Exhibit 10.2

(Bilateral Form)

(ISDA Agreements subject to New York Law Only)

ISDA®

International Swaps and Derivatives Association, Inc.

CREDIT SUPPORT ANNEX

to the Schedule to the

ISDA MASTER AGREEMENT

……………………………………………

dated as of December 28, 2007

between

BARCLAYS BANK PLC

and

LEGG MASON, INC.

………………………………………………          …………………………………………….

 

("Party A")

("Party B")

 

 

 

This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.

Accordingly, the parties agree as follows:—

 

Paragraph 1. Interpretation

(a)

Definitions and Inconsistency. Capitalized terms not otherwise defined herein or
elsewhere in this Agreement have the meanings specified pursuant to Paragraph
12, and all references in this Annex to Paragraphs are to Paragraphs of this
Annex. In the event of any inconsistency between this Annex and the other
provisions of this Schedule, this Annex will prevail, and in the event of any
inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.

(b)

Secured Party and Pledgor. All references in this Annex to the "Secured Party"
will be to either party when acting in that capacity and all corresponding
references to the "Pledgor" will be to the other party when acting in that
capacity; provided, however, that if Other Posted Support is held by a party to
this Annex, all references herein to that party as the Secured Party with
respect to that Other Posted Support will be to that party as the beneficiary
thereof and will not subject that support or that party as the beneficiary
thereof to provisions of law generally relating to security interests and
secured parties.

Paragraph 2. Security Interest

Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.

Copyright © 1994  International Swaps and Derivatives Association, Inc.

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Paragraph 3. Credit Support Obligations

(a)

Delivery Amount. Subject to Paragraphs 4 and 5, upon a demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount,
then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified
in Paragraph 13, the "Delivery Amount” applicable to the Pledgor for any
Valuation Date will equal the amount by which:

(i)

the Credit Support Amount

exceeds

(ii)

the Value as of that Valuation Date of all Posted Credit Support held by the
Secured Party.

(b)

Return Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Pledgor
on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds the Secured Party's Minimum Transfer Amount,
then the Secured Party will Transfer to the Pledgor Posted Credit Support
specified by the Pledgor in that demand having a Value as of the date of
Transfer as close as practicable to the applicable Return Amount (rounded
pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the
"Return Amount" applicable to the Secured Party for any Valuation Date will
equal the amount by which:

(i)

the Value as of that Valuation Date of all Posted Credit Support held by the
Secured Party

exceeds

(ii)

the Credit Support Amount.

 

"Credit Support Amount" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.

 

Paragraph 4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions

 

(a)

Conditions Precedent. Each Transfer obligation of the Pledgor under Paragraphs 3
and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is
subject to the conditions precedent that:

 

(i)

no Event of Default, Potential Event of Default or Specified Condition has
occurred and is continuing with respect to the other party; and

 

(ii)

no Early Termination Date for which any unsatisfied payment obligations exist
has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the other party.

 

(b)

Transfer Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the next Local Business Day; if
a demand is made after the Notification Time, then the relevant Transfer will be
made not later than the close of business on the second Local Business Day
thereafter.

 

(c)

Calculations. All calculations of Value and Exposure for purposes of Paragraphs
3 and 6(d) will be made by the Valuation Agent as of the Valuation Time. The
Valuation Agent will notify each party (or the other party, if the Valuation
Agent is a party) of its calculations not later than the Notification Time on
the Local Business Day following the applicable Valuation Date (or in the case
of Paragraph 6(d), following the date of calculation).

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(d)

Substitutions.

 

(i)

Unless otherwise specified in Paragraph 13, upon notice to the Secured Party
specifying the items of Posted Credit Support to be exchanged, the Pledgor may,
on any Local Business Day, Transfer to the Secured Party substitute Eligible
Credit Support (the "Substitute Credit Support"); and

 

(ii)

subject to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the
items of Posted Credit Support specified by the Pledgor in its notice not later
than the Local Business Day following the date on which the Secured Party
receives the Substitute Credit Support, unless otherwise specified in Paragraph
13 (the "Substitution Date"); provided that the Secured Party will only be
obligated to Transfer Posted Credit Support with a Value as of the date of
Transfer of that Posted Credit Support equal to the Value as of that date of the
Substitute Credit Support.

