exv10w21



 






Exhibit 10.21




 



MIDLAND FINANCIAL HOLDINGS,
INC.,

AS ISSUER



 

AND

 




WILMINGTON TRUST
COMPANY,

AS TRUSTEE


 


INDENTURE

Dated as of May 3, 2004


 



Up to $120,000,000


 



9.5% JUNIOR SUBORDINATED DEBENTURES DUE MAY 3, 2034




 






 









 





TABLE OF CONTENTS



	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I
	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	 	2
	Section 1.1
	 	Definitions	 	2
	Section 1.2
	 	Compliance Certificates and Opinions	 	9
	Section 1.3
	 	Form of Documents Delivered to Trustee	 	10
	Section 1.4
	 	Acts of Holders; Record Dates	 	10
	Section 1.5
	 	Notices, Etc., to Trustee and the Company	 	11
	Section 1.6
	 	Notice to Holders; Waiver	 	11
	Section 1.7
	 	Effect of Headings and Table of Contents	 	12
	Section 1.8
	 	Successors and Assigns	 	12
	Section 1.9
	 	Separability Clause	 	12
	Section 1.10
	 	Benefits of Indenture	 	12
	Section 1.11
	 	Governing Law	 	12
	Section 1.12
	 	Legal Holidays	 	12
	ARTICLE II
	DEBENTURE FORMS	 	13
	Section 2.1
	 	Forms Generally	 	13
	Section 2.2
	 	Initial Issuance to Property Trustee	 	13
	Section 2.3
	 	Global Debenture	 	13
	ARTICLE III
	THE DEBENTURES	 	14
	Section 3.1
	 	Title and Terms	 	14
	Section 3.2
	 	Denominations	 	15
	Section 3.3
	 	Execution, Authentication, Delivery and Dating	 	16
	Section 3.4
	 	Temporary Debentures	 	16
	Section 3.5
	 	Registration, Registration of Transfer and Exchange	 	16
	Section 3.6
	 	Mutilated, Destroyed, Lost and Stolen Debentures	 	17
	Section 3.7
	 	Payment of Interest; Interest Rights Preserved	 	18
	Section 3.8
	 	Persons Deemed Owners	 	19
	Section 3.9
	 	Cancellation	 	19
	Section 3.10
	 	Right of Set Off	 	19
	Section 3.11
	 	CUSIP Numbers	 	19
	Section 3.12
	 	Paying Agent and Registrar	 	20
	Section 3.13
	 	Calculation of Original Issue Discount	 	20






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TABLE OF CONTENTS

(continued)



	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE IV
	SATISFACTION AND DISCHARGE	 	20
	Section 4.1
	 	Satisfaction and Discharge of Indenture	 	20
	Section 4.2
	 	Application of Trust Money	 	21
	ARTICLE V
	REMEDIES	 	21
	Section 5.1
	 	Indenture Events of Default	 	21
	Section 5.2
	 	Acceleration of Maturity; Rescission and Annulment	 	22
	Section 5.3
	 	Collection of Indebtedness and Suits for Enforcement by Trustee	 	23
	Section 5.4
	 	Trustee May File Proofs of Claim	 	23
	Section 5.5
	 	Trustee May Enforce Claims Without Possession of Debentures	 	24
	Section 5.6
	 	Application of Money Collected	 	24
	Section 5.7
	 	Limitation on Suits	 	24
	Section 5.8
	 	Unconditional Right of Holders To Receive Principal and Interest	 	25
	Section 5.9
	 	Restoration of Rights and Remedies	 	25
	Section 5.10
	 	Rights and Remedies Cumulative	 	25
	Section 5.11
	 	Delay or Omission Not Waiver	 	25
	Section 5.12
	 	Control by Holders	 	26
	Section 5.13
	 	Waiver of Past Defaults	 	26
	Section 5.14
	 	Undertaking For Costs	 	26
	Section 5.15
	 	Waiver of Stay or Extension Laws	 	26
	Section 5.16
	 	Enforcement by Holders of Trust Preferred Securities	 	27
	ARTICLE VI
	THE TRUSTEE	 	27
	Section 6.1
	 	Certain Duties and Responsibilities	 	27
	Section 6.2
	 	Notice of Defaults	 	27
	Section 6.3
	 	Certain Rights of Trustee	 	28
	Section 6.4
	 	Not Responsible for Recitals or Issuance of Debentures	 	29
	Section 6.5
	 	May Hold Debentures	 	29
	Section 6.6
	 	Money Held in Trust	 	29
	Section 6.7
	 	Compensation and Reimbursement	 	29
	Section 6.8
	 	Disqualification; Conflicting Interests	 	30
	Section 6.9
	 	Corporate Trustee Required; Eligibility	 	30
	Section 6.10
	 	Resignation and Removal; Appointment of Successor	 	30
	Section 6.11
	 	Acceptance of Appointment by Successor	 	31






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TABLE OF CONTENTS

(continued)



	 	 	 	 	 
	 	 	 	 	Page
	Section 6.12
	 	Merger, Conversion, Consolidation or Succession to Business	 	31
	Section 6.13
	 	Preferential Collection of Claims Against Company	 	31
	ARTICLE VII
	HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY	 	32
	Section 7.1
	 	Company to Furnish Trustee Names and Addresses of Holders	 	32
	Section 7.2
	 	Preservation of Information; Communications to Holders	 	32
	Section 7.3
	 	Reports by Trustee	 	32
	Section 7.4
	 	Reports by Company	 	32
	ARTICLE VIII
	CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	 	33
	Section 8.1
	 	Company May Consolidate, etc., Only on Certain Terms	 	33
	Section 8.2
	 	Successor Substituted	 	33
	ARTICLE IX
	SUPPLEMENTAL INDENTURES	 	34
	Section 9.1
	 	Supplemental Indentures Without Consent of Holders	 	34
	Section 9.2
	 	Supplemental Indentures with Consent of Holders	 	35
	Section 9.3
	 	Execution of Supplemental Indentures	 	36
	Section 9.4
	 	Effect of Supplemental Indentures	 	36
	Section 9.5
	 	Reference in Debentures to Supplemental Indentures	 	36
	ARTICLE X
	COVENANTS; REPRESENTATIONS AND WARRANTIES	 	36
	Section 10.1
	 	Payment of Principal and Interest	 	36
	Section 10.2
	 	Maintenance of Office or Agency	 	36
	Section 10.3
	 	Money for Debenture Payments to Be Held in Trust	 	37
	Section 10.4
	 	Statement by Officers as to Default	 	38
	Section 10.5
	 	Additional Covenants	 	38
	Section 10.6
	 	Payment of Expenses of the Trust	 	39
	ARTICLE XI
	REDEMPTION OF DEBENTURES	 	39
	Section 11.1
	 	Redemption	 	39
	Section 11.2
	 	Applicability of Article	 	40
	Section 11.3
	 	Election to Redeem; Notice to Trustee	 	40
	Section 11.4
	 	Notice of Redemption	 	40
	Section 11.5
	 	Deposit of Redemption Price	 	40
	Section 11.6
	 	Debentures Payable on Redemption Date	 	41
	Section 11.7
	 	No Sinking Fund	 	41






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TABLE OF CONTENTS

(continued)



	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE XII
	SUBORDINATION OF DEBENTURES	 	41
	Section 12.1
	 	Agreement to Subordinate	 	41
	Section 12.2
	 	Default on Senior Debt	 	42
	Section 12.3
	 	Liquidation; Dissolution; Bankruptcy	 	42
	Section 12.4
	 	Subrogation	 	43
	Section 12.5
	 	Trustee to Effectuate Subordination	 	44
	Section 12.6
	 	Notice by the Company	 	44
	Section 12.7
	 	Rights of the Trustee; Holders of Senior Debt	 	44
	Section 12.8
	 	Subordination May Not Be Impaired	 	45
	Section 12.9
	 	Article Applicable to Paying Agents	 	45
	Section 12.10
	 	Right to Bring Direct Action Subordinate	 	45
	ARTICLE XIII
	IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS	 	45
	Section 13.1
	 	No Recourse	 	45
	Section 13.2
	 	PORTAL Eligibility	 	46
	Section 13.3
	 	Counterparts	 	46







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INDENTURE




     INDENTURE, dated as of May 3, 2004, between Midland Financial Holdings, Inc., a corporation duly
organized and existing under the laws of the State of Florida (the “Company”), having its principal
office at 621 E. Pratt Street, Suite 300, Baltimore, Maryland 21202, and Wilmington Trust Company,
a Delaware-chartered bank and trust company (“Wilmington Trust”), as trustee, having its principal
office at Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890 (the
“Trustee”).



RECITALS OF THE COMPANY




     WHEREAS, MFH Financial Trust I, a Delaware statutory trust (the “Trust”) governed by the Amended
and Restated Declaration of Trust dated as of April 28, 2004 (the “Declaration”), by and among the
Company, as sponsor, Mark K. Joseph, Michael L. Falcone and William S. Harrison, as administrative
trustees (the “Administrative Trustees”), and Wilmington Trust as Delaware trustee and property
trustee (the “Property Trustee”), will issue and sell up to 1,200,000 9.5% Trust Preferred
Securities (Liquidation Amount of $100 per Trust Preferred Security) (the “Trust Preferred
Securities”) representing undivided beneficial interests in the assets of the Trust, with a
liquidation amount of $100 per Trust Preferred Security, or up to $120,000,000 in the aggregate;
and



     WHEREAS, the Trust will issue and sell to the Company 100 9.5% Trust Common Securities (Liquidation
Amount of $1.00 per Trust Common Security) (the “Trust Common Securities” and, together with the
Trust Preferred Securities, the “Trust Securities”) representing undivided beneficial interests in
the assets of the Trust, with a liquidation amount of $1 per Trust Common Security, or $100 in the
aggregate; and



     WHEREAS, pursuant to the Declaration, the Trust will use the proceeds from the sale of the Trust
Securities to purchase from the Company the 9.5% Junior Subordinated Debentures Due May 3, 2034
described in this Indenture (the “Debentures”) in an aggregate principal amount of up to $100,000;
and



     WHEREAS, in connection with the issuance and sale by the Trust of the Trust Preferred Securities
and the issuance and sale of the Debentures by the Company to the Trust, the Company is also
executing and delivering a Trust Preferred Securities Guarantee Agreement of even date herewith
(the “MFH Guarantee”);



     WHEREAS, Municipal Mortgage & Equity, LLC, a Maryland limited liability company and the indirect
parent of the Company (“MuniMae”), is also executing and delivering a guarantee agreement of even
date herewith (the “MMA Guarantee”);

     WHEREAS, the Company has duly authorized the creation of the Debentures, this Indenture sets forth
the terms and conditions thereof, and all things necessary to make this Indenture a valid agreement
of the Company, subject to execution and delivery of this Indenture by the Company and the Trustee,
have been done.



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



     For and in consideration of the premises and the purchase of the Debentures by the Holders (as
defined herein) as provided for herein, it is mutually agreed, for the equal and proportionate
benefit of the Holders, as follows:



 









 





ARTICLE I




DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION




     Section 1.1          Definitions.



     For all purposes of this Indenture, except as otherwise expressly provided or unless the
context otherwise requires:



          (a)     capitalized terms used in this Indenture have the respective meanings assigned to
them in this Section 1.1, unless otherwise specified;



          (b)     all references to “the Indenture” or “this Indenture” are to this Indenture as modified,
supplemented or amended from time to time;



          (c)     all references in this Indenture to “Articles” and “Sections” and “Annexes” and “Exhibits”
are to Articles and Sections and Annexes and Exhibits to this Indenture unless otherwise specified;



          (d)     a reference to the singular includes the plural and vice versa;



          (e)     all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States; and



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



     “Act” when used with respect to any Holder has the meaning specified in Section 1.4.



     “Additional Interest” has the meaning specified in Section 3.1.



     “Administrative Trustees” has the meaning specified in the Recitals to this instrument.



     “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.



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



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



     “Business Day” means any day other than a Saturday, Sunday or day on which banking institutions in
New York City or in Wilmington, Delaware are authorized or required by law to close.



     “Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A
of the Exchange Act that is acting as Depositary for the Debentures and in whose name or in



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the
name of a nominee of that organization shall be registered a Global Debenture under the
circumstances described in Section 2.3.



     “Commission” means the United States Securities and Exchange Commission.



     “Common Stock” means, in the case of a Person that is a corporation, any capital stock of any class
of such Person, and, in the case of any Person that is not a corporation, any equity security of
any class of such Person, in each case which capital stock or equity security has no preference
with respect to dividends or to amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of such Person.



     “Company” means the Person named as the “Company” 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 “Company” shall mean such successor Person.



     “Company Request” or “Company Order” means a written request or order signed in the name of the
Company by its Chairman of the Board of Directors, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.



     “Corporate Trust Office” means the principal office of the Trustee in Wilmington, Delaware, at
which at any particular time its corporate trust business shall be administered and which at the
date of this Indenture is located at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890, Attention: Corporate Trust Administration.



     “Debentures” has the meaning specified in the Recitals to this instrument.



     “Declaration” has the meaning specified in the Recitals to this instrument. A copy of the
Declaration is attached to this Indenture as Annex A.



     “Declaration Event of Default” has the meaning specified in the Declaration.



