redemption will comply with the conditions herein, and such notice may be revoked at any time prior to the giving of a notice of redemption to the Holders pursuant to this Section 3.02.  If fewer than all the Debt Securities of a series are to be redeemed, the record date relating to such redemption shall be selected by the Issuers and given in writing to the Trustee, which record date shall be not less than three days after the date of notice to the Trustee.

 

By 11 a.m., New York City time, on the Redemption Date for any Debt Securities, the Issuers shall deposit with the Trustee or with a paying agent (or, if an Issuer is acting as its own paying agent, segregate and hold in trust) an amount of money in Dollars (except as provided pursuant to Section 2.03) sufficient to pay the redemption price of such Debt Securities or any portions thereof that are to be redeemed on that date, together with any interest accrued to the Redemption Date.

 

If less than all the Debt Securities of like tenor and terms of a series are to be redeemed (other than pursuant to mandatory sinking fund redemptions), the Trustee shall select, on a pro rata basis, by lot or by such other method as in its sole discretion it shall deem appropriate and fair, the Debt Securities of that series or portions thereof (in multiples of $1,000) to be redeemed.  In any case where more than one Debt Security of such series is registered in the same name, the Trustee in its discretion may treat the aggregate principal amount so registered as if it were represented by one Debt Security of such series.  The Trustee shall promptly notify the Issuers in writing of the Debt Securities selected for redemption and, in the case of any Debt Securities selected for partial redemption, the principal amount thereof to be redeemed.  If any Debt Security called for redemption shall not be so paid upon surrender thereof on such Redemption Date, the principal, premium, if any, and interest shall bear interest until paid from the Redemption Date at the rate borne by the Debt Securities of that series.  If less than all the Debt Securities of unlike tenor and terms of a series are to be redeemed, the particular Debt Securities to be redeemed shall be selected by the Issuers.  Provisions of this Indenture that apply to Debt Securities called for redemption also apply to portions of Debt Securities called for redemption.

 

Section 3.03          Payment of Debt Securities Called for Redemption.  If notice of redemption has been given as provided in Section 3.02, the Debt Securities or portions of Debt Securities of the series with respect to which such notice has been given shall become due and payable on the date and at the Place or Places of Payment stated in such notice at the applicable redemption price, together with any interest accrued to the date fixed for redemption, and on and after said date (unless the Issuers shall default in the payment of such Debt Securities at the applicable redemption price, together with any interest accrued to said date) any interest on the Debt Securities or portions of Debt Securities of any series so called for redemption shall cease to accrue, and any original issue discount in the case of Original Issue Discount Securities shall cease to accrue.  On presentation and surrender of such Debt Securities at the Place or Places of Payment in said notice specified, the said Debt Securities or the specified portions thereof shall be paid and redeemed by the Issuers at the applicable redemption price, together with any interest accrued thereon to the date fixed for redemption.

 

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Any Debt Security that is to be redeemed only in part shall be surrendered at the Place of Payment with, if the Issuers, the Registrar or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuers, the Registrar and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing, and the Issuers shall execute, and the Trustee shall authenticate and deliver to the Holder of such Debt Security without service charge, a new Debt Security or Debt Securities of the same series, of like tenor and form, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Debt Security so surrendered; except that if a Global Security is so surrendered, the Issuers shall execute, and the Trustee shall authenticate and deliver to the Depositary for such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed portion of the principal of the Global Security so surrendered.  In the case of a Debt Security providing appropriate space for such notation, at the option of the Holder thereof, the Trustee, in lieu of delivering a new Debt Security or Debt Securities as aforesaid, may make a notation on such Debt Security of the payment of the redeemed portion thereof.

 

Section 3.04          Mandatory and Optional Sinking Funds.  The minimum amount of any sinking fund payment provided for by the terms of Debt Securities of any series, resolution of the Board of Directors or a supplemental Indenture 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 Debt Securities of any series, resolution of the Board of Directors or a supplemental Indenture is herein referred to as an “optional sinking fund payment.”

 

In lieu of making all or any part of any mandatory sinking fund payment with respect to any Debt Securities of a series in cash, the Issuers may at their option (a) deliver to the Trustee Debt Securities of that series theretofore purchased or otherwise acquired by the Issuers or (b) receive credit for the principal amount of Debt Securities of that series which have been redeemed either at the election of the Issuers pursuant to the terms of such Debt Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Debt Securities, resolution or supplemental Indenture; provided, that such Debt Securities have not been previously so credited.  Such Debt Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Debt Securities, resolution or supplemental Indenture for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly.

 

Section 3.05          Redemption of Debt Securities for Sinking Fund.  Not less than 60 days prior to each sinking fund payment date for any series of Debt Securities, the Issuers will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, any resolution or supplemental Indenture, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Debt Securities of that series pursuant to this Section 3.05 (which Debt Securities, if not previously redeemed, will accompany such certificate) and whether the Issuers intend to exercise its right to make any permitted optional sinking fund payment with respect to such series.  Such certificate shall also state that no Event of Default has occurred and is continuing with respect to such series.  Such certificate shall be irrevocable and upon its delivery the Issuers shall be obligated to make the cash payment

 

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or payments therein referred to, if any, by 11 a.m., New York City time, on the next succeeding sinking fund payment date.  Failure of the Issuers to deliver such certificate (or to deliver the Debt Securities specified in this paragraph) shall not constitute a Default, but such failure shall require that the sinking fund payment due on the next succeeding sinking fund payment date for that series shall be paid entirely in cash and shall be sufficient to redeem the principal amount of such Debt Securities subject to a mandatory sinking fund payment without the option to deliver or credit Debt Securities as provided in this Section 3.05 and without the right to make any optional sinking fund payment, if any, with respect to such series.

 

Any sinking fund payment or payments (mandatory or optional) made in cash plus any unused balance of any preceding sinking fund payments made in cash which shall equal or exceed $100,000 (or a lesser sum if the Issuers shall so request) with respect to the Debt Securities of any particular series shall be applied by the Trustee on the sinking fund payment date on which such payment is made (or, if such payment is made before a sinking fund payment date, on the sinking fund payment date following the date of such payment) to the redemption of such Debt Securities at the redemption price specified in such Debt Securities, resolution or supplemental Indenture for operation of the sinking fund together with any accrued interest to the date fixed for redemption.  Any sinking fund moneys not so applied or allocated by the Trustee to the redemption of Debt Securities shall be added to the next cash sinking fund payment received by the Trustee for such series and, together with such payment, shall be applied in accordance with the provisions of this Section 3.05.  Any and all sinking fund moneys with respect to the Debt Securities of any particular series held by the Trustee on the last sinking fund payment date with respect to Debt Securities of such series and not held for the payment or redemption of particular Debt Securities shall be applied by the Trustee, together with other moneys, if necessary, to be deposited sufficient for the purpose, to the payment of the principal of the Debt Securities of that series at its Stated Maturity.

 

The Trustee shall select the Debt Securities to be redeemed upon such sinking fund payment date in the manner specified in the last paragraph of Section 3.02 and the Issuers shall cause notice of the redemption thereof to be given in the manner provided in Section 3.02 except that the notice of redemption shall also state that the Debt Securities are being redeemed by operation of the sinking fund.  Such notice having been duly given, the redemption of such Debt Securities shall be made upon the terms and in the manner stated in Section 3.03.

 

The Trustee shall not redeem any Debt Securities of a series with sinking fund moneys or mail any notice of redemption of such Debt Securities by operation of the sinking fund for such series during the continuance of a Default in payment of interest on such Debt Securities or of any Event of Default (other than an Event of Default occurring as a consequence of this paragraph) with respect to such Debt Securities, except that if the notice of redemption of any such Debt Securities shall theretofore have been mailed in accordance with the provisions hereof, the Trustee shall redeem such Debt Securities if cash sufficient for that purpose shall be deposited with the Trustee for that purpose in accordance with the terms of this Article III.  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 such sinking fund shall, during the continuance of such Default or Event of Default, be held as security for the payment of such Debt Securities; provided, however, that in case such Default or Event of Default shall have been cured or waived as provided herein, such moneys shall thereafter be

 

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applied on the next sinking fund payment date for such Debt Securities on which such moneys may be applied pursuant to the provisions of this Section 3.05.

 

ARTICLE IV
 PARTICULAR COVENANTS OF THE ISSUERS

 

Section 4.01          Payment of Principal of, and Premium, If Any, and Interest on, Debt Securities.  The Issuers, for the benefit of each series of Debt Securities, will duly and punctually pay or cause to be paid the principal of, and premium, if any, and interest on, each of the Debt Securities at the place, at the respective times and in the manner provided herein or in the Debt Securities.  Each installment of interest on any Debt Securities not in global form may at the Issuers’ option be paid by mailing checks for such interest payable to the Person entitled thereto pursuant to Section 2.07(a) to the address of such Person as it appears on the Debt Security Register.

 

Principal of and premium and interest on Debt Securities of any series shall be considered paid on the date due if, by 11 a.m., New York City time, on such date the Trustee or any paying agent holds in accordance with this Indenture money sufficient to pay all principal, premium and interest then due and, in the case of Debt Securities subordinated pursuant to the terms of Article XII, the Trustee or such paying agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

 

The Issuers shall pay interest on overdue principal or premium, if any, at the rate specified therefor in the Debt Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

 

Section 4.02          Maintenance of Offices or Agencies for Registration of Transfer, Exchange and Payment of Debt Securities.  The Issuers will maintain in each Place of Payment for any series of Debt Securities an office or agency where Debt Securities of such series may be presented or surrendered for payment, and it shall also maintain (in or outside such Place of Payment) an office or agency where Debt Securities of such series may be surrendered for transfer or exchange and where notices and demands to or upon the Issuers in respect of the Debt Securities of such series and this Indenture may be served.  The Issuers will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Issuers 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 office of the Trustee where its corporate trust business is principally administered in the United States, and the Issuers hereby appoint the Trustee as their agent to receive all presentations, surrenders, notices and demands.

 

The Issuers may also from time to time designate different or additional offices or agencies to be maintained for such purposes (in or outside of such Place of Payment), and may from time to time rescind any such designation; provided, however, that no such designation or rescission shall in any manner relieve the Issuers of their obligations described in the preceding paragraph.  The Issuers will give prompt written notice to the Trustee of any such additional designation or rescission of designation and any change in the location of any such different or additional office or agency.

 

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Section 4.03          Appointment to Fill a Vacancy in the Office of Trustee.  The Issuers, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so that there shall at all times be a Trustee hereunder with respect to each series of Debt Securities.

 

Section 4.04          Duties of Paying Agents, etc.

 

(a)           The Issuers shall cause each paying agent, if any, other than the Trustee, to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 4.04,

 

(i)            that it will hold all sums held by it as such agent for the payment of the principal of, and premium, if any, or interest on, the Debt Securities of any series (whether such sums have been paid to it by the Issuers or by any other obligor on the Debt Securities of such series) in trust for the benefit of the Holders of the Debt Securities of such series;

 

(ii)           that it will give the Trustee notice of any failure by the Issuers (or by any other obligor on the Debt Securities of such series) to make any payment of the principal of, and premium, if any, or interest on, the Debt Securities of such series when the same shall be due and payable; and

 

(iii)          that it will at any time during the continuance of an Event of Default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held by it as such agent.

 

(b)           If any Issuer shall act as its own paying agent, it will, on or before each due date of the principal of, and premium, if any, or interest on, the Debt Securities of any series, set aside, segregate and hold in trust for the benefit of the Holders of the Debt Securities of such series a sum sufficient to pay such principal, premium, if any, or interest so becoming due.  The Issuers will promptly notify the Trustee of any failure by any Issuer to take such action or the failure by any other obligor on such Debt Securities to make any payment of the principal of, and premium, if any, or interest on, such Debt Securities when the same shall be due and payable.

 

(c)           Anything in this Section 4.04 to the contrary notwithstanding, any Issuer may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by such Issuer or any paying agent, as required by this Section 4.04, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by such Issuer or such paying agent.

 

(d)           Whenever the Issuers shall have one or more paying agents with respect to any series of Debt Securities, they will, prior to each due date of the principal of, and premium, if any, or interest on, any Debt Securities of such series, deposit with any such paying agent a sum sufficient to pay the principal, premium or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless any such paying agent is the Trustee) the Issuers will promptly notify the Trustee of its action or failure so to act.

 

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(e)           Anything in this Section 4.04 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section 4.04 is subject to the provisions of Section 11.05.

 

Section 4.05          SEC Reports; Financial Statements.

 

(a)           The Parent Guarantor shall, so long as any Debt Securities are Outstanding, file with the Trustee, within 30 days after the Parent Guarantor files the same with the SEC, copies of the annual reports and the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) that the Parent Guarantor is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.  If the Parent Guarantor is not subject to the requirements of such Section 13 or 15(d), the Parent Guarantor shall file with the Trustee, within 30 days after the Parent Guarantor would have been required to file the same with the SEC, financial statements, including any notes thereto (and with respect to annual reports, an auditors’ report by a firm of established national reputation), and a “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” both comparable to that which the Parent Guarantor would have been required to include in such annual reports, information, documents or other reports if the Parent Guarantor had been subject to the requirements of such Section 13 or 15 (d).  The Issuers shall also comply with the provisions of TIA Section 314(a).

 

(b)           The Issuers shall provide the Trustee with a sufficient number of copies of all reports and other documents and information that the Trustee may be required to deliver to Holders under this Section.

 

Section 4.06          Compliance Certificate.

 

(a)           The Issuers shall, so long as any Debt Securities are Outstanding, deliver to the Trustee, within 120 days after the end of each fiscal year of the Parent Guarantor, an Officers’ Certificate stating that a review of the activities of each Issuer during the preceding fiscal year has been made under the supervision of the Officers signing the certificate with a view to determining whether each Issuer 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 each Issuer 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 hereof, without regard to any grace period or requirement of notice required by this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which such Officer may have knowledge and what action each Issuer is taking or proposes to take with respect thereto) and that to the best of his knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of, or premium, if any, or interest, if any, on the Debt Securities are prohibited or, if such event has occurred, a description of the event and what action the each Issuer or Guarantor is taking or proposes to take with respect thereto.

 

(b)           Each Issuer shall, so long as any Debt Securities are Outstanding, deliver to the Trustee, within 30 days of any Officer of such Issuer becoming aware of the occurrence of any Event of Default, an Officers’ Certificate specifying such Event of Default and what action such Issuer is taking or proposes to take with respect thereto.

 

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Section 4.07          Further Instruments and Acts.  The Issuers will, upon request of the Trustee, execute and deliver such further instruments and do such further acts as may reasonably be necessary or proper to carry out more effectually the purposes of this Indenture.

 

Section 4.08          Existence.  Except as permitted by Article X hereof, each Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence and all rights (charter and statutory) and franchises of such Issuer, provided that such Issuer shall not be required to preserve any such right or franchise, if its Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of such Issuer.

 

Section 4.09          Maintenance of Properties.  Each Issuer shall cause all properties owned by such Issuer or any of its Subsidiaries or used or held for use in the conduct of its business or the business of any such Subsidiary to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of such Issuer may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided that nothing in this Section shall prevent such Issuer from discontinuing the operation or maintenance of any of such properties if such discontinuance is, in the judgment of such Issuer, desirable in the conduct of its business or the business of any such Subsidiary and not disadvantageous in any material respect to the Holders.

 

Section 4.10          Payment of Taxes and Other Claims.  Each Issuer shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies except any such taxes that are being contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders.

 

Section 4.11          Waiver of Certain Covenants.  The Issuers and the Guarantors may, with respect to the Debt Securities of any series, omit in any particular instance to comply with any covenant set forth in this Article IV (except Sections 4.01 through 4.08) or made applicable to such Debt Securities pursuant to Section 2.03, if, before or after the time for such compliance, the Holders of at least a majority in principal amount of the Outstanding Debt Securities of each series affected, waive such compliance in such instance with such covenant, but no such waiver shall extend to or affect such covenant except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Issuers and the Guarantors and the duties of the Trustee in respect of any such covenant shall remain in full force and effect.

 

ARTICLE V
 HOLDERS’ LISTS AND REPORTS BY THE TRUSTEE

 

Section 5.01          Issuers to Furnish Trustee Information as to Names and Addresses of Holders; Preservation of Information.  The Issuers covenant and agree that they will furnish or cause to be furnished to the Trustee with respect to the Debt Securities of each series:

 

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(a)           not more than 10 days after each record date with respect to the payment of interest, if any, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of such record date, and

 

(b)           at such other times as the Trustee may request in writing, within 30 days after the receipt by the Issuers of any such request, a list of similar form and contents as of a date not more than 15 days prior to the time such list is furnished;

 

provided, however, that so long as the Trustee shall be the Registrar, such lists shall not be required to be furnished.

 

The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Holders (i) contained in the most recent list furnished to it as provided in this Section 5.01 or (ii) received by it in the capacity of paying agent or Registrar (if so acting) hereunder.

 

The Trustee may destroy any list furnished to it as provided in this Section 5.01 upon receipt of a new list so furnished.

 

Section 5.02          Communications to Holders.  Holders may communicate pursuant to Section 312(b) of the TIA with other Holders with respect to their rights under this Indenture or the Debt Securities.  The Issuers, the Trustee, the Registrar and anyone else shall have the protection of Section 312(c) of the TIA.

 

Section 5.03          Reports by Trustee.  Within 60 days after each January 31, beginning with the first January 31 following the date of this Indenture, and in any event on or before April 1 in each year, the Trustee shall mail to Holders a brief report dated as of such January 31 that complies with TIA Section 313 (a); provided, however, that if no event described in TIA Section 313 (a) has occurred within the twelve months preceding the reporting date, no report need be transmitted.  The Trustee also shall comply with TIA Section 313 (b).

 

Reports pursuant to this Section 5.03 shall be transmitted by mail:

 

(a)           to all Holders, as the names and addresses of such Holders appear in the Debt Security Register; and

 

(b)           except in the cases of reports under Section 313(b)(2) of the TIA, to each Holder of a Debt Security of any series whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 5.01.

 

A copy of each report at the time of its mailing to Holders shall be filed with the Securities and Exchange Commission and each stock exchange (if any) on which the Debt Securities of any series are listed.  The Issuers agree to notify promptly the Trustee whenever the Debt Securities of any series become listed on any stock exchange and of any delisting thereof.

 

Section 5.04          Record Dates for Action by Holders.  If the Issuers shall solicit from the Holders of Debt Securities of any series any action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action),

 

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the Issuers may, at their option, by resolution of their respective Boards of Directors, fix in advance a record date for the determination of Holders of Debt Securities entitled to take such action, but the Issuers shall have no obligation to do so.  Any such record date shall be fixed at the Issuers’ discretion.  If such a record date is fixed, such action may be sought or given before or after the record date, but only the Holders of Debt Securities of record at the close of business on such record date shall be deemed to be Holders of Debt Securities for the purpose of determining whether Holders of the requisite proportion of Debt Securities of such series Outstanding have authorized or agreed or consented to such action, and for that purpose the Debt Securities of such series Outstanding shall be computed as of such record date.

 

ARTICLE VI
 REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT

 

Section 6.01          Events of Default.  If any one or more of the following shall have occurred and be continuing with respect to Debt Securities of any series (each of the following, an “Event of Default”):

 

(a)           default in the payment of any installment of interest upon any Debt Securities of that series as and when the same shall become due and payable, whether or not such payment shall be prohibited by Article XII, if applicable, and continuance of such default for a period of 30 days; or

 

(b)           default in the payment of the principal of or premium, if any, on any Debt Securities of that series as and when the same shall become due and payable, whether at Stated Maturity, upon redemption, by declaration, upon required repurchase or otherwise, whether or not such payment shall be prohibited by Article XII, if applicable; or

 

(c)           default in the payment of any sinking fund payment with respect to any Debt Securities of that series as and when the same shall become due and payable; or

 

(d)           failure on the part of an Issuer, or if any series of Debt Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee, any of the Guarantors, duly to observe or perform any other of the covenants or agreements on the part of the Issuers, or if applicable, any of the Guarantors, in the Debt Securities of that series, in any resolution of the Board of Directors authorizing the issuance of that series of Debt Securities, in this Indenture with respect to such series or in any supplemental Indenture with respect to such series (other than a covenant a default in the performance of which is elsewhere in this Section specifically dealt with), continuing for a period of 60 days after the date on which written notice specifying such failure and requiring the Issuers, or if applicable, the Guarantors, to remedy the same shall have been given to the Issuers, or if applicable, the Guarantors, by the Trustee or to the Issuers, or if applicable, the Guarantors, and the Trustee by the Holders of at least 25% in aggregate principal amount of the Debt Securities of that series at the time Outstanding; or

 

(e)           any Issuer, or if any series of Debt Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee, any of the Guarantors, pursuant to or within the meaning of any Bankruptcy Law,

 

(i)            commences a voluntary case,

 

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(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; or

 

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

 

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

 

(i)            is for relief against any Issuers, or if any series of Debt Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee, any of the Guarantors, as debtor in an involuntary case,

 

(ii)           appoints a Custodian of any Issuer, or if any series of Debt Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee,  any of the Guarantors, or a Custodian for all or substantially all of the property of any Issuers, or if applicable, any Guarantors, or

 

(iii)          orders the liquidation of any Issuer, or if any series of Debt Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee, any of the Guarantors,

 

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

 

(g)           if any series of Debt Securities Outstanding under this Indenture is entitled to the benefits of the Guarantee, the Guarantee of any Guarantors ceases to be in full force and effect with respect to Debt Securities of that series (except as otherwise provided in this Indenture) or is declared null and void in a judicial proceeding or any of the Guarantors denies or disaffirms its obligations under this Indenture or such Guarantee; or

 

(h)           any other Event of Default provided with respect to Debt Securities of that series;

 

then and in each and every case that an Event of Default described in clause (a), (b), (c), (d), (g), or (h) with respect to Debt Securities of that series at the time Outstanding occurs and is continuing, unless the principal of, premium, if any, and accrued and unpaid interest on all the Debt Securities of that series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Debt Securities of that series then Outstanding hereunder, by notice in writing to the Issuers (and to the Trustee if given by Holders), may declare the principal of (or, if the Debt Securities of that series are Original Issue Discount Debt Securities, such portion of the principal amount as may be specified in the terms of that series), premium, if any, and interest on all the Debt Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Debt Securities of that series contained to the contrary notwithstanding.  If an Event of Default described in clause (e) or (f) occurs with respect to any Issuer, then and in each and every such case, unless the principal of and accrued and unpaid interest on all the Debt Securities shall have become due and payable, the principal of (or, if the Debt Securities of that series are Original Issue Discount Debt

 

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Securities, such portion of the principal amount as may be specified in the terms thereof), premium, if any, and interest on all the Debt Securities then Outstanding hereunder shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders, anything in this Indenture or in the Debt Securities contained to the contrary notwithstanding.

 

The Holders of a majority in aggregate principal amount of the Debt Securities of a particular series by written notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree of a court of competent jurisdiction already rendered and if all existing Events of Default with respect to that series have been cured or waived except nonpayment of principal, premium, if any, or interest that has become due solely because of acceleration.  Upon any such rescission, the parties hereto shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the parties hereto shall continue as though no such proceeding had been taken.

 

Section 6.02          Collection of Debt by Trustee, etc.  If an Event of Default occurs and is continuing, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid or enforce the performance of any provision of the Debt Securities of the affected series or this Indenture, and may prosecute any such action or proceedings to judgment or final decree, and may enforce any such judgment or final decree against any of the Guarantors or the Issuers or any other obligor upon the Debt Securities of such series (and collect in the manner provided by law out of the property of any of the Guarantors or the Issuers or any other obligor upon the Debt Securities of such series wherever situated the moneys adjudged or decreed to be payable).

 

In case there shall be pending proceedings for the bankruptcy or for the reorganization of any of the Guarantors or the Issuers or any other obligor upon the Debt Securities of any series under any Bankruptcy Law, or in case a Custodian shall have been appointed for its property, or in case of any other similar judicial proceedings relative to any of the Guarantors or the Issuers or any other obligor upon the Debt Securities of any series, its creditors or its property, the Trustee, irrespective of whether the principal of Debt Securities of any series shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 6.02, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal, premium, if any, and interest (or, if the Debt Securities of such series are Original Issue Discount Debt Securities, such portion of the principal amount as may be specified in the terms of such series) owing and unpaid in respect of the Debt Securities of such series, and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for reasonable compensation to the Trustee, its agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith) and of the Holders thereof allowed in any such judicial proceedings relative to any of the Guarantors or the Issuers, or any other obligor upon the Debt Securities of such series, its creditors or its property, and to collect and receive any moneys or other property payable or deliverable on any such claims, and to distribute all amounts received

 

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with respect to the claims of such Holders and of the Trustee on their behalf, and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of such Holders to make payments to the Trustee, and, in the event that the Trustee shall consent to the making of payments directly to such Holders, to pay to the Trustee such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith.

 

All rights of action and of asserting claims under this Indenture, or under any of the Debt Securities of any series, may be enforced by the Trustee without the possession of any such Debt Securities, or the production thereof in any trial or other proceedings relative thereto, and any such action or proceedings instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment (except for any amounts payable to the Trustee pursuant to Section 7.06) shall be for the ratable benefit of the Holders of all the Debt Securities in respect of which such action was taken.

 

In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Section 6.03          Application of Moneys Collected by Trustee.  Any moneys or other property collected by the Trustee pursuant to Section 6.02 with respect to Debt Securities of any series shall be applied, after giving effect to the provisions of Article XII, if applicable, in the order following, at the date or dates fixed by the Trustee for the distribution of such moneys or other property, upon presentation of the several Debt Securities of such series in respect of which moneys or other property have been collected, and the notation thereon of the payment, if only partially paid, and upon surrender thereof if fully paid:

 

FIRST:  To the payment of all money due the Trustee pursuant to Section 7.06;

 

SECOND:  In case the principal of the Outstanding Debt Securities in respect of which such moneys have been collected shall not have become due, to the payment of interest on the Debt Securities of such series in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the rate or Yield to Maturity (in the case of Original Issue Discount Debt Securities) borne by the Debt Securities of such series, such payments to be made ratably to the Persons entitled thereto, without discrimination or preference;

 

THIRD:  In case the principal of the Outstanding Debt Securities in respect of which such moneys have been collected shall have become due, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon the Debt Securities of such series for principal and premium, if any, and interest, with interest on the overdue principal and premium, if any, and (to the extent that such interest has been collected by the Trustee) upon overdue installments

 

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of interest at the rate or Yield to Maturity (in the case of Original Issue Discount Debt Securities) borne by the Debt Securities of such series; and, in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Debt Securities of such series, then to the payment of such principal and premium, if any, and interest, without preference or priority of principal and premium, if any, over interest, or of interest over principal and premium, if any, or of any installment of interest over any other installment of interest, or of any Debt Security of such series over any Debt Security of such series, ratably to the aggregate of such principal and premium, if any, and interest; and

 

FOURTH:  The remainder, if any, shall be paid to the Guarantors or the Issuers, as applicable, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct.