 

Paragraph 5. Dispute Resolution

 

If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in the case
of (I) above or (Y) the date of Transfer in the case of (II) above, (2) subject
to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to
the other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:

 

(i)

In the case of a dispute involving a Delivery Amount or Return Amount, unless
otherwise specified in Paragraph 13, the Valuation Agent will recalculate the
Exposure and the Value as of the Recalculation Date by:

 

(A)

utilizing any calculations of Exposure for the Transactions (or Swap
Transactions) that the parties have agreed are not in dispute;

 

(B)

calculating the Exposure for the Transactions (or Swap Transactions) in dispute
by seeking four actual quotations at mid-market from Reference Market-makers for
purposes of calculating Market Quotation, and taking the arithmetic average of
those obtained; provided that if four quotations are not available for a
particular Transaction (or Swap Transaction), then fewer than four quotations
may be used for that Transaction (or Swap Transaction); and if no quotations are
available for a particular Transaction (or Swap Transaction), then the Valuation
Agent's original calculations will be used for that Transaction (or Swap
Transaction); and

 

(C)

utilizing the procedures specified in Paragraph 13 for calculating the Value, if
disputed, of Posted Credit Support.

 

(ii)

In the case of a dispute involving the Value of any Transfer of Eligible Credit
Support or Posted Credit Support, the Valuation Agent will recalculate the Value
as of the date of Transfer pursuant to Paragraph 13.

 

Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.

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Paragraph 6. Holding and Using Posted Collateral

 

(a)

Care of Posted Collateral. Without limiting the Secured Party's rights under
Paragraph 6(c), the Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law,
and in any event the Secured Party will be deemed to have exercised reasonable
care if it exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding sentence, the
Secured Party will have no duty with respect to Posted Collateral, including,
without limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.

 

(b)

Eligibility to Hold Posted Collateral; Custodians.

 

(i)

General. Subject to the satisfaction of any conditions specified in Paragraph 13
for holding Posted Collateral, the Secured Party will be entitled to hold Posted
Collateral or to appoint an agent (a "Custodian") to hold Posted Collateral for
the Secured Party. Upon notice by the Secured Party to the Pledgor of the
appointment of a Custodian, the Pledgor's obligations to make any Transfer will
be discharged by making the Transfer to that Custodian. The holding of Posted
Collateral by a Custodian will be deemed to be the holding of that Posted
Collateral by the Secured Party for which the Custodian is acting.

 

(ii)

Failure to Satisfy Conditions. If the Secured Party or its Custodian fails to
satisfy any conditions for holding Posted Collateral, then upon a demand made by
the Pledgor, the Secured Party will, not later than five Local Business Days
after the demand, Transfer or cause its Custodian to Transfer all Posted
Collateral held by it to a Custodian that satisfies those conditions or to the
Secured Party if it satisfies those conditions.

 

(iii)

Liability. The Secured Party will be liable for the acts or omissions of its
Custodian to the same extent that the Secured Party would be liable hereunder
for its own acts or omissions.

 

(c)

Use of Posted Collateral. Unless otherwise specified in Paragraph 13 and without
limiting the rights and

obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the
Secured Party is not a Defaulting Party or an Affected Party with respect to a
Specified Condition and no Early Termination Date has occurred or been
designated as the result of an Event of Default or Specified Condition with
respect to the Secured Party, then the Secured Party will, notwithstanding
Section 9-207 of the New York Uniform Commercial Code, have the right

to:

 

(i)

sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose
of, or otherwise use in its business any Posted Collateral it holds, free from
any claim or right of any nature whatsoever of the Pledgor, including any equity
or right of redemption by the Pledgor; and

 

(ii)

register any Posted Collateral in the name of the Secured Party, its Custodian
or a nominee for either.

 

For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.

 

(d)

Distributions and Interest Amount.