     “Defaulted Interest” has the meaning specified in Section 3.7.



     “Depositary” has the meaning specified in the Declaration.



     “Direct Action” means a proceeding directly instituted by a holder of Trust Preferred Securities to
compel payment to such holder of the principal of or interest on Debentures having a principal
amount equal to the aggregate liquidation amount of the Trust Preferred Securities of such holder
on or after the due date thereof as specified herein, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of the Company to pay
interest, principal or on the Debentures on the date such interest, principal is otherwise payable
(or in the case of redemption, on the Redemption Date).



     “Dissolution Event” means that, as a result of the occurrence and continuation of a Special Event,
the Trust is to be dissolved in accordance with the Declaration and the Debentures held by the
Property Trustee are to be distributed to the holders of Trust Securities in accordance with the
Declaration.



     “Equity Interest,” in any Person means any and all shares, interest, rights to purchase, warrants,
options, participations or other equivalents of or interest in (however designated) corporate stock
or other equity participations, including partnership interests, whether general or limited, in
such Person, including any Preferred Equity Interests.



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     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any
successor legislation.



     “Fiduciary Indemnified Person” has the meaning set forth in Section 6.7(c).



     “Global Debenture” has the meaning specified in Section 2.3.



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



     “Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are expressly incorporated
into and govern this instrument and any such supplemental indenture, respectively.



     “Indenture Event of Default” has the meaning specified in Section 5.1.



     “Interest Payment Date” has the meaning specified in Section 3.1.



     “Interest Reset Date” means May 5, 2014.



     “Investment Company” means an investment company as defined in the Investment Company Act.



     “Investment Company Act” means the Investment Company Act of 1940, as amended from time to time, or
any successor legislation.



     “Investment Company Event” means that the Administrative Trustees shall have received an opinion of
counsel experienced in practice under the Investment Company Act who is not an employee, officer or
Affiliate of MuniMae that, as a result of (a) any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United States or any
political subdivision thereof or therein, (b) any amendment to, or change in, an interpretation or
application of any such laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or pronouncement that
provides for a position with respect to such laws or regulations that differs from the theretofore
generally accepted position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is taken, in each case on or
after the date of original issuance of the Debentures (collectively, “Change in 1940 Act Law”),
there is more than an insubstantial risk that the Company, MuniMae or the Trust is or will be
considered an Investment Company that is required to be registered under the Investment Company
Act.



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



     “MFH Guarantee” has the meaning specified in the Recitals to this instrument.



     “MMA Guarantee” has the meaning specified in the Recitals to this instrument.



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     “MuniMae” shall have the meaning ascribed to such term in the recitals to this Indenture, and shall
include any successor entity in a merger, consolidation or amalgamation, or any assignee of MuniMae
pursuant to the terms of the MMA Guarantee.



     “Officers’ Certificate” means a certificate signed by the Chairman of the Board of Directors, the
President or a Vice President of the Company, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the Trustee. One of the
officers signing an Officers’ Certificate given pursuant to Section 10.4 shall be the principal
executive, financial or accounting officer of the Company.



     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company, and
who shall be acceptable to the Trustee in its reasonable discretion.



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




     (a)     Debentures theretofore canceled by the Trustee or delivered to the Trustee for
cancellation;




     (b)     Debentures for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any other Paying Agent for the Holders of such
Debentures; and




     (c)     Debentures that have been paid pursuant to Section 3.6 or in exchange for or in lieu of
which other Debentures have been authenticated and delivered pursuant to this Indenture, other than
any such Debentures with respect to which there shall have been presented to the Trustee proof
satisfactory to it that such Debentures are held by a bona fide purchaser in whose
hands such Debentures are valid obligations of the Company;


provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Debentures have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Debentures owned by the Company or any other obligor upon the Debentures or any
Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only Debentures that the
Trustee knows to be so owned shall be so disregarded. Debentures so owned that have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee that the pledgee has the right so to act with respect to such Debentures and that the
pledgee is not the Company or any other obligor upon the Debentures or any Affiliate of the Company
or of such other obligor. Upon the written request of the Trustee, the Company shall furnish to
the Trustee promptly an Officers’ Certificate listing and identifying all Debentures, if any, known
by the Company to be owned or held by or for the account of the Company or any other obligor on the
Debentures or any Affiliate of the Company or such obligor, and, subject to the provisions of
Section 6.1, the Trustee shall be entitled to accept such Officers’ Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Debentures not listed therein are
Outstanding for the purpose of any such determination.




     “Paying Agent” means the Trustee or any other Person authorized by the Company to pay the principal
of or interest on any Debentures on behalf of the Company.



-5-









 





     “Person” means a legal person, including any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust, unincorporated
association, or government or any agency or political subdivision thereof, or any other entity of
whatever nature.



     “Predecessor Debenture” of any particular Debenture means every previous Debenture evidencing all
or a portion of the same debt as that evidenced by such particular Debenture; and, for the purposes
of this definition, any Debenture authenticated and delivered under Section 3.6 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Debenture shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Debenture.



     “Preferred Equity Interest,” in any Person, means an Equity Interest of any class or classes
(however designated) which is preferred as to the payment of dividends or distribution, or as to
the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over Equity Interests of any other class in such Person.



     “Property Trustee” has the meaning specified in the Recitals to this instrument.



     “pro rata” when used with respect to any payment, distribution or treatment of the Debentures shall
mean pro rata to each Holder of Debentures according to the aggregate principal amount of the
Debentures Outstanding; provided, that in the event any Debentures are held by the Company or any
Affiliate thereof and an Indenture Event of Default has occurred and is continuing, any funds
available for such payment shall first be paid to each Holder of the Debentures (other than the
Company or any Affiliate thereof) pro rata according to the aggregate principal amount of the
Debentures held by each such Holder relative to the aggregate principal amount of all Debentures
Outstanding and held by such Holders, and only after satisfaction of all amounts owed to such
Holders of the Debentures (other than the Company or any Affiliate thereof), any additional funds
available for such payment shall be made to the Company or any Affiliate thereof pro rata according
to the aggregate principal amount of Debentures held by them.



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



     “Redemption Price” means 100% of the principal amount of the Debentures to be redeemed plus accrued
and unpaid interest (including any Additional Interest) thereon to the Redemption Date.



     “Redemption Tax Event” means a Tax Event in connection with which (a) the Administrative Trustees
shall have received an opinion of tax counsel experienced in such matters who is not an employee,
officer or Affiliate of MuniMae that, as a result of the Tax Event, there is more than an
insubstantial risk that the Company would be precluded from deducting the interest on the
Debentures for U.S. federal income tax purposes even if the Debentures were distributed to the
holders of the Trust Securities in liquidation of such holders’ interest in the Trust or (b) the
Administrative Trustees shall have been informed by such tax counsel that they are unable to
deliver to the Trust an opinion to the effect that the holders of the Trust Preferred Securities
would not recognize any income, gain or loss for U.S. federal income tax purposes as a result of
such dissolution and distribution of the Debentures.



     “Register” and “Registrar” have the respective meanings specified in Section 3.5.



     “Regular Record Date” has the meaning specified in Section 3.1.



     “Responsible Officer” when used with respect to the Trustee means any vice-president, any assistant
vice-president, the treasurer, any assistant treasurer, any trust officer or assistant trust
officer,



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any financial services officer or any other officer in the Corporate Trust Department of
the Trustee customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer’s knowledge of and familiarity with
the particular subject.



     “Rights Plan” means a plan of the Company providing for the issuance by the Company to all holders
of its Common Stock of rights entitling the holders thereof to subscribe for or purchase shares of
Common Stock or any class or series of preferred stock of the Company, which rights (i) are deemed
to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also
issued in respect of future issuances of the Company’s Common Stock, in each case until the
occurrence of a specified event or events.



     “Senior Debt” means (i) the principal, premium, if any, and interest with respect to (A)
indebtedness of the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company, including without
limitation, any future indebtedness under any indenture (other than this Indenture) to which the
Company is a party, (ii) all capital lease obligations of the Company, (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of business), (iv) all
obligations of the Company for the reimbursement of any letter of credit, banker’s acceptance,
security purchase facility, any repurchase agreement or similar arrangement, or under any interest
rate swap or total return swap or other hedging arrangement or any obligation under options or any
similar credit or other transaction, (v) all obligations of the type referred to in clauses (i)
through (iv) above of other Persons for the payment of which the Company is responsible or liable
as obligor, guarantor or otherwise, (vi) all obligations of various classes of existing and future
preferred shares of the Company and all of its subsidiaries, other than the Trust Preferred
Securities and (vii) all obligations of the type referred to in clauses (i) through (vi) above of
other Persons secured by any lien on any property or asset of the
Company (whether or not such obligation is assumed by the Company), except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the Debentures and (2) any
indebtedness for money borrowed by any of the Company’s Affiliates (but only Affiliates in which
MuniMae and its Subsidiaries own more than 50% of the Equity Interests); in the case of clauses (i)
through (vii) above, whether outstanding at the date of this Indenture or thereafter incurred.
Such Senior Debt shall continue to be Senior Debt and entitled to the benefits of the subordination
provisions hereof irrespective of any amendment, modification or waiver of any term of such Senior
Debt.



     “Special Event” means an Investment Company Event or a Tax Event.



     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee
pursuant to Section 3.7.



     “Stated Maturity” of the Debentures or any installment of interest thereon means the date specified
herein as the fixed date on which the principal of such Debentures, or the Interest Payment Date on
which such installment of interest, is due and payable.



     “Subsidiary” of any Person means (i) a corporation more than 50% of the outstanding Voting Stock of
which is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such
Person or by such Person and one or more Subsidiaries thereof or (ii) any other Person (other than
a corporation) with respect to which such Person, or one or more other Subsidiaries of such Person
or such Person and one or more other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership or the power to direct the policies, management and affairs thereof.



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     “Tax Event” means that the Administrative Trustees shall have received an opinion of tax counsel
experienced in such matters who is not an employee, officer or Affiliate of MuniMae to the effect
that, as a result of (a) any amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) any amendment to, or change in, an interpretation or
application of any such laws or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or pronouncement that
provides for a position with respect to such laws or regulations that differs from the theretofore
generally accepted position, or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is taken, in each case on or
after the date of original issuance of the Debentures (collectively, a “Change in Tax Law”), there
is more than an insubstantial risk that (i) the Trust is, or will be within 90 days of the date
thereof, subject to U.S. federal income tax with respect to interest accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof, subject to more than
a de minimis amount of other taxes, duties or other governmental charges, or (iii) interest payable
by the Company to the Trust on the Debentures is not, or within 90 days of the date thereof will
not be, deductible by the Company for U.S. federal income tax purposes. Notwithstanding anything in
the previous sentence to the contrary, a Tax Event shall not include any Change in Tax Law that
requires the Company for U.S. federal income tax purposes to defer taking a deduction for any
original issue discount that accrues with respect to the Debentures until the interest payment
related to such original issue discount is paid by the Company in money.



     “Trust” has the meaning specified in the Recitals to this instrument.



     “Trust Common Securities” has the meaning specified in the recitals to this Instrument.



     “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument, acting
not individually but solely as trustee under this Indenture, until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall
mean such successor Trustee.



     “Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which
this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, “Trust Indenture Act” means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.



     “Trust Preferred Securities Guarantees” means the MFH Guarantee and the MMA Guarantee, considered
together.



     “Trust Preferred Securities” has the meaning specified in the Recitals to this instrument.



     “Trust Preferred Securities Certificate” has the meaning specified in the Declaration.



     “Trust Securities” has the meaning specified in the Recitals to this instrument.



     “U.S. Treasury Rate” means:




	 	(i)  	the yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release designated
“H.15(519)” or any successor publication which is published weekly by the Board of
Governors of the 




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	 	   	Federal Reserve System and which established a yield for actively
traded United States treasury securities adjusted to constant maturity under the
caption “Treasury Constant Maturities,” with a maturity (or remaining maturity) closest
to ten years specified on such publication as described above (if no maturity of ten
years is published, yields for the two published maturities most closely corresponding
to such time period shall be determined and the U.S. Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding to the
nearest month); or






	 	(ii)  	in the event that such yield referred to in paragraph (i) above does not appear
in such statistical release or any such successor during the seven days up to and
including the Interest Reset Date, the yield determined by the Trustee as follows:






	 	(a)  	The Trustee will request the principal New York office of each
of four primary United States government securities dealers to provide a
quotation of the yield it offers for United States treasury notes with a
maturity (or remaining maturity) closest to ten years and determine the average
of such quotations from each of the dealers for each of the days of the week
preceding the Interest Reset Date (rounded, if necessary, to the nearest one
thousandth of a percentage point, 0.0005 being rounded upwards); or
	 
	 	(b)  	if the Trustee is unable to obtain quotation and determine the
yield pursuant to sub-paragraph (ii)(a) above, the Trustee will determine,
based on the quotations from the dealers set forth in sub-paragraph (i)(a)
above (to the extent available), the latest calculable yield (the average of
the available quotations, if more than one) for United States treasury notes
with a maturity (or remaining maturity) closest to five years on the latest
available Business Day prior to the Interest Reset Date (rounded, if necessary,
to the nearest one thousandth of a percentage point 0.0005 being rounded
upwards).