 

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.03.  At least 15 days before such record date, the Issuers shall mail to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid.

 

Section 6.04          Limitation on Suits by Holders.  No Holder of any Debt Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any action or proceeding at law or in equity or in bankruptcy or otherwise, upon or under or with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such Holder previously shall have given to the Trustee written notice of an Event of Default with respect to Debt Securities of that same series and of the continuance thereof and unless the Holders of not less than 25% in aggregate principal amount of the Outstanding Debt Securities of that series shall have made written request upon the Trustee to institute such action or proceedings in respect of such Event of Default in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity or security as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee, for 60 days after its receipt of such notice, request and offer of indemnity or security shall have failed to institute any such action or proceedings and no direction inconsistent with such written request shall have been given to the Trustee pursuant to Section 6.06; it being understood and intended, and being expressly covenanted by the Holder of every Debt Security with every other Holder and the Trustee, that no one or more Holders shall have any right in any manner whatever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any Holders, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all such Holders.  For the protection and enforcement of the provisions of this Section 6.04, each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

Notwithstanding any other provision in this Indenture, however, the right of any Holder of any Debt Security to receive payment of the principal of, and premium, if any, and (subject to Section 2.12) interest on, such Debt Security, on or after the respective due dates expressed in such Debt Security, and to institute 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.

 

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Section 6.05          Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of Default.  All powers and remedies given by this Article VI to the Trustee or to the Holders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Holders, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder to exercise any right or power accruing upon any Default occurring and continuing as aforesaid, shall impair any such right or power, or shall be construed to be a waiver of any such Default or an acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article VI or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders.

 

Section 6.06          Rights of Holders of Majority in Principal Amount of Debt Securities to Direct Trustee and to Waive Default.  The Holders of not less than a majority in aggregate principal amount of the Debt Securities of any series at the time Outstanding shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or of exercising any right, trust or power conferred on the Trustee, with respect to the Debt Securities of such series; provided, however, that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture, and that subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee being advised by counsel shall determine that the action so directed may not lawfully be taken or is inconsistent with any provision of this Indenture, or if the Trustee shall by a responsible officer or officers determine that the action so directed would involve it in personal liability or would be unduly prejudicial to Holders of Debt Securities of such series not taking part in such direction; and provided, further, however, that nothing in this Indenture contained shall impair the right of the Trustee to take any action deemed proper by the Trustee and which is not inconsistent with such direction by such Holders.  The Holders of not less than a majority in aggregate principal amount of the Debt Securities of any series at the time Outstanding may on behalf of the Holders of all the Debt Securities of that series waive any past Default or Event of Default and its consequences for that series, except a Default or Event of Default in the payment of the principal of, and premium, if any, or interest on, any of the Debt Securities and a Default or Event of Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder affected thereby.  In case of any such waiver, such Default shall cease to exist, any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture, and the Guarantors, the Issuers, the Trustee and the Holders of the Debt Securities of that series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

 

Section 6.07          Trustee to Give Notice of Events of Defaults Known to It, but May Withhold Such Notice in Certain Circumstances.  The Trustee shall, within 90 days after the occurrence of an Event of Default, or if later, within 30 days after the Trustee obtains actual knowledge of the Event of Default, with respect to a series of Debt Securities give to the Holders thereof, in the manner provided in Section 13.03, notice of all Events of Default with respect to such series known to the Trustee, unless such Events of Default shall have been cured or waived before the giving of such notice; provided, that, except in the case of an Event of  Default in the payment of the principal of, or premium, if any, or interest on, any of the Debt Securities of such

 

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series or in the making of any sinking fund payment with respect to the Debt Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a committee of directors or responsible officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders thereof.

 

Section 6.08          Requirement of an Undertaking to Pay Costs in Certain Suits under the Indenture or Against the Trustee.  All parties to this Indenture agree, and each Holder of any Debt Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit in the manner and to the extent provided in the TIA, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 6.08 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 25 percent in principal amount of the Outstanding Debt Securities of that series or to any suit instituted by any Holder for the enforcement of the payment of the principal of, or premium, if any, or interest on, any Debt Security on or after the due date for such payment expressed in such Debt Security.

 

ARTICLE VII
 CONCERNING THE TRUSTEE

 

Section 7.01          Certain Duties and Responsibilities.  The Trustee, prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture.  In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

 

No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, its own bad faith or its own willful misconduct, except that:

 

(a)           this paragraph shall not be construed to limit the effect of the first paragraph of this Section 7.01;

 

(b)           prior to the occurrence of an Event of Default with respect to the Debt Securities of a series and after the curing or waiving of all Events of Default with respect to such series which may have occurred:

 

(i)            the duties and obligations of the Trustee with respect to Debt Securities of any series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations with respect to such series as are specifically set forth in this Indenture, and no implied

 

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covenants or obligations with respect to such series shall be read into this Indenture against the Trustee;

 

(ii)           in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; but the Trustee shall examine the evidence furnished to it pursuant to Sections 4.05 and 4.06 to determine whether or not such evidence conforms to the requirement of this Indenture;

 

(iii)          the Trustee shall not be liable for an error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(iv)          the Trustee shall not be liable with respect to any action taken or omitted to be taken by it with respect to Debt Securities of any series in good faith in accordance with the direction of the Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of that series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to Debt Securities of such series.

 

None of the provisions of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any personal financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

Section 7.02          Certain Rights of Trustee.  Except as otherwise provided in Section 7.01:

 

(a)           the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)           any request, direction, order or demand of an Issuer mentioned herein shall be sufficiently; evidenced by an Issuer Order (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors of an Issuer may be evidenced to the Trustee by a copy thereof certified by such Issuer’s Secretary or Assistant Secretary;

 

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

 

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

 

(e)           the Trustee shall not be liable for any action taken or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(f)            prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, approval or other paper or document, unless requested in writing to do so by the Holders of a majority in aggregate principal amount of the then Outstanding Debt Securities of a series affected by such matter; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is not, in the opinion of the Trustee, reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding, and the reasonable expense of every such investigation shall be paid by the Issuers or, if paid by the Trustee, shall be repaid by the Issuers upon demand;

 

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

 

(h)           if any property other than cash shall at any time be subject to a Lien in favor of the Holders, the Trustee, if and to the extent authorized by a receivership or bankruptcy court of competent jurisdiction or by the supplemental instrument subjecting such property to such Lien, shall be entitled to make advances for the purpose of preserving such property or of discharging tax Liens or other prior Liens or encumbrances thereon.

 

Section 7.03          Trustee Not Liable for Recitals in Indenture or in Debt Securities.  The recitals contained herein, in the Debt Securities (except the Trustee’s certificate of authentication) shall be taken as the statements of the Issuers, and the Trustee assumes no responsibility for the correctness of the same.  The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Debt Securities of any series, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Debt Securities and perform its obligations hereunder, and that the statements made by it or to be made by it in a Statement of Eligibility and Qualification on Form T-1 supplied to the Issuers are

 

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true and accurate.  The Trustee shall not be accountable for the use or application by the Issuers of any of the Debt Securities or of the proceeds thereof.

 

Section 7.04          Trustee, Paying Agent or Registrar May Own Debt Securities.  The Trustee or any paying agent or Registrar, in its individual or any other capacity, may become the owner or pledgee of Debt Securities and subject to the provisions of the TIA relating to conflicts of interest and preferential claims may otherwise deal with the Issuers with the same rights it would have if it were not Trustee, paying agent or Registrar.

 

Section 7.05          Moneys Received by Trustee to Be Held in Trust.  Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for interest on any moneys received by it hereunder.  So long as no Event of Default shall have occurred and be continuing, all interest allowed on any such moneys shall be paid from time to time to the Issuers upon an Issuer Order.

 

Section 7.06          Compensation and Reimbursement.  The Issuers covenant and agree to pay in Dollars to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation for all services rendered by it hereunder (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and, except as otherwise expressly provided herein, the Issuers will pay or reimburse in Dollars the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents, attorneys and counsel and of all Persons not regularly in its employ), including without limitation, Section 6.02, except any such expense, disbursement or advances as may arise from its negligence, willful misconduct or bad faith.  The Issuers also covenant to indemnify in Dollars the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on the part of the Trustee, arising out of or in connection with the acceptance or administration of this trust or trusts hereunder, including the reasonable costs and expenses of defending itself against any claim of liability in connection with the exercise or performance of any of its powers or duties hereunder.  The obligations of the Issuers under this Section 7.06 to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional Debt hereunder and shall survive the satisfaction and discharge of this Indenture.  The Issuers and the Holders agree that such additional Debt shall be secured by a Lien prior to that of the Debt Securities upon all property and funds held or collected by the Trustee, as such, except funds held in trust for the payment of principal of, and premium, if any, or interest on, particular Debt Securities.

 

When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(e) or (f) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

Section 7.07          Right of Trustee to Rely on an Officers’ Certificate Where No Other Evidence Specifically Prescribed.  Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable

 

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that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof.

 

Section 7.08          Separate Trustee; Replacement of Trustee.  The Issuers may, but need not, appoint a separate Trustee for any one or more series of Debt Securities.  The Trustee may resign with respect to one or more or all series of Debt Securities at any time by giving notice to the Issuers.  The Holders of a majority in principal amount of the Debt Securities of a particular series may remove the Trustee for such series and only such series by so notifying the Trustee and may appoint a successor Trustee.  The Issuers shall remove the Trustee if:

 

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

 

(b)           the Trustee is adjudged bankrupt or insolvent;

 

(c)           a Custodian takes charge of the Trustee or its property; or

 

(d)           the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns, is removed by the Issuers or by the Holders of a majority in principal amount of the Debt Securities of a particular series and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee.  No resignation or removal of the Trustee and no appointment of a successor Trustee shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of this Section 7.08.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers.  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 Debt Securities of each applicable series.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.06.

 

If a successor Trustee does not take office within 60 days after the retiring Trustee gives notice of resignation or is removed, the retiring Trustee or the Holders of 25% in principal amount of the Debt Securities of any applicable series may petition any court of competent jurisdiction for the appointment of a successor Trustee for the Debt Securities of such series.

 

If the Trustee fails to comply with Section 7.10, any Holder of Debt Securities of any applicable series may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee for the Debt Securities of such series.

 

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Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuers’ obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.

 

In the case of the appointment hereunder of a separate or successor Trustee with respect to the Debt Securities of one or more series, the Issuers, any retiring Trustee and each successor or separate Trustee with respect to the Debt Securities of any applicable series shall execute and deliver an Indenture supplemental hereto (i) which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of any retiring Trustee with respect to the Debt Securities of any series as to which any such retiring Trustee is not retiring shall continue to be vested in such retiring Trustee and (ii) that shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one trustee, it being understood that nothing herein or in such supplemental Indenture shall constitute such Trustees co-trustees of the same trust and that each such separate, retiring or successor 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.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation or banking association without any further act shall be the successor Trustee.

 

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

 

Section 7.10          Eligibility; Disqualification.  The Trustee shall at all times satisfy the requirements of Section 310(a) of the TIA.  The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.  No obligor upon the Debt Securities of a particular series or Person directly or indirectly controlling, controlled by or under common control with such obligor shall serve as Trustee for the Debt Securities of such series.  The Trustee shall comply with Section 310(b) of the TIA; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the TIA this Indenture or any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuers are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the TIA are met.

 

Section 7.11          Preferential Collection of Claims Against Issuers.  The Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA.  A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated therein.

 

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Section 7.12          Compliance with Tax Laws.  The Trustee hereby agrees to comply with all U.S. Federal income tax information reporting and withholding requirements applicable to it with respect to payments of premium (if any) and interest on the Debt Securities, whether acting as Trustee, Registrar, paying agent or otherwise with respect to the Debt Securities.

 

ARTICLE VIII
 CONCERNING THE HOLDERS

 

Section 8.01          Evidence of Action by Holders.  Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount of the Debt Securities of any or all series may take action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in Person or by agent or proxy appointed in writing, (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Section 5.02, (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders or (d) in the case of Debt Securities evidenced by a Global Security, by any electronic transmission or other message, whether or not in written format, that complies with the Depositary’s applicable procedures.

 

Section 8.02          Proof of Execution of Instruments and of Holding of Debt Securities.  Subject to the provisions of Sections 7.01, 7.02 and 13.09, proof of the execution of any instrument by a Holder or his agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The ownership of Debt Securities of any series shall be proved by the Debt Security Register or by a certificate of the Registrar for such series. The Trustee may require such additional proof of any matter referred to in this Section 8.02 as it shall deem necessary.

 

Section 8.03          Who May Be Deemed Owner of Debt Securities.  Prior to due presentment for registration of transfer of any Debt Security, the Issuers, the Guarantors, the Trustee, any paying agent and any Registrar may deem and treat the Person in whose name any Debt Security shall be registered upon the books of the Issuers as the absolute owner of such Debt Security (whether or not such Debt Security shall be overdue and notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of or on account of the principal of and premium, if any, and (subject to Section 2.12) interest on such Debt Security and for all other purposes, and none of the Issuers, the Guarantors or the Trustee nor any paying agent nor any Registrar shall be affected by any notice to the contrary; and all such payments so made to any such Holder for the time being, or upon his order, shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any such Debt Security.

 

None of the Issuers, the Guarantors, the Trustee, any paying agent or any Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

 

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Section 8.04          Instruments Executed by Holders Bind Future Holders.  At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Debt Securities of any series specified in this Indenture in connection with such action and subject to the following paragraph, any Holder of a Debt Security which is shown by the evidence to be included in the Debt Securities the Holders of which have consented to such action may, by filing written notice with the Trustee at its corporate trust office and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Debt Security.  Except as aforesaid any such action taken by the Holder of any Debt Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Debt Security and of any Debt Security issued upon transfer thereof or in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made upon such Debt Security or such other Debt Securities.  Any action taken by the Holders of the percentage in aggregate principal amount of the Debt Securities of any series specified in this Indenture in connection with such action shall be conclusively binding upon the Issuers, the Guarantors, the Trustee and the Holders of all the Debt Securities of such series.

 

The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders of Debt Securities entitled to give their consent or take any other action required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders of Debt Securities at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders of Debt Securities after such record date.  No such consent shall be valid or effective for more than 120 days after such record date unless the consent of the Holders of the percentage in aggregate principal amount of the Debt Securities of such series specified in this Indenture shall have been received within such 120-day period.

 

ARTICLE IX
 SUPPLEMENTAL INDENTURES

 

Section 9.01          Purposes for Which Supplemental Indenture May Be Entered into Without Consent of Holders.  The Issuers and any Guarantors, when authorized by resolutions of each Issuer’s Board of Directors, and the Trustee may from time to time and at any time, without the consent of Holders, enter into an Indenture or Indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof) for one or more of the following purposes:

 

(a)           to evidence the succession pursuant to Article X of another Person to any Issuer, or successive successions, and the assumption by the Successor Company (as defined in Section 10.01) of the covenants, agreements and obligations of its predecessor Issuer in this Indenture and in the Debt Securities;

 

(b)           to surrender any right or power herein conferred upon the Issuers or the Guarantors, to add to the covenants of the Issuers or the Guarantors such further covenants, restrictions, conditions or provisions for the protection of the Holders of all or any series of Debt

 

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Securities (and if such covenants are to be for the benefit of less than all series of Debt Securities, stating that such covenants are expressly being included solely for the benefit of such series) as the Board of Directors shall consider to be for the protection of the Holders of such Debt Securities, and to make the occurrence, or the occurrence and continuance, of a Default in any of such additional covenants, restrictions, conditions or provisions a Default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture; provided, that in respect of any such additional covenant, restriction, condition or provision 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 or may limit the right of the Holders of a majority in aggregate principal amount of any or all series of Debt Securities to waive such Default;

 

(c)           to cure any ambiguity or omission or to correct or supplement any provision contained herein, in any supplemental Indenture or in any Debt Securities of any series that may be defective or inconsistent with any other provision contained herein, in any supplemental Indenture or in the Debt Securities of such series; to convey, transfer, assign, mortgage or pledge any property to or with the Trustee, or to make such other provisions in regard to matters or questions arising under this Indenture as shall not adversely affect the interests of any Holders of Debt Securities of any series;

 

(d)           to permit the qualification of this Indenture or any Indenture supplemental hereto under the TIA as then in effect, except that nothing herein contained shall permit or authorize the inclusion in any Indenture supplemental hereto of the provisions referred to in Section 316(a)(2) of the TIA;

 

(e)           to change or eliminate any restrictions on the payment of principal of, or premium, if any, on, Debt Securities; provided, that any such action shall not adversely affect the interests of the Holders of Debt Securities of any series in any material respect or permit or facilitate the issuance of Debt Securities of any series in uncertificated form;

 

(f)            to reflect the release of any Guarantor in accordance with Article XIV

 

(g)           in the case of any Debt Securities subordinated pursuant to Article XII, to make any change in Article XII that would limit or terminate the benefits available to any holder of Senior Indebtedness (or Representatives therefor) under Article XII;

 

(h)           to add Guarantors with respect to any or all of the Debt Securities or to secure any or all of the Debt Securities or the Guarantee;

 

(i)            to make any change that does not adversely affect the rights hereunder of any Holder;

 

(j)            to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Debt Securities; provided, however, that any such addition, change or elimination not otherwise permitted under this Section 9.01 shall  neither  apply to any Debt Security of any series created prior to the execution of such supplemental Indenture and entitled to the benefit of such provision nor  modify the rights of the Holder of any such Debt Security

 

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with respect to such provision or  shall become effective only when there is no such Debt Security Outstanding;

 

(k)           to evidence and provide for the acceptance of appointment hereunder by a successor or separate Trustee with respect to the Debt 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; and

 

(l)            to establish the form or terms of Debt Securities of any series as permitted by Sections 2.01 and 2.03.

 

The Trustee is hereby authorized to join with the Issuers and the Guarantors in the execution of any such supplemental Indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer, assignment, mortgage or pledge of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental Indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental Indenture authorized by the provisions of this Section 9.01 may be executed by the Issuers, the Guarantors and the Trustee without the consent of the Holders of any of the Debt Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.

 

In the case of Debt Securities subordinated pursuant to Article XII, an amendment under this Section 9.01 may not make any change that adversely affects the rights under Article XII of any holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness (or any group or Representative thereof authorized to give a consent) consent to such change.

 

Section 9.02          Modification of Indenture with Consent of Holders of Debt Securities.  Without notice to any Holder but with the consent (evidenced as provided in Section 8.01) of the Holders of not less than a majority in aggregate principal amount of the Outstanding Debt Securities of each series affected by such supplemental Indenture (including consents obtained in connection with a tender offer or exchange offer for any such series of Debt Securities), the Issuers and the Guarantors, when authorized by resolutions of each Issuer’s Board of Directors, and the Trustee may from time to time and at any time enter into an Indenture or Indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of execution thereof) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental Indenture or of modifying in any manner the rights of the Holders of the Debt Securities of such series; provided, that no such supplemental Indenture, without the consent of the Holders of each Debt Security so affected, shall: reduce the percentage in principal amount of Debt Securities of any series whose Holders must consent to an amendment; reduce the rate of or extend the time for payment of interest on any Debt Security; reduce the principal of or extend the Stated Maturity of any Debt Security; reduce any premium payable upon the redemption of any Debt Security or change the time at which any Debt Security may or shall be redeemed in accordance with Article III;  make any Debt Security payable in currency other than the Dollar; impair the right of any

 

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Holder to receive payment of premium, if any, principal of and interest on such Holder’s Debt Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Debt Securities; in the case of any Debt Security subordinated pursuant to Article XII, make any change in Article XII that adversely affects the rights of any Holder under Article XII release any security that may have been granted in respect of the Debt Securities, other than in accordance with this Indenture; make any change in Section 6.06 or this Section 9.02; or, except as provided in Section 11.02(b) or Section 14.04, release the Guarantors other than as provided in this Indenture or modify the Guarantee in any manner adverse to the Holders.

 

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

 

Upon the request of the Issuers, accompanied by a copy of resolutions of the Board of Directors of each Issuer authorizing the execution of any such supplemental Indenture, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid, the Trustee shall join with the Issuers and the Guarantors in the execution of such supplemental Indenture unless such 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 supplemental Indenture.

 

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

 

In the case of any Debt Securities subordinated pursuant to Article XII, an amendment under this Section 9.02 may not make any change that adversely affects the rights under Article XII of any holder of Senior Indebtedness then outstanding unless the holders of such Senior Indebtedness (or any group or Representative thereof authorized to give a consent) consent to such change.

 

After an amendment under this Section 9.02 requiring the consent of the Holders of any series of Debt Securities becomes effective, the Issuers shall mail to Holders of that series of Debt Securities of each series affected thereby a notice briefly describing such amendment.  The failure to give such notice to any such Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02 with respect to other Holders.

 

Section 9.03          Effect of Supplemental Indentures.  Upon the execution of any supplemental Indenture pursuant to the provisions of this Article IX, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Issuers, the Guarantors and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and

 

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conditions of any such supplemental Indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

The Trustee, subject to the provisions of Sections 7.01 and 7.02, may receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such supplemental Indenture complies with the provisions of this Article IX.

 

Section 9.04          Debt Securities May Bear Notation of Changes by Supplemental Indentures.  Debt Securities of any series authenticated and delivered after the execution of any supplemental Indenture pursuant to the provisions of this Article IX may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental Indenture.  New Debt Securities of any series so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental Indenture may be prepared and executed by the Issuers, authenticated by the Trustee and delivered in exchange for the Debt Securities of such series then Outstanding.  Failure to make the appropriate notation or to issue a new Debt Security of such series shall not affect the validity of such amendment.

 

ARTICLE X
 CONSOLIDATION, MERGER, SALE OR CONVEYANCE

 

Section 10.01       Consolidations and Mergers of the Issuers.  No Issuer may consolidate or amalgamate with or merge with or into any Person, or sell, convey, transfer, lease or otherwise dispose of all or substantially all its assets to any Person, whether in a single transaction or a series of related transactions, unless: (a) either (i) such Issuer shall be the surviving Person in the case of a merger or (ii) the resulting, surviving or transferee Person if other than such Issuer (the “Successor Company”), shall be a partnership, limited liability company or corporation organized and existing under the laws of the United States, any State thereof, the District of Columbia, Canada or any subdivision thereof and the Successor Company shall expressly assume, by an Indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Issuer under this Indenture and the Debt Securities according to their tenor; (b) immediately after giving effect to such transaction or series of transactions (and treating any Debt which becomes an obligation of the Successor Company or any Subsidiary of such Issuer as a result of such transaction as having been incurred by the Successor Company or such Subsidiary at the time of such transaction or series of transactions), no Default or Event of Default would occur or be continuing; (c) if such Issuer is not the continuing Person, then each Guarantor, unless it has become the Successor Company, shall confirm that its Guarantee shall continue to apply to the obligations under the Debt Securities and this Indenture; and (d) the Issuers shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, amalgamation, merger or disposition and such supplemental Indenture (if any) comply with this Indenture.

 

Section 10.02       Rights and Duties of Successor Company.  In case of any consolidation, amalgamation or merger where such Issuer is not the continuing Person, or disposition of all or substantially all of the assets of such Issuer in accordance with Section 10.01, the Successor Company shall succeed to and be substituted for such Issuer with the same effect as if it had been named herein as the respective party to this Indenture, and the predecessor entity shall be

 

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released from all liabilities and obligations under this Indenture and the Debt Securities, except that no such release will occur in the case of a lease of all or substantially all of such Issuer’s assets.  The Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of such Issuer, any or all the Debt Securities issuable hereunder which theretofore shall not have been signed by  or on behalf of such Issuer and delivered to the Trustee; and, upon the order of the Successor Company, instead of such Issuer, and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Debt Securities which previously shall have been signed and delivered by or on behalf of such Issuer to the Trustee for authentication, and any Debt Securities which the Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose.  All the Debt Securities so issued shall in all respects have the same legal rank and benefit under this Indenture as the Debt Securities theretofore or thereafter issued in accordance with the terms of this Indenture as though all such Debt Securities had been issued at the date of the execution hereof.

 

In case of any such consolidation, amalgamation, merger, sale or disposition such changes in phraseology and form (but not in substance) may be made in the Debt Securities thereafter to be issued as may be appropriate.

 

ARTICLE XI
 SATISFACTION AND DISCHARGE OF
 INDENTURE; DEFEASANCE; UNCLAIMED MONEYS

 

Section 11.01       Applicability of Article.  The provisions of this Article XI relating to discharge or defeasance of Debt Securities shall be applicable to each series of Debt Securities except as otherwise specified pursuant to Section 2.03 for Debt Securities of such series.

 

Section 11.02       Satisfaction and Discharge of Indenture; Defeasance.

 

(a)           If at any time the Issuers shall have delivered to the Trustee for cancellation all Debt Securities of any series theretofore authenticated and delivered (other than any Debt Securities of such series which shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in Section 2.09 and  Debt Securities for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuers as provided in Section 11.05) or all Debt Securities of such series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Issuers shall deposit with the Trustee as trust funds the entire amount in cash sufficient to pay at final maturity or upon redemption all Debt Securities of such series not theretofore delivered to the Trustee for cancellation, including principal and premium, if any, and interest due or to become due on such date of maturity or Redemption Date, as the case may be, and if in either case the Issuers shall also pay or cause to be paid all other sums payable hereunder by the Issuers, then this Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of such Debt Securities herein expressly provided for) with respect to the Debt Securities of such series, and the Trustee, on demand of the Issuers accompanied by an Officers’ Certificate and an Opinion of Counsel and at the cost and expense of the Issuers, shall execute

 

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proper instruments acknowledging satisfaction of and discharging this Indenture with respect to the Debt Securities of such series.

 

(b)           Subject to Sections 11.02(c), 11.03 and 11.07, the Issuers at any time may terminate, with respect to Debt Securities of a particular series,  all their obligations under the Debt Securities of such series and this Indenture with respect to the Debt Securities of such series (“legal defeasance option”) or the operation of (w) Sections 4.09 and 4.10, (x) any covenant made applicable to such Debt Securities pursuant to Section 2.03, (y) Sections 6.01(d), (g) and (h) and (z) as they relate to the Guarantors only, Sections 6.01(e) and (f) (“covenant defeasance option”).  If the Issuers exercise either their legal defeasance option or their covenant defeasance option with respect to Debt Securities of a particular series that are entitled to the benefit of the Guarantee, the Guarantee will terminate with respect to that series of Debt Securities.  The Issuers may exercise their legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.