 

(i)

Distributions. Subject to Paragraph 4(a), if the Secured Party receives or is
deemed to receive Distributions on a Local Business Day, it will Transfer to the
Pledgor not later than the following Local Business Day any Distributions it
receives or is deemed to receive to the extent that a Delivery Amount would not
be created or increased by that Transfer, as calculated by the Valuation Agent
(and the date of calculation will be deemed to be a Valuation Date for this
purpose).

 

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(ii)

Interest Amount. Unless otherwise specified in Paragraph 13 and subject to
Paragraph 4(a), in lieu of any interest, dividends or other amounts paid or
deemed to have been paid with respect to Posted Collateral in the form of Cash
(all of which may be retained by the Secured Party), the Secured Party will
Transfer to the Pledgor at the times specified in Paragraph 13 the Interest
Amount to the extent that a Delivery Amount would not be created or increased by
that Transfer, as calculated by the Valuation Agent (and the date of calculation
will be deemed to be a Valuation Date for this purpose). The Interest Amount or
portion thereof not Transferred pursuant to this Paragraph will constitute
Posted Collateral in the form of Cash and will be subject to the security
interest granted under Paragraph 2.

 

Paragraph 7. Events of Default

 

For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:

(i)

that party fails (or fails to cause its Custodian) to make, when due, any
Transfer of Eligible Collateral, Posted Collateral or the Interest Amount, as
applicable, required to be made by it and that failure continues for two Local
Business Days after notice of that failure is given to that party;

 

(ii)

that party fails to comply with any restriction or prohibition specified in this
Annex with respect to any of the rights specified in Paragraph 6(c) and that
failure continues for five Local Business Days after notice of that failure is
given to that party; or

 

(iii)

that party fails to comply with or perform any agreement or obligation other
than those specified in Paragraphs 7(i) and 7(ii) and that failure continues for
30 days after notice of that failure is given to that party.

 

Paragraph 8. Certain Rights and Remedies

 

(a)

Secured Party's Rights and Remedies. If at any time (1) an Event of Default or
Specified Condition with respect to the Pledgor has occurred and is continuing
or (2) an Early Termination Date has occurred or been designated as the result
of an Event of Default or Specified Condition with respect to the Pledgor, then,
unless the Pledgor has paid in full all of its Obligations that are then due,
the Secured Party may exercise one or more of the following rights and remedies:

 

(i)

all rights and remedies available to a secured party under applicable law with
respect to Posted Collateral held by the Secured Party;

 

(ii)

any other rights and remedies available to the Secured Party under the terms of
Other Posted Support, if any;

 

(iii)

the right to Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash equivalent of any Posted
Collateral held by the Secured Party (or any obligation of the Secured Party to
Transfer that Posted Collateral); and

 

(iv)

the right to liquidate any Posted Collateral held by the Secured Party through
one or more public or private sales or other dispositions with such notice, if
any, as may be required under applicable law, free from any claim or right of
any nature whatsoever of the Pledgor, including any equity or right of
redemption by the Pledgor (with the Secured Party having the right to purchase
any or all of the Posted Collateral to be sold) and to apply the proceeds (or
the Cash equivalent thereof) from the liquidation of the Posted Collateral to
any amounts payable by the Pledgor with respect to any Obligations in that order
as the Secured Party may elect.

 

Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.

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(b)

 Pledgor's Rights and Remedies. If at any time an Early Termination Date has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):

 

(i)

the Pledgor may exercise all rights and remedies available to a pledgor under
applicable law with respect to Posted Collateral held by the Secured Party;

 

(ii)

the Pledgor may exercise any other rights and remedies available to the Pledgor
under the terms of Other Posted Support, if any;

 

(iii)

the Secured Party will be obligated immediately to Transfer all Posted
Collateral and the Interest Amount to the Pledgor; and

 

(iv)

to the extent that Posted Collateral or the Interest Amount is not so
Transferred pursuant to (iii) above, the Pledgor may:

 

(A)

Set-off any amounts payable by the Pledgor with respect to any Obligations
against any Posted Collateral or the Cash equivalent of any Posted Collateral
held by the Secured Party (or any obligation of the Secured Party to Transfer
that Posted Collateral); and

 

(B)

to the extent that the Pledgor does not Set-off under (iv)(A) above, withhold
payment of any remaining amounts payable by the Pledgor with respect to any
Obligations, up to the Value of any remaining Posted Collateral held by the
Secured Party, until that Posted Collateral is Transferred to the Pledgor.