     “Vice President” when used with respect to the Company means any vice president, whether or
not designated by a number or a word or words added before or after the title “vice president.”




     “Voting Stock” of any Person means capital stock or other equity securities of such Person that
ordinarily have voting power for the election of directors (or Persons performing similar
functions) of such Person, whether at all times or only so long as no senior class of securities
has such voting power by reason of any contingency.



     Section 1.2     Compliance Certificates and Opinions.



     Upon any application or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be reasonably requested by the Trustee in connection with such application or
request. Each such certificate or opinion shall be given in the form of an Officer’s Certificate,
if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel,
and shall comply with the applicable provisions of this Indenture.


     Every certificate or opinion with respect to compliance with a condition or covenant provided for
in this Indenture shall include:



          (a)     a statement that each individual signing such certificate or opinion has read such
covenant or condition and the definitions herein relating thereto;



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



          (d)     a statement as to whether, in the opinion of each such individual, such condition or
covenant has been complied with.



     Section 1.3     Form of Documents Delivered to Trustee.



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



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



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



     Section 1.4     Acts of Holders; Record Dates.



          (a)     Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.1) conclusive in favor of the Trustee and the Company, if made in the manner provided in
this Section.



          (b)     The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also



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constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee or the Company, as the case may be, deems
sufficient.




          (c)     The Company may fix any day as the record date for the purpose of determining the Holders
of Outstanding Debentures entitled to give, make or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to the first
solicitation of a Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote shall be the 30th day
(or, if later, the date of the most recent list of Holders required to be provided pursuant to
Section 7.1) prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action.



          (d)     The ownership of Debentures shall be proved by the Register.



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



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



     Section 1.5     Notices, Etc., to Trustee and the Company.



     Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with,



          (a)     the Trustee by any Holder, by any holder of Trust Preferred Securities or by the
Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, Attention: Corporate Capital
Markets, or



          (b)     the Company by the Trustee, by any Holder or by any holder of Trust Preferred Securities
shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of
its principal office specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.



     Section 1.6     Notice to Holders; Waiver.



     Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at such Holder’s address as it
appears in the Register, not later than the latest date (if any), and not earlier than the earliest
date (if any), prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such notice with respect to other Holders.
Any notice when mailed to a Holder in the aforesaid manner shall be



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conclusively deemed to have
been received by such Holder whether or not actually received by such Holder.



     Where this Indenture provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action taken in reliance upon
such waiver.



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



     Section 1.7     Effect of Headings and Table of Contents.



     The Article and Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.



     Section 1.8     Successors and Assigns.



     This Indenture shall bind the Company’s successors and assigns, whether so expressed or not.



     Section 1.9     Separability Clause.



     In case any provision in this Indenture or in the Debentures 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 1.10     Benefits of Indenture.



     Nothing in this Indenture or in the Debentures, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, the holders of Senior Debt, the
holders of Trust Preferred Securities (to the extent provided herein) and the Holders of
Debentures, any benefit or any legal or equitable right, remedy or claim under this Indenture.



     Section 1.11     Governing Law.



     THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.



     Section 1.12     Legal Holidays.



     In any case where any Stated Maturity (including any Interest Payment Date) or Redemption Date
of any Debenture shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Debentures) payment of principal of or interest (including any Additional
Interest) on the Debentures need not be made on such date, but may be made on the next succeeding
Business Day (except that, if such Business Day is in the next succeeding calendar year, such
Stated Maturity or Redemption Date, as the case may be, shall be the immediately preceding Business
Day) with the same force and effect as if made on the Stated Maturity or Redemption Date; provided,
that no interest in respect of such payment shall accrue for the period from and after such Stated
Maturity or Redemption Date, as the case may be.



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ARTICLE II




DEBENTURE FORMS




     Section 2.1     Forms Generally.



     The Debentures and the Trustee’s certificates of authentication shall be substantially in the
form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture.
The Debentures may have notations, legends or endorsements required by law, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in
a form acceptable to the Company). The Company shall furnish any such legend not contained in
Exhibit A to the Trustee in writing. Each Debenture shall be dated the date of its authentication.
The terms and provisions of the Debentures set forth in Exhibit A are part of the terms of this
Indenture and to the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.



     The definitive Debentures shall be typewritten, printed, lithographed or engraved or produced by
any combination of these methods, if required by the requirements of any securities exchange or
automated quotation system on which the Debentures may be listed or traded on a steel engraved
border or on steel engraved borders, or may be produced in any other manner permitted by the
requirements of any securities exchange or automated quotation system on which the Debentures may
be listed or traded, all as determined by the officers executing such Debentures, as evidenced by
their execution of such Debentures.



     Section 2.2     Initial Issuance to Property Trustee.



     The Debentures initially issued to the Property Trustee of the Trust shall be in the form of
one or more individual certificates in definitive, fully registered form without distribution
coupons.



     Section 2.3     Global Debenture.



          (a)     In connection with a Dissolution Event, the following provisions apply:



                    (i)     The Debentures may be presented to the Trustee by the Property Trustee in exchange for a
global Debenture in an aggregate principal amount equal to the aggregate principal amount of all
outstanding Debentures (a “Global Debenture”) to be registered in the name of the Clearing Agency,
or its nominee, and delivered by the Trustee to the Clearing Agency for crediting to the accounts
of its participants pursuant to the instructions of the Company, following which the Clearing
Agency will act as depositary for the Debentures. The Company, upon any such presentation, shall
execute a Global Debenture in such aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with this Indenture. Payments on the Debentures
issued as a Global Debenture will be made to the Clearing Agency.



                    (ii)     If any Trust Preferred Securities are held in non book-entry certificated form, the
Debentures may be presented to the Trustee by the Property Trustee and any Trust Preferred
Securities Certificate that represents Trust Preferred Securities other than Trust Preferred
Securities held by the Depositary or its nominee (“Non Book-Entry Trust Preferred Securities”) will
be deemed to represent beneficial interests in Debentures presented to the Trustee by the Property
Trustee having an aggregate principal amount equal to the aggregate liquidation amount of the Non
Book-Entry Trust Preferred Securities until such Non Book-Entry Trust Preferred Securities are
presented to the Registrar for transfer or reissuance at which time such Non Book-Entry Trust
Preferred Securities will be canceled



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and a Debenture, registered in the name of the holder of the
Non Book-Entry Trust Preferred Securities or the transferee of the holder of such Non Book-Entry
Trust Preferred Securities, as the case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Trust Preferred Securities canceled, will be
executed by the Company and delivered to the Trustee for authentication and delivery in accordance
with this Indenture.



          (b)     Except as provided in (c) below, a Global Debenture may be transferred, in whole but not
in part, only to a nominee of the Clearing Agency (including any successor Clearing Agency selected
or approved by the Company or a nominee of such successor Clearing Agency).



          (c)     If at any time the Clearing Agency notifies the Company that it is unwilling or unable to
continue as depositary or if at any time the Clearing Agency shall no longer be registered or in
good standing under the Exchange Act or other applicable statute or regulation, and a successor
Clearing Agency is not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company will execute, and the
Trustee, upon receipt of a Company Order with respect to authentication and delivery, will
authenticate and deliver the Debentures in accordance with the provisions set forth in this Section
2.3(c) in definitive registered form, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Debenture in exchange for such Global Debenture.
In addition, the Company may at any time determine that the Debentures shall no longer be
represented by a Global Debenture. In such event the Company will execute, and the Trustee, upon
receipt of an Officers’ Certificate evidencing such determination by the Company and a Company
Order with respect to authentication and delivery, will authenticate and deliver the Debentures in
accordance with the provisions set forth in this Section 2.3(c) in definitive registered form, in
authorized denominations, and in an aggregate principal amount equal to the principal amount of the
Global Debenture in exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form, in authorized denominations, the Global
Debenture shall be canceled by the Trustee. Such Debentures in definitive registered form issued
in exchange for the Global Debenture shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its direct or indirect
participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Debentures to the
Clearing Agency for delivery to the Persons in whose names such Debentures are so registered.



ARTICLE III




THE DEBENTURES




     Section 3.1     Title and Terms.



     The aggregate principal amount of Debentures that may be authenticated and delivered under
this Indenture is limited to the sum of $120,000,100, except for Debentures authenticated and
delivered upon transfer of, or in exchange for, or in lieu of, other Debentures pursuant to Section
3.4, 3.5 or 3.6.



     The Debentures shall be known and designated as the “9.5% Junior Subordinated Debentures Due May 3,
2034” of the Company. The Stated Maturity of the principal of the Debentures shall be May 3, 2034,
and they shall bear interest at the rate of 9.5% per annum from May 3, 2004, and a rate which is
equal to the greater of (a) 9.5% per annum or (b) the rate per annum which is equal to 6.00% plus
the U.S. Treasury Rate on the Interest Reset Date from such date, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, as the case may be, payable
quarterly, in arrears, on February 3, May 3, August 3 and November 3 (each such date, an “Interest
Payment Date”) of each year, commencing August 3, 2004, until the principal thereof is paid or made
available for payment, and each installment of interest on a Debenture shall be paid (subject to
Section 3.7) to the Person in whose name



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such Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the regular record date (the “Regular Record Date”) for such
installment of interest, which in respect of any Debentures of which the Property Trustee is the
Holder of a Global Debenture shall, except as provided in the following sentence, be the close of
business on the Business Day next preceding the Interest Payment Date for that installment of
interest. Notwithstanding the foregoing sentence, if the Trust Preferred Securities are no longer
in book-entry-only form or, except if the Debentures are held by the Property Trustee, the
Debentures are not represented by a Global Debenture, the Regular Record Date for such installment
of interest shall be the close of business on the 15th day next preceding the Interest Payment Date
for such installment of interest (or if such day is not a Business Day, on the day next preceding
that 15th day that is a Business Day). Interest will compound quarterly and will accrue at the
rate of interest per annum then applicable on any interest installment in arrears.




     The amount of interest payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months. Except as provided in the following sentence, the amount of interest payable
for any period shorter than a full quarterly period for which interest is computed will be computed
on the basis of the actual number of days elapsed per 30-day month. If any Interest Payment Date
is not a Business Day, then payment of the interest payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the Interest Payment Date.



     If at any time while the Property Trustee is the Holder of any Debentures, the Trust or the
Property Trustee is required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed on the Trust by the United States or any
other taxing authority, then, in any such case, the Company will pay as additional interest
(“Additional Interest”) on the Debentures held by the Property Trustee, such amounts as shall be
required so that the net amounts received and retained by the Trust and the Property Trustee after
paying any such taxes, duties, assessments or other governmental charges will be at least the
amounts the Trust and the Property Trustee would have received had no such taxes, duties,
assessments or other governmental charges been imposed.



     The principal of and interest on the Debentures shall be payable at the office or agency of the
Company in the United States maintained for such purpose under Section 10.2 and at any other office
or agency maintained by the Company for such purpose in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of any installment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such address shall appear
in the Register or (ii) by wire transfer in immediately available funds at such place and to such
account as may be designated in writing at least 15 days before the Interest Payment Date for that
installment of interest by the Person entitled thereto.



     The Debentures shall be redeemable as provided in Article XI hereof.



     The Debentures shall be subordinated in right of payment to Senior Debt as provided in Article XII
hereof.



     Section 3.2     Denominations.



     The Debentures shall be issuable only in registered form without coupons and only in
denominations of (a) $100 and integral multiples thereof to the
Company and its Affiliates and (b) $2,000,000 and integral multiples thereof to Persons other than the Company and its Affiliates.



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     Section 3.3     Execution, Authentication, Delivery and Dating.



     The Debentures shall be executed on behalf of the Company by its Chairman of the Board, its
President or one of its Vice Presidents. The signature of any of these officers on the Debentures
may be manual or facsimile. Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to the authentication
and delivery of such Debentures or did not hold such offices at the date of such Debentures.



     At any time and from time to time after the execution and delivery of this Indenture, the Company
may deliver Debentures executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Debentures; and the Trustee in accordance
with such Company Order shall authenticate and make available for delivery such Debentures as in
this Indenture provided and not otherwise.



     No Debenture shall be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose unless there appears on such Debenture a certificate of authentication substantially in
the form provided for herein executed by the Trustee by manual signature, and such certificate upon
any Debenture shall be conclusive evidence, and the only evidence, that such Debenture has been
duly authenticated and delivered hereunder.



     Section 3.4     Temporary Debentures.



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




     If temporary Debentures are issued, the Company will cause definitive Debentures to be prepared
without unreasonable delay. After the preparation of definitive Debentures, the temporary
Debentures shall be exchangeable for definitive Debentures upon surrender of the temporary
Debentures at any office or agency of the Company designated pursuant to Section 10.2, without
charge to the Holder. Upon surrender for cancellation of any one or more temporary Debentures the
Company shall execute and the Trustee shall authenticate and make available for delivery in
exchange therefor a like principal amount of definitive Debentures of authorized denominations.
Until so exchanged the temporary Debentures shall in all respects be entitled to the same benefits
under this Indenture as definitive Debentures.



     Section 3.5     Registration, Registration of Transfer and Exchange.



          (a)     General.