 

If the Issuers exercise their legal defeasance option, payment of the Debt Securities of the defeased series may not be accelerated because of an Event of Default.  If the Issuers exercise their covenant defeasance option, payment of the Debt Securities of the defeased series may not be accelerated because of an Event of Default specified in Sections 6.01(d), (g) and (h) and, with respect to the Guarantors only, Sections 6.01(e) and (f).

 

Upon satisfaction of the conditions set forth herein and upon request of the Issuers, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuers terminate.

 

(c)           Notwithstanding clauses (a) and (b) above, the Issuers’ obligations in Sections 2.07, 2.09, 4.02, 4.03, 4.04, the last sentence of 4.05(a), 4.06(a), 5.01, 7.06, 11.05, 11.06 and 11.07 shall survive until the Debt Securities of the defeased series have been paid in full.  Thereafter, the Issuers’ obligations in Sections 7.06, 11.05 and 11.06 shall survive.

 

Section 11.03       Conditions of Defeasance.  The Issuers may exercise their legal defeasance option or its covenant defeasance option with respect to Debt Securities of a particular series only if:

 

(a)           the Issuers irrevocably deposit in trust with the Trustee money or U.S. Government Obligations for the payment of principal of, and premium, if any, and interest on, the Debt Securities of such series to final maturity or redemption, as the case may be;

 

(b)           the Issuers deliver to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay the principal, premium, if any, and interest when due on all the Debt Securities of such series to final maturity or redemption, as the case may be;

 

(c)           91 days pass after the deposit is made and during the 91-day period no Default specified in Section 6.01(e) or (f) with respect to the Issuers occurs which is continuing at the end of the period;

 

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(d)           no Default has occurred and is continuing on the date of such deposit and after giving effect thereto;

 

(e)           the deposit does not constitute a default under any other agreement binding on the Issuers and, if the Debt Securities of such series are subordinated pursuant to Article XII, is not prohibited by Article XII;

 

(f)            the Issuers deliver to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940;

 

(g)           in the event of the legal defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel stating that  the Issuers have received from the Internal Revenue Service a ruling, or  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 Debt Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such 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 defeasance had not occurred;

 

(h)           in the event of the covenant defeasance option, the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of Debt Securities of such 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; and

 

(i)            the Issuers deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Debt Securities of such series as contemplated by this Article XI have been complied with.

 

Before or after a deposit, the Issuers may make arrangements satisfactory to the Trustee for the redemption of Debt Securities of such series at a future date in accordance with Article III.

 

Section 11.04       Application of Trust Money.  The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article XI.  It shall apply the deposited money and the money from U.S. Government Obligations through any paying agent and in accordance with this Indenture to the payment of principal of, and premium, if any, and interest on, the Debt Securities of the defeased series.  In the event the Debt Securities of the defeased series are subordinated pursuant to Article XII, money and securities so held in trust are not subject to Article XII.

 

Section 11.05       Repayment to Issuers.  The Trustee and any paying agent shall promptly turn over to the Issuers upon request any excess money or securities held by them at any time.

 

Subject to any applicable abandoned property law, the Trustee and any paying agent shall pay to the Issuers upon request any money held by them for the payment of principal, premium

 

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or interest that remains unclaimed for two years, and, thereafter, Holders entitled to such money must look to the Issuers for payment as general creditors.

 

Section 11.06       Indemnity for U.S. Government Obligations. The Issuers shall pay and shall indemnify the Trustee and the Holders against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

 

Section 11.07       Reinstatement.  If the Trustee or any paying agent is unable to apply any money or U.S. Government Obligations in accordance with this Article XI by reason of any legal proceeding or by reason of any order or judgment of any court or government authority enjoining, restraining or otherwise prohibiting such application, the Issuers’ obligations under this Indenture and the Debt Securities of the defeased series shall be revived and reinstated as though no deposit had occurred pursuant to this Article XI until such time as the Trustee or any paying agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article XI.

 

ARTICLE XII
 SUBORDINATION OF DEBT SECURITIES AND GUARANTEE

 

Section 12.01       Applicability of Article; Agreement to Subordinate.  The provisions of this Article XII shall only be applicable to the Debt Securities of any series (Debt Securities of such series referred to in this Article XII as “Subordinated Debt Securities”) designated, pursuant to Section 2.03, as subordinated to Senior Indebtedness and any related Guarantee of such Subordinated Debt Securities. Each Holder by accepting a Subordinated Debt Security agrees that the Debt evidenced by such Subordinated Debt Security and any related Guarantee of such Subordinated Debt Security is subordinated in right of payment, to the extent and in the manner provided in this Article XII, to the prior payment of all Senior Indebtedness and that the subordination is for the benefit of and enforceable by the holders of Senior Indebtedness. All provisions of this Article XII shall be subject to Section 12.12.

 

Section 12.02       Liquidation, Dissolution, Bankruptcy.  Upon any payment or distribution of the assets of any of the Issuers or the Guarantors to creditors (i) upon a liquidation or a dissolution of any of the Issuers or the Guarantors or (ii) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to any of the Issuers or the Guarantors or its property:

 

(a)           holders of Senior Indebtedness of the Issuers or any Guarantor, as the case may be, shall be entitled to receive payment in full in cash of such Senior Indebtedness of such Person (including interest (if any), accruing on or after the commencement of a proceeding in bankruptcy, whether or not allowed as a claim against any of the Issuers or the Guarantors, as the case may be, in such bankruptcy proceeding) before Holders of Subordinated Debt Securities and any related Guarantee shall be entitled to receive any payment of principal of, or premium, if any, or interest on, the Subordinated Debt Securities from the Issuers, or any payment in respect of the Guarantee from the Guarantors; and

 

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(b)           until the Senior Indebtedness of the Issuers or any Guarantor, as the case may be, is paid in full, any distribution to which Holders of Subordinated Debt Securities and any related Guarantee would be entitled but for this Article XII shall be made to holders of Senior Indebtedness of the Issuers or the Guarantors, as the case may be, as their interests may appear, except that such Holders may receive capital stock and any debt securities that are subordinated to Senior Indebtedness of any of the Issuers or the Guarantors, as the case may be, to at least the same extent as the Subordinated Debt Securities of the Issuers or the related Guarantee of any Guarantor, respectively.

 

Section 12.03       Default on Senior Indebtedness.  The Issuers and the Guarantors may not pay the principal of, or premium, if any, or interest on, the Subordinated Debt Securities or any related Guarantee or make any deposit pursuant to Article XI and may not repurchase, redeem or otherwise retire (except, in the case of Subordinated Debt Securities that provide for a mandatory sinking fund pursuant to Section 3.05, by the delivery of Subordinated Debt Securities by the Issuers to the Trustee pursuant to the first paragraph of Section 3.05) any Subordinated Debt Securities (collectively, “pay the Subordinated Debt Securities”) if any principal, premium or interest in respect of Senior Indebtedness of such Person is not paid within any applicable grace period (including at maturity) or any other default on Senior Indebtedness of such Person occurs and the maturity of such Senior Indebtedness is accelerated in accordance with its terms unless and until the default has been cured or waived and any such acceleration has been rescinded or such Senior Indebtedness has been paid in full in cash; provided, however, that the Issuers and the Guarantors may make payments on the Subordinated Debt Securities or any related Guarantee without regard to the foregoing if the Issuers and the Trustee receive written notice approving such payment from the Representative of each issue of Designated Senior Indebtedness. During the continuance of any other default with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Issuers and the Guarantors may not make payments on the Subordinated Debt Securities or any related Guarantee for a period (a “Payment Blockage Period”) commencing upon the receipt by the Issuers and the Trustee (and if such Designated Senior Indebtedness is Debt of a Guarantor, the Guarantor) of written notice of such default from the Representative of any Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period (a “Blockage Notice”) and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated by written notice to the Trustee and the Issuers (and if such Designated Senior Indebtedness is Debt of a Guarantor, the Guarantor) from the Person or Persons who gave such Blockage Notice, by repayment in full in cash of such Designated Senior Indebtedness or because the default giving rise to such Blockage Notice is no longer continuing). Notwithstanding the provisions described in the immediately preceding sentence (but subject to the provisions contained in Section 12.02 and the first sentence of this Section 12.03), unless the holders of such Designated Senior Indebtedness or the Representative of such holders shall have accelerated the maturity of such Designated Senior Indebtedness, the Issuers and the Guarantors may resume payments on the Subordinated Debt Securities and related Guarantees after such Payment Blockage Period. Not more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of the number of defaults with respect to any number of issues of Designated Senior Indebtedness during such period, unless otherwise specified pursuant to Section 2.03 for the Subordinated Debt Securities of a series; provided, however, that in no event may the total number of days during which any Payment

 

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Blockage Period or Periods is in effect exceed 179 days in the aggregate during any 360 consecutive day period. For purposes of this Section 12.03, no default or event of default which existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to the Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or be made, the basis of the commencement of a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness, whether or not within a period of 360 consecutive days, unless such default or event of default shall have been cured or waived for a period of not less than 90 consecutive days.

 

Section 12.04       Acceleration of Payment of Debt Securities.  If payment of the Subordinated Debt Securities is accelerated because of an Event of Default, the Issuers shall promptly notify the holders of the Designated Senior Indebtedness (or their Representatives) of the acceleration.

 

Section 12.05       When Distribution Must Be Paid Over.  If a distribution is made to Holders of Subordinated Debt Securities or a related Guarantee that because of this Article XII should not have been made to them, the Holders who receive such distribution shall hold it in trust for holders of Senior Indebtedness and pay it over to them as their interests may appear.

 

Section 12.06       Subrogation.  After all Senior Indebtedness is paid in full and until the Subordinated Debt Securities are paid in full, Holders thereof shall be subrogated to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness. A distribution made under this Article XII to holders of Senior Indebtedness which otherwise would have been made to Holders of Subordinated Debt Securities is not, as between the Issuers or the Guarantors, as the case may be, and such Holders, a payment by the Issuers or the Guarantors, as the case may be, on Senior Indebtedness.

 

Section 12.07       Relative Rights.  This Article XII defines the relative rights of Holders of Subordinated Debt Securities and holders of Senior Indebtedness. Nothing in this Indenture shall:

 

(a)           impair, as between the Issuers or the Guarantors, as the case may be, and Holders of Subordinated Debt Securities, the obligation of the Issuers or the Guarantors, as the case may be, which is absolute and unconditional, to pay principal of, and premium, if any, and interest on, the Subordinated Debt Securities in accordance with their terms; or

 

(b)           prevent the Trustee or any Holder of Subordinated Debt Securities from exercising its available remedies upon an Event of Default, subject to the rights of holders of Senior Indebtedness to receive distributions otherwise payable to Holders of Subordinated Debt Securities.

 

Section 12.08       Subordination May Not Be Impaired by Issuers.  No right of any holder of Senior Indebtedness to enforce the subordination of the Debt evidenced by the Subordinated Debt Securities and the Guarantee in respect thereof shall be impaired by any act or failure to act by any of the Issuers or the Guarantors or by its failure to comply with this Indenture.

 

Section 12.09       Rights of Trustee and Paying Agent.  Notwithstanding Sections 12.02 and 12.03, the Trustee or any paying agent may continue to make payments on Subordinated Debt

 

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Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a responsible officer of the Trustee receives notice satisfactory to it that payments may not be made under this Article XII. The Issuers, the Registrar, any paying agent, a Representative or a holder of Senior Indebtedness may give the notice; provided, however, that, if an issue of Senior Indebtedness has a Representative, only the Representative may give the notice on behalf of the Holders of the Senior Indebtedness of that issue.

 

The Trustee in its individual or any other capacity may hold Senior Indebtedness with the same rights it would have if it were not Trustee. The Registrar and any paying agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article XII with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness; and nothing in Article VII shall deprive the Trustee of any of its rights as such holder. Nothing in this Article XII shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.06.

 

Section 12.10       Distribution or Notice to Representative.  Whenever a distribution is to be made or a notice given to holders of Senior Indebtedness, the distribution may be made and the notice given to their Representative (if any).

 

Section 12.11       Article XII Not to Prevent Defaults or Limit Right to Accelerate.  The failure to make a payment pursuant to the Subordinated Debt Securities, whether directly or pursuant to the Guarantee, by reason of any provision in this Article XII shall not be construed as preventing the occurrence of a Default. Nothing in this Article XII shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of either the Subordinated Debt Securities or the Debt Securities, as the case may be.

 

Section 12.12       Trust Moneys Not Subordinated.  Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust under Article XI by the Trustee for the payment of principal of, and premium, if any, and interest on, the Subordinated Debt Securities or the Debt Securities shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this Article XII, and none of the Holders thereof shall be obligated to pay over any such amount to the Issuers, the Guarantors or any holder of Senior Indebtedness of the Issuers or the Guarantors or any other creditor of the Issuers or the Guarantor.

 

Section 12.13       Trustee Entitled to Rely.  Upon any payment or distribution pursuant to this Article XII, the Trustee and the Holders shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 are pending, upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to such Holders or upon the Representatives for the holders of Senior Indebtedness for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other Debt of any of the Issuers or the Guarantors, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XII. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or

 

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distribution pursuant to this Article XII, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article XII, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article XII.

 

Section 12.14       Trustee to Effectuate Subordination.  Each Holder by accepting a Subordinated Debt Security authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders of Subordinated Debt Securities and the holders of Senior Indebtedness as provided in this Article XII and appoints the Trustee as attorney-in-fact for any and all such purposes.

 

Section 12.15       Trustee Not Fiduciary for Holders of Senior Indebtedness.  The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders of Subordinated Debt Securities or any of the Issuers or the Guarantors or any other Person, money or assets to which any holders of Senior Indebtedness shall be entitled by virtue of this Article XII or otherwise.

 

Section 12.16       Reliance by Holders of Senior Indebtedness on Subordination Provisions.  Each Holder by accepting a Subordinated Debt Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Subordinated Debt Securities, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

 

ARTICLE XIII 
 MISCELLANEOUS PROVISIONS

 

Section 13.01       Successors and Assigns of Issuers Bound by Indenture.  All the covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the Issuers, the Guarantors or the Trustee shall bind their respective successors and assigns, whether so expressed or not.

 

Section 13.02       Acts of Board, Committee or Officer of Successor Issuer Valid.  Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of any Issuer shall and may be done and performed with like force and effect by the like board, committee or officer of any Successor Company.

 

Section 13.03       Required Notices or Demands.  Any notice or communication by the Issuers, the Guarantors or the Trustee to the others is duly given if in writing in the English language and delivered in Person or mailed by registered or certified mail (return receipt

 

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requested), telecopier or overnight air courier guaranteeing next day delivery, to the other’s address:

 

If to the Issuers or any Guarantor:

 

[                                    ]

 

If to the Trustee:

 

[                                        ]

 

The Issuers, any Guarantor or the Trustee by notice to the others may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications 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; on the first Business Day on or after being sent, if telecopied and the sender receives confirmation of successful transmission; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

 

Any notice required or permitted to a Holder by the Issuers, any Guarantor or the Trustee pursuant to the provisions of this Indenture shall be deemed to be properly mailed by being deposited postage prepaid in a post office letter box in the United States addressed to such Holder at the address of such Holder as shown on the Debt Security Register.  Any report pursuant to Section 313 of the TIA shall be transmitted in compliance with subsection (c) therein.

 

Notwithstanding the foregoing, any notice to Holders of Floating Rate Securities regarding the determination of a periodic rate of interest, if such notice is required pursuant to Section 2.03, shall be sufficiently given if given in the manner specified pursuant to Section 2.03.

 

In the event of suspension of regular mail service or by reason of any other cause it shall be impracticable to give notice by mail, then such notification as shall be given with the approval of the Trustee shall constitute sufficient notice for every purpose hereunder.

 

In the event it shall be impracticable to give notice by publication, then such notification as shall be given with the approval of the Trustee shall constitute sufficient notice for every purpose hereunder.

 

Failure to mail a notice or communication to a Holder or any defect in it or any defect in any notice by publication as to a Holder shall not affect the sufficiency of such notice with respect to other Holders.  If a notice or communication is mailed or published in the manner provided above, it is conclusively presumed duly given.

 

Section 13.04       Indenture and Debt Securities to Be Construed in Accordance with the Laws of the State of New York.  THIS INDENTURE, EACH DEBT SECURITY AND THE GUARANTEE SHALL BE DEEMED TO BE NEW YORK CONTRACTS, AND FOR ALL

 

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PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE.

 

Section 13.05       Officers’ Certificate and Opinion of Counsel to Be Furnished upon Application or Demand by the Issuers.  Upon any application or demand by the Issuers to the Trustee to take any action under any of the provisions of this Indenture, each of the Issuers shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such document is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

 

Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture 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 has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

 

Section 13.06       Payments Due on Legal Holidays.  In any case where the date of maturity of interest on or principal of and premium, if any, on the Debt Securities of a series or the date fixed for redemption or repayment of any Debt Security or the making of any sinking fund payment shall not be a Business Day at any Place of Payment for the Debt Securities of such series, then payment of interest or principal and premium, if any, or the making of such sinking fund payment need not be made on such date at such Place of Payment, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after such date.  If a record date is not a Business Day, the record date shall not be affected.

 

Section 13.07       Provisions Required by TIA to Control.  If and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture which is required to be included in this Indenture by any of Sections 310 to 318, inclusive, of the TIA, such required provision shall control.

 

Section 13.08       Computation of Interest on Debt Securities.  Interest, if any, on the Debt Securities shall be computed on the basis of a 360-day year of twelve 30-day months, except as may otherwise be provided pursuant to Section 2.03.

 

Section 13.09       Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for action by or a meeting of Holders.  The Registrar and any paying agent may make reasonable rules for their functions.

 

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Section 13.10       No Recourse Against Others.  No director, officer, employee, incorporator, member, or stockholder of any Issuer or Guarantor, as such, will have any liability for any obligations of any of the Issuers or Guarantors under the Debt Securities, this Indenture or the Guarantee or for any claim based on, in respect of, or by reason of, such obligations or their creation, except for any liability of a stockholder of any Issuer or Guarantor which is an unlimited liability company that may arise under applicable law governing such unlimited liability company.  By accepting a Debt Security, each Holder shall be deemed to have waived and released all such liability.  The waiver and release are part of the consideration for any issuance of the Debt Securities.

 

Section 13.11       Severability.  In case any provision in this Indenture or the Debt 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 13.12       Effect of Headings.  The article and section headings herein and in the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 13.13       Indenture May Be Executed in Counterparts.  This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

 

ARTICLE XIV
 GUARANTEE

 

Section 14.01       Unconditional Guarantee.

 

(a)           Notwithstanding any provision of this Article XIV to the contrary, the provisions of this Article XIV shall be applicable only to, and inure solely to the benefit of, the Debt Securities of any series designated, pursuant to Section 2.03, as entitled to the benefits of the Guarantee of each of the Guarantors.

 

(b)           For value received, each of the Guarantors hereby fully, unconditionally and absolutely guarantees (the “Guarantee”) to the Holders and to the Trustee the due and punctual payment of the principal of, and premium, if any, and interest on the Debt Securities and all other amounts due and payable under this Indenture and the Debt Securities by the Issuers, when and as such principal, premium, if any, and interest shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, according to the terms of the Debt Securities and this Indenture, subject to (i) the limitations set forth in Section 14.03 and (ii) in the case of the Guarantee of the Subordinated Debt Securities, to the subordination provisions contained in Article XII.

 

(c)           Failing payment when due of any amount guaranteed pursuant to the Guarantee, for whatever reason, each of the Guarantors will be jointly and severally obligated to pay the same immediately, subject, in the case of the Guarantee of the Subordinated Debt Securities, to the subordination provisions contained in Article XII. The Guarantee hereunder (other than the Guarantee of Subordinated Debt Securities) is intended to be a general, unsecured, senior obligation of each of the Guarantors and will rank pari passu in right of payment with all Debt of each Guarantor that is not, by its terms, expressly subordinated in right of payment to the

 

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Guarantee.  Each of the Guarantors hereby agrees that its obligations hereunder shall be full, unconditional and absolute, irrespective of the validity, regularity or enforceability of the Debt Securities, the Guarantee (including the Guarantee of any other Guarantor) or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Debt Securities with respect to any provisions hereof or thereof, the recovery of any judgment against any of the Issuers or any other Guarantor, or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of any of the Guarantors.  Each of the Guarantors hereby agrees that in the event of a default in payment of the principal of, or premium, if any, or interest on the Debt Securities, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, legal proceedings may be instituted by the Trustee on behalf of the Holders or, subject to Section 6.04, by the Holders, on the terms and conditions set forth in this Indenture, directly against such Guarantor to enforce the Guarantee without first proceeding against any of the Issuers or any other Guarantor.

 

(d)           The obligations of each of the Guarantors under this Article XIV shall be as aforesaid full, unconditional and absolute and shall not be impaired, modified, released or limited by any occurrence or condition whatsoever, including, without limitation, (A) any compromise, settlement, release, waiver, renewal, extension, indulgence or modification of, or any change in, any of the obligations and liabilities of any of the Issuers or the Guarantors contained in the Debt Securities or this Indenture, (B) any impairment, modification, release or limitation of the liability of any of the Issuers or the Guarantors or any of their estates in bankruptcy, or any remedy for the enforcement thereof, resulting from the operation of any present or future provision of any applicable Bankruptcy Law, as amended, or other statute or from the decision of any court, (C) the assertion or exercise by any of the Issuers, the Guarantors or the Trustee of any rights or remedies under the Debt Securities or this Indenture or their delay in or failure to assert or exercise any such rights or remedies, (D) the assignment or the purported assignment of any property as security for the Debt Securities, including all or any part of the rights of any of the Issuers or the Guarantors under this Indenture, (E) the extension of the time for payment by any of the Issuers or the Guarantors of any payments or other sums or any part thereof owing or payable under any of the terms and provisions of the Debt Securities or this Indenture or of the time for performance by any of the Issuers or the Guarantors of any other obligations under or arising out of any such terms and provisions or the extension or the renewal of any thereof, (F) the modification or amendment (whether material or otherwise) of any duty, agreement or obligation of any of the Issuers or the Guarantors set forth in this Indenture, (G) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all of the  assets, marshaling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, any of the Issuers or the Guarantors or any of their respective assets, or the disaffirmance of the Debt Securities, the Guarantee or this Indenture in any such proceeding, (H) the release or discharge of any of the Issuers or the Guarantors from the performance or observance of any agreement, covenant, term or condition contained in any of such instruments by operation of law, (I) the unenforceability of the Debt Securities, the Guarantee or this Indenture or (J) any other circumstances (other than payment in full or discharge of all amounts guaranteed pursuant to the Guarantee) which might otherwise constitute a legal or equitable discharge of a surety or guarantor.

 

59

 

(e)           Each of the Guarantors hereby (A) waives diligence, presentment, demand of payment, filing of claims with a court in the event of the merger, insolvency or bankruptcy of any of the Issuers or the Guarantors, and all demands whatsoever, (B) acknowledges that any agreement, instrument or document evidencing the Guarantee may be transferred and that the benefit of its obligations hereunder shall extend to each holder of any agreement, instrument or document evidencing the Guarantee without notice to it and (C) covenants that the Guarantee will not be discharged except by complete performance of the Guarantee.  Each of the Guarantors further agrees that if at any time all or any part of any payment theretofore applied by any Person to the Guarantee is, or must be, rescinded or returned for any reason whatsoever, including without limitation, the insolvency, bankruptcy or reorganization of any of the Issuers or the Guarantors, the Guarantee shall, to the extent that such payment is or must be rescinded or returned, be deemed to have continued in existence notwithstanding such application, and the Guarantee shall continue to be effective or be reinstated, as the case may be, as though such application had not been made.

 

(f)            Each of the Guarantors shall be subrogated to all rights of the Holders and the Trustee against the Issuers in respect of any amounts paid by such Guarantor pursuant to the provisions of this Indenture, provided, however, that such Guarantor, shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until all of the Debt Securities and the Guarantee shall have been paid in full or discharged.

 

Section 14.02       Execution and Delivery of Guarantee.  To further evidence the Guarantee set forth in Section 14.01, each of the Guarantors hereby agrees that a notation relating to such Guarantee, substantially in the form attached hereto as Annex A, shall be endorsed on each Debt Security entitled to the benefits of the Guarantee authenticated and delivered by the Trustee and executed by either manual or facsimile signature of an Officer of such Guarantor.  Each of the Guarantors hereby agrees that the Guarantee set forth in Section 14.01 shall remain in full force and effect notwithstanding any failure to endorse on each Debt Security a notation relating to the Guarantee.  If any Officer of any Guarantor whose signature is on this Indenture or a Debt Security no longer holds that office at the time the Trustee authenticates such Debt Security or at any time thereafter, the Guarantee of such Debt Security shall be valid nevertheless.  The delivery of any Debt Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors.

 

The Trustee hereby accepts the trusts in this Indenture upon the terms and conditions herein set forth.

 

Section 14.03       Limitation on Guarantors’ Liability.  Each Guarantor and by its acceptance hereof each Holder of a Debt Security entitled to the benefits of the Guarantee hereby confirm that it is the intention of all such parties that the guarantee by such Guarantor pursuant to the Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Federal or state law.  To effectuate the foregoing intention, the Holders of a Debt Security entitled to the benefits of the Guarantee and the Guarantors hereby irrevocably agree that the obligations of each Guarantor under the Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such

 

60

 

other Guarantor under the Guarantee, not result in the obligations of such Guarantor under the Guarantee constituting a fraudulent conveyance or fraudulent transfer under Federal or state law.

 

Section 14.04       Release of Guarantors from Guarantee.