 

(c)

Deficiencies and Excess Proceeds. The Secured Party will Transfer to the Pledgor
any proceeds and Posted Credit Support remaining after liquidation, Set-off
and/or application under Paragraphs 8(a) and 8(b) after satisfaction in full of
all amounts payable by the Pledgor with respect to any Obligations; the Pledgor
in all events will remain liable for any amounts remaining unpaid after any
liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).

 

(d)

Final Returns. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential liability
under Section 2(d) of this Agreement), the Secured Party will Transfer to the
Pledgor all Posted Credit Support and the Interest Amount, if any.

 

Paragraph 9. Representations

 

Each party represents to the other party (which representations will be deemed
to be repeated as of each date

on which it, as the Pledgor, Transfers Eligible Collateral) that:

 

(i)

it has the power to grant a security interest in and lien on any Eligible
Collateral it Transfers as the Pledgor and has taken all necessary actions to
authorize the granting of that security interest and lien;

 

(ii)

it is the sole owner of or otherwise has the right to Transfer all Eligible
Collateral it Transfers to the Secured Party hereunder, free and clear of any
security interest, lien, encumbrance or other restrictions other than the
security interest and lien granted under Paragraph 2;

 

(iii)

upon the Transfer of any Eligible Collateral to the Secured Party under the
terms of this Annex, the Secured Party will have a valid and perfected first
priority security interest therein (assuming that any central clearing
corporation or any third-party financial intermediary or other entity not within
the control of the Pledgor involved in the Transfer of that Eligible Collateral
gives the notices and takes the action required of it under applicable law for
perfection of that interest); and

 

(iv)

the performance by it of its obligations under this Annex will not result in the
creation of any security interest, lien or other encumbrance on any Posted
Collateral other than the security interest and lien granted under Paragraph 2.

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Paragraph 10. Expenses

 

(a)

General. Except as otherwise provided in Paragraphs 10(b) and 10(c), each party
will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.

 

(b)

Posted Credit Support. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Posted
Credit Support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of that Posted Credit Support is subsequently
disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party's rights under
Paragraph 6(c).

 

(c)

Liquidation/Application of Posted Credit Support. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.

 

Paragraph 11. Miscellaneous

 

(a)

Default Interest. A Secured Party that fails to make, when due, any Transfer of
Posted Collateral or the Interest Amount will be obligated to pay the Pledgor
(to the extent permitted under applicable law) an amount equal to interest at
the Default Rate multiplied by the Value of the items of property that were
required to be Transferred, from (and including) the date that Posted Collateral
or Interest Amount was required to be Transferred to (but excluding) the date of
Transfer of that Posted Collateral or Interest Amount. This interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed.

 

(b)

Further Assurances. Promptly following a demand made by a party, the other party
will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that
party to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.

 

(c)

Further Protection. The Pledgor will promptly give notice to the Secured Party
of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured
Party's rights under Paragraph 6(c).

 

(d)

Good Faith and Commercially Reasonable Manner. Performance of all obligations
under this Annex, including, but not limited to, all calculations, valuations
and determinations made by either party, will be made in good faith and in a
commercially reasonable manner.

 

(e)

Demands and Notices. All demands and notices made by a party under this Annex
will be made as specified in the Notices Section of this Agreement, except as
otherwise provided in Paragraph 13.

 

(f)

Specifications of Certain Matters. Anything referred to in this Annex as being
specified in Paragraph 13 also may be specified in one or more Confirmations or
other documents and this Annex will be construed accordingly.

 

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Paragraph 12. Definitions

 

As used in this Annex:-

 

"Cash" means the lawful currency of the United States of America.

 

"Credit Support Amount" has the meaning specified in Paragraph 3.

 

"Custodian" has the meaning specified in Paragraphs 6(b)(i) and 13.