     The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register
(the register maintained in such office and in any other office or agency designated pursuant to
Section 10.2 being herein sometimes collectively referred to as the “Register”) in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide for the registration
of Debentures and of transfers of Debentures. The Trustee is hereby appointed “Registrar” for the
purpose of registering Debentures and transfers of Debentures as herein provided.



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     Upon surrender for registration of transfer of any Debenture at an office or agency of the Company
designated pursuant to Section 10.2 for such purpose, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or transferees, one or
more new Debentures of any authorized denominations and of a like aggregate principal amount.



     At the option of the Holder, Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the Debentures to be
exchanged at such office or agency. Whenever any Debentures are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available for delivery, the
Debentures that the Holder making the exchange is entitled to receive.



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



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



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



          (b)     Transfer Procedures.



     Upon any distribution of the Debentures to the holders of the Trust Preferred Securities in
accordance with the Declaration, the Company and the Trustee shall enter into a supplemental
indenture pursuant to Section 9.1(d) to provide for transfer procedures and restrictions with
respect to the Debentures substantially similar to those contained in the Declaration to the extent
applicable in the circumstances existing at the time of such distribution.



     Section 3.6     Mutilated, Destroyed, Lost and Stolen Debentures.



     If any mutilated Debenture is surrendered to the Trustee, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a new Debenture of like tenor and
principal amount and bearing a number not contemporaneously outstanding.



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



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



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



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



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



     Section 3.7     Payment of Interest; Interest Rights Preserved.



     Any installment of interest on any Debenture that is payable, and is punctually paid or duly
provided for, on the Interest Payment Date for that installment of interest shall be paid to the
Person in whose name that Debenture (or one or more Predecessor Debentures) is registered at the
close of business on the Regular Record Date for that installment of interest, except that interest
(including any Additional Interest) payable on the Maturity of the principal of a Debenture shall
be paid to the Person to whom such principal is paid.



     Any installment of interest on any Debenture that is payable, but is not punctually paid or duly
provided for, on the Interest Payment Date for such installment of interest (herein called
“Defaulted Interest”) shall forthwith cease to be payable to the Person in whose name that
Debenture (or one or more Predecessor Debentures) was registered at the close of business on
the Regular Record Date for that installment of interest, and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in subparagraph (a) or (b) below:



          (a)     The Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Debentures (or their respective Predecessor Debentures) 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 (a “Special Record Date”). The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Debenture and the date of
the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this subparagraph 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 Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as it
appears in the 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 Debentures (or
their respective Predecessor Debentures) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following subparagraph (b).



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



     Subject to the foregoing provisions of this Section, each Debenture delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Debenture
shall carry the rights to interest accrued and unpaid, and to accrue (including in each such case
any Additional Interest), that were carried by such other Debenture.



     Section 3.8     Persons Deemed Owners.



     Prior to due presentment of a Debenture for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name such Debenture is
registered as the owner of such Debenture for the purpose of receiving payment of principal of, and
(subject to Section 3.7) interest (including any Additional Interest) on, such Debenture and for
all other purposes whatsoever, whether or not such Debenture be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.



     Section 3.9     Cancellation.



     All Debentures surrendered for payment, redemption or registration of transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall
be promptly canceled by it. The Company may at any time deliver to the Trustee for cancellation
any Debentures previously authenticated and delivered hereunder that the Company may have
acquired in any manner whatsoever, and all Debentures so delivered shall be promptly canceled by
the Trustee. No Debentures shall be authenticated in lieu of or in exchange for any Debentures
canceled as provided in this Section, except as expressly permitted by this Indenture. All
canceled Debentures held by the Trustee shall be disposed of as directed by a Company Order;
provided, however, that the Trustee shall not be required to destroy the certificates representing
such canceled Debentures.



     Section 3.10     Right of Set Off.



     Notwithstanding anything to the contrary in this Indenture, the Company shall have the right
to set off any payment it is otherwise required to make hereunder to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a payment under the Trust
Preferred Securities Guarantees.



     Section 3.11     CUSIP Numbers.



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



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     Section 3.12     Paying Agent and Registrar.



     The Trustee will initially act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-registrar without prior notice. The Company or any of its Affiliates
may act in any such capacity.



     Section 3.13     Calculation of Original Issue Discount.



     The Company shall file with the Trustee promptly at the end of each calendar year a written
notice specifying the amount of original issue discount, if any (including daily rates and accrual
periods), accrued on Outstanding Debentures as of the end of such year.



ARTICLE IV




SATISFACTION AND DISCHARGE




     Section 4.1     Satisfaction and Discharge of Indenture.



     This Indenture shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Debentures herein expressly provided for), and the Trustee,
on demand of and at the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when (1) either (A) all Debentures theretofore
authenticated and delivered (other than (i) Debentures that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 3.6 and (ii) Debentures for whose payment
money has theretofore been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or (B) all such Debentures not theretofore
delivered to the Trustee for cancellation have become due and payable, and the Company has
deposited or caused to be deposited with the Trustee funds in trust for the purpose
and in an amount sufficient to pay and discharge the entire indebtedness on such Debentures not
theretofore delivered to the Trustee for cancellation, for principal and interest (including any
Additional Interest) to the date of such deposit (in the case of Debentures that have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company has
paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for or relating to the satisfaction and discharge of this
Indenture have been complied with. Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.7 and, if money shall have
been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive.




     If the Trustee or Paying Agent is unable to apply any amount to pay principal and interest
(including any Additional Interest) on the Debentures at their Stated Maturity or Redemption Date
by reason of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, the
Company’s obligations under this Indenture and the Debentures shall be revived and reinstated as
though no deposit had occurred pursuant to this Section until such time as the Trustee or Paying
Agent is permitted to apply all such amounts to the payment of the Debentures; provided, however,
that if the Company has made any payment of interest on or principal of any Debentures because of
the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders
of such Debentures to receive such payment from the amounts held by the Trustee or Paying Agent.



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     Section 4.2     Application of Trust Money.



     Subject to the provisions of the last paragraph of Section 10.3, all money deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the
provisions of the Debentures and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal and interest (including any Additional Interest)
for whose payment such money has been deposited with the Trustee.



ARTICLE V




REMEDIES




     Section 5.1     Indenture Events of Default.



     “Indenture Event of Default,” wherever used herein, means any one of the following events that
has occurred and is continuing (whatever the reason for such Indenture Event of Default and whether
it shall be occasioned by the provisions of Article XII or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental body):



          (a)     failure for 30 days to pay interest on the Debentures, including any Additional
Interest in respect thereof, when due;



          (b)     failure to pay principal of the Debentures at Maturity;



          (c)     any failure to observe or perform in any respect any covenant contained in Section 8.1 or
Section 10.5 hereof and any failure by MuniMae to observe or perform in any respect any covenant
contained in Section 5.6 or Section 6.2 of the MMA Guarantee;



          (d)     any failure to observe or perform in any material respect any other covenant contained in
this Indenture, in each such case for 30 days after notice to the Company by the Trustee, or by the
Holders of at least a majority in aggregate principal amount of Outstanding Debentures, specifying
such failure and requiring it be remedied;



          (e)     any failure to observe or perform in any material respect any other covenant contained in
the MMA Guarantee, in each such case for 30 days after notice to MuniMae by the Trustee, or by the
Holders of at least a majority in aggregate principal amount of Outstanding Debentures, specifying
such failure and requiring it be remedied; and



          (f)     entry by a court having jurisdiction in the premises of (A) a decree or order for relief
in respect of the Company and/or MuniMae in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or
order adjudging the Company and/or MuniMae a bankrupt or insolvent, or approving as properly filed
a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the
Company and/or MuniMae under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company
and/or MuniMae or of substantially all of the property of the Company and/or MuniMae, or ordering
the winding up or liquidation of its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of 60 consecutive
days;



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          (g)     the commencement by the Company and/or MuniMae of a voluntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Company
and/or MuniMae to the entry of a decree or order for relief in respect of itself in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against
the Company and/or MuniMae, or the filing by the Company and/or MuniMae of a petition or answer or
consent seeking reorganization or relief under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or the consent by the Company and/or MuniMae to
the filing of any such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company
and/or MuniMae or of substantially all of the property of the Company and/or MuniMae, or the making
by the Company and/or MuniMae of an assignment for the benefit of creditors, or the admission by
the Company and/or MuniMae in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company and/or MuniMae in furtherance of any such
action; or



          (h)     the voluntary or involuntary dissolution, winding up or termination of the Trust, except
in connection with (i) the distribution of Debentures to holders of Trust Preferred Securities in
liquidation of the Trust upon the occurrence of a Dissolution Event or (ii) certain mergers,
consolidations or amalgamations, as permitted under the Declaration.



     Section 5.2     Acceleration of Maturity; Rescission and Annulment.



     If an Indenture Event of Default specified in Section 5.1(e) or Section 5.1(f) occurs, the
principal of all the Debentures and all accrued interest (including any Additional Interest) shall
automatically become immediately due and payable.



     If any other Indenture Event of Default occurs and is continuing, then, and in every such case, the
Trustee or the Holders of at least a majority in principal amount of the Outstanding Debentures may
declare the principal of all the Debentures and any other amounts payable hereunder to be due and
payable immediately, by a notice in writing given to the Company (and to the Trustee if given by
Holders), and upon any such declaration such principal and all accrued interest (including any
Additional Interest) shall become immediately due and payable.


     At any time after such a declaration of acceleration has been made and before a judgment or decree
for payment of the money due has been obtained by the Trustee as provided in this Article
hereinafter, the Holders of a majority in aggregate principal amount of the Outstanding Debentures,
by written notice to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:



          (a)     the Company has paid or deposited with the Trustee a sum sufficient to pay



                    (i)     all overdue interest (including any Additional Interest) on all Debentures,



                    (ii)     the principal of any Debentures that have become due otherwise than by such declaration
of acceleration and interest thereon at the rate borne by the Debentures and



                    (iii)     all sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel; and



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          (b)     all Indenture Events of Default, other than the non-payment of the principal of Debentures
that has become due solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.13.



     No such rescission shall affect any subsequent default or impair any right consequent thereon.



     Section 5.3     Collection of Indebtedness and Suits for Enforcement by Trustee.



     The Company covenants that if:



          (a)     default is made in the payment of any interest (including any Additional Interest) on
any Debenture when such interest becomes due and payable and such default continues for a period of
30 days or



          (b)     default is made in the payment of the principal of any Debenture at the Maturity thereof,


     the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Debentures, the whole amount then due and payable on such Debentures for principal, and
interest (including any Additional Interest) and, to the extent that payment thereof shall be
legally enforceable, interest on any overdue principal and on any overdue interest (including any
Additional Interest), at the rate borne by the Debentures, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel.



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



     Section 5.4     Trustee May File Proofs of Claim.



     In case of any judicial proceeding relative to the Company and/or MuniMae (or any other
obligor upon the Debentures), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all actions appropriate
for a Trustee in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.



     No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or
similar official and be a member of a creditors or other similar committee.



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     Section 5.5     Trustee May Enforce Claims Without Possession of Debentures.



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



     Section 5.6     Application of Money Collected.



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



     FIRST: To the payment of all amounts due the Trustee under Section 6.7;



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



     THIRD: The balance, if any, to the Person or Persons entitled thereto.



     Section 5.7     Limitation on Suits.



     No Holder of any Debenture shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless



          (a)     such Holder has previously given written notice to the Trustee of a continuing
Indenture Event of Default;



          (b)     the Holders of at least a majority in aggregate principal amount of the Outstanding
Debentures shall have made written request to the Trustee to institute proceedings in respect of
such Indenture Event of Default in its own name as Trustee hereunder;



          (c)     such Holder or Holders have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance with such request;



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



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



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     it being understood and intended that no one or more Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Holders, or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the Holders. The limitations
specified in (a) through (e) above shall not apply to a suit initiated by a Holder of a Debenture
for enforcement of payment of the principal of or interest (including any Additional Interest) on
such Debenture on or after the respective due dates of such payments expressed in such Debenture.



     Section 5.8     Unconditional Right of Holders To Receive Principal and Interest.



     Notwithstanding any other provision in this Indenture, the Holder of any Debenture shall have
the right, which is absolute and unconditional, to receive payment of the principal of and (subject
to Section 3.7) interest (including any Additional Interest) on such Debenture on the respective
Stated Maturities expressed in such Debenture (or, in the case of redemption, on the Redemption
Date) and to institute suit to compel the Company to make any such payment that is not made when
due, and such right shall not be impaired without the consent of such Holder.



     Section 5.9     Restoration of Rights and Remedies.



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



     Section 5.10     Rights and Remedies Cumulative.



     Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debentures in the last paragraph of Section 3.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.



     Section 5.11     Delay or Omission Not Waiver.



     No delay or omission of the Trustee, any Holder or any holder of any Trust Preferred Security
to exercise any right or remedy accruing under this Indenture shall impair any such right or remedy
or constitute a waiver of any Indenture Event of Default or an acquiescence therein. Every right
and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee, the Holders and the holders
of the Trust Preferred Securities, as the case may be.



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     Section 5.12     Control by Holders.



     The Holders of a majority in principal amount of the Outstanding Debentures have the right to
direct the time, method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee; provided, that (1) such
direction shall not be in conflict with any rule of law or with this Indenture; (2) the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent with such direction;
and (3) subject to the provisions of Section 6.1, the Trustee shall have the right to decline to
follow such direction if a Responsible Officer or Officers of the Trustee shall, in good faith,
determine that the proceeding so directed would be unjustly prejudicial to the Holders not joining
in any such direction or would involve the Trustee in personal liability.