 

(a)           Notwithstanding any other provisions of this Indenture, the Guarantee of any Guarantor may be released upon the terms and subject to the conditions set forth in Section 11.02(b) and in this Section 14.04. Provided that no Default shall have occurred and shall be continuing under this Indenture, any Guarantee incurred by a Guarantor pursuant to this Article XIV shall be unconditionally released and discharged (i) in the case of a Subsidiary Guarantor, (A) automatically upon (1) any sale, exchange or transfer, whether by way of merger or otherwise, to any Person that is not an Affiliate of the Parent Guarantor, of all of the Parent Guarantor’s direct or indirect capital stock or other equity interests in such Guarantor (provided such sale, exchange or transfer is not prohibited by this Indenture), (2) the merger or amalgamation of such Subsidiary Guarantor into an Issuer or any other Subsidiary Guarantor or the liquidation and dissolution of such Subsidiary Guarantor (in each case to the extent not prohibited by this Indenture) or (3) the Issuers’ exercise of their legal defeasance option or covenant defeasance option under 11.02(b) or if the Issuers’ obligations under this Indenture are discharged in accordance with the terms of this Indenture, or (B) upon the Issuers’ delivery of a written notice to the Trustee of the release or discharge of all guarantees by such Subsidiary Guarantor of any Debt of the Issuers other than obligations arising under this Indenture and any Debt Securities issued hereunder, except a discharge or release by or as a result of payment under such guarantees, and (ii) in the case of the Parent Guarantor, (A) automatically upon, (1) the Issuers ceasing to be wholly-owned Subsidiaries of the Parent Guarantor, (2) the Issuers’ sale, exchange or transfer, whether by way of merger or otherwise, to any Person that is not an Affiliate of the Parent Guarantor, of all of the their assets and such transferee assumes the Issuers’ obligations under this Indenture (provided such sale, exchange or transfer is not prohibited by this Indenture), (3) the Issuer’s exercise of their legal defeasance option or covenant defeasance option under 11.02(b) or if the Issuer’s obligations under this Indenture are discharged in accordance with the terms of this Indenture, or (4) automatically upon the merger of the Parent Guarantor into an Issuer or any other Guarantor or the liquidation and dissolution of the Parent Guarantor (in each case to the extent not prohibited by this Indenture).

 

(b)           The Trustee shall deliver an appropriate instrument evidencing any release of a Guarantor from the Guarantee upon receipt of a written request of the Issuers accompanied by an Officers’ Certificate and an Opinion of Counsel to the effect that the Guarantor is entitled to such release in accordance with the provisions of this Indenture.  Any Guarantor not so released shall remain liable for the full amount of principal of (and premium, if any) and interest on the Debt Securities entitled to the benefits of the Guarantee as provided in this Indenture, subject to the limitations of Section 14.03.

 

Section 14.05       Subsidiary Guarantor Contribution.  In order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors hereby agree, inter se, that in the event any payment or distribution is made by any Subsidiary Guarantor (a “Funding Guarantor”) under the Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Subsidiary Guarantor (if any) in a pro rata amount based on the net assets of each Subsidiary Guarantor (including the Funding Guarantor) for all payments,

 

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damages and expenses incurred by that Funding Guarantor in discharging the Issuers’ obligations with respect to the Debt Securities or any other Subsidiary Guarantor’s obligations with respect to the Guarantee.

 

[Remainder of This Page Intentionally Left Blank.]

 

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

 

	
 
    	
[PARENT   GUARANTOR:]
    
	
 
    	
 
    
	
 
    	
[Niska   Gas Storage Partners LLC]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
ISSUERS:
    
	
 
    	
 
    
	
 
    	
[                                    ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
[                                    ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[GUARANTORS:]
    
	
 
    	
 
    
	
 
    	
[                                    ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TRUSTEE:
    
	
 
    	
 
    
	
 
    	
[                                    ]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

[Signature Page to Subordinated Indenture]

 

 

ANNEX A

 

NOTATION OF GUARANTEE

 

Each of the Guarantors (which term includes any successor Person under the Indenture), has fully, unconditionally and absolutely guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, the due and punctual payment of the principal of, and premium, if any, and interest on the Debt Securities and all other amounts due and payable under the Indenture and the Debt Securities by the Issuers.

 

The obligations of the Guarantors to the Holders of Debt Securities and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article XIV of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee.

 

 

[NAME GUARANTOR(S)]

 

 

	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

A-1Exhibit 10.1

 

PURCHASE AGREEMENT

 

DATED AS OF

 

November 3, 2014

 

BETWEEN

 

L-3 COMMUNICATIONS CORPORATION

 

AND

 

OPTEX SYSTEMS, INC.

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE 1	DEFINITIONS	1
	1.1	Definitions	1
	 	 	 
	ARTICLE 2	SALE AND PURCHASE OF ASSETS	1
	2.1	Transferred Assets	1
	2.2	Excluded Assets	2
	2.3	Non-Transferability of Certain Assets	3
	 	 	 
	ARTICLE 3	LIABILITIES	4
	3.1	Assumption of Liabilities	4
	3.2	Retained Liabilities	5
	3.3	Shared Liabilities	6
	 	 	 
	ARTICLE 4	PURCHASE PRICE	6
	4.1	Purchase Price	6
	4.2	Payment at Closing	6
	4.3	Allocation of the Purchase Price	6
	 	 	 
	ARTICLE 5	REPRESENTATIONS AND WARRANTIES OF THE SELLER	7
	5.1	Organization and Existence of Seller	7
	5.2	Corporate Authority	7
	5.3	Financial Statements	7
	5.4	Inventory	7
	5.5	Real Property	7
	5.6	Title to Personal Property	8
	5.7	Condition and Sufficiency of Transferred Assets	8
	5.8	Contracts	8
	5.9	Proprietary Rights	10
	5.10	Tax Matters	10
	5.11	Environmental Matters	11
	5.12	No Breach of Contract, No Violations of Law, No Prior Approval	12
	5.13	Litigation	13
	5.14	Finders, Brokers and Investment Bankers	13
	5.15	No Material Adverse Change	13
	5.16	Governmental Permits and Licenses; Compliance with Laws	13
	5.17	Employees; Labor Relations	14
	5.18	Employee Benefits	14
	5.19	Liabilities	15
	5.20	Government Contracts	15
	5.21	Government Furnished Equipment	16
	5.22	Disclaimer; Cross References	16
	 	 	 
	ARTICLE 6	REPRESENTATIONS AND WARRANTIES OF THE BUYER	16
	6.1	Organization, Existence and Standing of the Buyer	17
	6.2	Corporate Authority	17

 

    	 

    	 

    

 

	6.3	No Breach of Contract, No Violations of Law, No Prior Approval	17
	6.4	Litigation	17
	6.5	Finders, Brokers and Investment Bankers	17
	6.6	Financing	17
	6.7	Disclaimer as to Condition of Transferred Assets	17
	6.8	Nonreliance	18
	6.9	Access to Information	18
	6.10	Disclaimer	18
	 	 	 
	ARTICLE 7	COVENANTS OF THE SELLER	19
	7.1	Access by the Buyer to Properties and Records; Furnishing Information	19
	 	 	 
	ARTICLE 8	COVENANTS OF THE BUYER	19
	8.1	Make Records Available	19
	8.2	Novation of Government Contracts	19
	 	 	 
	ARTICLE 9	MUTUAL COVENANTS	20
	9.1	Transition Services Agreements	20
	9.2	Payments Received	20
	9.3	Further Assurances	20
	9.4	Covenant Regarding Personnel	20
	9.5	Guarantee of Performance	21
	 	 	 
	ARTICLE 10	EMPLOYEES AND EMPLOYEE BENEFITS	21
	10.1	Offer of Employment.	21
	10.2	Severance Payment Responsibilities.	21
	10.3	Employee Benefit Plans.	22
	10.4	Enforceability	23
	10.5	No Third-Party Beneficiaries	24
	10.6	Vacation Responsibilities	24
	10.7	Workers’ Compensation Claims	24
	10.8	WARN Responsibilities	24
	 	 	 
	ARTICLE 12	INTENTIONALLY LEFT BLANK	24
	 	 	 
	ARTICLE 13	INTENTIONALLY LEFT BLANK	24
	 	 	 
	ARTICLE 14	INTENTIONALLY LEFT BLANK	25
	 	 	 
	ARTICLE 15	CLOSING	25
	15.1	The Closing Date	25
	15.2	Deliveries by the Buyer	25
	15.3	Deliveries by the Seller	25
	15.4	Effective Time and Rights to Possession	26
	 	 	 
	ARTICLE 16	SALES AND TRANSFER TAXES	26
	 	 	 
	ARTICLE 17	BULK SALES	26

 

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	ARTICLE 18	SURVIVAL OF REPRESENTATIONS, WARRANTIES AND  COVENANTS	26
	18.1	Survival	26
	18.2	Notice of Claim	27
	 	 	 
	ARTICLE 19	INDEMNIFICATION	27
	19.1	Indemnification of the Buyer	27
	19.2	Indemnification of the Seller	28
	19.3	Eligible Claim, Threshold Amount, Payment	28
	19.4	Procedures for Claims	28
	19.5	Third-Party Claims	29
	19.6	Exclusive Remedy	29
	19.7	Payment of Amounts	30
	19.8	Insurance Offset	30
	19.9	No Indemnification For Known Breaches of Representations and Warranties	30
	19.10	Maximum Amount of Any Indemnification	30
	 	 	 
	ARTICLE 20	INTENTIONALLY LEFT BLANK	30
	 	 	 
	ARTICLE 21	EXPENSES	30
	21.1	Expenses	30
	 	 	 
	ARTICLE 22	DISPUTE RESOLUTION	31
	22.1	Jurisdiction; No Jury Trial	31
	 	 	 
	ARTICLE 23	MISCELLANEOUS	31
	23.1	Notices	31
	23.2	Waiver	32
	23.3	Captions	32
	23.4	Successors and Assigns	32
	23.5	Enforceability	32
	23.6	No Third-Party Beneficiaries or Right to Rely	32
	23.7	Counterparts	33
	23.8	Governing Law	33
	23.9	Time of Essence	33
	23.10	No Strict Construction	33
	23.11	Public Announcements	33
	23.12	Currency/Method of Payment	33
	23.13	Subsequent Legal Fees	33
	23.14	Miscellaneous	33
	23.15	Entire Agreement; Amendment	34

 

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	 	 	Exhibit
	EXHIBIT	 	Number
	 	 	 
	Financial Statements	 	5.3
	Capital Expenditure Budget	 	7.1(d)
	Agency Designation	 	7.11A
	Transitional Services Agreement – Seller to Buyer	 	9.1 A
	Transitional Services Agreement – Buyer to Seller	 	9.1 B
	General Assignment and Bill of Sale	 	15.3(a)

 

	 	 	Schedule
	SCHEDULE	 	Number
	 	 	 
	Definitions	 	1.1
	Seller’s Accounting Principles	 	1.1(ffff)
	Seller’s Knowledge	 	1.1(gggg)
	Leased Real Property	 	2.1(a)
	Personal Property and Personal Property Leases	 	2.1(b)
	Proprietary Rights	 	2.1(f)
	Other Transferred Assets	 	2.1(j)
	Excluded Proprietary Rights	 	2.2(c)
	Other Excluded Assets	 	2.2(j)
	Payment Instructions	 	4.2
	Allocation of the Purchase Price	 	4.3
	Adjustments to Financial Statements	 	5.3
	Accounts Receivable Exceptions	 	5.3
	Inventory	 	5.4
	Leased Real Property Exceptions	 	5.5(b)
	Real Property used in Business	 	5.5(c)
	Personal Property Exceptions	 	5.6
	Disclosed Contracts	 	5.8(a)
	Disclosed Contracts Exceptions	 	5.8(b)
	Proprietary Rights Exceptions	 	5.9
	Tax Matters Exceptions	 	5.10
	Environmental Exceptions	 	5.11(a)
	Creation of Lien on Transferred Assets	 	5.12(a)
	Consents	 	5.12(b)
	Litigation	 	5.13
	Material Adverse Change	 	5.15
	Collective Bargaining Agreements	 	5.17(b)
	Employee Claims	 	5.17(c)
	Employee Benefit Plans	 	5.18(a)
	Claims against Employee Benefit Plans	 	5.18(c)
	Government Contract Investigations or Audits	 	5.20(a)

 

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	Government Contract Claims and Disputes	 	5.20(b)
	Government Contract Rate Schedules	 	5.20(d)
	Government Furnished Equipment	 	5.21(b)
	Retained Employees	 	9.4(a)
	Excluded Product Line Employees	 	10.1

 

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PURCHASE AGREEMENT

 

THIS PURCHASE AGREEMENT (the “Agreement”)
is made and entered into as of November 3, 2014 between L-3 Communications Corporation, a Delaware corporation (“Seller”),
and Optex Systems, Inc., a Delaware corporation (“Buyer”).

 

RECITALS:

 

A.           Through
Seller’s Applied Optics Product Line (the “Product Line”), Seller is engaged in the design, manufacture, marketing
and distribution of precision optical assemblies utilizing thin film coating capabilities used in Optical Systems and Components
(the “Business”); and

 

B.           Upon
the terms and subject to the conditions hereinafter set forth, Buyer wishes to acquire from Seller, and Seller wishes to sell to
Buyer, all of the Transferred Assets, Assumed Liabilities and Shared Liabilities (as such terms are defined below), in exchange
for the purchase price provided for herein.

 

NOW, THEREFORE, in consideration
of the payments herein provided for and the covenants herein contained, the parties hereby agree as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1           Definitions.
Unless elsewhere defined herein, capitalized terms used herein shall have the meanings set forth in Schedule 1.1. All references
herein to an Article, Section or Schedule are to an Article, Section or Schedule of or to this Agreement, unless otherwise indicated.

 

ARTICLE 2

SALE AND PURCHASE OF ASSETS

 

2.1           Transferred
Assets. On the terms and subject to the conditions of this Agreement, and for the consideration set forth in Article 4,
the Seller shall, on the Closing Date, sell, transfer and convey to the Buyer, free and clear of all Liens, other than the Assumed
Liabilities, the Real Property Permitted Exceptions and the Personal Property Permitted Exceptions, all of the Seller’s respective
rights, titles and interests in and to the assets that are used, held for use, or useful solely or primarily in connection with
the operation of the Business (the “Transferred Assets”), consistent with the terms and conditions of this Agreement,
subject in each case to Section 2.2 and Section 2.3, including, but not limited to, the following:

 

    	 

    	 

    

 

(a)          Leased
Real Property. All of the real property listed on Schedule 2.1(a), which real property is leased or subleased by the
Business as the same shall exist on the Closing Date (the “Leased Real Property”);

 

(b)          Personal
Property. All Personal Property and Personal Property Leases including those items and leases identified on Schedule 2.1(b);

 

(c)          Inventory.
All Inventory as set forth on Schedule 2.1(c) hereto;

 

(d)          Contracts.
Subject to Article 10, all rights and claims of the Business under all Contracts including those identified on Schedule 5.8(a);

 

(e)          Lists
and Records. All of the Business’s books and records, customer and supplier lists, sales, cost and shipping records and
other lists and documents primarily or exclusively related to the conduct of the Business;

 

(f)          Intellectual
Property. All of the Intellectual Property listed on Schedule 2.1(f) (the “Proprietary Rights”);

 

(g)          Prepaid
Items. All of the Business’s prepaid expenses and deposits which are capable of being transferred, as set forth on Schedule
2.1(g) hereto;

 

(h)          Governmental
Permits and Licenses. To the extent transferable under applicable law, all of the permits, licenses, certifications, approvals,
consents, and other governmental authorizations (the “Permits”) issued to Seller primarily or exclusively in connection
with the conduct of the Business, subject to Section 2.3;

 

(i)          Claims
Against Third Parties. All claims, actions, suits, proceedings or choses in action arising primarily or exclusively in connection
with the conduct of the Business, except those relating to Excluded Assets, Retained Liabilities or the Seller’s share of
the Shared Liabilities; and

 

(j)          Other
Transferred Assets. Any other assets identified on Schedule 2.1(j) (the “Other Transferred Assets”).

 

2.2       Excluded
Assets. Notwithstanding the foregoing, the following assets to the extent existing prior to the Closing (the “Excluded
Assets”) shall be retained by the Seller and shall not be included in the Transferred Assets:

 

(a)          all
cash (except petty cash), bank accounts, and certificates of deposit, cash equivalents and marketable securities owned by the Seller;

 

(b)          all
of the Accounts Receivable, for all product delivered before the Closing except for unsettled claims for undelivered/terminated/cancelled
contracts to the extent the related inventory is included in the purchased assets;

 

    	2

    	 

    

 

(c)          the
Intellectual Property owned, licensed or otherwise used by any of the Seller or any of their Affiliates which is not used primarily
or exclusively in the conduct of the Business, including, without limitation, (i) any patents or pending patent applications, (ii)
any trade secrets, (iii) the trade names and trademarks “L-3”, “L-3 Communications Corporation” and “L-3
Communications”, (iv) any other trade names, trademarks, corporate names and logos incorporating in any way any of the foregoing
names or affiliated therewith and (v) those trademarks and such other Intellectual Property identified on Schedule 2.2(c)
(the “Excluded Proprietary Rights”);

 

(d)          subject
to Section 2.3, any Non-Transferable Assets for which consent, approval or novation to transfer has not been obtained prior to
the Closing Date;

 

(e)          all
claims and rights of, relating to or arising from any of the Excluded Assets, the Retained Liabilities or the Seller’s share
of the Shared Liabilities;

 

(f)          all
rights, properties and assets of the Business which shall have been transferred or disposed of by the Business prior to the Closing
Date in transactions occurring in the ordinary course;

 

(g)          except
as provided in Article 10, all assets held by or on behalf of the Business in trust, reserve or otherwise, in respect of Employee
Benefit Plans or any other obligations pertaining to Product Line Employees, except to the extent the liabilities with respect
to which are transferred at Closing, then the assets shall be transferred to be held in trust, reserve or otherwise;

 

(h)          all
rights of the Business to any claims for any federal, state or local Tax credits or refunds relating to the operation of the Business
during periods prior to or on the Closing Date;

 

(i)          all
rights of the Business to any claims for insurance proceeds relating to the operation of the Business during periods prior to or
on the Closing Date provided that facility repairs related to the claim have been satisfactorily completed; and

 

(j)          those
assets specifically identified on Schedule 2.2(j) (the “Other Excluded Assets”).

 

2.3       Non-Transferability
of Certain Assets.

 

(a)        To
the extent that there are certain assets or agreements of the Business, including without limitation the Permits, which are not
assignable without the consent, approval or novation of Persons other than the Seller (“Non-Transferable Assets”),
and such consents, approvals or novations are not obtained by the Closing Date, this Agreement and the Closing shall not constitute
an assignment or agreement to assign or transfer such assets without such consent, approval or novation.

 

    	3

    	 

    

 

(b)        For
a reasonable period following the Closing Date, the Seller agrees to cooperate in good faith with the Buyer to enter into any reasonable
arrangement (other than an arrangement under which the Seller would incur or retain any financial obligation with respect to the
Non-Transferable Assets) designed to provide the Buyer the benefit of such Non-Transferable Assets, including the enforcement for
the benefit and at the expense of the Buyer of any rights previously enjoyed by the Seller in connection with any such assets.
Provided that the Seller so cooperates and proceeds in good faith to obtain such consents, approvals or novations and provide such
arrangements, the Seller shall not be deemed to be in breach of any of its obligations under this Agreement by reason of the failure
to obtain any consent, approval or novation. Except as reimbursed by the Buyer, in no event shall compliance by the Seller with
this Section 2.3 be deemed to require the Seller to incur any obligation or pay any monies to Third Parties in connection
with such efforts.

 

(c)        To
the extent that the Buyer is provided the benefits pursuant to this Section 2.3 of any Non-Transferable Assets, the Buyer
shall perform the obligations of the Seller under or in connection with such Non-Transferable Assets. Upon receipt of the required
consent, approval or novation, Seller agrees to assign or transfer, and Buyer shall accept, such Non-Transferable Assets.

 

ARTICLE 3

LIABILITIES

 

3.1       Assumption
of Liabilities. Together with the transfer of the Transferred Assets on the Closing Date in accordance with this Agreement,
the Buyer shall, assume and agree to pay, discharge or perform, as appropriate, all of the liabilities, fixed and contingent, and
obligations of any nature, whether accrued, absolute, contingent, threatened or otherwise, of the Business other than the Retained
Liabilities, as set forth below (the “Assumed Liabilities”):

 

(a)          all
liabilities and obligations of the Business, including accounts payable and accrued liabilities arising in the ordinary course,
as set forth on Schedule 3.1(a) hereto;

 

(b)          all
liabilities and obligations of the Business in respect of those Contracts which constitute Transferred Assets or which are assigned
or transferred pursuant to Section 2.3, the leases for the Leased Real Property, the Personal Property Leases and the Permits which
are Transferred Assets;

 

(c)          all
liabilities and obligations of the Business in respect of customer returns, customer warranty claims and product recalls with respect
to products of the Business, as set forth on Schedule 3.1(c) hereto;

 

(d)          all
product liability and similar claims for injury to person (including death) or property in connection with any products sold by
the Business, as set forth on Schedule 3.1(d) hereto, and any products included in Inventory as of the Closing;

 

(e)          any
liabilities related to any advance customer deposits for any products and services not delivered as of the Closing Date by Seller;

 

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(f)          Buyer’s
share of the Shared Liabilities, in accordance with Section 3.3;

 

(g)          all
liabilities and obligations assumed by the Buyer pursuant to Article 10;

 

(h)          all
liabilities and obligations assumed by the Buyer pursuant to Article 12;

 

(i)          subject
to Section 3.3(b) and as more fully described in Article 16, any transfer, sales, use or other non-income tax incurred in connection
with the consummation of the transactions contemplated hereby and customarily attributed to the Buyer;

 

(ji)         
Excluding any liabilities in respect to ad valorem, property, real estate, income (federal, state, provincial or financial) and
similar type Taxes for the tax year in which the Closing occurs for periods up to and including the Closing Date. Seller will be
responsible for timely filing and payment of associated tax requirements.

 

(kj)         Excluding
any liabilities whether accrued or otherwise obligated in respect to wages, salaries, commissions, bonuses, 401K matching or withheld,
or benefits or other compensation other than accrued vacation or severance obligations for existing employees as of Closing Date
due to any product line employee or otherwise arising under any employment related policy, practice, agreement, plan, program,
statute or law.

 

3.2       Retained
Liabilities. Notwithstanding the foregoing, Seller shall retain and shall pay and timely discharge without liability to
the Buyer, the following liabilities and obligations of the Business (the “Retained Liabilities”):

 

(a)          any
liability or obligation attributable to the Excluded Assets and any liability or obligation of the Seller with respect to any Retained
Liability;

 

(b)          except
as transferred to Buyer in Section 3.1(h) and except as shared pro rata between Buyer and Seller in Section 3.3, any capital gain
payable with respect to the Business, the Transferred Assets or the Assumed Liabilities for any period prior to and including the
Closing Date;

 

(c)          any
liability for the failure to comply with the bulk sales laws of any jurisdiction, except any such liability arising out of the
failure of the Buyer to pay any Assumed Liability;

 

(d)          any
fees and expenses incurred by the Seller in connection with negotiating, preparing, closing and carrying out this Agreement and
the transactions contemplated by this Agreement, including, without limitation, the fees, disbursements and expenses for the Seller’s
attorneys, accountants and consultants;

 

(e)          
all liabilities and obligations retained by the Seller pursuant to Article 10;

and

 

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(f)          all
liabilities and obligations retained by the Seller pursuant to Article 12.

 

3.3       Shared
Liabilities. The following liabilities and obligations relating to the Business and the Transferred Assets shall be shared
pro rata between the Buyer and the Seller (the “Shared Liabilities”), as follows:

 

(a)          With
respect to utility charges which relate to billing periods beginning before the Closing Date and ending after the Closing Date,
the responsibility for payment of such utility charges, to the extent that the actual utility charges for such period exceed the
reserves for such utility charges set forth on the Closing Balance Sheet, shall be prorated between the Parties on the basis of
the proportional number of calendar days in the relevant billing period that the Buyer or the Seller owns the Business; and

 

(b)          With
respect to ad valorem, property, real estate, income (federal, state, provincial or financial) and similar type Taxes for the tax
year in which the Closing occurs, the responsibility for payment of such Taxes, will be prorated between the Parties on the basis
of the proportional number of calendar days that the Buyer or the Seller owns the Business in the relevant tax year.

 

If either Party pays any of the
Shared Liabilities for which the other Party is entirely or partially responsible hereunder, then the responsible Party will reimburse
the paying Party for that portion of the Shared Liabilities for which the responsible Party is responsible within twenty (20) business
days of the paying Party’s written demand therefore, provided that any demand for reimbursement shall be accompanied by appropriate
evidence of payment thereof.

 

ARTICLE 4

PURCHASE PRICE

 

4.1       Purchase
Price.

 

(a)        The
aggregate purchase price for the Transferred Assets, shall be U.S. $1,013,053 (the “Purchase Price”), together with
the Buyer’s assumption of the Assumed Liabilities and the Buyer’s share of the Shared Liabilities.

 

4.2       Payment
at Closing. At Closing, the Buyer shall wire transfer the Purchase Price, in immediately available funds to the bank accounts
designated by the Seller to Buyer pursuant to the instructions listed on Schedule 4.2.

 

4.3       Allocation
of the Purchase Price. The parties shall agree to an allocation of the Purchase Price among the Transferred Assets as set
forth on Schedule 4.3, no later than sixty (60) days after the Closing Date. If the parties are unable to agree as
to the allocation within sixty (60) days after the Closing, then the allocation shall be determined by an independent nationally
recognized accountant selected by Buyer but with no past or present personal or business relationship with Buyer or any affiliates
of Buyer. All such mutually agreed to allocations shall

 

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be used for all purposes, including all necessary information
returns required by Section 1060 of the Tax Code relating to the allocation of the consideration for the Transferred Assets, and
any other domestic or any foreign income Tax returns with respect to the transactions contemplated hereby, and no Party hereto
shall take or assert any position inconsistent therewith.

 

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

As of the date hereof, the Seller
makes the following representations and warranties to the Buyer.

 

5.1       Organization
and Existence. The Seller is a duly organized and validly existing legal entity under the laws of the jurisdiction of its
formation and has full power and authority (i) to own or lease the Transferred Assets owned or leased by it, as the case may be,
and (ii) to consummate the transactions contemplated by this Agreement and the Related Agreements.

 

5.2       Corporate
Authority. The entering into and the execution and delivery of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by all requisite corporate action
of the Seller, (b) constitutes the legal, valid and binding obligation of the Seller, and (c) no additional corporate or shareholder
authorization or consent is or will be required.

 

5.3       Financial
Statements. Copies of the Financial Statements have been delivered to the Buyer and are attached as Exhibit 5.3.
The Financial Statements (i) have been prepared from information contained in the books and records of the Seller, (ii) present
fairly, in all material respects, for those items listed therein, the financial position of the Business as of the dates shown
and the results of the Business’s operations for the periods then ended, and (iii) have been prepared in accordance with
the Seller’s Accounting Principles, except as set forth on Schedule 5.3.