 

"Delivery Amount” has the meaning specified in Paragraph 3(a).

 

"Disputing Party" has the meaning specified in Paragraph 5.

 

"Distributions" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.

 

"Eligible Collateral” means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.

 

"Eligible Credit Support" means Eligible Collateral and Other Eligible Support.

 

"Exposure" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").

 

"Independent Amount” means, with respect to a party, the amount specified as
such for that party in Paragraph 13; if no amount is specified, zero.

 

"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:

 

(x)

 the amount of that Cash on that day; multiplied by

 

(y)

the Interest Rate in effect for that day; divided by

 

(z)

360.

 

"Interest Period" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.

 

"Interest Rate” means the rate specified in Paragraph 13.

 

"Local Business Day", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.

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"Minimum Transfer Amount” means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.

 

"Notification Time" has the meaning specified in Paragraph 13.

 

"Obligations" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.

 

"Other Eligible Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.

 

"Other Posted Support" means all Other Eligible Support Transferred to the
Secured Party that remains in effect

for the benefit of that Secured Party.

 

"Pledgor" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).

 

"Posted Collateral" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.

 

"Posted Credit Support" means Posted Collateral and Other Posted Support.

 

"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.

 

"Resolution Time" has the meaning specified in Paragraph 13.

 

"Return Amount" has the meaning specified in Paragraph 3(b).

 

"Secured Party" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.

 

"Specified Condition" means, with respect to a party, any event specified as
such for that party in Paragraph 13.

 

"Substitute Credit Support" has the meaning specified in Paragraph 4(d)(i).

 

"Substitution Date" has the meaning specified in Paragraph 4(d)(ii).

 

"Threshold" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.

 

"Transfer" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:

 

(i)

in the case of Cash, payment or delivery by wire transfer into one or more bank
accounts specified by the recipient;

 

(ii)

in the case of certificated securities that cannot be paid or delivered by
book-entry, payment or delivery in appropriate physical form to the recipient or
its account accompanied by any duly executed instruments of transfer,
assignments in blank, transfer tax stamps and any other documents necessary to
constitute a legally valid transfer to the recipient;

 

(iii)

in the case of securities that can be paid or delivered by book-entry, the
giving of written instructions to the relevant depository institution or other
entity specified by the recipient, together with a written copy thereof to the
recipient, sufficient if complied with to result in a legally effective transfer
of the relevant interest to the recipient; and

 

(iv)

in the case of Other Eligible Support or Other Posted Support, as specified in
Paragraph 13.

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"Valuation Agent" has the meaning specified in Paragraph 13.

 

"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 13.

 

"Valuation Percentage” means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.

 

"Valuation Time" has the meaning specified in Paragraph 13.

 

"Value" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to:

 

(i)

Eligible Collateral or Posted Collateral that is:

 

(A) Cash, the amount thereof; and

 

(B) a security, the bid price obtained by the Valuation Agent multiplied by the
applicable Valuation Percentage, if any;

 

(ii)

Posted Collateral that consists of items that are not specified as Eligible
Collateral, zero; and

 

(iii)

Other Eligible Support and Other Posted Support, as specified in Paragraph 13.

BARCLAYS BANK PLC

LEGG MASON, INC.

By:

/s/ John Lovisolo

Name: John Lovisolo

Title: MD

By:

/s/Charles J. Daley, Jr.

Name:

Charles J. Daley, Jr.

Title: Senior Vice President, Chief Financial Officer and Treasurer

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Party A:  BARCLAYS BANK PLC

Party B:  LEGG MASON, INC.

Paragraph 13.  Elections and Variables

(a)

Security Interest for "Obligations".  The term "Obligations" as used in this
Annex includes the following additional obligations:

With respect to Party A:  None.

With respect to Party B:  None.

(b)

Credit Support Obligations.

(i)

Delivery Amount, Return Amount and Credit Support Amount.