     Section 5.13     Waiver of Past Defaults.



     Subject to Section 9.2 hereof, the Holders of at least a majority in principal amount of the
Outstanding Debentures may on behalf of the Holders of all the Debentures waive any past default
hereunder and its consequences, except a default (1) in the payment of the principal, or interest
(including any Additional Interest) on any Debenture (unless such default has been cured and a sum
sufficient to pay all matured installments of interest (including any Additional Interest) and
principal due otherwise than by acceleration has been deposited with the Trustee); or (2) in
respect of a covenant or provision hereof which under Article IX cannot be modified or amended
without the consent of the Holder of each Outstanding Debenture affected (which default may be
waived only with the consent of the Holders of all Outstanding Debentures); provided, however, that
if the Debentures are held by the Trust or a trustee of the Trust, such waiver shall not be
effective until the holders of a majority in liquidation amount of Trust Securities shall have
consented to such waiver; provided, further, that if the consent of the Holder of each Outstanding
Debenture is required, such waiver shall not be effective until each holder of the Trust Securities
shall have consented to such waiver.



     Upon any such waiver, such default shall cease to exist, and any Indenture Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right consequent thereon.



     Section 5.14     Undertaking For Costs.



     In any suit for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such suit, and may
assess costs against any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act shall be deemed to
authorize any court to require such an undertaking or to make such an assessment in any suit
instituted by the Company or the Trustee or in any suit for the enforcement of the right to receive
the principal or interest (including any Additional Interest) on any Debenture.



     Section 5.15     Waiver of Stay or Extension Laws.



     The Company covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension of law wherever enacted, now or at any time hereafter in force, that may affect
the covenants or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that
it will not hinder, delay or



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impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law had been enacted.



     Section 5.16     Enforcement by Holders of Trust Preferred Securities.



     If the Property Trustee fails to enforce the terms of the Debentures after a holder of Trust
Preferred Securities has made a written request that it do so in accordance with the terms of the
Declaration, such holder of Trust Preferred Securities may, to the fullest extent permitted by
applicable law in view of the rights accorded the holders of Trust Preferred Securities by this
Indenture and the Declaration, institute a legal proceeding against the Company to enforce the
Property Trustee’s rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other Person. Notwithstanding the foregoing, if a Declaration
Event of Default has occurred and is continuing and such event is attributable to the failure of
the Company to pay interest (including any Additional Interest), principal on the Debentures on the
date such interest, principal is due (or in the case of redemption on the redemption date), the
Company acknowledges that, in such event, a holder of Trust Preferred Securities may, to the
fullest extent permitted by applicable law in view of the rights accorded the holders of Trust
Preferred Securities by this Indenture and the Declaration, institute a Direct Action for payment
to such holder of the principal, interest then due on Debentures having a principal amount equal to
the aggregate liquidation amount of the Trust Preferred Securities of such holder.



     The Company may not amend the Indenture to remove the foregoing right to bring a Direct Action
without the prior written consent of all the holders of Trust Preferred Securities.
Notwithstanding any payment made to such holder of Trust Preferred Securities by the Company in
connection with a Direct Action, the Company shall remain obligated to pay the principal of and
interest (including any Additional Interest) on the Debentures held by the Trust or the Property
Trustee and the Company shall be subrogated to the rights of the holders of such Trust Preferred
Securities with respect to payments on the Trust Preferred Securities to the extent of any payments
made by the Company to such holder in any Direct Action. The holders of Trust Preferred Securities
will not be able to exercise directly any other remedy available to the Holders of the Debentures.



ARTICLE VI




THE TRUSTEE




     Section 6.1     Certain Duties and Responsibilities.



     The duties and responsibilities of the Trustee shall be as provided by Section 315 of the
Trust Indenture Act, which Section 315 shall apply hereto. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have 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 6.2     Notice of Defaults.



     The Trustee shall give the Holders notice of any default hereunder as and to the extent
provided by Section 315(b) the Trust Indenture Act; provided, however, that in the case of any
default of the character specified in Section 5.1(a), no such notice to Holders shall be given
until at least 30 days after



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the occurrence thereof. For the purpose of this Section, the term
“default” means any event that is, or after notice or lapse of time or both would become, an
Indenture Event of Default.



     Section 6.3     Certain Rights of Trustee.



     Subject to the provisions of Section 6.1:



          (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, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties;



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



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



          (d)     the Trustee may consult with counsel of its choice 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, suffered or omitted by it hereunder in good faith and in reliance thereon;



          (e)     the Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee adequate security and indemnity, reasonably
satisfactory to the Trustee, against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction;



          (f)     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, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to reasonable examination of the books, records and premises of
the Company, personally or by agent or attorney;



          (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 with
due care by it hereunder; and



          (h)     the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by
it in good faith, without negligence or willful misconduct, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by this Indenture.



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     Section 6.4     Not Responsible for Recitals or Issuance of Debentures.



     The recitals contained herein and in the Debentures, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures. The Trustee shall not be accountable for the
use or application by the Company of the Debentures or the proceeds thereof.



     Section 6.5     May Hold Debentures.



     The Trustee, any Paying Agent, any Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Debentures and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Registrar or such other agent.



     Section 6.6     Money Held in Trust.



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



     Section 6.7     Compensation and Reimbursement.



     The Company agrees:



          (a)     to pay to the Trustee from time to time such reasonable compensation as the Company
and the Trustee shall from time to time agree in writing for all services rendered by it hereunder;



          (b)     except as otherwise expressly provided herein, to reimburse the Trustee upon its request
for all reasonable expenses, fees, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and



          (c)     to indemnify each of the (i) Trustee and any predecessor Trustee, (ii) any Affiliate of
the Trustee or any predecessor Trustee, and (iii) any officer, director, shareholder, member,
partner, employee, representative, custodian, nominee or agent of the Trustee or any
predecessor Trustee (each of the Persons in (i) through (iii), including the Trustee and any
predecessor Trustee in their respective individual and trustee capacities, being referred to as a
“Fiduciary Indemnified Person”) for, and to hold each Fiduciary Indemnified Person harmless
against, any and all loss, liability, claim, action, suit, cost or expense of any kind and nature
whatsoever, including taxes (other than taxes based on the income of such Fiduciary Indemnified
Person), incurred without negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration or the trust or trusts hereunder, including the costs and expenses
(including reasonable legal fees and expenses) of defending itself against or investigating any
claim or liability in connection with the exercise or performance of any of its powers or duties
hereunder. When the Trustee incurs expenses or renders services in connection with an Indenture
Event of Default specified in Section 5.1(e) or Section 5.1(f), the expenses (including the
reasonable legal fees and expenses of its counsel) and the compensation for the services are
intended to constitute expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.



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     The provisions of this Section shall survive the termination of this Indenture and the
resignation or removal of the Trustee.



     Section 6.8     Disqualification; Conflicting Interests.



     If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.



     Section 6.9     Corporate Trustee Required; Eligibility.



     There shall at all times be a Trustee hereunder that shall (a) be a corporation organized and
doing business under the laws of the United States of America or of any state or territory or the
District of Columbia, authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal, state, territorial or District of Columbia authority, (b) be
a Person that is eligible pursuant to the Trust Indenture Act to act as such, and (c) have a
combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.



     Section 6.10     Resignation and Removal; Appointment of Successor.



          (a)     No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 6.11.



          (b)     The Trustee may resign at any time by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within
60 days after the giving of such notice of removal, the Trustee to be removed may petition any
court of competent jurisdiction for the appointment of a successor Trustee.



          (c)     The Trustee may be removed at any time by Act of the Holders of a majority in principal
amount of the Outstanding Debentures, delivered to the Trustee and to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee
within 60 days after the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee.



          (d)     If at any time: (1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide Holder of a Debenture for
at least six months, or (2) the Trustee shall cease to be eligible under Section 6.9 and shall fail
to resign after written request therefor by the Company or by any such Holder, or (3) the Trustee
shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company by Board Resolution may remove the Trustee, or
(ii) subject to Section 5.14, any Holder who has been a bona fide Holder of a Debenture for at
least six months may, on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.



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          (e)     If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of Trustee for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If, within six months after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding Debentures delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed by the Company or
the Holders and accepted appointment in the manner hereinafter provided, any Holder who has been a
bona fide Holder of a Debenture for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the appointment of a successor
Trustee.



          (f)     The Company shall give notice of each resignation and each removal of the Trustee and each
appointment of a successor Trustee to all Holders in the manner provided in Section 1.6. Each
notice shall include the name of the successor Trustee and the address of its Corporate Trust
Office.



     Section 6.11     Acceptance of Appointment by Successor.



     Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; provided, that on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments required to more fully and certainly vest in and
confirm to such successor Trustee all such rights, powers and trusts.


     No successor Trustee shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this Article.



     Section 6.12     Merger, Conversion, Consolidation or Succession to Business.



     Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided
such corporation shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the parties hereto. In
case any Debentures shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Debentures so authenticated with the same effect as if
such successor Trustee had itself authenticated such Debentures.



     Section 6.13     Preferential Collection of Claims Against Company.



     If and when the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Debentures), the Trustee shall be subject to the provisions of the Trust Indenture Act
regarding the collection of claims against the Company (or any such other obligor).



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ARTICLE VII




HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY




     Section 7.1     Company to Furnish Trustee Names and Addresses of Holders.



     The Company will furnish or cause to be furnished to the Trustee (a) within 14 days after each
record date for payment of interest, 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 any other time, within
30 days of receipt by the Trust of a written request for a list of Holders as of a date no more
than 14 days before such list of Holders is given to the Trustee; excluding from any such list
names and addresses received by the Trustee in its capacity as Registrar.



     Section 7.2     Preservation of Information; Communications to Holders.



          (a)     The Trustee shall preserve, in as current a form as is reasonably practicable, the names
and addresses of Holders contained in the most recent list furnished to the Trustee as provided in
Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as
Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon
receipt of a new list so furnished.



          (b)     The rights of Holders to communicate with other Holders with respect to their rights under
this Indenture or under the Debentures, and the corresponding rights and duties of the Trustee,
shall be as provided by Section 312(b) of the Trust Indenture Act.



          (c)     Every Holder of Debentures, by receiving and holding the same, agrees with the Company and
the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held
accountable by reason of any disclosure of information as to names and addresses of Holders made
pursuant to this Indenture.



     Section 7.3     Reports by Trustee.



          (a)     Within 60 days after December 31 of each year, commencing December 31, 2004, the Trustee
shall transmit by mail to Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within 60
days after each May 15 following the date of this Indenture, deliver to Holders a brief
report, dated as of such May 15, that complies with the provisions of such Section 313(a).



     Section 7.4     Reports by Company.



     In order to render the Trust Preferred Securities eligible for resale pursuant to Rule
144A under the Securities Act, while any Trust Preferred Securities remain outstanding, the Company
shall file with the Trustee and will make available, upon request, to any Holder or prospective
purchaser of Trust Preferred Securities information specified in Rule 144A(d)(4), unless the
Company furnishes information to the Commission pursuant to Section 13 or 15(d) of the Exchange
Act. In addition, and unless the Company furnishes information to the Commission pursuant to
Section 13 or 15(d) of the Exchange Act, the Company shall file with the Trustee and make available
to Holders on a reasonably timely basis annual reports containing audited financial statements
certified by the Company’s independent auditors and quarterly unaudited financial statements, in
each case, prepared in accordance with generally accepted accounting principles.



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



     The Company shall also provide to the Trustee on a timely basis such information as the Trustee
requires to enable the Trustee to prepare and file any form required to be submitted by the Company
with the U.S. Internal Revenue Service and the Holders of the Debentures relating to original issue
discount, including, without limitation, Form 1099-OID or any successor form.



ARTICLE VIII




CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE




     Section 8.1     Company May Consolidate, etc., Only on Certain Terms.



     The Company shall not consolidate with or merge with or into any other Person or, directly or
indirectly, convey, transfer or lease all or substantially all of its properties and assets on a
consolidated basis to any Person, unless:



          (a)     the Person formed by such consolidation or into which the Company is merged or the
Person that acquires by conveyance, transfer or lease, all or substantially all of the properties
and assets of the Company on a consolidated basis shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the
due and punctual payment of the principal of and interest (including any Additional Interest) on
all the Debentures and the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;



          (b)     immediately after giving effect to such transaction and treating any indebtedness that
becomes an obligation of the Company or any of its Subsidiaries as a result of such transaction as
having been incurred by the Company or such Subsidiary at the time of such transaction, no
Indenture
Event of Default, and no event that, after notice or lapse of time or both, would become an
Indenture Event of Default, shall have occurred and be continuing; and



          (c)     the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or lease, and if a
supplemental indenture is required in connection with such transaction, such supplemental
indenture, comply with this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.



     This Section shall only apply to a merger or consolidation in which the Company is not the
surviving corporation and to conveyances, leases and transfers by the Company as transferor or
lessor.



     Section 8.2     Successor Substituted.