 

5.4       Inventory.
The Inventory included in the Financial Statements consists only of raw materials, work-in-process representing contract jobs in
process, finished goods, packaging, supplies and spare parts. Except as set forth on Schedule 5.4, all Inventory is of a
quality and quantity usable and saleable in the ordinary course of business, as determined in accordance with the Seller’s
Accounting Principles.

 

5.5       Real
Property.

 

(a)        Owned
Real Property. The Product Line does not have any Owned Real Property.

 

(b)        Leased
Real Property. The Seller has good and valid leaseholds to all of the Leased Real Property, such leasehold interests being
free and clear of all Liens except Real Property Permitted Exceptions. Each of the leases for the Leased Real Property is in full
force and effect, and the Seller has provided the Buyer with complete copies of all such leases. Except as disclosed on Schedule
5.5(b), the Business has in all material respects performed and is

 

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performing all obligations required to be performed
by it under the leases, and it is not in default of any material obligation under any of the leases. Except as disclosed on Schedule
5.5(b), the Business has not received any written notice of default under any of the leases, nor has any event occurred which
with notice or lapse of time or both would constitute a default by the Business.

 

(c)        Real
Property. Except as described on Schedule 5.5(c), the Real Property constitutes all of the real estate used by the Business
in connection with the conduct of the Business. There are no pending or, to the best of the Seller’s Knowledge, threatened
condemnation or eminent domain proceedings involving the Real Property or any portion thereof, or for a sale in lieu thereof. The
Real Property is zoned so as to permit the continued use of the Real Property by the Buyer for the same purposes and uses as the
same have heretofore been used by the Business.

 

5.6       Title
to Personal Property. Except as set forth on Schedule 5.6, the Seller has good and marketable title to all of the
Personal Property included in the Transferred Assets, free and clear of all Liens, except for (a) Liens for Taxes not yet due and
payable or which are being contested in good faith, and (b) other matters that do not materially impair the operation of the Business
as presently conducted or that would otherwise have a Material Adverse Effect. The exceptions set forth in subsections (a) and
(b) in this Section 5.6 above shall be referred to as the “Personal Property Permitted Exceptions.”

 

5.7       Condition
and Sufficiency of Transferred Assets. The Transferred Assets currently used in the operation of the Business are in such
condition and repair, reasonable wear and tear excepted, as is suitable for the purposes for which they are presently used in the
conduct of the Business. The Transferred Assets, together with the Buyer’s rights and interests under the Related Agreements,
constitute all of the assets, rights and interests which are related primarily or exclusively to the Business (other than Excluded
Assets) and are sufficient, together with the items set forth pursuant to Section 5.23(b), for the lawful operation of the Business.

 

5.8       Contracts.

 

(a)        Except
as set forth on Schedule 5.8(a), the Seller is not a party to or bound by any agreement or contract, whether written or
oral, of the following types that involve the Business, the Transferred Assets, the Assumed Liabilities or the Buyer’s share
of the Shared Liabilities nor are any such agreements or contracts presently being negotiated or discussed:

 

(i)          Any
contract, lease, agreement, plan or arrangement (other than blanket purchase orders from customers) involving commitments to others
to make capital expenditures or purchases or sales involving $100,000 or more in any one case or $250,000 in the aggregate in any
period of 12 consecutive months which are not cancelable by the Seller, without penalty, on less than 90 days prior written notice
and any blanket purchase orders from customers involving $250,000 or more which are not cancelable by the Seller, without penalty,
on less than 90 days prior written notice;

 

(ii)         Any
contract, lease, agreement, plan or arrangement relating to any direct or indirect indebtedness for borrowed money (including loan
agreements, lease purchase

 

    	8

    	 

    

 

arrangements, guarantees, agreements to purchase goods
or services or to supply funds or other undertakings on which others rely in extending credit), or any conditional sales contracts,
chattel mortgages, equipment lease agreements and other security arrangements with respect to personal property with an obligation
in excess of $100,000 in any one case or $250,000 in the aggregate in any period of 12 consecutive months which are not cancelable
by the Seller, without penalty, on less than 90 days prior written notice;

 

(iii)        Any
contract, lease, agreement, plan or arrangement between the Seller and any Affiliate or related party thereof in their respective
individual capacities outside the ordinary course of business where the amount involved exceeds $50,000,

 

(iv)         Any
employment, consulting or management services contract or any confidentiality or proprietary rights agreement with any employee
of the Seller or any Third Party entered into outside the ordinary course of business where the amount involved exceeds $50,000;

 

(v)          Any
license agreement, either as licensor or licensee, or any other agreement or arrangement of any type relating to any patent, trademark
or trade name or other Transferred Asset except for licenses for Software where the annual fees for the license are less than $25,000;

 

(vi)         Any
contract, agreement or arrangement of any kind whatsoever, whether exclusive or otherwise, with any sales agent, representative,
franchisee or distributor outside the ordinary course of business where the amount involved exceeds $75,000;

 

(vii)        Any
contract or arrangement of any kind whatsoever which requires the payment of royalties;

 

(viii)      Any
outstanding bid or proposal to any customer relating to an agreement in excess of $1,000,000;

 

(ix)         Any
other legally binding contract, agreement, plan or arrangement not of the type covered by any of the other items of this Section
5.8 involving money or property having an obligation in excess of $100,000 in any one case or $250,000 in the aggregate in any
period of 12 consecutive months which are not cancelable by the Seller, without penalty, on less than 90 days prior written notice
(collectively, the contracts set forth on Schedule 5.8(a) shall be the “Disclosed Contracts”).

 

(b)        Except
as disclosed on Schedule 5.8(b), with respect to the Business,

 

(i)          all
of the Disclosed Contracts are in full force and effect and are valid, binding and enforceable in accordance with their terms;
and

 

(ii)         the
Seller has not received any written notice of default under any of the Disclosed Contracts, nor has any event occurred which with
notice or lapse of time or both

 

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would constitute a default by the Seller thereunder,
and the Seller has not received any written or verbal notice of intent to terminate any Disclosed Contract.

 

5.9       Proprietary
Rights. The Seller is the sole owner of all of the Proprietary Rights listed as “owned” on Schedule
2.1(f), and the Seller has the right, under valid, binding and subsisting license, technology or similar agreements to employ or
otherwise use the Proprietary Rights listed as “licensed” on Schedule 2.1(f). Except as disclosed on Schedule
5.9:

 

(a)        The
Seller is not in default of any material obligation under any such license, technology or similar agreement;

 

(b)        The
Seller has not granted any right or interest to any Person in connection with any of the Proprietary Rights;

 

(c)        The
Seller is not obligated to pay any amount, whether as a royalty, license fee or other payment, to any Person in order to use any
of the Proprietary Rights in the conduct of the Business or the ownership of the Transferred Assets;

 

(d)        The
Seller has acquired sole and exclusive ownership of all Proprietary Rights (except with respect to the Software for which the Business
has been granted end-user licenses) and applications thereof (whether or not patentable) and have the right to use or license the
use of the Proprietary Rights to the products or services which are now being used in the conduct of the Business and all of such
patents and registrations and applications therefor are free and clear of any Liens; and

 

(e)        Except
with respect to the Software for which the Seller has been granted end-user licenses, to the best of the Seller’s Knowledge
(i) none of the Proprietary Rights and none of the applications therefor set forth on Schedule 2.1(f) are subject to any pending
or threatened challenge, claim or dispute, (ii) none of the Proprietary Rights and none of the applications therefor set forth
on Schedule 2.1(f) have during the prior three years been the subject of any challenge, claim or dispute, (iii) the operation of
the Business and the ownership of the Transferred Assets does not infringe upon or otherwise violate any right of any Third Party,
(iv) none of the Proprietary Rights is being infringed by any Third Party; (v) there are no impediments to the ability of
the Seller to maintain and, where lawful, to renew the Proprietary Rights, (vi) none of the Proprietary Rights is subject to any
outstanding order, decree, judgment or stipulation, and (vii) the Seller has not received any notice of conflict with asserted
proprietary rights of others.

 

5.10     Tax
Matters.

 

(a)        Except
for Tax returns and Tax reports set forth on Schedule 5.10, which are being contested in good faith and by appropriate proceedings,
the Seller has filed all federal, state, provincial, local, foreign, or other income tax returns and tax reports required to be
filed by it that have a substantial and direct connection with the Transferred Assets or the Business, and has paid all federal,
state, provincial, local, foreign, or other income taxes shown on such returns and reports as owing that have a substantial and
direct connection with the Transferred Assets or

 

    	10

    	 

    

 

the Business, except where the failure to file such
income tax returns and reports or to pay such income taxes would not have a material adverse effect on the financial condition
of Business. 

 

(b)        Except
as set forth on Schedule 5.10 and specifically limited to audits, issues, agreements or waivers substantially and directly
related to the Transferred Assets or the Business, no Tax audit with respect to any Tax returns or Taxes of Seller is pending,
no taxing authority has raised any issues in connection with any tax audit of the Seller that could reasonably be expected to result
in a material tax deficiency based upon applicable law existing on or before the date hereof, and there are no outstanding agreements
or waivers to extend the period of limitations for the assessment or collection of any Tax.

 

(c)        Buyer
will not assume any Liability for (i) Taxes of Seller (or any stockholder or Affiliate of Seller) or relating to the Business,
the Purchased Assets or the Assumed Liabilities for any Pre-Closing Tax period; (ii) Taxes that result from Seller’s gain
or loss due to the consummation of the transactions contemplated hereby or that are the responsibility of Seller pursuant to Section
3.1; or (iii) other Taxes of Seller (or any stockholder or Affiliate of Seller) of any kind or description (including any Liability
for Taxes of Seller (or any stockholder or Affiliate of Seller) that becomes a Liability of Buyer under any common law doctrine
of de facto merger or transferee or successor liability or otherwise by operation of contract or Law).

 

 

5.11     Environmental
Matters.

 

(a)        Except
as set forth in Schedule 5.11(a) and except for such matters as would not be reasonably likely to have a Material Adverse
Effect:

 

(i)          All
of the operations of the Business are in compliance with all applicable Environmental Laws including, but not limited to, the possession
of all permits and other governmental authorizations required under applicable Environmental Laws;

 

(ii)         There
is no pending or threatened claim, lawsuit or administrative proceeding against the Seller with respect to the Business, under
any Environmental Law, and the Seller has not received written notice from any Person, including a Governmental Entity, alleging
that the Seller is in violation of any applicable Environmental Law or otherwise may be liable under any applicable Environmental
Law in connection with ownership or operation of the Business, which violation or liability is unresolved; and

 

(iii)        There
have been no Releases, spills or discharges of Hazardous Materials on or underneath any of the Owned Real Property or Leased Real
Property by the Seller in amounts that would be reasonably likely to give rise to remedial obligations under any applicable Environmental
Laws.

 

(b)        The
following terms shall have the indicated meaning:

 

“Environmental Laws”
means all federal, state, local and foreign laws (including common law) and regulations relating to pollution or protection of
human health or the

 

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environment, including without limitation, laws relating
to Releases or threatened Releases of Hazardous Materials or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, Release, disposal, transport or handling of Hazardous Materials and all laws and regulations with regard to
record keeping, notification, disclosure and reporting requirements respecting Hazardous Materials, including but not limited to
the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), the Resource Conservation and
Recovery Act (“RCRA”), 42 U.S.C. §6901 et seq. (“RCRA”), the Clean Water Act 33 U.S.C. §1251
et seq.(“CWA”), the Safe Drinking Water Act, 42 U.S.C. §300f et seq. (“SWDA”), the Clean Air Act,
42 U.S.C. §7401 et. seq. (“CAA”), the Toxic Substances Control Act, 15 U.S.C §2601 et seq. (“TSCA”),
and the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §11001 et seq. (“EPCRA”), and similar
federal, state, provincial, territorial, local, municipal and foreign laws; and any laws, ordinances, regulations, rules,
orders, permits, approvals, decisions or decrees, and any laws concerning worker health or safety, including, but not limited to,
the Occupational Safety and Health Act (“OSHA”) and similar state, provincial, territorial, local, municipal and foreign
laws.

 

“Hazardous Materials”
means all substances defined as Hazardous Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous Substances
Pollution Contingency Plan, 40 C.F.R. § 300.5, or defined as such by, or regulated as such under, any Environmental Law.

 

“Release” means
any release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration into
the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater and surface or subsurface
strata) or into or out of any property, including the movement of Hazardous Materials through or in the air, surface water, groundwater
or property.

 

5.12     No
Breach of Contract, No Violations of Law, No Prior Approval.

 

(a)        Neither
the execution and delivery of this Agreement nor compliance with its terms and provisions will conflict with, result in the breach
or violation of, or constitute a default under, any of the terms, conditions or provisions of (i) the Seller’s Articles of
Incorporation or Regulations (or comparable charter documents); (ii) any agreement or instrument to which the Seller is a party,
or to which any of the Transferred Assets or Assumed Liabilities are subject except as set forth on Schedule 5.12(a); or
(iii) any law applicable to any of the Transferred Assets, other than, in the case of clauses (ii) and (iii) of this Section 5.12(a),
conflicts, breaches, violations or defaults which would not have a Material Adverse Effect. Except as identified on Schedule
5.12(a), neither the execution and delivery of this Agreement nor compliance with its terms and provisions will result in the
creation or imposition of any Lien upon any of the Transferred Assets.

 

(b)        Other
than (i) consents to transfer or novations required with respect to contracts with governments or government agencies (including,
without limitation, the Government Contracts), and (ii) those filings, Permits, authorizations, consents and approvals identified
on Schedule 5.12(b), no filing with, or Permit, authorization, consent or approval of, any domestic or foreign government
authority is required for the consummation by the Seller of the

 

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transactions contemplated by this Agreement, except
for any filings, Permits, authorizations, consents or approvals the failure to make, file, give or obtain which would not have
a Material Adverse Effect.

 

5.13         Litigation.
Except as set forth on Schedule 5.13, there is no material pending or, to the best of the Seller’s Knowledge, threatened
claim, litigation, proceeding or order of any court or governmental agency or arbitrator or governmental investigation solely or
primarily relating to the Business or any of the Transferred Assets.

 

5.14         Finders,
Brokers and Investment Bankers. No finder, broker or investment banker acting or who has acted on behalf of the Seller
in connection with the transactions contemplated by this Agreement is entitled to receive any commission or finder’s fee
in connection with such transactions, and, to the best of the Seller’s Knowledge, no other Person is entitled to receive
any commission or finder’s fee from the Seller in connection with such transactions.

 

5.15         No
Material Adverse Change. Except as contemplated by this Agreement or as disclosed on Schedule 5.15, and except where
such events would not reasonably be expected to have a Material Adverse Effect, since June 27, 2014, the Seller has conducted the
Business in the ordinary course consistent with past practices and there has not occurred:

 

(a)          any
Material Adverse Effect;

 

(b)          any
uninsured damage to, destruction or loss of any Transferred Asset that could reasonably be expected to have a Material Adverse
Effect;

 

(c)          any
material change by the Seller to the Seller’s Accounting Principles, except changes mandated by GAAP;

 

(d)          any
material revaluation of any of the Transferred Assets, including, without limitation, writing down the value of Inventory or writing
off Accounts Receivable other than in the ordinary course of business; or

 

(e)          any
sale or transfer of a material amount of the Transferred Assets, other than sales of inventory in the ordinary course of business.

 

5.16         Governmental
Permits and Licenses; Compliance with Laws. Except for matters which would not have a Material Adverse Effect on the Business,
the Transferred Assets or the Assumed Liabilities (a) the Seller has all of the Permits required to own the Transferred Assets
and to carry on the Business as presently conducted, and, assuming proper action by the other party thereto or by the issuer thereof,
all such Permits are valid and in effect, and (b) to the best of the Seller’s Knowledge, neither the ownership of the Transferred
Assets nor the operation of the Business as it is presently conducted, violates any applicable order, law, ordinance, code or regulation.
The Seller has not received any written notice of any such violation.

 

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5.17       Employees;
Labor Relations.

 

(a)          Except
for items that would not be material, the Seller has paid in full or will accrue on the Closing Balance Sheet all wages, salaries,
commissions, bonuses, benefits, and other compensation due to any Product Line Employee or otherwise arising under any employment
related policy, practice, agreement, plan, program, statute or law.

 

(b)          Schedule
5.17(b) sets forth a correct and complete list of all collective bargaining agreements (the “Collective Bargaining Agreements”),
complete copies of which have been made available to the Buyer, covering Product Line Employees.

 

(c)          With
respect to the Business, except as set forth on Schedule 5.17(c), the Seller has not received any written notice of any
unfair labor practice complaints or any other action, suit, complaint, charge, arbitration, inquiry, proceeding or investigation
pending before the National Labor Relations Board or any other agency having similar jurisdiction and, to the best of the Seller’s
Knowledge, no such complaint has been threatened. With respect to the Product Line Employees, except as set forth on Schedule
5.17(c), there are no material unsatisfied judgments relating to claims, grievances, arbitration proceedings, workers’
compensation proceedings other than standard employee medical, temporary total, permanent partial and applications for increase
in permanent partial disability benefits currently covered by the Seller’s past and present workers compensation insurance.
The Seller is not a party to or otherwise bound by, any consent decree with, or citation by, any government agency relating to
any Product Line Employee or employment practices, wages, hours, and terms and conditions of employment with respect to the Business.

 

5.18      Employee
Benefits.

 

(a)          Schedule
5.18(a) lists all material Employee Benefit Plans maintained by the Seller with respect to the Business. The Seller has furnished
or made available to the Buyer (i) a complete and correct copy or description of each Employee Benefit Plan; (ii) the most recent
summary plan description for the Master Savings Plan (401(k)) and Welfare Plans; (iii) the most recent determination letter issued
by the Internal Revenue Service for the Master Savings Plan; and (iv) the two most recent annual reports (Form 5500 series) and
accompanying schedules for the Master Savings Plan and Welfare Plans;

 

(b)          Each
Employee Benefit Plan has been maintained in all material respects in accordance with its terms and with the requirements prescribed
by Law.

 

(c)          Except
as set forth on Schedule 5.18(c), there are no actions, suits, arbitrations or other proceedings (other than routine claims
for benefits), or to the best of Sellers’ Knowledge, there are no threatened actions, suits, arbitration, or other proceedings
against any Employee Benefit Plan which could reasonably be expected to result adversely in a Material Adverse Effect.

 

(d)          All
contributions required to be made to an Employee Benefit Plan by Law or by any Employee Benefit Plan document or contractual undertaking,
and all premiums

 

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due or payable with respect to any insurance policy
funding any Employee Benefit Plan for the time period through the date hereof, have been timely made or paid in full, or to the
extent not required to be made or paid on or before the date hereof, have been reflected on the Closing Balance Sheet.

 

(e)          The
Internal Revenue Service has issued a favorable determination letter with respect to the Master Savings Plan (and related funding
arrangement) which has not been revoked and no circumstance or event exists or has occurred which could adversely affect such qualified
status thereof.

 

(f)          Each
Health Plan that provides medical benefits to Product Line Employees has been operated in compliance in all respects with the requirements
of Sections 601 through 608 of ERISA and Section 4980B of the Tax Code (“COBRA”) relating to the continuation of coverage
under certain circumstances in which coverage would otherwise cease.

 

5.19       Liabilities.
Except as set forth and adequately reserved for on the Closing Balance Sheet and except for matters which would not have a Material
Adverse Effect, the Seller has no outstanding claims, liabilities or indebtedness, fixed or contingent, or obligations of any nature,
whether accrued, absolute, contingent, threatened or otherwise, whether due or to become due, with respect to the Business, other
than (a) liabilities incurred in the ordinary course and conduct of the Business since December 31, 2013 which do not involve indebtedness
for borrowed money and (b) claims, liabilities or indebtedness of the type not required to be disclosed in the Financial Statements
or notes thereto in accordance with GAAP.

 

5.20       Government
Contracts.

 

(a)          Except
as set forth on Schedule 5.20(a), to the best of Seller’s Knowledge, (i) none of the employees of the Business is or during
the last two (2) years has been (except as to routine security investigations) under administrative, civil or criminal investigation,
indictment or information by the U.S. Government, (ii) there is not any pending audit or investigation of the Business or any of
its employees which would result in a Material Adverse Effect with respect to any alleged irregularity, misstatement or omission
arising under or relating to a Government Contract or bid and (iii) during the last two (2) years, the Seller has not made, with
respect to the Business, a voluntary disclosure with respect to any alleged irregularity, misstatement or omission arising under
or relating to any Government Contract or bid relating to the Business, in each case of (i) through (iii) above, other than routine
inquiries, audits and reconciliations such as do not constitute a Material Adverse Effect.

 

(b)          Except
as set forth on Schedule 5.20(b), with respect to the Business, there are (i) no outstanding claims by the U.S. Government
or by any prime contractor, subcontractor or vendor arising under or relating to any Government Contract or bid and (ii) no disputes
with the U.S. Government under the Contract Disputes Act or any other federal statute, except such as in each case are not reasonably
expected to have a Material Adverse Effect.

 

(c)          None
of the employees of the Business is (or during the last two (2) years has been) suspended or debarred from doing business with
the U.S. Government or is (or during such

 

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period was) the subject of a finding of non-responsibility
or ineligibility for U.S. Government contracting.

 

(d)          Except
as set forth on Schedule 5.20(d), the rates and rate schedules submitted to the U.S. Government with respect to the Government
Contracts included in the Transferred Assets have been closed for all years prior to 2008.

 

5.21       Government
Furnished Equipment.

 

(a)          The
Business is in compliance with all material obligations relating to any equipment or fixtures owned by any Governmental Entity
and loaned, bailed or otherwise furnished to or held by the Business, except where the failure to so comply would not, individually
be expected to have a Material Adverse Effect.

 

(b)          Schedule
5.21(b) contains a list of a government-furnished equipment used or held for use by the Business by or on behalf of the U.S.
Government. Such schedules are maintained in the files of the Business and were accurate and complete and, as of the Closing Date,
would contain only those additions and omit only those deletions of equipment and fixtures that have occurred in the ordinary course
of business, except for such inaccuracies that could not reasonably be expected to have a Material Adverse Effect.

 

5.22       Disclaimer;
Cross References.

 

(a)          EXCEPT
FOR REPRESENTATIONS AND WARRANTIES MADE BY THE SELLER IN ARTICLE 5, THE SELLER HAS NOT MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES,
EITHER EXPRESS OR IMPLIED, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, ALL SUCH WARRANTIES BEING EXPRESSLY DISCLAIMED, AND THE BUYER HAS NOT RELIED ON ANY SUCH REPRESENTATIONS
AND WARRANTIES, EXCEPT FOR THOSE MADE BY THE SELLER IN ARTICLE 5. THIS AGREEMENT SHALL NOT BE COVERED BY THE WARRANTIES PROVIDED
BY ARTICLE 2 OF THE UNIFORM COMMERCIAL CODE OR ANY SIMILAR LAWS OF ANY JURISDICTION. THIS PROVISION SHALL NOT IN ANY WAY AFFECT
OR DIMINISH ANY AGREEMENT OR COVENANT CONTAINED IN ANY OTHER SECTION OF THIS AGREEMENT.

 

(b)          Information
to be disclosed in any one Schedule herein referred to may be supplied in any Schedule by cross-reference to any other Schedule.

 

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF THE BUYER

 

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The Buyer makes the following representations
and warranties to the Seller.

 

6.1         Organization,
Existence and Standing of the Buyer. The Buyer is a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority to own or lease its assets, to carry on its business
as it is now conducted and to consummate the transactions contemplated by this Agreement and the Related Agreements.

 

6.2         Corporate
Authority. The entering into and the execution and delivery of this Agreement and the Related Agreements and the consummation
of the transactions contemplated hereby and thereby (a) have been duly and validly authorized by requisite corporate action of
the Buyer, and (b) constitutes the legal, valid, and binding obligation of Buyer and (c) no additional corporate or stockholder
authorization or consent is or will be required.

 

6.3         No
Breach of Contract, No Violations of Law, No Prior Approval.

 

(a)          Neither
the execution and delivery of this Agreement nor compliance with its terms and provisions will conflict with, result in the breach
or violation of, or constitute a default under, any of the terms, conditions, or provisions of (i) the Buyer’s Certificate
of Incorporation or By-laws (or comparable charter documents); (ii) any agreement or instrument to which the Buyer is a party or
by which the Buyer is bound; or (iii) any law applicable to the Buyer, other than, in the case of clauses (ii) and (iii) of this
Section 6.3(a), conflicts, breaches, violations or defaults which would not have a Material Adverse Effect.

 

(b)          No
filing with, or Permit, authorization, consent or approval of, any domestic or foreign government authority is required for the
consummation by the Buyer of the transactions contemplated by this Agreement.

 

6.4         Litigation.
There is no pending, or to the best of the Buyer’s knowledge, threatened claim, litigation, proceeding or order of any court
or governmental agency or arbitrator or governmental investigation relating to the Buyer, their business or their assets which,
if adversely determined, would, individually or in the aggregate, materially impair, hinder or otherwise materially and adversely
affect the ability of the Buyer to effect the Closing, or to perform any of its material obligations under this Agreement or any
of the Related Agreements.

 

6.5         Finders,
Brokers and Investment Bankers. No finder, broker or investment banker acting or who has acted on behalf of the Buyer in
connection with the transactions contemplated by this Agreement is entitled to receive any commission or finder’s fee in
connection with such transactions, and to the best of Buyer’s knowledge, no other Person is entitled to receive any commission
or finder’s fee from the Buyer in connection with such transactions.

 

6.6         Financing.
As of Closing, the Buyer shall have sufficient funds available to it to pay to the Seller, as the case may be, the Purchase Price
and to otherwise satisfy all of its obligations under this Agreement and the Related Agreements.

 

6.7.        Disclaimer
as to Condition of Transferred Assets. Except as otherwise expressly provided in this Agreement, Buyer acknowledges, on
behalf of itself and any affiliates or related

 

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parties, that Seller has not made, and that the Seller
has expressly disclaimed and negated, any representation or warranty, express or implied, relating to the condition of the Sale
Assets, and Buyer acknowledges Section 5.22 hereof:

 

It is the express intention of
Buyer and Seller that (except to the extent expressly provided in this Agreement) the Transferred Assets shall be acquired by or
conveyed to Buyer “AS IS” and in their present condition and state of repair.