(A)

"Delivery Amount" has the meaning specified in Paragraph 3(a).  For the
avoidance of doubt, and without otherwise limiting the obligations of Party B,
LM Marketing Co., LLC may Transfer Eligible Credit Support to Party A in, full
or partial, satisfaction of Party B’s obligations to make such Transfer pursuant
to Paragraph 3(a).  With respect to any such Transfer by LM Marketing Co., LLC,
LM Marketing Co., LLC shall make, and be deemed to make, as of the date of such
Transfer, the representations and be bound by the same undertakings (mutatis
mutandis) as Party B would make and be bound by with respect to such Transfer
had Party B made such Transfer itself. Further, and notwithstanding any other
provision of this Annex, Party A shall have no obligation as Secured Party to
Transfer Posted Credit Support to LM Marketing Co., LLC and may satisfy its
obligations, if any, under Paragraph 3(b) by Transferring Posted Credit Support
to Party B (rather than LM Marketing Co., LLC) and shall have no obligations
hereunder to LM Marketing Co., LLC.     

(B)

"Return Amount" has the meaning specified in Paragraph 3(b).

(C)

"Credit Support Amount" has the meaning specified in Paragraph 3.

(ii)

Eligible Collateral.  The following items will qualify as "Eligible Collateral"
for the party specified:

 

 

Party B

Valuation

Percentage

(A)

Cash

[ X ]

   100%

(B)

negotiable debt obligations issued by the U.S. Treasury Department having a
remaining term to maturity of not more than 2 years (“Treasury Securities”)

[ X ]

  99.25%

(C)

Treasury Securities having a remaining term to maturity of more than 2 years but
not more than 5 years.

[ X ]

    98.5%

(D)

Treasury Securities having a remaining term to maturity of more than 5 years but
not more than 10 years

[ X ]

    97.25%

(E)

Treasury Securities having a remaining term to maturity of more than ten years

[ X ]

    97%

(iii)

Other Eligible Support.  The following items will qualify as "Other Eligible
Support" for Party A and Party B:  None.

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(iv)

Thresholds.

(A)

"Independent Amount" means with respect to Party A: None

"Independent Amount" means with respect to Party B: The aggregate of the amounts
specified as such in each Confirmation of a Transaction.  

(B)

“Threshold” means with respect to Party A:  infinite

“Threshold” means with respect to Party B: zero.

(C)

"Minimum Transfer Amount" means with respect to Party A or Party B:  $750,000,
but provided that if (i) an Event of Default or a Potential Event of Default has
occurred with respect to a party, the Minimum Transfer Amount for such party
shall be zero; and (ii) where the Credit Support Amount with respect to both
parties on a Valuation Date is zero and there are no outstanding Transactions,
the Minimum Transfer Amount with respect to both parties on such day shall be
zero.

(D)

Rounding.  The Delivery Amount and the Return Amount will be rounded up and
down, in each case, to the nearest integral multiple of USD10,000, respectively.

(c)

Valuation and Timing.

(i)

"Valuation Agent" means, Party A.

(ii)

"Valuation Date" means each day that is a Local Business Day for both Party A
and Party B.

(iii) "Valuation Time" means the close of business on the Local Business Day
immediately preceding the Valuation Date or date of calculation, as applicable,
provided that the calculations of Value and Exposure will, as far as
practicable, be made as of approximately the same time on the same date.

(iv)

"Notification Time" means 1:00 p.m., New York time, on a Local Business Day.

(d)

Conditions Precedent and Secured Party's Rights and Remedies.  The following
Termination Event(s) will be a "Specified Condition" for the party specified
(that party being the Affected Party) so long as all Transactions are Affected
Transactions:

 

 

Party A

Party B

 

Illegality

  [ X ]

  [ X ]

 

Tax Event

  [ X ]

  [ X ]

 

Tax Event Upon Merger

  [ X ]

  [ X ]

 

Credit Event Upon Merger

  [ X ]

  [ X ]

 

Additional Termination Events

  [ X ]

  [ X ]

(e)

Substitution.

(i)

"Substitution Date" has the meaning specified in Paragraph 4(d)(ii).

(ii)

Consent.  If specified here as applicable, then the Pledgor must obtain the
Secured Party's consent for any substitution pursuant to Paragraph 4(d):
 Applicable.  Neither party shall unreasonably withhold its consent to any
substitution request by the other party.