     Upon any consolidation of the Company with, or merger of the Company with or into, any other
Person or any conveyance, transfer or lease of all or substantially all the properties and assets
of the



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Company on a consolidated basis in accordance with Section 8.1, the successor Person formed
by such consolidation or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor Person had been named as
the Company herein, and thereafter the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Debentures.


     Such successor Person may cause to be signed, and may issue either in its own name or in the name
of the Company, any or all of the Debentures issuable hereunder that theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the written order of such
successor Person instead of the Company and subject to all the terms, conditions and limitations in
this Indenture prescribed, the Trustee shall authenticate and shall make available for delivery any
Debentures that previously shall have been signed and delivered by the officers of the Company to
the Trustee for authentication pursuant to such provisions and any Debentures that such successor
Person thereafter shall cause to be signed and delivered to the Trustee on its behalf for the
purpose pursuant to such provisions. All the Debentures so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Debentures theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Debentures had been issued at
the date of the execution hereof.


     In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology
and form may be made in the Debentures thereafter to be issued as may be appropriate.



ARTICLE IX




SUPPLEMENTAL INDENTURES




     Section 9.1     Supplemental Indentures Without Consent of Holders.



     Without the consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into one or more indentures supplemental
hereto, in form reasonably satisfactory to the Trustee, for any of the following purposes:



          (a)     to evidence the succession of another Person to the Company and the assumption by any
such successor of the covenants of the Company herein and in the Debentures;



          (b)     to add to the covenants of the Company for the benefit of the Holders, or to surrender any
right or power herein conferred upon the Company;



          (c)     to cure any ambiguity, to correct or supplement any provision herein that may be defective
or inconsistent with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture that shall not be inconsistent with the
provisions of this Indenture; provided, that such action pursuant to this clause shall not
adversely affect the interests of the Holders of the Debentures in any material respect or, so long
as any of the Trust Preferred Securities shall remain outstanding, the holders of the Trust
Preferred Securities (a supplemental indenture specifying procedures to deal with fractional
interests in Debentures in connection with any redemption of fewer than all the outstanding
Debentures will not be deemed to have any such material adverse effect);



          (d)     to make provision for transfer procedures, certification, the form of restricted
securities legends, if any, to be placed on Debentures, and all other matters required pursuant to
Section 3.5(b) or otherwise necessary, desirable or appropriate in connection with the issuance of



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Debentures to holders of Trust Preferred Securities in the event of a distribution of Debentures by
the Trust upon the occurrence of a Dissolution Event; or



          (e)     to evidence and provide for the acceptance of appointment hereunder by a successor Trustee
with respect to the Debentures and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.11(b).



     Section 9.2     Supplemental Indentures with Consent of Holders.



     With the consent of the Holders of at least a majority in principal amount of the Outstanding
Debentures, by Act of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Debenture affected thereby:



          (a)     extend the Stated Maturity of the principal of, or any installment of interest
(including any Additional Interest) on, any Debenture, or reduce the principal amount thereof, or
reduce the rate or extend the time for payment of interest thereon, or change the place of payment
where, or the coin or currency in which, any Debenture or interest thereon is payable, or impair
the right to institute suit for the enforcement of the right to receive any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date),
or modify the provisions of this Indenture with respect to the subordination of the Debentures in a
manner adverse to the Holders;



          (b)     reduce the percentage in principal amount of the Outstanding Debentures, the consent of
whose Holders is required for any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture; or



          (c)     modify any of the provisions of this Section, Section 5.13 or Section 10.5, except to
increase any such percentage or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding Debenture affected
thereby;



provided, that if the Debentures are held by the Trust or a trustee of the Trust, such
supplemental indenture shall not be effective until the holders of a majority in liquidation amount
of Trust Securities shall have consented to such supplemental indenture; provided, further, that if
the consent of the Holder of each Outstanding Debenture is required, such supplemental indenture
shall not be effective until each holder of the Trust Securities of the Trust shall have consented
to such supplemental indenture.



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



     The Company may, but shall not be obligated to, fix a record date for the purpose of determining
the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed,
the Holders on such record date, or their duly designated proxies, and only such Persons, shall be
entitled to consent to such supplemental indenture, whether or not such Holders remain Holders
after such record date; provided, that unless such consent shall have become effective by virtue of
the requisite percentage



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having been obtained prior to the date that is 90 days after such record
date, any such consent previously given shall automatically and without further action by any
Holder be canceled and of no further effect.



     Section 9.3     Execution of Supplemental Indentures.



     In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent thereto have been met.
The Trustee may, but shall not be obligated to, enter into any such supplemental indenture that
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.



     Section 9.4     Effect of Supplemental Indentures.



     Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Debentures theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby. No such supplemental indenture shall directly or
indirectly modify the provisions of Article XII in any manner that might terminate or impair the
rights of the holders of the Senior Debt.



     Section 9.5     Reference in Debentures to Supplemental Indentures.



     Debentures authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures so modified as to conform, in the opinion of the Trustee
and the Company, to any such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Debentures.



ARTICLE X




COVENANTS; REPRESENTATIONS AND WARRANTIES




     Section 10.1     Payment of Principal and Interest.



     The Company will duly and punctually pay the principal of and interest (including any
Additional Interest) on the Debentures in accordance with the terms of the Debentures and this
Indenture.



     Section 10.2     Maintenance of Office or Agency.



     The Company will maintain in the United States an office or agency where Debentures may be
presented or surrendered for payment, where Debentures may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in respect of the
Debentures and this Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company will give prompt
written notice to the Trustee of any change in the location of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of



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the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and demands.



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



     Section 10.3     Money for Debenture Payments to Be Held in Trust.



     If the Company shall at any time act as its own Paying Agent, it will, on or before each due
date of the principal of or interest (including any Additional Interest) on any of the Debentures,
segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal and interest (including any Additional Interest) so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify
the Trustee of its action or failure so to act.



     Whenever the Company shall have one or more Paying Agents, it will, prior to each due date of the
principal of or interest (including any Additional Interest) on any Debentures, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.



     The Company will cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent all of which provisions shall apply to this
Indenture and (ii) during the continuance of any default by the Company (or any other obligor
upon the Debentures) in the making of any payment in respect of the Debentures, upon the written
request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent as
such.



     The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.



     Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for
the payment of the principal of or interest (including any Additional Interest) on any Debenture
and remaining unclaimed for two years after such principal or interest has become due and payable
shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be paid to the Company on Company Request, or if then held by the Company
shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be discharged from such trust; and the Holder of any such Debenture shall
thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.



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     Section 10.4     Statement by Officers as to Default.



     The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company ending after the date hereof, an Officers’ Certificate covering such fiscal year
stating whether or not, to the best knowledge of the signers thereof, the Company is in default in
the performance and observance of any of the material terms, provisions and conditions of this
Indenture (without regard to any period of grace or requirement of notice provided hereunder) and,
if the Company shall be in default, specifying all such defaults and the nature and status thereof
of which they may have knowledge.



     Section 10.5     Additional Covenants.



          (a)     The Company covenants that so long as the Debentures are outstanding, if at any time (i)
the Debentures are held by the Trust and the Company shall have defaulted with respect to its
payment of any obligations under the Guarantee and such default shall be continuing, (ii) there
shall have occurred and be continuing an Indenture Event of Default or (iii) there shall have
occurred and be continuing an Indenture Event of Default with the giving of notice or the lapse of
time or both, would constitute an Indenture Event of Default, then the Company shall not, and shall
cause each of its Subsidiaries not to,



                    (i)     declare or pay dividends on, or make a distribution with respect to, or redeem or purchase
or acquire, or make a liquidation payment with respect to, any of its capital stock or other equity
securities other than (A) any purchase or acquisition of Common Stock (or Common Stock equivalents)
in connection with the satisfaction by the Company or the Subsidiary of its obligations under any
employee benefit plan or the satisfaction by the Company or the Subsidiary of its obligations
pursuant to any contract or security requiring the Company or the Subsidiary to purchase Common
Stock (or Common Stock equivalents), (B) any purchase of Common Stock (or Common Stock equivalents)
from an officer or employee (or a Person performing similar functions) of the Company or any of its
Subsidiaries upon termination of employment or retirement, (C) as a result of a reclassification of
the capital stock or other equity securities of the Company or any of its Subsidiaries or the
exchange or conversion of one class or series of capital stock or other equity securities for
another class or series of
capital stock or other equity securities of the Company or any of its Subsidiaries, (D) any
dividend or distribution of Common Stock on Common Stock, (E) any purchase of fractional interests
in capital stock or other equity securities of the Company or any of its Subsidiaries pursuant to
the conversion or exchange provisions of such capital stock or other equity security being
converted or exchanged, (F) any declaration or payment of a dividend in connection with the
implementation of a Rights Plan or the redemption or repurchase of any rights distributed pursuant
to a Rights Plan, and (G) any dividend or distribution by a Subsidiary of the Company to the
Company or another Subsidiary of the Company;



                    (ii)     make any payment of principal of, or interest on, or repay, repurchase or redeem, any
debt securities issued by the Company that rank pari passu with or junior to the Debentures; or



                    (iii)     make any guarantee payments with respect to any guarantee (other than the MFH Guarantee)
by the Company of any debt securities of any of its Subsidiaries, if such guarantee ranks pari
passu with or junior to the Debentures.



          (b)     The Company also covenants and agrees that, so long as the Debentures are outstanding and
a Dissolution Event shall not have occurred (i) it shall directly or indirectly maintain 100%
ownership of the Trust Common Securities; provided, however, that any permitted successor of the
Company hereunder may succeed to the Company’s ownership of such Trust Common Securities and (ii)
it shall use its reasonable efforts, consistent with the terms and provisions of the Declaration,
to cause the



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Trust (x) to remain a statutory trust under the laws of the State of Delaware, except
in connection with the distribution of the Debentures to the holders of Trust Securities in
liquidation of the Trust upon the occurrence of a Dissolution Event, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (y) to otherwise
continue to be classified as a grantor trust for U.S. federal income tax purposes.



     Section 10.6     Payment of Expenses of the Trust.



     In connection with the offering, sale and issuance of the Debentures to the Property Trustee
in connection with the sale of the Trust Securities by the Trust, the Company shall:



          (a)     pay for all costs, fees and expenses of the Trust relating to the offering, sale and
issuance of the Debentures, including compensation of the Trustee under the Indenture in accordance
with the provisions of Section 6.7 of this Indenture;



          (b)     be responsible for and pay for all debts and obligations (other than with respect to the
Trust Securities) of the Trust, pay for all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the offering, sale and
issuance of the Trust Securities, the fees and expenses of the Property Trustee, the costs and
expenses relating to the operation of the Trust, including without limitation, costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing, and disposition of Trust assets); and



          (c)     pay any and all taxes (other than United States withholding taxes attributable to the
Trust or its assets) and all liabilities, costs and expenses with respect to such taxes of the
Trust.



     The obligation of the Company to pay all debts, obligations, costs, fees and expenses of the
Trust (other than with respect to the Trust Securities) shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture.



ARTICLE XI




REDEMPTION OF DEBENTURES




     Section 11.1     Redemption.



          (a)     The Debentures may be redeemed, at the election of the Company, in whole or in part, in
cash at the Redemption Price, at any time and from time to time on May 5, 2014. If the Debentures
are redeemed in part, the Debentures to be redeemed shall be selected by the Trustee on a pro rata
basis from the Outstanding Debentures not previously called for redemption.



          (b)     The Debentures may be redeemed, at the election of the Company, in whole (but not in
part), in cash at the Redemption Price, at any time within 90 days following the occurrence and
continuation of a Redemption Tax Event; provided, however, that if at the time, there is available
to the Company the opportunity to eliminate, within such 90-day period, the Redemption Tax Event by
taking some ministerial action, such as filing a form or making an election, or pursuing some other
similar reasonable measure, that in the reasonable judgment of the Company has and will cause no
adverse effect on the Trust, the Holders of the Trust Securities or the Company and will involve no
material cost, then



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the Company shall effect such ministerial action and eliminate such Redemption
Tax Event in lieu of redemption of the Debentures.



     Section 11.2     Applicability of Article.



     Redemption of Debentures at the election of the Company, as permitted by the provisions of
paragraph (a) and (b) of Section 11.1, shall be made in accordance with such provisions and this
Article.



     Section 11.3     Election to Redeem; Notice to Trustee.



     The election of the Company to redeem Debentures pursuant to paragraph (a) or (b) of Section
11.1 shall be evidenced by a Board Resolution. In case of any such elective redemption, the
Company shall fix a Redemption Date complying with any applicable time limitation in Section 11.1
and, at least 30 days and no more than 60 days prior to the Redemption Date so fixed (unless a
shorter notice shall be satisfactory to the Trustee), shall notify the Trustee in writing of such
Redemption Date and of the principal amount of Debentures to be redeemed and shall provide the
Trustee a copy of the notice of redemption to be given to Holders of Debentures to be redeemed
pursuant to Section 11.4 and, in the case of an elective redemption, a copy of the applicable Board
Resolution.



     Section 11.4     Notice of Redemption.



     Notice of redemption shall be given to each Holder of Debentures to be redeemed in the manner
provided in Section 1.6 at least 30 but not more than 60 days prior to the Redemption Date.