 

6.8.        Nonreliance.
In connection with its decision to purchase the Transferred Assets, the Assumed Liabilities and the Shared Liabilities, Buyer,
on behalf of itself, its affiliates and its related parties, acknowledge, understand and agree that the Buyer (a) is a sophisticated
party with such knowledge and experience in business matters that they appreciate the merits and risks of purchasing the Transferred
Assets, the Assumed Liabilities and the Shared Liabilities and consummating the Transaction, (b) are not relying upon any forward
looking projections, forecasts, budgets, financial data or any other forward looking information (written or oral), with respect
to the Business, the Transferred Assets, the Assumed Liabilities or the Shared Liabilities, prepared by or furnished to it by or
on behalf of Seller (“Forward Looking Data”), (d) recognize that significant uncertainties are inherent in such
Forward Looking Data and that Seller has not made any representations or warranties, expressed or implied, relating to the Forward
Looking Data, and (e) take full responsibility for making their own evaluation as to the adequacy and accuracy of such Forward
Looking Data. Except for the representations and warranties made by Seller in Article 5, Buyer acknowledges that there are no representations
or warranties, express or implied, as to the financial condition, assets, liabilities, equity, operations, or prospects of the
Business.

 

6.9.        Access
to Information. Buyer has had an adequate opportunity to discuss with the management of the Business, the Business, and
to review in detail the Business, the Transferred Assets, the Assumed Liabilities, the Shared Liabilities and operations of the
Business, including, but not limited to, the properties, operations, liabilities, obligations, books, accounts, records, contracts
and documents, and is deemed to have knowledge of the information contained therein, the information made available to Buyer, and
otherwise disclosed to Buyer.

 

6.10       Disclaimer.
EXCEPT FOR REPRESENTATIONS AND WARRANTIES MADE BY THE BUYER IN ARTICLE 6, THE BUYER HAS NOT MADE AND MAKES NO REPRESENTATIONS OR
WARRANTIES, EITHER EXPRESS OR IMPLIED, CONCERNING THE SUBJECT MATTER OF THIS AGREEMENT, AND THE SELLER HAS NOT RELIED ON ANY REPRESENTATIONS
AND WARRANTIES EXCEPT FOR THOSE MADE BY THE BUYER IN ARTICLE 6. THIS AGREEMENT SHALL NOT BE COVERED BY THE WARRANTIES PROVIDED
BY ARTICLE 2 OF THE UNIFORM COMMERCIAL CODE OR ANY SIMILAR LAWS OF ANY JURISDICTION. THIS PROVISION SHALL NOT IN ANY WAY AFFECT
OR DIMINISH ANY AGREEMENT OR COVENANT CONTAINED IN ANY OTHER SECTION OF THIS AGREEMENT.

 

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ARTICLE 7

COVENANTS OF THE SELLER

 

The Seller covenants and agrees
with the Buyer as follows:

 

7.1        Access
by the Buyer to Properties and Records; Furnishing Information

 

Subject to the provisions of the
Confidentiality Agreement, any applicable laws or regulations, including, without limitation, those prohibiting disclosure of information
to non-US citizens, and the terms of any contracts of the Business, from and after the Closing Date, the Seller shall make available
to the Buyer, from time to time as the Buyer may reasonably request, copies of such of the records retained by the Seller relating
to the Business, the Transferred Assets, the Assumed Liabilities, and the Buyer’s share of the Shared Liabilities as may
be reasonably required to enable the Buyer to defend against or assert claims related to or arising from ownership of the Transferred
Assets, the assumption of the Assumed Liabilities, the Buyer’s share of the Shared Liabilities or the conduct of the Business
prior to the Closing Date and to handle Tax and financial audits involving the Business; provided, however, that the Buyer
agrees to hold such records in confidence, except to the extent required to defend or assert such claims and to handle such audits,
and to return the same to the Seller promptly upon the conclusion of their use by the Buyer for the purposes herein specified.

 

ARTICLE 8

COVENANTS OF THE BUYER

 

The Buyer covenants and agrees
with the Seller as follows.

 

8.1         Make
Records Available. From and after the Closing Date, the Buyer shall make available to the Seller, from time to time as
the Seller may reasonably request, copies of such of the records transferred to the Buyer by the Seller pursuant to this Agreement
as may be reasonably required by Seller to enable it to defend against or assert claims related to or arising from ownership of
the Transferred Assets or the conduct of the Business by the Seller prior to the Closing Date and to handle Tax and financial audits
involving the Business; provided, however, that the Seller agrees to hold such records in confidence, except to the extent
required to defend or assert such claims and to handle such audits, and to return the same to the Buyer promptly upon the conclusion
of their use by the Seller for the purposes herein specified. The Buyer shall also use its best efforts to make Buyer’s employees
available to assist in connection with such claims when reasonably requested by Seller.

 

8.2        Novation
of Government Contracts. As soon as practicable following the Closing, the Buyer shall prepare (with the Seller’s
assistance, which will include preparation of the initial drafts of the novation requests and furnishing the information required
for such requests), in accordance with Federal Acquisition Regulations Part 42.12 and any applicable agency regulations or policies,
a written request meeting the requirements of the Federal Acquisition Regulations Part 42, as reasonably interpreted by the Responsible
Contracting Officer (as such term is defined in Federal Acquisition Regulations Part 42 (P) 42.1202(a)), which shall be submitted
by the Seller to each Responsible Contracting Officer (i) to recognize the Buyer as the Seller’s successor-in-interest to
all the Transferred Assets constituting a Government Contract; and (ii) to enter into a novation agreement (a “Novation Agreement”)
in form and in accordance with government requirements, pursuant to which, subject to the

 

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requirements of the Federal Acquisition Regulations
Part 42, all of Seller’s right, title and interest in and to, and all of Seller’s obligations and liabilities under,
each such Government Contract shall be validly conveyed, transferred and assigned and novated to the Buyer by all parties thereto.
The Seller and the Buyer shall each use all reasonable efforts to obtain all consents, approvals and waivers required for the purpose
of processing, entering into and completing the Novation Agreements with regard to any of the Government Contracts, including responding
to any requests for information by the U.S. Government with regard to such Novation Agreements.

 

ARTICLE 9

MUTUAL COVENANTS

 

9.1         Transition
Services Agreements. At Closing, the Seller shall enter into Transitional Services Agreements (if required) in the forms
set forth on Exhibit 9.1 A and Exhibit 9.1 B (the “Services Agreements”). Exhibit 9.1 A relates
to the provision of certain services by the Seller for the Buyer following the Closing Date, and Exhibit 9.1 B relates to
the provision of certain services by the Buyer for the Seller following the Closing Date.

 

9.2         Payments
Received. The Seller and the Buyer agree that, after the Closing Date, they shall hold and shall promptly transfer and
deliver to the other, from time to time as and when received by them and in the currency received by them, any cash, checks with
appropriate endorsements, or other property that they may receive on or after the Closing Date which properly belongs to the other
Party, including, without limitation, any payments of accounts receivable and insurance proceeds, and shall account to the other
for all such receipts. In the event of a dispute between the Parties regarding their respective obligations hereunder, the Parties
shall cooperate and act in good faith to promptly resolve such dispute and, in connection with such cooperation, allow each other
reasonable access to the records of the other relating to such disputed item.

 

9.3         Further
Assurances. From time to time after the Closing Date, the Buyer and the Seller shall, at their own expense, execute and
deliver, or cause to be executed and delivered, all such other instruments, including instruments of conveyance, assignment and
transfer and to make all filings with and to obtain all consents, approvals or authorizations of any governmental or regulatory
authority or any other Person under any Permit and take all such other actions as such Party may reasonably be requested to take
by the other Party to this Agreement, consistent with the terms of this Agreement, in order to effectuate better the provisions
and purposes of this Agreement and the transactions contemplated by this Agreement.

 

9.4         Covenant
Regarding Personnel.

 

(a)          Except
for the Employees set forth on Schedule 9.4(a), Seller agrees that, for a period of one year after the Closing Date, it
shall not, and shall cause its Subsidiaries not to, without first obtaining the written consent of the Buyer, which consent may
be withheld for any reason, directly or indirectly solicit or attempt to solicit any person who is employed by the Buyer or its
Subsidiaries in the Business to leave his or her employer or to become an employee of the Seller or any of its Subsidiaries. The
foregoing shall not prohibit (i) the Seller or its

 

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Subsidiaries from soliciting or employing any individual
who has received notice of termination from, or ceases to be employed by, the Buyer or its Subsidiaries prior to the first time
such individual discussed with any representative of the Seller or its Subsidiaries employment by such party, and (ii) the
Seller or its Subsidiaries from employing an individual who responds to a general solicitation of employment by such party.

 

(b)          Except
as contemplated by Sections 9.4 and 10.1, the Buyer agrees that, for a period of one year after the Closing Date, it shall not,
and shall cause its Subsidiaries not to, without first obtaining the written consent of the Seller, which consent may be withheld
for any reason, directly or indirectly solicit or attempt to solicit any person who is or was employed by the Seller or its Subsidiaries
to leave his or her employer or to become an employee of the Buyer or any of its Subsidiaries. The foregoing shall not prohibit
(i) the Buyer or its Subsidiaries from soliciting or employing any individual who has received notice of termination from,
or ceases to be employed by, the Seller or its Subsidiaries prior to the first time such individual discussed with any representative
of the Buyer or its Subsidiaries employment by such party, and (ii) the Buyer or its Subsidiaries from employing an individual
who responds to a general solicitation of employment by such party.

 

9.5         Guarantee
of Performance. Buyer hereby irrevocably and unconditionally guarantees to the Seller the full, faithful and prompt performance
by the Buyer Subsidiaries of all obligations, when due, which are, by this Agreement, obligations of (i) the Buyer Subsidiaries
or (ii) Buyer, but which have been assigned or transferred to the Buyer Subsidiaries, whether such obligations are in the nature
of the payment of money, the providing of services or otherwise (“Buyer Obligations”). The obligations of Buyer hereunder
are direct and primary and shall not be discharged until all of the Buyer Obligations have been discharged by the Buyer Subsidiaries
or Buyer, and such obligations of the Buyer hereunder shall not be discharged, released or affected by any bankruptcy, insolvency,
dissolution, liquidation, reorganization or similar circumstances of or relating to the Buyer Subsidiaries.

 

ARTICLE 10

EMPLOYEES AND EMPLOYEE BENEFITS

 

10.1       Offer
of Employment. The Buyer agrees to offer immediate employment as of the day following the Closing Date (the “Effective
Date”) to the Product Line Employees (including, without limitation, Inactive Employees, but excluding those Product Line
Employees identified on Schedule 10.1). Employment for Product Line Employees shall be offered on such terms and conditions
that are equivalent, in the aggregate, to the terms and conditions provided by the Seller to such Product Line Employees as of
the Closing Date. In addition, the Buyer agrees to offer employment to any Product Line Employee who is absent due to long-term
disability on the Closing Date and who is able to return to work within the 18-month period following the Closing Date. The Buyer
agrees to comply with all employer obligations required by Law with respect to Product Line Employees.

 

10.2       Severance
Payment Responsibilities. On and after the Effective Date, the Buyer shall assume all liabilities, responsibilities, and
obligations for severance payments or other separation benefits to which any transferred Product Line Employee may be or become
entitled, or claim to be entitled, as a result of the acquisition of the Business by the Buyer, including,

 

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without limitation, any such claim which might be made
against either the Seller or the Buyer at any time. The severance payments and separation benefits provided by the Buyer to any
Product Line Employee after the Closing Date shall be at least equal to the payments and benefits that would have been provided
to such Product Line Employee under the plans, programs and policies described on Schedule 10.2 for a period of 24 months
after the Effective Date.

 

10.3      Employee
Benefit Plans.

 

(a)        Welfare
Plans and Benefit Arrangements. The Seller and the Buyer agree that:

 

(i)          As
soon as practicable after the Effective Date but no later than January 1, 2015, the Buyer shall transition Product Line Employees
who become employees of the Buyer on the Effective Date (“Transferred Employees”) with employee health and welfare
plans and programs (“Buyer’s Welfare Plans”) and benefit arrangements (“Buyer’s Benefit Arrangements”)
which are the same as those offered to current similar level employees of Buyer. Until the time of transfer, the Seller agrees
to cover the Transferred Employees on its Health and Welfare Plans and, for fully insured plans, shall bill the Buyer for the premium
cost and, for self-insured plans, the Administrative Service Fee and actual claims incurred – therefor without any markup
or service fee.

 

(ii)         The
Buyer’s Welfare Plans which provide medical, dental, vision, and health benefits to Transferred Employees shall provide such
benefits pursuant to Section 10.3(a)(i) without the applicability of any pre-existing physical or mental condition restrictions
(other than those in effect on the Closing Date under a Welfare Plan) and to the extent that a Transferred Employee has satisfied
in whole or in part any annual deductible amount, any out-of-pocket limits or paid any expenses pursuant to a co-insurance provision
under a Welfare Plan on the Closing Date, such Transferred Employee shall be credited with such amounts under the applicable Buyer’s
Welfare Plan.

 

(iii)        The
Buyer shall provide health care continuation coverage pursuant to COBRA to any eligible Transferred Employee (or dependents thereof)
whose coverage terminates on and after the Effective Date.

 

(iv)         Except
as may be provided for under a Transition Services Agreement, Buyer shall be liable and responsible for welfare benefit claims
with respect to services rendered on or after the Closing Date and Seller shall be liable and responsible for welfare benefit claims
with respect to services rendered prior to the Closing Date. Except as specifically otherwise provided herein, coverage of all
Transferred Employees under the Welfare Plans or Benefit Arrangements maintained by the Seller on the Closing Date, including without
limitation, COBRA continuation coverage, life, accidental death and dismemberment, short and long term disability insurance, for
such Transferred Employees, shall cease as of midnight on the Closing Date; provided, however, that coverage under Welfare Plans
providing medical, dental, vision, and health benefits to Transferred Employees shall cease on the last day of the month in which
the Closing Date occurs.

 

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(v)          The
Buyer shall be liable, responsible, and obligated for the payment of all vacation and holiday benefits, as determined in accordance
with the Seller’s vacation practices in effect on the Closing Date for Product Line Employees, that have not been paid by
the Seller prior to the Closing Date to the Transferred Employees. On and after the Effective Date, the Buyer shall provide each
Product Line Employee, who becomes a Transferred Employee, with the same annual vacation benefits as are available to Buyer’s
similarly situated employees.

 

(b)        Savings
Plan.

 

(i)          As
soon as practicable (and in no event later than 120 days) after the Closing Date, unless otherwise agreed upon by the parties in
writing, Buyer shall establish one or more defined contribution savings plans intended to qualify under Sections 401(a) and 401(k)
of the Code, and/or amend one or more existing defined contribution plans sponsored by Buyer or any of its subsidiaries, that are
so qualified (collectively and individually, “Buyer’s 401(k) Plan”). The Buyer shall make available and maintain
for a period of at least two years the Buyer’s 401(k) Plan to the Transferred Employees. Effective as of the Closing, for
purposes of determining elgibility for participation, vesting and eligibility for allocations or contributions under the Buyer’s
401(k) Plan, Buyer shall give credit to the Transferred Employees for all service prior to the Closing date to the extent recognized
by the Seller’s 401(k) Plan. As soon as practicable after the Closing, Seller’s 401(k) Plan shall make distributions
available to Transferred Employees as permitted by Section 401(k)(2) of the Code and Buyer’s 401(k) Plan shall accept any
such distribution as a rollover distribution if so directed by the Transferred Employee, in accordance with the terms of Buyer’s
401(k) Plan governing qualified rollovers. Seller shall make any employer or employee contributions to the Seller’s 401(k)
Plan that were due or payable by Seller on or before the Closing Date.

 

(c)          Service
Recognition. Any of the Buyer’s benefit plans, programs, arrangements and policies, including, but not limited to vacation,
retirement plans, savings plans, retiree medical coverage, employee stock purchase, incentive compensation, severance, fringe benefit
and welfare plans, shall provide that for purposes of determining eligibility to participate, vesting, and for any schedule of
benefits based on service, all service with Seller and any predecessor, shall be recognized, as such service is applied to Buyer’s
such benefit plans, programs, arrangements and policies but shall not entitle any Transferred Employees with benefits exceeding
those given under the Buyer’s current plans except as relates herein to severance .

 

(d)          Long-Term
Disability Return. If any Product Line Employee on long-term disability on the Closing Date accepts an employment offer by
the Buyer pursuant to Section 10.1 and returns to work within the 18-month period specified in Section 10.1, the Seller agrees
that the Product Line Employee shall be treated as a “Transferred Employee” for all intents and purposes. In addition,
Seller agrees to facilitate any 401(k) plan-to-plan transfer with respect to such Product Line Employees.

 

10.4       Enforceability.
This Article 10 shall survive consummation of the Transaction, and shall be binding on the Buyer, its successors and assigns.

 

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10.5       No
Third-Party Beneficiaries. Neither the Buyer nor the Seller intend that this Article 10 shall create any rights or interests,
except as between the Buyer and the Seller, and no present or future employees (or any dependents or beneficiaries of such employees)
of either party, or any of their Affiliates shall be treated or deemed as third party beneficiaries in or under this Agreement.

 

10.6       Vacation
Responsibilities. The Buyer shall be liable, responsible, and obligated for the payment of accrued vacation benefits, as determined
in accordance with the Seller’s vacation practices in effect immediately prior to the Closing Date for Business Employees,
and which have not been paid by the Seller prior to the Closing Date to the Transferred Employees. On and after the Closing Date,
the Buyer shall provide each Transferred Employee, on a going-forward basis, with an annual paid vacation entitlement that the
same as that provided to similarly situated employees of the Buyer, with credit for service with the Seller and its Affiliates
as well as any predecessor employer thereof.

 

10.7       Workers’
Compensation Claims.

 

(a)          Except
to the extent contrary to any applicable law, the Seller will be responsible for workers’ compensation claims of Transferred
Employees based on occupational injuries or illnesses which arose out of and during the course of employment with the Seller prior
to the Closing Date.

 

(b)          Except
to the extent contrary to any applicable law, the Buyer will be responsible for workers’ compensation claims of Transferred
Employees based on injuries or illnesses which arise out of and during the course of employment with the Buyer after the Closing
Date.

 

10.8       WARN
Responsibilities The Buyer represents and covenants that it does not intend to implement a “mass layoff” or a “plant
closing”, as those terms are defined in the Worker Adjustment and Retraining Act (“WARN”), with respect to the
Business and the Transferred Employees within sixty (60) days after the Closing. The Buyer agrees that it will give any and all
notices required by WARN or similar state law or regulation to the Transferred Employees and that it will indemnify and hold the
Seller harmless for any and all claims asserted by the Transferred Employees under WARN, or any similar state law or regulation,
because of a “mass layoff” or “plant closing” occurring on or after the Closing.

 

ARTICLE 11

INTENTIONALLY LEFT BLANK

 

ARTICLE 12

INTENTIONALLY LEFT BLANK

 

ARTICLE 13

INTENTIONALLY LEFT BLANK

 

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ARTICLE 14

 

INTENTIONALLY LEFT BLANK

 

ARTICLE 15

CLOSING

 

15.1       The
Closing Date. The Closing shall take place at the offices of L-3 Communications Corporation, 600 Third Avenue, New York,
New York 10016, on November 3, 2014, at such other place or on such other day as the Buyer and the Seller shall agree upon in writing.
Such date is herein called the “Closing Date.” On the Closing Date, the Buyer and the Seller shall make the deliveries
set forth in Sections 15.2 and 15.3.

 

15.2       Deliveries
by the Buyer. Subject to the terms and conditions of this Agreement, at the Closing, the Buyer shall deliver or cause to
be delivered to the Seller:

 

(a)          the
Purchase Price required by Section 4.1;

 

(b)          each
of the Services Agreements;

 

(c)          a
copy of all resolutions adopted by the Board of Directors of Buyer authorizing the execution and delivery of this Agreement and
the consummation of the Transaction, together with a certificate duly executed by the Secretary or Assistant Secretary of Buyer,
stating that such copies are true, complete and correct, and that the resolutions have been duly adopted by Buyer’s Board
of Directors, and have not been amended since adoption, and remain in full force and effect; and

 

(d)          such
other and further instruments, documents and other considerations as Seller may reasonably deem necessary or desirable, or as may
be required to consummate the transaction.

 

15.3       Deliveries
by the Seller. Subject to the terms and conditions of this Agreement, at the Closing, the Seller shall deliver or cause
to be delivered to the Buyer:

 

(a)          assignment
and bill of sale in the form set forth on Exhibit 15.3(a);

 

(b)          assignments
of the Seller’s ownership rights to each of the Proprietary Rights in form mutually satisfactory to counsel for the Buyer
and the Seller hereunder and in recordable form to the extent necessary to assign such rights;

 

(c)          each
of the Services Agreements;

 

(d)          separate
assignments or other appropriate instruments of transfer to the Buyer of any of the Transferred Assets not appropriately transferred
by the documents referred to in clauses (a) through (d) above;

 

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(e)          a
copy of the resolution adopted by the Board of Directors of the Seller authorizing the execution and delivery of this Agreement
and the consummation of the Transaction, together with a certificate duly executed by the Secretary or Assistant Secretary of Seller,
stating that such copies are true, complete and correct, and that the resolutions have been duly adopted by the Seller’s
Board of Directors, and have not been amended since adoption, and remain in full force and effect;

 

(f)          the
Assignment Agreement; and

 

(g)          such
other and further instruments, documents and other considerations as Buyer may reasonably deem necessary or desirable, or as may
be required to consummate the transaction.

 

15.4       Effective
Time and Rights to Possession. Upon delivery by the Buyer and the Seller, as the case may be, of each of the items required
by Sections 15.2 and 15.3, the Closing shall become effective as of 11:59 P.M. of the Closing Date.

 

ARTICLE 16

SALES AND TRANSFER TAXES

 

The Buyer shall pay all sales,
use, transfer and documentary Taxes and recording and filing fees, if any, including, without limitation, all foreign, state and
local land transfer Taxes, foreign, state and local sales Taxes, and any other charges applicable to the transfer of the Transferred
Assets and the assumption of the Assumed Liabilities provided for by this Agreement.

 

ARTICLE 17

BULK SALES

 

The Buyer hereby waives compliance
by the Seller with any applicable bulk sales or bulk transfer law applicable in any jurisdiction where the Transferred Assets are
located, and the Seller hereby agrees that the provisions of Section 19.1 shall apply to any losses, damages, costs, charges or
expenses which the Buyer may sustain as a consequence of the Seller not complying with such bulk sales or bulk transfer laws.

 

ARTICLE 18

SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

 

18.1       Survival.
All of the representations, warranties, covenants and agreements of the Seller and the Buyer contained in this Agreement and all
unasserted claims and causes of action

 

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with respect thereto shall terminate upon expiration
of the eighteenth full month following the Closing Date, except that:

 

(a)          the
representations and warranties in Section 5.10 (Tax Matters), shall terminate upon the expiration of the applicable statute of
limitations;

 

(b)          the
representations and warranties in Section 5.12 (Environmental Matters) shall terminate on the second anniversary of the Closing
Date;

 

(c)          the
representations and warranties in Section 5.1 (Organization and Existence), Section 5.2 (Corporate Authority), Section 5.7 (Title
to Personal Property), Section 6.1 (Organization, Existence and Standing of the Buyer), and Section 6.2 (Corporate Authority) shall
terminate on the fifth anniversary of the Closing Date;

 

(d)          the
covenants and agreements contained in this Agreement having specific time periods of applicability shall survive the Closing Date
for the periods set forth therein; and

 

(e)          the
covenants and agreements of the Buyer to assume the Assumed Liabilities, the Buyer’s share of the Shared Liabilities, and
the liabilities assumed by the Buyer under Article 10 and to indemnify the Seller with respect to the Assumed Liabilities, the
Buyer’s share of the Shared Liabilities, and the liabilities assumed by the Buyer under Article 10, all as provided for in
clause (b) of Section 19.2 and the covenants and agreements of the Seller to retain the Retained Liabilities, the Seller’s
share of the Shared Liabilities, and the liabilities retained by the Seller under Article 10 and to indemnify the Buyer with respect
to the Retained Liabilities, the Seller’s share of the Shared Liabilities, and the liabilities retained by the Seller under
Article 10, all as provided for in clause (c) of Section 19.1 shall (except as otherwise expressly set forth in Article 10) survive
indefinitely.

 

18.2       Notice
of Claim. In the event notice of any claim for indemnification is given (as provided for in Article 19) within the applicable
survival period, the representations, warranties, covenants and agreements that are the subject of such indemnification claim shall
survive until such time as such claim is finally resolved.

 

ARTICLE 19

INDEMNIFICATION

 

19.1       Indemnification
of the Buyer. Subject to Article 18 and to compliance with Sections 19.3, 19.4 and 19.10, the Seller agrees to indemnify
the Buyer against any loss, cost, liability or expense (including, without limitation, costs and expenses of investigation and
litigation and, to the extent permitted by law, reasonable attorney’s fees) but excluding consequential damages (collectively,
“Indemnified Losses”) incurred by the Buyer by reason of (a) any breach of any representation, warranty, covenant or
agreement of the Seller, or in any certificate or other closing document furnished by the Seller, pursuant to this Agreement, (b)
the provision contained in Article 17 (Bulk Sales), or (c) the assertion against the Buyer of any of the

 

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Retained Liabilities, the Seller’s share of the
Shared Liabilities or liabilities retained or assumed by the Seller under Article 10.

 

19.2         Indemnification
of the Seller. Subject to Article 18 and to compliance with Sections 19.3, 19.4 and 19.10, the Buyer agrees to indemnify
the Seller against any Indemnified Losses (excluding consequential damages) incurred by the Seller by reason of (a) any breach
of any representation, warranty, covenant or agreement of the Buyer, or in any certificate or other closing document furnished
by the Buyer, pursuant to this Agreement, or (b) the assertion against the Seller of any of the Assumed Liabilities, the Buyer’s
share of the Shared Liabilities or liabilities assumed by the Buyer under Article 10.