(f)

Dispute Resolution.

(i)

"Resolution Time" means 1:00 p.m., New York time, on the Local Business Day
following the date on which notice of the dispute is given under Paragraph 5.

(ii)

Value.  For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value of Eligible
Credit Support or Posted Credit Support as of the relevant Valuation Date or
date of Transfer will be calculated as follows:

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(A)

with respect to Cash, the amount thereof; and

(B)

with respect to Treasury Securities, the product of (i) the sum of (1) either
(x) the mean of the bid and asked prices for Treasury Securities that appear in
Bloomberg Financial Markets and Commodities News produced by Bloomberg L.P., a
Delaware limited partnership ("Bloomberg") for such day (or, if such day is not
a Local Business Day, for the preceding Local Business Day) or (y) if the bid
and asked prices for Treasury Securities does not so appear, the mean of the
final bid prices quoted on such date by any two principal market makers for such
Treasury Securities chosen by the Valuation Agent, or (z) if the bid and asked
prices for Treasury Securities does not so appear and if quotations are not
available from two principal market makers for such date (to determine whether
quotations are not available, the Valuation Agent shall seek quotations from at
least three principal market markers), the mean of such final bid prices as of
the day next preceding such date on which such quotations were available, plus
(2) the accreted interest on such Treasury Securities (except to the extent
included in the applicable price referred to in (1) of this clause (B) as of
such date), multiplied by (ii) the Valuation Percentage applicable to such
Treasury Securities.

The definition of “Value” in this Annex is modified to include in clause (i)(B)
thereof after the words “bid price” the parenthetical “(or at the option of the
Valuation Agent the mean of the bid price and asked price)”.

(iii)

Alternative.  The provisions of Paragraph 5 will apply except that Paragraph
5(i)(B) shall be amended by deleting all of the words in Paragraph 5(i)(B)
immediately prior to the words “the Valuation Agent’s original calculations will
be used for that Transaction (or Swap Transaction); and”.

(g)

Holding and Using Posted Collateral.

(i)

Eligibility to Hold Posted Collateral; Custodians.  Each party (and its
Custodian, if any) will be entitled to hold Posted Collateral pursuant to
Paragraph 6(b); provided that the following conditions applicable to it are
satisfied:

(A)

Posted Collateral may be held only in the following jurisdictions:  New York.

(B)

The Party is not a Defaulting Party or an Affected Party.

(C)

Party B's Custodian:  Party B's Custodian shall (A) be a trust company or a
commercial bank with trust powers organized under the laws of the United States
or any state thereof and subject to supervision or examination by a federal or
state authority and (B) have a Credit Rating of A2 or higher by Moody's or A or
higher by Standard & Poor's, respectively.

(ii)

Use of Posted Collateral.  The provisions of Paragraph 6(c) will apply to the
parties.

(h)

Distributions and Interest Amount.

(i)

Interest Rate.  The “Interest Rate” will be the effective Federal Funds rate in
U.S. Dollars as reported in Federal Reserve Publication H. 15.

(ii)

Transfer of Interest Amount.  The Transfer of the Interest Amount will be made
on the last Local Business Day of each calendar month and on any Local Business
Day that Posted Collateral in the form of Cash is Transferred to the Pledgor
pursuant to Paragraph 3(b).

(iii)

Alternative to Interest Amount.  The provisions of Paragraph 6(d)(ii) will apply
except as modified here:  If Transfer of an Interest Amount (or any portion
thereof) to a Pledgor on any day would result in, or increase, a Delivery Amount
(treating that day as a Valuation Date, as provided in Paragraph 6(d)(ii)) but
the Pledgor would nonetheless have no obligation to make a Transfer pursuant to
Paragraph 3(a) on that day if it were a Valuation Date (because the Delivery
Amount is lower than the Pledgor's Minimum Transfer Amount or otherwise), the
Secured Party will be required to Transfer that Interest Amount (or portion
thereof) to the Pledgor, notwithstanding anything to the contrary in Paragraph
6(d)(ii).