     All notices of redemption shall identify the Debentures to be redeemed (including, if relevant,
CUSIP number) and shall state:



          (a)     the Redemption Date,



          (b)     the applicable Redemption Price,



          (c)     if less than all Outstanding Debentures are to be redeemed, the identification (and, in
the case of partial redemption, the respective principal amounts) of the particular Debentures to
be redeemed;



          (d)     that on the Redemption Date the Redemption Price will become due and payable upon each
such Debenture to be redeemed and that interest thereon (including any Additional Interest) will
cease to accrue on and after said date, and



          (e)     the place or places where such Debentures are to be surrendered for payment of the
Redemption Price.



     Notice of redemption of Debentures to be redeemed at the election of the Company shall be
given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of
the Company.



     Section 11.5     Deposit of Redemption Price.



     Prior to 10:00 a.m. New York City time on the Redemption Date specified in the notice of
redemption given as provided in Section 11.4, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as



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provided in Section 10.3) an amount of money sufficient to pay the Redemption Price of, and (except
if the Redemption Date shall be an Interest Payment Date) accrued interest (including any
Additional Interest) on, all the Debentures that are to be redeemed on that date.



     Section 11.6     Debentures Payable on Redemption Date.



     Notice of redemption having been given as aforesaid, the Debentures so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date, unless the Company shall default in the payment of the Redemption Price or
accrued interest (including any Additional Interest), such Debentures shall cease to bear interest.
Upon surrender of any such Debenture for redemption in accordance with said notice, such Debenture
shall be paid by the Company (through the Trustee or the Paying Agent) at the Redemption Price,
together with accrued interest (including any Additional Interest) to the Redemption Date;
provided, however, any installment of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Debentures, or one or more Predecessor
Debentures, registered as such at the close of business on the Regular Record Date for such
installment of interest according to the terms and the provisions of Section 3.7.
Upon surrender of any Debenture redeemed in part only, the Company shall execute and the Trustee
shall authenticate and make available for delivery to the Holder thereof, at the expense of the
Company, a new Debenture or Debentures, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of, and otherwise having the same terms as, the Debenture so
surrendered. If a Global Debenture is so surrendered, such new Debenture will also be a new Global
Debenture.
If any Debenture called for redemption shall not be so paid upon surrender thereof for redemption,
the principal shall, until paid, bear interest from the Redemption Date at the rate borne by the
Debenture.



     Section 11.7     No Sinking Fund.



     The Debentures are not entitled to the benefit of any sinking fund.



ARTICLE XII




SUBORDINATION OF DEBENTURES




     Section 12.1     Agreement to Subordinate.



     The Company covenants and agrees, and each Holder of a Debentures by such Holder’s acceptance
thereof likewise covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article XII; and each Holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such provisions. The obligations
of the Company under the Debentures will constitute unsecured obligations of the Company and will
rank
(i) senior to the Company’s Common Stock and (ii) subordinated and junior in right of payment to
the prior payment in full of all Senior Debt; provided, however, that no provision of this Article
XII shall prevent the occurrence of any default or Indenture Event of Default hereunder.



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     Section 12.2     Default on Senior Debt.



     In the event of any default by the Company in the payment of principal, interest or any other
payment due on any Senior Debt continuing beyond the period of grace, if any, specified in the
instrument evidencing such Senior Debt, unless and until such default shall have been cured or
waived or shall have ceased to exist, and in the event that the maturity of any Senior Debt has
been accelerated because of a default, unless and until all amounts payable with respect to such
accelerated Senior Debt have been paid in full, then no payment shall be made by the Company with
respect to the principal of (including redemption payments, if any) or interest (including any
Additional Interest) on the Debentures.



     In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee when
such payment is prohibited by the preceding paragraph of this Section 12.2, such payment shall be
held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior
Debt or their respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their respective interests may
appear, but only to the extent that the holders of the Senior Debt (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of such payment of the
amounts then due and owing on the Senior Debt and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Debt.



     Section 12.3     Liquidation; Dissolution; Bankruptcy.



     Upon any payment by the Company or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any dissolution or winding up
or liquidation or reorganization of the Company, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all principal of, and interest due or to
become due on, all Senior Debt must be paid in full before any payment is made on account of the
principal of, or interest (including any Additional Interest) on, the Debentures; and upon any such
dissolution or winding up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Debentures or the Trustee would be entitled, except for the
provisions of this Article XII, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by
the Holders of the Debentures or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Debt (pro rata to such holders on the basis of the respective
amounts of Senior Debt held by such holders, as calculated by the Company) or their representative
or representatives, or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing Senior Debt may have been issued, as their respective interests may appear,
to the extent necessary to pay the Senior Debt in full, in money or money’s worth, after giving
effect to any concurrent payment or distribution to or for the holders of Senior Debt, before any
payment or distribution is made to the Holders of Debentures or to the Trustee. In the event that,
notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee or the Holders of the Debentures before all Senior Debt is paid in full, or
provision is made for such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Debt or their representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing Senior Debt may have been issued,
as their respective interests may appear, as calculated by the Company, for application to the
payment of all Senior Debt remaining unpaid to the extent necessary to pay such Senior Debt in full
in money in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Debt.



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     For purposes of this Article XII, the words, “cash, property or securities” shall not be deemed to
include shares of stock of the Company as reorganized or readjusted, or securities of the Company
or any other corporation provided for by a plan of reorganization or readjustment, the payment of
which is subordinated at least to the extent provided in this Article XII with respect to the
Debentures to the payment of all Senior Debt that may at the time be outstanding; provided, that
(i) such Senior Debt is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such Senior Debt are not,
without the consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into, another Person or the
liquidation or dissolution of the Company following the conveyance, transfer or lease of all or
substantially all its properties and assets on a consolidated basis to another Person upon the
terms and conditions provided for in Article VIII hereof shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 12.3 if such other Person shall,
as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions
stated in Article VIII hereof. Nothing in Section 12.2 or in this Section 12.3 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.7 hereof.



     Section 12.4     Subrogation.



     Subject to the payment in full of all Senior Debt, the rights of the Holders of the Debentures
shall be subrogated to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Company, as the case may be, applicable to the
Senior Debt until the principal of and interest (including any Additional Interest) on the
Debentures shall be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of Senior Debt of any cash, property or securities to which the
Holders of the Debentures or the Trustee would be entitled except for the provisions of this
Article XII, and no payment pursuant to the provisions of this Article XII to or for the benefit of
the holders of Senior Debt by Holders of the Debentures or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Debt, and the Holders of the Debentures, be
deemed to be a payment by the
Company to or on account of the Debentures. It is understood that the provisions of this Article
XII are and are intended solely for the purposes of defining the relative rights of the Holders of
the Debentures, on the one hand, and the holders of Senior Debt, on the other hand.



     Nothing contained in this Article XII or elsewhere in this Indenture or in the Debentures is
intended to or shall impair, as between the Company, its creditors other than the holders of Senior
Debt, and the Holders of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Debentures the principal of and interest (including any
Additional Interest) on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative rights of the Holders
of the Debentures and creditors of the Company, as the case may be, other than the holders of
Senior Debt, nor shall anything herein or therein prevent the Trustee or the Holder of any
Debenture from exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article XII of the holders of Senior Debt
in respect of cash, property or securities of the Company, as the case may be, received upon the
exercise of any such remedy.



     Upon any payment or distribution of assets of the Company referred to in this Article XII, the
Trustee, subject to the provisions of Section 6.3, and the Holders of the Debentures, shall be
entitled to rely upon any order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending, or a certificate of
the receiver, trustee in bankruptcy, liquidation trustee, agent or other Person making such payment
or distribution, delivered to the Trustee or to the Holders of the Debentures, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the holders of Senior Debt
and other indebtedness of the Company, as the



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case may be, 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.



     Section 12.5     Trustee to Effectuate Subordination.



     Each Holder of Debentures by such Holder’s acceptance thereof authorizes and directs the
Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article XII and appoints the Trustee as such Holder’s
attorney-in-fact for any and all such purposes.



     Section 12.6     Notice by the Company.



     The Company shall give prompt written notice to a Responsible Officer of the Trustee of any
fact of which the Company has actual knowledge as a result of which the making of any payment of
monies to or by the Trustee in respect of the Debentures would be prohibited by the provisions of
this Article XII. Notwithstanding the provisions of this Article XII or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts as a
result of which the making of any payment of monies to or by the Trustee in respect of the
Debentures would be prohibited by the provisions of this Article XII, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at the Corporate
Trust Office of the Trustee from the Company or a holder or holders of Senior Debt or from any
trustee therefor; and before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.3 hereof, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice provided for in
this Section 12.6 at least three Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the payment of the
principal of, or interest (including any Additional Interest) on any Debenture), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they were received, and shall
not be affected by any notice to the contrary that may be received by it within three Business Days
prior to such date.



     The Trustee, subject to the provisions of Section 6.3, shall be entitled to rely on the delivery to
it of a written notice by a Person representing himself to be a holder of Senior Debt (or a trustee
on behalf of such holder) to establish that such notice has been given by a holder of Senior Debt
or a trustee on behalf of any such holder or holders. In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or 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 Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the right 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.



     Section 12.7     Rights of the Trustee; Holders of Senior Debt.



     The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article XII in respect of any Senior Debt at any time held by it, to the same extent as any other
holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights
as such holder.



     With respect to the holders of Senior Debt of the Company, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set forth in this Article
XII, and no implied covenants or obligations with respect to the holders of Senior Debt shall be
read into this



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Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt and, subject to the provisions of Section 6.3, the Trustee shall
not be liable to any holder of Senior Debt if it shall pay over or deliver to Holders of
Debentures, the Company or any other Person money or assets to which any holder of Senior Debt
shall be entitled by virtue of this Article XII or otherwise.



     Section 12.8     Subordination May Not Be Impaired.



     No right of any present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof that any such holder may have or otherwise be charged with.


     Without in any way limiting the generality of the foregoing paragraph, the holder or holders of any
Senior Debt may, at any time and from time to time, without the consent of or notice to the Trustee
or the Holders of the Debentures, without incurring responsibility to the Holders of the Debentures
and without impairing or releasing the subordination provided in this Article XII or the
obligations hereunder of the Holders of the Debentures to the holders of Senior Debt, do any one or
more of the following: (i) change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, such Senior Debt, or otherwise amend or supplement in any manner
such Senior Debt or any instrument evidencing the same or any agreement under
which such Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing such Senior Debt; (iii) release any Person liable
in any manner for the collection of such Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.



     Section 12.9     Article Applicable to Paying Agents.



     In case at any time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term “Trustee” as used in this Article shall in such case
(unless the context otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee.



     Section 12.10     Right to Bring Direct Action Subordinate.



     The right of a holder of Trust Preferred Securities to bring a Direct Action is subordinate
and junior in right of payment to all present and future Senior Debt, and the holder of such Trust
Preferred Securities shall not have by reason of such right any rights greater than the rights the
Holder of Debentures of a principal amount equal to the aggregate liquidation amount of such Trust
Preferred Securities would have by reason of holding such Debentures.



ARTICLE XIII




IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS




     Section 13.1     No Recourse.



     No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any
Debenture, or for any claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, past, present or future as such, of the Company or
of any predecessor or successor corporation, either directly or through the Company or any



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such
predecessor or successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood
that this Indenture and the obligations issued hereunder are solely corporate obligations, and that
no such personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, shareholders, officers or directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such incorporator, shareholder,
officer or director as such, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in this Indenture or in
any of the Debentures or implied therefrom, are hereby expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issuance of such
Debentures.



     Section 13.2     PORTAL Eligibility.



     In connection with the distribution of the Debentures to the holders of the Trust Preferred
Securities upon a Dissolution Event, the Company will use its best efforts to have such Debentures
declared eligible for trading on the Private Offerings and Resales through Automated
Linkages System of the National Association of Securities Dealers (“PORTAL”) or on such other
automated quotation system as the Trust Preferred Securities were listed or traded immediately
prior to the distribution of the Debentures.



     Section 13.3     Counterparts.



     This instrument may be executed in any number of counterparts, each of which so executed shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same instrument.



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     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their
respective corporate seals to be hereunto affixed and attested, all as of the day and year first
above written.


	 	 	 	 	 
	 	MIDLAND FINANCIAL HOLDINGS, INC.

 	 
	 	By:  	                 /s/ William S. Harrison
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	WILMINGTON TRUST COMPANY, as trustee

 	 
	 	By:  	                 /s/ Janel R. Havrille
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 





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EXHIBIT A

FORM OF DEBENTURE




[FORM OF FACE OF DEBENTURE]




     [IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT — This Debenture is a Global Debenture within
the meaning of the Indenture hereinafter referred to and is registered in the name of [Name of
Clearing Agency] or a nominee of [Name of Clearing Agency] (the “Clearing Agency”). This Debenture
is exchangeable for Debentures registered in the name of a person other than the Clearing Agency or
its nominee only in the limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Clearing Agency to a nominee
of the Clearing Agency or by a nominee of the Clearing Agency to the Clearing Agency or another
nominee of the Clearing Agency) may be registered except in limited circumstances. Unless this
Debenture is presented by an authorized representative of the Clearing Agency to the issuer or its
agent for registration of transfer, exchange or payment, and any Debenture issued is registered in
the name of the Clearing Agency or such other name as requested by an authorized representative of
the Clearing Agency, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, the Clearing Agency or its nominee, has an interest
herein.]