 

19.3         Eligible
Claim, Threshold Amount, Payment. A Party may bring a claim seeking indemnification (the “Indemnified Party”)
under the terms and provisions of this Article 19 only if such claim exceeds $15,000 (an “Eligible Claim”) and the
aggregate amount of all of such Indemnified Party’s Eligible Claims exceeds $150,000 (the “Threshold Amount”).
Until such time as a Party can bring an Eligible Claim or Eligible Claims in the aggregate amount in excess of the Threshold Amount,
no right to indemnification under this Article 19 shall arise. In the event that a Party brings an Eligible Claim or Eligible Claims
for an amount in excess of the Threshold Amount, such Party shall be entitled to indemnification for the full amount of all Indemnified
Losses in excess of the Threshold Amount up to the maximum amount referred to in Section 19.10. NOTWITHSTANDING ANYTHING IN THE
FOREGOING TO THE CONTRARY BUT SUBJECT TO SECTION 19.10, CLAIMS BY THE BUYER AGAINST THE SELLER IN RESPECT OF THE RETAINED LIABILITIES,
THE SELLER’S SHARE OF THE SHARED LIABILITIES, THE SELLER’S LIABILITIES UNDER ARTICLE 10, ARTICLE 12 OR ARTICLE 17,
WHETHER OR NOT ANY OF THE FOREGOING LIABILITIES ARE DIRECTLY OR INDIRECTLY RELATED TO ANY REPRESENTATION OR WARRANTY HEREIN, AND
CLAIMS BY THE SELLER IN RESPECT OF THE ASSUMED LIABILITIES, THE BUYER’S SHARE OF THE SHARED LIABILITIES, OR THE BUYER’S
LIABILITIES UNDER ARTICLE 10 OR ARTICLE 12, WHETHER OR NOT ANY OF THE FOREGOING LIABILITIES ARE DIRECTLY OR INDIRECTLY RELATED
TO ANY REPRESENTATION OR WARRANTY HEREIN, SHALL NOT BE SUBJECT TO ANY OF THE LIMITATIONS ON INDEMNIFICATION SET FORTH IN THIS SECTION
19.3.

 

19.4         Procedures
for Claims. Subject to Section 19.3, any Indemnified Party shall provide written notice of any Eligible Claim to the Party
from which it seeks indemnification (the “Indemnifying Party”) within thirty (30) days of such Party becoming aware
of the existence of such Eligible Claim stating the amount claimed to be due and payable or an estimate of the Eligible Claim if
contingent or unliquidated, a detailed statement of the basis of the Eligible Claim and the provision or provisions of this Agreement
under which such Eligible Claim is asserted. Within thirty (30) calendar days after receipt of such notice, the Indemnifying Party
shall by written notice to the Indemnified Party either (a) concede liability in whole as to the amount claimed in such notice,
(b) deny liability in whole as to such amount, or (c) concede liability in part and deny liability in part. If the Parties are
not able to resolve any dispute over a claim brought under this Article 19 within 30 days after the Indemnified Party receives
written

 

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notice from the Indemnifying Party denying liability
in whole or in part, the Parties shall submit the dispute to the dispute resolution procedure set forth in Article 22.

 

19.5        Third-Party
Claims.

 

(a)          An
Indemnifying Party shall have the right, exercisable by written notice to the Indemnified Party within thirty (30) days of receipt
of written notice from the Indemnified Party of the commencement of or assertion of any lawsuit filed or instituted against the
Indemnified Party asserting any claim for which the Indemnifying Party may be responsible under this Agreement (each, a “Third
Party Claim”), to assume and conduct the defense of each Third Party Claim with counsel selected by the Indemnifying Party
and reasonably acceptable to the Indemnified Party; provided, however, that such Third Party Claim involves (and continues
to involve) solely monetary damages (the “Litigation Condition”).

 

(b)          If
the Indemnifying Party does not assume the defense of such Third Party Claim in accordance with this Section 19.5, the Indemnified
Party may continue to defend the Third Party Claim. If the Indemnifying Party has assumed the defense of a Third Party Claim as
provided in this Section 19.5, the Indemnifying Party shall not be liable for any legal expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof; provided, however, that if (i) the Litigation Condition ceases to be met,
or (ii) the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Third Party Claim within thirty
(30) calendar days (or such shorter period as may be required to defend diligently such Third Party Claim) after receiving written
notice from the Indemnified Party that the Indemnified Party believes the Indemnifying Party has failed to take such steps, the
Indemnified Party may assume its own defense, and the Indemnifying Party shall be liable for all reasonable costs or expenses paid
or incurred in connection therewith.

 

(c)          Without
the Indemnified Party’s prior written consent or authorization, the Indemnifying Party shall not consent to a settlement
of, or the entry of any judgment arising from, any Third Party Claim. If the Indemnifying Party does not assume the defense of
any such Third Party Claim or litigation resulting from such claim in accordance with the terms of this Article 19, the Indemnified
Party may defend against such claim or litigation in such manner as it may deem appropriate, including settling such claim or litigation,
after giving notice of the same to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate. If the
Indemnifying Party seeks to question the manner in which the Indemnified Party defended such Third Party Claim or litigation resulting
from such claim or the amount of or nature of any such settlement, the Indemnifying Party shall have the burden to prove by a preponderance
of the evidence that the Indemnified Party did not defend such claim in a reasonably prudent manner.

 

19.6        Exclusive
Remedy. Except as otherwise expressly provided in this Agreement, following the Closing, the indemnification provided by
this Article 19 shall be the exclusive remedy for the Buyer or the Seller, as the case may be, with respect to this Agreement and
the transactions contemplated by this Agreement, except claims for fraud or intentional misrepresentation shall not be limited
by the provisions in this Article 19.

 

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19.7         Payment
of Amounts. If any amount is determined to be due and owing to a Party as a result of any occurrence which gives rise to
indemnification obligations under this Article 19, such amount shall be paid promptly by the Indemnifying Party to the Indemnified
Party in immediately available funds. All indemnification payments under this Article 19 shall be deemed adjustments to the Purchase
Price.

 

19.8         Tax
and Insurance Offset. The amount of any Indemnified Losses suffered by an Indemnified Party shall be reduced by the net
effect of any Tax-related benefits or insurance coverage which may be realized by such Party following the date of such Indemnified
Losses in respect of or as a result of such Indemnified Losses or the facts or circumstances relating thereto. Notwithstanding
the foregoing, it is understood and agreed that the determination of the net Tax effect and/or insurance coverage benefit of any
Indemnified Losses, if any, shall not delay payment or indemnification of such Indemnified Losses by the Indemnifying Party. All
Indemnified Losses shall be paid or reimbursed promptly upon determination; the Indemnified Party shall promptly reimburse the
Indemnifying Party for the net Tax effect benefit of such Indemnified Losses, if any, upon the date of filing of the Tax return
with respect to which such Tax benefit is realizable or upon the date of recovery of any insurance proceeds.

 

19.9         No
Indemnification For Known Breaches of Representations and Warranties. Notwithstanding any provision to the contrary contained
herein, in the event that either party proves that the other party had actual knowledge, on or before the Closing Date, of the
specific facts upon which a claim for indemnification by the other party is based, then the party shall have no liability for any
Indemnified Losses resulting from or arising out of such claim.

 

19.10         Maximum
Amount of Any Indemnification. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NO PARTY SHALL BE REQUIRED TO
INDEMNIFY THE OTHER FOR CLAIMS WITH RESPECT TO WHICH INDEMNIFICATION (ON A CUMULATIVE BASIS, INCLUDING PURSUANT TO ARTICLE 12)
UNDER THIS AGREEMENT WOULD OTHERWISE BE AVAILABLE IN EXCESS OF AN AMOUNT EQUAL TO 25% OF THE PURCHASE PRICE, EXCEPT FOR CLAIMS
BASED UPON FRAUD.

 

ARTICLE 20

INTENTIONALLY LEFT BLANK

 

ARTICLE 21

EXPENSES

 

21.1         Expenses.
Subject to Section 9.1, Section 11.1(b), and Article 16, whether or not the transactions contemplated hereby are consummated, each
of the Parties will, except in the case of any breach of the terms and provisions of this Agreement for which either the Buyer
or the Seller, as the case may be, may be entitled to indemnification under Article 19 hereof, pay its respective expenses, income
and other Taxes and costs (including, without limitation, the commissions, fees, disbursements and expenses of its investment bankers,
attorneys, accountants

 

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and consultants) incurred by it in negotiating, preparing,
closing and carrying out this Agreement and the Related Agreements and the transactions contemplated hereby and thereby.

 

ARTICLE 22

DISPUTE RESOLUTION

 

22.1         Jurisdiction;
No Jury Trial. Each Party (a) submits to the exclusive jurisdiction of any state or federal court sitting in the State
of New York in any action or proceeding arising out of or relating to this Agreement, (b) agrees that all claims in respect of
such action or proceeding may be heard and determined only in any such court, and (c) agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each Party waives any defense of inconvenient forum to the maintenance
of any action or proceeding so brought and waives any bond, surety or other security that might be required of the other Party
with respect thereto. Each Party may make service on the other Party by sending or delivering a copy of the process to the Party
to be served at the address and in the manner provided for the giving of notices in Section 23.1. Nothing in this Section 22.1,
however, shall affect the right of any Party to serve legal process in any other manner prohibited by law. To the extent permitted
by applicable law, each Party hereby irrevocably waives all rights to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this Agreement or the transactions contemplated hereby or the
actions of either Party in the negotiation, administration, performance and enforcement of this Agreement.

 

ARTICLE 23

MISCELLANEOUS

 

23.1         Notices.
Any notice, request, instruction, consent or other document to be given hereunder by either Party hereto to the other Party shall
be in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, as follows:

 

	If to the Buyer:	Optex Systems, Inc.
	 	1420 Presidential Dr.
	 	Richardson, TX 75081
	 	Attention: Danny Schoening, CEO
	 	 
	With a copy to:	Jolie Kahn, Esq.
	 	1020 Riverview Lane
	 	Conshohocken PA 19428 
	 	Attention: Jolie Kahn, Esq.
	 	 
	If to the Seller:	L-3 Communications Corporation
	 	9890 Towne Centre Dr
	 	San Diego, CA 92121
	 	Attention:  Scott Meader

 

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	With a copy to:	L-3 Communications Corporation
	 	600 Third Avenue
	 	New York, New York 10016
	 	Attention: General Counsel

 

or at such other address for a Party as shall be specified
in writing by that Party. Any notice which is delivered personally or by telecopy to the addresses provided herein shall be deemed
to have been duly given to the Party to whom it is directed upon actual receipt by such Party (or its agent for notices hereunder).
Any notice which is addressed and mailed in the manner herein provided shall be deemed given to the entity to which it is addressed
when received.

 

23.2         Waiver.
Any of the terms or conditions of this Agreement may be waived in writing at any time by the Party which is entitled to the benefits
thereof. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of such provision at
any time in the future or a waiver of any other provision hereof.

 

23.3         Captions.
The captions set forth in this Agreement are for convenience only and shall not be considered as part of this Agreement, nor affect
in any way the meaning of the terms and provisions hereof.

 

23.4         Successors
and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the Parties hereto; provided, however, that this Agreement may not be assigned by any Party without
the express written consent of the other Party hereto, except that either Party may assign all or part of its rights and obligations
under this Agreement to one or more Subsidiaries of such Party, but any such assignment will not release such Party of any of its
obligations.

 

23.5         Enforceability.
If any provision of this Agreement as applied to any Party or to any circumstance shall be adjudged by a court to be invalid or
unenforceable, the same shall in no way affect any other provision of this Agreement, the application of such provision in any
other circumstances, or the validity or enforceability of this Agreement. The Parties intend this Agreement to be enforced as written.
If any such provision, or part thereof, however, is held to be unenforceable because of the duration thereof or the area covered
thereby, the Seller and the Buyer agree that the court making such determination shall have the power to reduce the duration and/or
area of such provision, and/or to delete the specific words or phrases, and in its amended form such provision shall then be enforceable
and shall be enforced. If any provision of this Agreement shall otherwise finally be determined to be unlawful, then such provision
shall be deemed to be severed from this Agreement and every other provision of this Agreement shall remain in full force and effect.

 

23.6         No
Third-Party Beneficiaries or Right to Rely. Notwithstanding anything to the contrary in this Agreement, (a) nothing
in this Agreement is intended to or shall create for or grant to any Third Party (including without limitation to any former, current
or future employees or officers of any Party, any Subsidiary or any labor union) any rights whatever, as a Third Party

 

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beneficiary or otherwise, (b) no Third Party is
entitled to rely on any of the representations, warranties, covenants or agreements contained herein, and (c) no Party hereto
shall incur any liability or obligation to any Third Party because of any reliance by such Third Party on any representation, warranty,
covenant or agreement herein.

 

23.7         Counterparts.
This Agreement may be executed in more than one counterpart, each of which shall for all purposes be deemed to be an original and
all of which shall constitute one and the same agreement. A signature to this Agreement delivered by telecopy or other artificial
means shall be deemed valid.

 

23.8         Governing
Law. This Agreement shall in all respects be interpreted, construed and governed by and in accordance with the local laws
of the State of New York, without regard to principles of conflict of laws.

 

23.9         Time
of Essence. Time shall be of the essence with respect to this Agreement.

 

23.10       No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the Parties hereto
to express their mutual intent, and no rule of strict construction will be applied against either Party.

 

23.11       Public
Announcements. The Buyer and the Seller shall agree on the terms of the press releases to be issued upon the execution
of this Agreement, if any, and shall require the approval of the other party before issuing any other press releases with respect
to this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, each party shall be entitled to make
any announcements required to be made by it under the Securities Exchange Act of 1934, and the regulations promulgated thereunder
and otherwise by law.

 

23.12       Currency/Method
of Payment. Unless otherwise specifically provided herein, (a) all references to amounts of money shall be to lawful money
of the United States, and (b) all payments of money to be made by the Buyer or the Seller, as the case may be, shall be made in
immediately available funds.

 

23.13       Subsequent
Legal Fees. In the event any action or proceeding is initiated to enforce the terms and provisions of this Agreement, the
Party prevailing in said action shall be entitled to its reasonable attorney’s fees and costs.

 

23.14       Miscellaneous.
As used in this Agreement, the Schedules, the Exhibits and the Related Agreements and as required by the context: the singular
and plural shall be deemed to include each other and each gender, to include all genders; the terms herein, hereof, and hereunder
or other similar terms refer to this Agreement or the Related Agreements, in which they appear as a whole and not only to the particular
sentence, paragraph, subsection or section in which any such term is used except as expressly more specifically limited; and words
and phrases defined in this Agreement have the same meaning in the Schedules, Exhibits and Related Agreements unless specifically
provided to the contrary in any thereof.

 

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23.15       Entire
Agreement; Amendment. This Agreement, including all Schedules and Exhibits hereto, together with the Related Agreements
and the Confidentiality Agreement between the Seller and the Buyer, constitute the sole understanding of the Parties with respect
to the matters contemplated hereby and thereby and supersedes and renders null and void all other prior agreements and understandings
between the Parties with respect to such matters. No amendment, modification or alteration of the terms or provisions of this Agreement,
including all Schedules and Exhibits hereto, shall be binding unless the same shall be in writing and duly executed by the Party
against whom such would apply.

 

IN WITNESS WHEREOF, each of the
parties has caused this Agreement to be duly executed and delivered by its duly authorized representatives as of the date first
written above.

 

	 	L-3 COMMUNICATIONS CORPORATION
	 	 
	 	BY:/s/ David Reilly
	 	Name: David Reilly
	 	Title:Vice President
	 	 
	 	OPTEX SYSTEMS, INC.
	 	 
	 	BY:/s/ Danny Schoening
	 	Name: Danny Schoening
	 	Title: CEO

 

 

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SCHEDULE 1.1

 

Definitions

 

		(a)	“Accounts Receivable” means all of the Business’s trade and other accounts
receivable owned by Seller excluding all accounts receivable, if any, that are owed by the Seller or by any Affiliate of the Seller
and which relate to the Business.

 

		(b)	“Affiliate” shall mean, with respect to any Person, at the time in question,
any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control”
(including the terms “controlling,” “controlled by” and “under common control with”) means
the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise.

 

		(c)	“Agreement” means this Purchase Agreement.

 

		(d)	“Assignment Agreement”means the Assignment of Lease and Landlord
Consent Agreement (the "Agreement") dated as of the Closing Date, between L-3 Communications Corporation,  with
an office at 600 Third Avenue, New York,10016 (the “Tenant”),  Optex Systems, Inc. with an office at 1420 Presidential
Drive, Richardson, TX 75081 (the “Buyer”) and Cabot II TX1W04, LP, with an office c/o Stream Realty Partners, 2200
Ross Avenue, Dallas, TX 75207 for the term ending September 30, 2016

 

		(e)	“Assumed Liabilities” has the meaning set forth in Section 3.1.

 

		(f)	“Benefit Arrangement” means an Employee Benefit Plan which is neither a Pension
Plan nor a Welfare Plan.

 

		(g)	“Business” has the meaning set forth in Recital A.

 

		(h)	“Buyer” has the meaning set forth in the introductory paragraph.

 

		(i)	“Buyer’s 401(k) Plan” has the meaning set forth in Section 10.3(b)(i).

 

		(j)	“Buyer’s Benefit Arrangements” has the meaning set forth in Section 10.3(a)(i).

 

		(k)	“Buyer Obligations” has the meaning set forth in Section 9.5.

 

		(l)	“Buyer’s Welfare Plans” has the meaning set forth in Section 10.3(a)(i).

 

		(m)	“CAA” means the Clean Air Act, 42 U.S.C. §§ 7401, et seq.,
as amended.

 

    	 

    	 

    

 

		(n)	“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. §§ 9601, et seq., as amended by, among other things, the Superfund Amendments and Reauthorization
Act of 1986.

 

		(o)	“Closing” means the closing of the transactions contemplated by this Agreement.

 

		(p)	“Closing Balance Sheet” sets forth the book value of the Transferred Assets
and the Assumed Liabilities at the time of close. The Closing Balance Sheet will reflect consistent application of accounting policies,
methods and practices consist with the preparation of the Financial Statements. All financial statement terms used and not specifically
defined hereunder shall be defined in accordance with the common definition of such term under GAAP unless otherwise stated.

 

		(q)	“Closing Date” has the meaning set forth in Section 15.1.

 

		(r)	“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, including the rules and regulations promulgated thereunder.

 

		(s)	“Collective Bargaining Agreements” has the meaning set forth in Section 5.17(b).

 

		(t)	“Confidentiality Agreement” means that Certain Agreement between L-3 Communications
Corporation and Optex Systems dated March 31, 2014.

 

		(u)	“Contracts” means all agreements, contracts and commitments of any sort whatsoever,
whether written or oral, entered into primarily or exclusively in connection with the conduct of the Business, including, but not
limited to, all purchase orders, sales orders, distributor agreements, franchise agreements, sales representation agreements, warranty
agreements, service agreements, collective bargaining agreements and other contracts with labor unions, if any, employment and
consulting agreements, guaranty agreements and confidentiality agreements.

 

		(v)	“CWA” means the Federal Water Pollution Control Act, 33 U.S.C. §§
1251, et seq., as amended.

 

		(w)	“Disclosed Contracts” has the meaning set forth in Section 5.8(a).

 

		(x)	“Effective Date” has the meaning set forth in Section 10.1.

 

		(y)	“Eligible Claim” has the meaning set forth in Section 19.3

 

		(z)	“Employee Benefit Plan” means each employee bonus, retirement, pension, profit
sharing, stock option, stock appreciation, stock purchase, incentive, deferred compensation, hospitalization, medical, dental,
vision, life and other health and disability (whether provided by insurance or otherwise), severance, termination and other plan,
program, arrangement, policy or payroll practice providing any remuneration or benefits (other than current cash compensation),
including, without limitation, each ERISA Plan (other than a multiemployer plan within the meaning of

 

    	 

    	 

    

 

Section 3(37) of ERISA) which is both (a)
(i) maintained by the Seller or any Person that would be aggregated with, or treated as the same employer as, the Seller for any
purpose under the Tax Code or ERISA (an “ERISA Affiliate”) or (ii) to which the Seller or any ERISA Affiliate
contributes or has contributed and (b) one under which any Product Line Employee or former Product Line Employee participates
or had accrued any rights or under which the Seller is liable in respect of a Product Line Employee or former Product Line Employee
with respect to his employment with the Product Line.

 

		(aa)	“Environmental Laws” has the meaning set forth in Section 5.11(b).

 

		(bb)	“EPCRA” means the Emergency Planning and Community Right-to-Know Act of 1986,
42 U.S.C. §§ 11001, et seq., as amended.

 

		(cc)	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
including the rules and regulations promulgated thereunder.

 

		(dd)	“ERISA Plan” has the meaning set forth in section 3(3) of ERISA with respect
to Employee Benefits Plans which are subject to ERISA.

 

		(ee)	“Excluded Assets” has the meaning set forth in Section 2.2.

 

		(ff)	“Excluded Proprietary Rights” has the meaning set forth in Section 2.2(c).

 

		(gg)	“Financial Statements” means each of the pro forma unaudited balance sheets
and pro forma unaudited statements of income of the Business for the fiscal years ending December 31, 2012, December 31, 2013 and
June 27th, 2014.

 

		(hh)	“Forward Looking Data” has the meaning set forth in Section 6.8.

 

		(ii)	“GAAP” means generally accepted accounting principles in the United States of
America.

 

		(jj)	“Governmental Authority” means the United States, any other country, any national
body (including the European Union), any state, province, municipality, or subdivision of any of the foregoing, any agency, governmental
department, court, entity, commission, board, ministry, bureau, locality or authority of any of the foregoing, or any quasi-governmental
or private body exercising any regulatory, Taxing, importing, exporting, or other governmental or quasi-governmental function or
any arbitrator.

 

		(kk)	“Governmental Entity” means any government or any court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory authority or agency, Federal, state, local, or foreign.

 

		(ll)	“Government Contract” means (i) any contract, agreement, lease or instrument
relating to the Business with any Governmental Entity and (ii) any contract, agreement, lease or

 

    	 

    	 

    

 

instrument relating to the Business entered
into by the Seller or the Business as subcontractor (at any tier) in connection with a contract between a Third Party and any Governmental
Entity.

 

		(mm)	“Hazardous Materials” has the meaning set forth in Section 5.11(b).

 

		(nn)	“Indemnified Losses” has the meaning set forth in Section 19.1.

 

		(oo)	“Indemnified Party” has the meaning set forth in Section 19.3.

 

		(pp)	“Indemnifying Party” has the meaning set forth in Section 19.4

 

		(qq)	“Inactive Employees” means those Product Line Employees who are temporarily
absent from active employment by reason of disability, illness, injury, workers’ compensation, military leave, approved leave
of absence or layoff, if any.

 

		(rr)	“Intellectual Property” means

 

		(i)	all inventions (whether patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, divisions, and reexaminations thereof;

 

		(ii)	all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with
all translations, adaptations, derivations, and combinations thereof, including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith,;

 

		(iii)	all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection
therewith;

 

		(iv)	all trade secrets and confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and marketing plans and proposals);

 

		(v)	computer software, including source code to the extent assignable, disks, documentation, operating
manuals, related systems data, source programs, record layouts, program libraries, and any other documentation in those application
areas that may pertain to any data processing system or operation; and

 

		(vi)	all copies and tangible embodiments of any of the foregoing (in whatever form or medium);

 

    	 

    	 

    

 

which, in each case, relate primarily or
exclusively to the conduct of the Business as conducted as of the date of this Agreement.

 

		(ccc)	“Inventory” means, with respect to the Business, all of the inventory of raw
materials, work-in-process, finished goods, packaging, supplies and spare parts, as the same shall exist on the Closing Date, whether
in the possession of, in transit to or from the Business or held by any third party.

 

		(ddd)	“Law” means all statutes; regulations; by-laws, codes; ordinances; decrees;
rules; judicial, arbitral, administrative, ministerial, departmental or regulatory judgments, orders, decisions, rulings, or awards;
policies; voluntary restraints; guidelines; directives; agreements with, requirements of, or instructions by any Governmental Authority;
and general principles of common or civil law and equity.

 

		(eee)	“Leased Real Property” has the meaning set forth in Section 2.1(a).

 

		(fff)	“Lien” means any lien, mortgage, charge, pledge, security interest, restriction
on transferability, easement, defect of title or other claim, easement, encroachment or other encumbrance of any nature whatsoever
on any Real Property or Personal Property or property interest.

 

		(ggg)	“Litigation Condition” has the meaning set forth in Section 19.5(a)

 

		(hhh)	“Material Adverse Effect” means (a) any effect that is materially adverse to
the value of the Transferred Assets taken as a whole or materially adverse to the Business, or results of operations of the Business
taken as a whole, or (b) any effect that would in the aggregate, materially impair, hinder or otherwise materially and adversely
affect the ability of the Seller or the Buyer, as the case may be, to effect the Closing, to perform any of their material obligations
under this Agreement or any of the Related Agreements, other than (x) any effect arising out of or resulting from general industry,
economic, regulatory or capital market conditions, (y) any effect caused by the public announcement, if any, of the transactions
contemplated by this Agreement or (z) any general reduction in military planning and spending by the U.S. Government or its agencies.

 

		(iii)	“Non-Transferable Assets” has the meaning set forth in Section 2.3(a).

 

		(jjj)	“Novation Agreement” has the meaning set forth in Section 8.2.

 

		(kkk)	“OSHA” means the Occupational Safety and Health Act of 1970, 29 U.S.C. §§
651, et seq.

 

		(lll)	“Other Excluded Assets” has the meaning set forth in Section 2.2(j).

 

		(mmm)	“Other Transferred Assets” has the meaning set forth in Section 2.1(j).

 

    	 

    	 

    

 

		(nnn)	Owned Real Property”.

 

		(ooo)	“Party” means the Buyer or the Seller, referred to individually, and “Parties”
means the Buyer and the Seller referred to collectively.

 

		(ppp)	“Permits” has the meaning set forth in Section 2.1(h).

 

		(qqq)	“Person” means an individual, corporation, limited liability company, partnership,
association, estate, trust, unincorporated organization, governmental or quasi-governmental agency or body or other entity or organization.

 

		(rrr)	“Personal Property” means all of the personal property, including, without limitation,
all machinery, equipment, computer hardware, vehicles, tools, dies, repair and replacement parts, office furniture, fixtures and
equipment used primarily or exclusively in the conduct of the Business, except to the extent disposed of in the ordinary course
of business prior to the Closing Date, and such additional items as are acquired in the ordinary course of business prior to the
Closing Date, in each case consistent with the terms and conditions of this Agreement.

 

		(sss)	“Personal Property Leases” means all leases covering any Personal Property.

 

		(ttt)	“Personal Property Permitted Exceptions” has the meaning set forth in Section
5.6.

 

		(uuu)	“Product Line” has the meaning set forth in Recital A.

 

		(vvv)	“Product Line Employees” means the persons who work primarily or exclusively
in connection with the conduct of the Business.

 

		(www)	“Proprietary Rights” has the meaning set forth in Section 2.1(f).

 

		(xxx)	“Purchase Price” has the meaning set forth in Section 4.1(a).

 

		(yyy)	“RCRA” means the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§
6901, et seq., as amended.