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(i)

Additional Representation(s):  None.

(j)

Other Eligible Support and Other Posted Support.

(i)

"Value" with respect to Other Eligible Support and Other Posted Support means:
 Not applicable.

(ii)

"Transfer" with respect to Other Eligible Support and Other Posted Support
means:  Not applicable.

(k)

Demands and Notices.

All demands, specifications and notices under this Annex will be made pursuant
to the Notices Section of this Agreement, unless otherwise specified here: N/A.

(l)

Addresses for Transfers.

Party A:

For cash:

For Treasury Securities:

Barclays Bank PLC, NY

Aba #026-002-574

F/O: Barclays Swaps & Options Group NY

A/C #: 050019228

Ref: NY Collateral Management

Bank of NYC/BBPLCLDN

Aba #021-000-018

Party B: To be specified in writing by Party B.

(m)

Other Provisions.

(i)  Transfer of Undisputed Amount.  Paragraph 5 is hereby amended by adding the
following after the phrase "of (II) above" in the eighth line thereof:

"(provided that such Transfer need not be made prior to the time that such
Transfer need otherwise be made pursuant to the demand made under Paragraph 3)".

(ii)  Certain Distributions Received.  If a Secured Party receives or is deemed
to receive Distributions on a day that is not a Local Business Day, or after its
close of business on a Local Business Day, it will Transfer the Distributions to
the Pledgor on the second following Local Business Day, subject to Paragraph
4(a), but only to the extent contemplated in Paragraph 6(d)(i) in connection
with Distributions received or deemed received on a Local Business Day.

(iii)  Set-off.  For purposes of Paragraphs 2 and 8(a)(iii) of this Annex, the
reference to any amount payable under Section 6 of this Agreement in the
definition of “Set-off” in this Agreement shall be deemed a reference to any
amount payable with respect to any Obligation, as described in Paragraph
8(a)(iii) of this Annex.

(iv)  Taxes.  Paragraph 10(b) is hereby amended by adding the following at the
end of the text thereof:

; provided, however, that notwithstanding this Paragraph 10(b), Section 2(d) of
the Agreement shall apply to any Indemnifiable Tax imposed on a payment or
deemed payment by the Secured Party to the Pledgor described in Paragraph 6(d)
hereof.

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(v)

Additional Definitions.  Paragraph 12 is hereby amended by adding the following:

"Credit Rating" means, with respect to a party or entity on any date of
determination, the respective rating then assigned to its unsecured and
unsubordinated long-term debt or deposit obligations (not supported by third
party credit enhancement) by Standard & Poor's, Moody's or the applicable rating
agency.

 "Moody's" means Moody's Investor Services, Inc. or its successor.

"Standard & Poor’s" means the Standard & Poor's Ratings Group (a division of
McGraw-Hill, Inc.) or its successor.

(vi)  Severability.  In the event any one or more of the provisions contained in
this Annex shall be held illegal, invalid or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained in
the Agreement shall not in any way be affected or impaired thereby.

(vii)  Agreement as to Single Pledgor and Secured Party.  PARTY A AND PARTY B
AGREE THAT, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS ANNEX, (A) THE TERM
“SECURED PARTY” AS USED IN THIS ANNEX MEANS ONLY PARTY A, (B) THE TERM “PLEDGOR”
AS USED IN THIS ANNEX MEANS ONLY PARTY B, AND (C) ONLY PARTY B WILL BE REQUIRED
TO MAKE TRANSFERS OF ELIGIBLE CREDIT SUPPORT HEREUNDER.

BARCLAYS BANK PLC

LEGG MASON, INC.

By: /s/ John Lovisolo                                         

By: : /s/Charles J. Daley, Jr.                                  

     Name: John Lovisolo

Name: Charles J. Daley, Jr.

 Title: MD

Title: Senior Vice President, Chief Financial Officer and Treasurer

LM MARKETING CO., LLC

By: /s/Charles J. Daley, Jr.                                  

Name: Charles J. Daley, Jr.

Title: Senior Vice President, Chief Financial Officer  and Treasurer

15

ISDA® 1994