MIDLAND FINANCIAL HOLDINGS, INC.




9.5% Junior Subordinated Debenture Due May 3, 2034




			
	No. [-]
	 	$[-]






[CUSIP No. [-]]




     Midland Financial Holdings, Inc., a corporation duly organized and existing under the laws of the
State of Maryland (herein called “the Company,” which term includes any successor corporation under
the Indenture hereinafter referred to), for value received, hereby promises to pay to Wilmington
Trust Company, as Property Trustee of MFH Financial Trust I under that certain Amended and Restated
Declaration of Trust, dated as of April 28, 2004 (the “Declaration”), or registered assigns, the
principal sum of [-] Dollars ($[-]) on May 3, 2034.



          Interest Payment Dates: February 3, May 3, August 3 and November 3, commencing August 3,
2004.



          Regular Record Dates: the Regular Record Date for an installment of interest shall be the
close of business on the Business Day next preceding the Interest Payment Date for such installment
of interest. [IF PURSUANT TO THE PROVISIONS OF THE INDENTURE THE DEBENTURES ARE NO LONGER
REPRESENTED BY A GLOBAL DEBENTURE — shall be the close of business on the 15th day next
preceding the Interest Payment Date for such installment of interest.] If any date on which
interest is payable on this Debenture is not a Business Day, then payment of the interest payable
on such date will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such Business Day is in the
next succeeding calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.



     Reference is hereby made to the further provisions of this Debenture set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.



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     Unless the certificate of authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Debenture shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.


     IN WITNESS WHEREOF, the Company has caused this instrument to be signed manually or by facsimile by
its duly authorized officers.



     Dated: ___, ___.


	 	 	 	 	 
	 	MIDLAND FINANCIAL HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 





     TRUSTEE’S CERTIFICATE OF AUTHENTICATION



     This is one of the Debentures referred to in the within-mentioned Indenture.



     Dated: ___, ___.


	 	 	 	 	 
	     WILMINGTON TRUST COMPANY,

     as Trustee

 	 	 
	     By:  	 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 
	 





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[FORM OF REVERSE OF DEBENTURE ]




MIDLAND FINANCIAL HOLDINGS, INC.




9.5% Junior Subordinated Debenture Due May 3, 20341





     (1)     Interest. Midland Financial Holdings, Inc., a Maryland corporation (the “Company”), is
the issuer of this 9.5% Junior Subordinated Debenture Due May 3, 2034 (the “Debenture”) limited in
aggregate principal amount to $120,000,100 issued under the Indenture hereinafter referred to. The
Stated Maturity of the principal of the Debentures shall be May 3, 2034, and they shall bear
interest at the rate of 9.5% per annum from May 3, 2004, and a rate which is equal the greater of
(a) 9.5% per annum or (b) the rate per annum which is equal to 6.00% plus the U.S. Treasury Rate on
the Interest Reset Date from such date, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable quarterly, in arrears, on
February 3, May 3, August 3 and November 3 of each year (each day an “Interest Payment Date”),
commencing August 3, 2004.



     The amount of interest payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months. Except as provided in the following sentence, the amount of interest payable
for any period shorter than a full quarterly period for which interest is computed will be computed
on the basis of the actual number of days elapsed per 30-day month. If any date on which interest
is payable on this Debenture is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.



     (2)     Additional Interest. The Company shall pay to MFH Financial Trust I (and its permitted
successors or assigns under the Declaration) (the “Trust”) such amounts as shall be required so
that the net amounts received and retained by the Trust after paying any taxes, duties, assessments
or other governmental charges of whatever nature (other than withholding taxes) imposed on the
Trust by the United States or any other taxing authority (“Additional Interest”) will be at least
the amounts the Trust would have received had no such taxes, duties, assessment or governmental
charges been imposed.



     (3)     Method of Payment. Any installment of interest on this Debenture that is payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on the Regular Record Date for that installment
of interest, except that interest payable on the Stated Maturity of the principal of this Debenture
shall be paid to the Person to whom such principal is paid.



     Any installment of interest on this Debenture that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (“Defaulted Interest”) may either be paid to the Person
in whose name this Debenture (or one or more Predecessor Debentures) is registered at
the close of business on a Special Record Date for the payment of such Defaulted Interest to be
fixed by the Trustee, notice whereof shall be given to the holder of this Debenture at least 10
days prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities









	1      All terms used in this Debenture that are defined
in the Indenture referred to herein or in the Declaration shall have the
meanings assigned to them in the Indenture, or if not there defined, in the
Declaration.





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exchange or automated quotation system on
which the Debentures may be listed or traded, and upon such notice as may be required by such
securities exchange or automated quotation system, all as more fully provided in said Indenture.


     The principal of and interest on this Debenture shall be payable at the office or agency of the
Company in the United States maintained for such purpose and at any other office or agency
maintained by the Company for such purpose in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of any installment of interest may be made (i)
by check mailed to the address of the Person entitled thereto as such address shall appear in the
Register or (ii) by wire transfer in immediately available funds at such place and to such account
as may be designated in writing at least 15 days before the Interest Payment Date for that
installment of interest by the Person entitled thereto.




     (4)     Paying Agent and Registrar. The Trustee will initially act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-registrar without prior
notice. The Company or any of its Affiliates may act in any such capacity.



     (5)     Indenture. The Company issued the Debentures under an indenture, dated as of May 3,
2004 (the “Indenture”), between the Company and Wilmington Trust Company, as Trustee (herein called
the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee, the Company and the
Holders of the Debentures, and of the terms upon which the Debentures are, and are to be,
authenticated and delivered. The terms of the Debentures include those stated in the Indenture and
those made part of the Indenture by the incorporation of specified provisions of the Trust
Indenture Act of 1939 as in force at the date of the Indenture (the “Trust Indenture Act”). The
Debentures are subject to, and qualified by, all such terms, certain of which are summarized
hereon, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of
such terms.



     The Debentures are unsecured general obligations of the Company limited to $120,000,100 in
aggregate principal amount and subordinated in right of payment to all existing and future Senior
Debt of the Company. No reference herein to the Indenture and no provision of this Debenture or of
the Indenture shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this Debenture at the times, place and rate,
and in the coin or currency, prescribed in the Indenture.



     (6)     Optional Redemption. The Debentures are subject to redemption, at the election of the
Company, in whole or in part, for cash at 100% of the principal amount of the Debentures to be
redeemed plus accrued and unpaid interest thereon, at any time and from time to time on May 5,
2014.



     (7)     Optional Redemption Upon Redemption Tax Event. The Debentures are subject to
redemption, at the election of the Company, in whole (but not in part), for cash at 100% of the
principal amount of the Debentures to be redeemed plus accrued and unpaid interest thereon, at any
time within 90 days following the occurrence and continuation of a Redemption Tax Event.



     (8)     Notice of Redemption. Notice of redemption will be mailed at least 30 but not more
than 60 days before the redemption date to each Holder of the Debentures to be redeemed at such
Holder’s address of record. In the event of a redemption of less than all of the Debentures, the
Debentures will be chosen for redemption by the Trustee in accordance with the Indenture. On and
after the Redemption Date, interest ceases to accrue on the Debentures or portions of them called
for redemption.



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     (9)     Subordination. The payment of the principal of, interest on or any other amounts due
on the Debentures is subordinated in right of payment to all existing and future Senior Debt (as
defined below) of the Company, as described in the Indenture. Each Holder, by accepting a
Debenture, agrees to such subordination and authorizes and directs the Trustee on its behalf to
take such action as may be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee as its attorney-in-fact for such purpose.



     “Senior Debt” means (i) the principal, premium, if any, and interest with respect to (A)
indebtedness of the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company, including without
limitation, any future indebtedness under any indenture (other than this Indenture) to which the
Company is a party, (ii) all capital lease obligations of the Company, (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of business), (iv) all
obligations of the Company for the reimbursement of any letter of credit, banker’s acceptance,
security purchase facility, any repurchase agreement or similar arrangement, or under any interest
rate swap or total return swap or other hedging arrangement or any obligation under options or any
similar credit or other transaction, (v) all obligations of the type referred to in clauses (i)
through (iv) above of other Persons for the payment of which the Company is responsible or liable
as obligor, guarantor or otherwise, (vi) all obligations of various classes of existing and future
preferred shares of the Company and all of its subsidiaries, other than the Trust Preferred
Securities and (vii) all obligations of the type referred to in clauses (i) through (vi) above of
other Persons secured by any lien on any property or asset of the Company (whether or not such
obligation is assumed by the Company), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Debentures and (2) any indebtedness for money borrowed by
any of the Company’s Affiliates (but only Affiliates in which MuniMae and its Subsidiaries own more
than 50% of the Equity Interests); in the case of clauses (i) through (vii) above, whether
outstanding at the date of this Indenture or thereafter incurred. Such Senior Debt shall continue
to be Senior Debt and entitled to the benefits of the subordination provisions hereof irrespective
of any amendment, modification or waiver of any term of such Senior Debt.



     (10)     Registration, Transfer, Exchange and Denominations. As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Debenture is registrable in
the Register, upon surrender of this Debenture for registration of transfer at the office or agency
of the Company in Baltimore, Maryland, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Debentures, of authorized
denominations and for the same aggregate principal amount, will be issued to the designated
transferee or transferees.



     The Debentures are issuable only in registered form without coupons in denominations of
(a) $100 and integral multiples thereof to the Company and its Affiliates and (b) $2,000,000 and
integral multiples thereof to Persons other than the Company and its Affiliates. No service
charge shall be made for any such registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge payable in connection
therewith. Prior to due presentment of this Debenture for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this
Debenture is registered as the owner hereof for all purposes, whether or not this Debenture be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.



     (11)     Persons Deemed Owners. Except as provided in Section 4 hereof, the registered Holder
of a Debenture may be treated as its owner for all purposes.



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     (12)     Unclaimed Money. If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent shall pay the money back to the Company at its
written request. After that, Holders of Debentures entitled to the money must look to the Company
for payment unless an abandoned property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.



     (13)     Defaults and Remedies. The Debentures shall have the Indenture Events of Default as
set forth in Section 5.1 of the Indenture. Subject to certain limitations in the Indenture, if an
Indenture Event of Default occurs and is continuing, the Trustee by notice to the Company or the
Holders of at least a majority in aggregate principal amount of the then Outstanding Debentures, by
notice to the Company and the Trustee, may declare all the Debentures to be due and payable
immediately.



     The Holders of a majority in principal amount of the Debentures then Outstanding by written notice
to the Trustee may rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Indenture Events of Default have been
cured or waived except nonpayment of principal or interest that has become due solely because of
the acceleration. Holders may not enforce the Indenture or the Debentures except as provided in
the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the
then Outstanding Debentures issued under the Indenture may direct the Trustee in its exercise of
any trust or power. The Company must furnish annually compliance certificates to the Trustee.



     (14)     Amendments, Supplements and Waivers. The Indenture permits, with certain exceptions
as therein provided, the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Debentures under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount
of the Debentures at the time Outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the Debentures at the time
Outstanding, on behalf of the Holders of all the Debentures, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Debenture shall be conclusive and
binding upon such Holder and upon all future Holders of this Debenture and of any Debenture issued
upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Debenture.



     (15)     Trustee Dealings with the Company. The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Debentures and may otherwise deal with the Company or
an Affiliate with the same rights it would have, as if it were not Trustee, subject to certain
limitations provided for in the Indenture and in the Trust Indenture Act. Any Paying Agent,
Registrar or co-registrar may do the same with like rights.



     (16)     No Recourse Against Others. A director, officer, employee or shareholder, as such, of
the Company shall not have any liability for any obligations of the Company under the Debentures or
the Indenture or for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Debentures by accepting a Debenture waives and releases all such
liability. The waiver and release are part of the consideration for the issue of the Debentures.



     (17)     Governing Law. THE INTERNAL LAWS OF THE STATE OF DELAWARE SHALL GOVERN THE INDENTURE
AND THE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.



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     (18)     Authentication. The Debentures shall not be valid until authenticated by the manual
signature of an authorized officer of the Trustee or an
authenticating agent.


     The Company will furnish to any Holder of the Debentures upon written request and without charge a
copy of the Indenture. Requests may be made to:


Midland Financial Holdings, Inc.

621 E. Pratt Street, Suite 300

Baltimore, Maryland 21202

Attention: Chief Financial Officer



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ASSIGNMENT FORM




To assign this Debenture, fill in the form below:



(I) or (we) assign and transfer this Debenture to





______________________________________________________________


(Insert assignee’s social security or taxpayer identification no.)







______________________________________________________________

(Print or type assignee’s name, address and zip code)



______________________________________________________________




______________________________________________________________




______________________________________________________________



and irrevocably appoint _________________________agent to transfer this Debenture on the books of
the Company. The agent may substitute another to act for him.



Your Signature: ___________________________________


(Sign exactly as your name
appears on the other side of this Debenture)



Date: __________________________



Signature Guarantee:* _________________________________________________________________________



* Signature must be guaranteed by a commercial bank, trust company or member firm of The New York
Stock Exchange, Inc.





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