 

		(zzz)	“Real Property” means the Owned Real Property and the Leased Real Property,
collectively.

 

		(aaaa)	“Real Property Permitted Exceptions” has the meaning set forth in Section 5.6(a).

 

		(bbbb)	“Related Agreements” means the related agreements contemplated by this Agreement
including those attached to this Agreement as Exhibits.

 

		(cccc)	“Release” has the meaning set forth in Section 5.11(b).

 

		(dddd)	“Retained Liabilities” has the meaning set forth in Section 3.2.

 

    	 

    	 

    

 

		(eeee)	“Seller” has the meaning set forth in the introductory paragraph.

 

		(ffff)	“Seller’s Accounting Principles” means the accounting principles used
by the Seller in preparing the Financial Statements which principles are in accordance with the historical method used by Seller
to prepare the Product Line’s Financial Statements. except as set forth on Schedule 1.1(ffff), consistently applied.

 

		(gggg)	“Seller’s Knowledge” means the actual knowledge of the individuals set
forth on Schedule 1.1(gggg).

 

		(hhhh)	“Services Agreements” has the meaning set forth in Section 9.1.

 

		(iiii)	“Shared Liabilities” has the meaning set forth in Section 3.3.

 

		(jjjj)	“Software” means computer software, including source code, disks, documentation,
operating manuals, related systems data, source programs, record layouts, program libraries, and any other documentation in those
application areas that may pertain to any data processing system or operation.

 

		(kkkk)	“Subsidiary” means any corporation, the capital stock of which represents more
than 50% of the general voting power under ordinary circumstances of such corporation, which is directly or indirectly owned or
controlled by another corporation.

 

		(llll)	“SWDA” has the meaning set forth in Section 5.12(b).

 

		(mmmm)	“Tax” means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum, estimated, or other Tax of any kind whatsoever, including
any interest, penalty, or addition thereto, whether disputed or not.

 

		(nnnn)	“Tax Code” means the Internal Revenue Code of 1986, as amended.

 

		(oooo)	“Threshold Amount” has the meaning set forth in Section 19.3

 

		(pppp)	“Third Party” means any Person not a signatory to this Agreement other than
a Buyer Subsidiary.

 

		(qqqq)	“Third Party Claim” has the meaning set forth in Section 19.5(a)

 

    	 

    	 

    

 

		(rrrr)	“Transaction” means the transactions contemplated by this Agreement and the
Related Agreements.

 

		(ssss)	“Transferred Assets” has the meaning set forth in Section 2.1.

 

		(tttt)	“Transferred Employees” has the meaning set forth in Section 10.3(a).

 

		(uuuu)	“TSCA” means the Toxic Substances Control Act, 15 U.S.C. §§ 52601,
et seq., as amended.

 

		(vvvv)	“WARN” has the meaning set forth in Section 10.8.

 

		(wwww)	“Welfare Plans” means the Employee Benefit Plans which are welfare plans within
the meaning of Section 3(1) of ERISA and which covers Product Line Employees.

 

    	 

    	 

    

 

EXHIBIT 5.3 FINANCIAL STATEMENTS

 

    	 

    	 

    

 

 

    	 

    	 

    

 

 

    	 

    	 

    

 

 

    	 

    	 

    

 

 

    	 

    	 

    

 

 

    	 

    	 

    

 

 

    	 

    	 

    

 

 

    	 

    	 

    

 

EXHIBIT 7.1(D) CAPITAL EXPENSE BUDGET 

 

None.

 

    	 

    	 

    

 

EXHIBIT 7.11(A) AGENCY DESIGNATION

 

Separately filed.

 

    	 

    	 

    

 

EXHIBIT 9.1(A) TRANSITION AGREEMENT

 

    	 

    	 

    

 

Schedule
9.1

 

TRANSITION
SERVICES AGREEMENT

 

This Transition Services
Agreement (the “Agreement”) is made as of October 30, 2014, by and between L-3 Communications Corporation Inc.,
a Delaware corporation (the “Seller”), and Optex Systems Inc., a Delaware Corporation (“Buyer”).
Capitalized terms used in this Agreement without definition have the respective meanings given to them in the Purchase Agreement
(as defined below).

 

Seller has agreed to
sell and assign to Buyer, and Buyer has agreed to purchase and assume from Seller, certain assets and liabilities of the L-3 Applied
Optics (“AOC”) product line/business pursuant to the terms and conditions set forth in that certain Purchase Agreement
of even date herewith, between Buyer and Seller (the “Purchase Agreement”).

 

At the Closing, the
parties desire that Seller provide to Buyer certain transition services with respect to the operation of the AOC business following
the Closing as more fully set forth in this Agreement.

 

NOW, THEREFORE, intending
to be legally bound and in consideration of the mutual provisions set forth in this Agreement and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE
1

PROVISION
OF SERVICES

 

Section 1.1     Transition
Services. During the term of this Agreement as set forth in Article 2, Seller will provide to Buyer, upon the terms
and subject to the conditions hereof, the services more particularly described on Schedule A with respect to the AOC Business
(collectively, the “Transition Services”).

 

Section 1.2     Level
of Transition Services.

 

(a)          Seller will
perform, or cause to be performed, the Transition Services in the manner substantially similar to that provided by Seller to the
AOC Business during the 6-month period immediately prior to the execution of the Purchase Agreement.

 

(b)          Notwithstanding
anything to the contrary herein, in no event will any Transition Service include (i) any services that would be unlawful for
Seller to provide or (ii) the exercise of business judgment or general management for Buyer.

 

Section 1.3     Compliance
with Laws. Each party will comply with all applicable Laws governing the provision of Transition Services to be provided under
this Agreement. No party will take any action in violation of such applicable Law that could result in liability being imposed
on the other party or any of its Affiliates.

 

Section 1.4     No
Obligation to Continue to Use Transition Services; Partial Termination. Buyer will have no obligation to continue to use any
of the Transition Services and, except as otherwise

 

    	 

    	 

    

 

specified on Schedule
A, may terminate any Transition Service by giving Seller not less than 5 days’ prior written notice of its desire to
terminate any Transition Service.

 

ARTICLE
2

TERM

 

Section 2.1     Term
and Termination.

 

(a)          This Agreement
is effective upon execution and delivery hereof and the term of this Agreement will commence on the Closing Date and, unless earlier
terminated in accordance with the provisions of this Agreement, will continue in effect with respect to each of the Transition
Services for the term thereof as set forth in Schedule A; the last date in each such term being referred to in this Agreement
as the “Termination Date” for each of such Transition Services.

 

(b)          This Agreement
may be terminated prior to any Termination Date as follows:

 

(i)          by
mutual consent of Buyer and Seller;

 

(ii)         by
Seller, by giving written notice to Buyer if Buyer breaches or is in default of any payment obligation set forth in this Agreement,
and such breach or default has not been cured or cannot be cured within 10 days after the notice of such breach from Seller; or

 

(iii)         by
Buyer (i) by giving written notice to Seller if Seller breaches or is in default of any obligation set forth in this Agreement,
and such breach or default has not been cured or cannot be cured within 10 days after the notice of such breach from Buyer or (ii)
as to any particular Transition Service pursuant to Section 1.4.

 

Section 2.2     General
Intent. Buyer will use reasonable commercial efforts to end its need to use the Transition Services as soon as practicable
following the Closing Date and (unless the parties otherwise agree) in all events to end such need with respect to each Transition
Service not later than the applicable Termination Date set forth on Schedule A.

 

ARTICLE
3

COMPENSATION

 

Section 3.1     Fees.
As consideration for the Transition Services, Buyer will pay, or cause to be paid, to Seller the amount specified for each Transition
Service as set forth in Schedule A (collectively, the “Fees”). All charges based on a hourly or other
time basis will be prorated based on actual hours elapsed during the period of service. Upon the termination of any Transition
Service in accordance herewith, the consideration to be paid under this Section 3.1 will be the accrued hourly fees payable
under this Section 3.1.

 

Section 3.2     Invoices.
Within 15 days after the end of each calendar month, Seller will submit an invoice to Buyer for all Transition Services provided
during such calendar month pursuant to this Agreement. The invoices will include a reasonably detailed description of, and specify
the amount for, each type of Transition Service including the name of the provider and recipient of the respective Transition Services.
Seller will provide documentation supporting any amounts invoiced pursuant to this Article 3 as Buyer may from time to time reasonably
request, including detail with respect to billing information relating to the Transition Services provided by any Third Party Provider
under this Agreement.

 

    	 

    	 

    

 

Section 3.3     Time
of Payment. Buyer will pay, or cause to be paid, all amounts due pursuant to this Agreement within 15 days after receipt of
each such invoice hereunder; provided, however, that in the event that Buyer, in good faith and upon reasonable grounds,
disputes any invoiced item, Buyer may withhold payment of the disputed amount and the parties will negotiate in good faith to resolve
all such disputed amounts. Upon resolution of any such dispute, Buyer will promptly pay to Seller all amounts agreed to be owed
by Buyer to Seller. Seller will continue to provide the Transition Services in accordance with this Agreement pending resolution
of any dispute.

 

ARTICLE
4

PERSONNEL

 

Section 4.1     Right
to Designate and Change Personnel. Seller will make available to Buyer such personnel as may be reasonably necessary to provide
the Transition Services. Seller will have the right, in its reasonable discretion, to designate which personnel it will assign
to perform the Transition Services. Seller also will have the right, in its reasonable discretion, to remove and replace any such
personnel at any time or, so long as there is no resulting increase in costs for Buyer; provided, however, that Seller
will use its commercially reasonable efforts to limit the disruption to Buyer in the transition of the Transition Services to different
personnel.

 

Section 4.2     Financial
Responsibility for Seller Personnel. Seller will pay for all personnel expenses, including wages and employee benefits, of
its employees performing the Transition Services.

 

ARTICLE
5

PROPRIETARY
RIGHTS

 

Section 5.1     Ownership.
This Agreement and the performance of the Transition Services hereunder will not affect the ownership of any assets (including
the Assets) allocated in the Purchase Agreement. Neither party will gain, by virtue of this Agreement or the Transition Services
hereunder, by implication or otherwise, any rights of ownership of any Intellectual Property or other property owned by the other.
Buyer will own all data assigned to Buyer pursuant to the Purchase Agreement as well as any changes or additions thereto made on
behalf of Buyer in the performance of the Transition Services. In addition, Buyer will own any other data with respect to Buyer
or the AOC Business to the extent (and only to the extent) such data is developed, processed, stored, used or generated by Seller
on behalf of Buyer or the AOC Business, in the performance of the Transition Services. The provisions of this Section 5.1 do not
grant Buyer any rights to any data concerning Seller or its business (other than the AOC business).

 

ARTICLE
6

INDEMNIFICATION

 

Section 6.1     No
Other Warranties. The representations and warranties set forth in this Agreement are Seller’s only representations and
warranties concerning the Transition Services and the Additional Services and are made for the benefit of Buyer in lieu of all
other representations or warranties of any kind, express or implied, including warranties of merchantability or fitness for any
particular use or purpose, with respect to any Transition Services hereunder.

 

Section 6.2     Indemnification.
Seller will indemnify and hold harmless Buyer Indemnified Parties from and against any and all Losses incurred or suffered by Buyer
Indemnified Parties arising or resulting from the gross negligence or intentional misconduct of Seller in connection with the provision
of, or failure to provide, any Transition Services to Buyer.

 

    	 

    	 

    

 

Section 6.3     Limitation
of Liability. Notwithstanding any other provision of this Agreement to the contrary,
in no event will any party be liable for any special, indirect, exemplary, punitive or consequential damages in connection with
any claims, losses, damages or injuries arising out of the conduct of such party pursuant to this Agreement regardless of whether
the nonperforming party was advised of the possibility of such damages or not except
to the extent awarded by a court of competent jurisdiction with respect to a third party claim.

 

ARTICLE
7

FORCE
MAJEURE

 

In the event that either
party is delayed in or prevented from performing its obligations under this Agreement, in whole or in part, due to a cause beyond
its reasonable control, including an act of God, fire, flood, explosion, civil disorder, strike, lockout or other labor trouble,
material shortages of utilities, delay in transportation, breakdown or accident, any Law, Proceeding, demand or requirement of
any Governmental Authority, riot, war, or other cause beyond its reasonable control (each a “Force Majeure Event”),
then upon written notice by the party whose performance is affected thereby to the other party of the nature of the Force Majeure
Event and its anticipated duration, (i) the affected obligations under this Agreement will be suspended to the extent prevented
during the period of the Force Majeure Event, (ii) neither party will have any liability to the other party or any other Person
in connection with such suspended obligation and (iii) the party claiming the Force Majeure Event will use its commercially reasonable
efforts to cure the cause of the delay or failure to perform promptly and will resume performance as soon as the Force Majeure
Event has ended.

 

ARTICLE
8

GENERAL
PROVISIONS

 

Section 8.1     Notices.
All notices given pursuant to this Agreement shall be governed by Section 15.1 of the Purchase Agreement.

 

Section 8.2     Section
Headings; Construction. The headings of Sections in this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section
or Sections of this Agreement. All words used in this Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

 

Section 8.3     Severability.
If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions
of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part
or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

Section 8.4     Entire
Agreement and Modification. This Agreement, together with all exhiAOCs and schedules hereto and the other documents referenced
herein, supersedes all prior agreements between the parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the Parties with
respect to its subject matter. This Agreement may not be amended except by a written agreement executed by the party to be charged
with the amendment.

 

Section 8.5     Assignments,
Successors, and No Third-Party Rights. No Party may assign any of its rights under this Agreement without the prior consent
of the other Parties, except that Buyer may assign any of its rights under this Agreement to any Subsidiary of Buyer. Subject to
the preceding

 

    	 

    	 

    

 

sentence, this Agreement
will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to give any Person other than the parties to this Agreement
any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement (other
than the Indemnified Persons). This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.

 

Section 8.6     Waiver.
The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement or the documents referred to in this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial exercise of any such right, power, or privilege
will preclude any other or further exercise of such right, power, or privilege or the exercise of any other right, power, or privilege.
To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or the documents referred
to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless
in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party
or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement
or the documents referred to herein.

 

Section 8.7     Governing
Law; Jurisdiction; Service of Process. . This Agreement will be governed by the laws of the State of New York without regard
to conflicts of laws principles. Any action or proceeding seeking to enforce any provision of, or based on any right arising out
of, this Agreement may be brought against any of the parties in the state or federal courts located in the State of New York, and
each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein.

 

Section 8.8     Counterparts.
This Agreement may be executed by electronic transmission and in one or more counterparts, each of which will be deemed to be
an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. Relationship
of the Parties. Nothing in this Agreement creates a joint venture or partnership between the parties. This Agreement does
not authorize either party (a) to bind or commit, or to act as an agent, employee or legal representative of, the other party,
except as may be specifically set forth in other provisions of this Agreement or (b) to have the power to control the activities
and operations of the other party. The parties are independent contractors with respect to each other under this Agreement. Each
party agrees not to hold itself out as having any authority or relationship contrary to this Section.

 

Section 8.9
– Intentionally Left Blank

 

Section 8.10      In
all matters relating to this Agreement, each party is solely responsible for the acts of its Affiliates, employees and agents,
and employees or agents of one party will not be considered employees or agents of any other party.

 

Section 8.11     Counterparts.   The parties may execute this Agreement in multiple counterparts, each of which constitutes an original as against the party that
signed it, and all of which together constitute one agreement. This Agreement is effective upon delivery of one executed counterpart
from each party to the other party. The signatures of all parties need not appear on the same counterpart. The delivery of signed
counterparts by facsimile or email transmission that includes a copy of the sending party’s signature(s) is as effective
as signing and delivering the counterpart in person.

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the parties hereto have executed and delivered this Asset Purchase Agreement as of the date first written above.

 

	BUYER:
	 
	Optex Systems, Inc
	 
	By:	 
	Name: 	 
	Title:	 
	 
	SELLER:
	L-3 Communications Corporation
	 
	By:	 
	Name:	 
	Title:	 

 

    	 

    	 

    

 

Schedule A

 

Transition Services

 

	Description of Service:	
        Phone Services - The Seller
        currently provides telephone services, including private branch exchange dial tone, local and long distance services, directory
        assistance, voice mail, repair and move/add/change/delete services. Seller will continue to provide these services to the Buyer
        while the Buyer migrates to a local service provider

         

	Termination Date:	
        45 days after the Closing
        Date.

         

	Fee:	
        1)     Actual
        costs incurred associated with phone services Labor rates at $80/hour

         

	 	
         

         

	Description of Service:	
        Network Connectivity – business currently operates on
        the Seller network. At Closing, the business will continue to have access to the Seller network until the transition period ends,
        OR, the business provides their own dedicated data circuit for the business network. At no time shall the business connect a private
        data circuit on business network while the Seller’s data connection is operational.

         

        Seller will continue to provide Internet connectivity to the
        facility during the transition period noted below while the Buyer transitions to an alternate solution/service provider.

         

        Upon request, Seller will provide commercially reasonable assistance
        to the Business in its transition of carrier contracts (data only) from existing Seller agreements to those provided by the business.
        Seller will be responsible for disconnecting all services that are not transitioned. All carrier services must be transitioned
        off Seller contracts within 45 days after the Closing.

         

        Further, Seller will assist business in transferring files and
        specified equipment and will facilitate the transfer of knowledge on how the systems operate and are maintained by the Seller.
        The Seller will also provide reasonable assistance to business in connection with business’s transition of such services
        to an alternate solution.

         

	Termination Date:	45 days after the Closing Date.

 

    	 

    	 

    

 

	Fee:	
        1)    Actual
        costs incurred for service and Labor rates at $80/hour

         

	 	 
	Description of Service:	
        Security System – business currently operates on the Seller’s
        security system. Seller will continue to provide Security systems service to the facility during the transition period noted below
        while the Buyer transitions to an alternate solution/service provider. The Seller’s network is required for the Security
        system and should that service be disconnected due to “Network connectivity” transition period mentioned above, the
        security system service will be discontinued.

         

	Termination Date:	
        45 days after the Closing
        Date

         

	Fee:	
        1)    Actual
        costs incurred for any parts/materials and service fees. Labor rates at $80/hour

         

	 	
         

         

	Description of Service:	
        Email Services – Seller will forward e-mail to Buyers
        e-mail addresses during the transition period noted below while the business migrates to an alternate solution. Seller agrees to
        provide an automated response for 30 days past the end of the transition period.

         

	Termination Date:	
        30 days after the Closing
        Date

         

	Fee:	Cost of service will be based on actual costs incurred. Labor rates at $80/hour
	 	 
	Description of Service:	
        Other Services – The Seller will work with Buyer to ensure
        any service gaps are covered in the unlikely event service is not available.

         

	Termination Date:	
        45 days after
        the Closing Date

         

	Fee:	Cost of service will be based on actual costs incurred. Labor rates at $80/hour

 

    	 

    	 

    

 

Transition Services Agreement

Schedule A.1-HR 

 

Title: Health and Welfare Plan Administration.

 

Description of service: 

 

L-3 will provide continuation of coverage and administrative
support for benefit plans and programs including: medical, Rx (including mail order), dental, vision, Cobra (ADP) and flexible
spending accounts (FSA) through its Benefit Center (Xerox) for eligibility, enrollment, customer service, premiums and claims for
L-3 Applied Optics (AOC) “Transitioned Employees”, as defined in Section 10.1 of the Asset Purchase Agreement, and
for post closing former employees (AOC terminations) through the end of the HR Transition Services period with the following clarifications:

 

		Ø	During the Transition Period, billings and reimbursements will be on a Cobra premium rate basis for both self insured and
fully insured medical, Rx, Dental, vision invoiced to L-3 AOC Division.

 

		Ø	FSA administration (HCRA & DCRA) can be continued through the Cobra process.

 

		Ø	Effective with the Closing Date, L-3 will issue a COBRA Notice to all AOC Transitioned Employees based on their qualifying
event (termination of employment). Should a Transitioned Employee terminate employment with Optex Systems, Inc. after the Closing
Date but before the end of the Transition Period, L-3 will issue a revised COBRA Notice effective immediately. COBRA coverage for
terminated Transitioned Employees will transfer to Optex Systems, Inc. plans at the end of the Transition Period.

 

		Ø	Effective with the end date of the Transition Period, L-3 will cease to have any responsibility to provide health care benefits
including administrative support incurred during the Transition Period.

 

		Ø	Effective with the Closing Date, Staffing Services, Short and Long Term Disability, Life Insurance, Accidental Death &
Disability (AD&D), all Voluntary Benefits (including but not limited to Supplemental AD&D, Long Term Care, Group Universal
Life, etc.), EAP, Business Travel Accident coverage (BTA), Unemployment and Workers Compensation coverage is excluded from this
agreement.

 

L-3 will invoice Optex Systems, Inc. for Transitioned Employees
Cobra premiums on a monthly basis.

 

    	 

    	 

    

 

Provider: Human Resources – Benefits

Organization: L-3

		Address:	600 Third Avenue

New York, New York 10016

 

		Contact:	Sabina Marotta – VP, Employee Benefits

		Phone:	212-805-5371

 

Receiver:

Organization: Optex Systems, Inc.

		Address:	1420 Presidential Dr.

Richardson,
TX 75081

 

		Contact:	Karen L. Hawkins

Vice President of Finance/Controller

		Phone:	Ph 972.764.5676

 

Basis for cost:

 

Other than the costs identified on this schedule, both L-3
and Optex Systems, Inc. will pay their respective costs in supporting the migration of the Business off of L-3’s business
infrastructure including but not limited to conversion efforts and knowledge transfer.

 

See attached for Health and Welfare costs and respective
start-up and on-going fees.

 

Benefit/Vendor Costs:

 

L-3 will send a request for funds to Optex Systems, Inc.
for all health and welfare plan costs on a monthly basis for payment by Optex Systems, Inc. 

 

Outside vendor Costs:

 

Outside vendor costs, if applicable, incurred by L-3 on behalf
of Transitioned Employees will be included as a separate line item on the L-3 invoice issued monthly. 

 

Term of service:        Closing Date until December 31, 2014

 

    	 

    	 

    

 

The below represents anticipated cost for coverage, start-up
and on-going administrative support based on L-3’s experience. 

 

	VENDOR	 	PRODUCT	 	EMPLOYER
    COST
	 	 	 	 	 
	Aetna Choice POS II	 	POS	 	
          EE               ES               EC               EF

        $635          $1,336         $1,241         $1,907

         

	Aetna EPO	 	EPO	 	
          EE               ES               EC               EF

        $589           $1,236        $1,147         $1,763

         

	
        Aetna Health Funds

        Option I

        Option II
	 	HRA	 	
          EE               ES               EC               EF

        $495         $1,040           $ 966          $1,485

        $454         $   954           $ 886          $1,362

         

	Incentive Credits	 	L-3	 	
        Health Risk Assessment             $ 75

        Annual Physical                         $125

        Disease Management                  $200

	Aetna International	 	Med/Rx	 	
          EE               ES               EC               EF

        $273.75       $858.18      $814.27      $1,225.40

         

	Aetna Dental	 	
        PPO

         
	 	
          EE               ES               EC               EF

          $29             $60              $56              $86

         

	Aetna Dental	 	DMO	 	
          EE               ES               EC               EF

        $26.75         $45.93         $62.30         $77.01

         

	Aetna International	 	Dental PPO	 	
          EE               ES               EC               EF

        $20.42         $43.90         $42.88        $74.53

         

	VSP	 	Vision	 	
          EE               ES               EC               EF

           $8            $14.50        $14.50            $20

         

	ADP	 	
         

        COBRA

        Admin Fee

         

        Cobra Rates
	 	
         

        Qualifying Event $6.75 per event per month

        Cobra Continuants $4.50 each per month

        HIPAA w/Non Cobra $4.50 each per month

         

        Above rates plus 2%

 

    	 

    	 

    

 

EXHIBIT 15.3  BILL OF SALE

 

    	 

    	 

    

 

ASSIGNMENT AND BILL OF SALE AGREEMENT

 

ASSIGNMENT AND BILL OF
SALE AGREEMENT, dated October 30, 2014, between L-3 Communications Corporation, a Delaware corporation (“Seller”),
and Optex Systems, Inc., a Delaware corporation (“Buyer”). Capitalized terms used herein without definition
shall have the meaning given to such terms in the Asset Purchase Agreement (as defined below).

 

WHEREAS, Buyer and Seller
are parties to an Asset Purchase Agreement, dated as of October 30, 2014 (the “Asset Purchase Agreement”), providing
for, among other things, the assignment to Buyer of the Assets and the assumption by Buyer of the Assumed Liabilities;

 

WHEREAS, Article 15 of
the Asset Purchase Agreement requires that an Assignment and Bill of Sale Agreement be executed and delivered at the Closing; and

 

WHEREAS, Buyer and Seller
now desire to carry out the intent and purpose of the Asset Purchase Agreement by executing and delivering this Agreement.

 

NOW, THEREFORE, in consideration
of (i) the mutual covenants of Buyer and Seller contained in the Asset Purchase Agreement and (ii) other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged:

 

Seller by these presents
does hereby bargain and sell, assign, transfer, convey to and vest in Buyer, its successors and assigns, all of Seller’s
right, title and interest, legal and equitable, in and to all of the Assets, to have, hold and use forever.

 

Buyer hereby undertakes,
assumes and agrees to perform, pay or discharge when due all of the Assumed Liabilities.

 

Nothing in this Agreement,
express or implied, is intended or shall be construed to confer upon or give to, any person, firm or corporation other than Buyer
and Seller and their respective successors and assigns, any remedy or claim under or by reason of this Agreement or any term, covenant
or condition hereof, and all the terms, covenants and conditions, promises and agreements contained in this Agreement shall be
for the sole and exclusive benefit of Buyer and Seller and their respective successors and assigns.

 

Seller has executed and
delivered to Buyer certain specific instruments of assignment of even date herewith with respect to certain of the Assets. Nothing
contained in such instruments of assignment shall be deemed to modify, limit or restrict anything contained in this Agreement.

 

This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto.

 

    	 

    	 	 

    

 

This Agreement may be
amended, extended, superseded, canceled or renewed, and the terms hereof may be waived, only by a written instrument signed by
the parties, or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

 

THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.

 

This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original but
all such counterparts together shall constitute one and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties hereto.

 

IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed and delivered by their respective duly-authorized officers on the date first
above written.

 

	 	OPTEX SYSTEMS, INC.
	 	 
	 	By:	 
	 	 	Name:  
	 	 	Title:  
	 	 	 
	 	L-3 COMMUNICATIONS CORPORATION
	 	 	 
	 	By:	 
	 	 	Name:  
	 	 	Title:

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