exv10w9



 




Exhibit 10.9




JUNIOR SUBORDINATED INDENTURE




between




NEW CENTURY FINANCIAL CORPORATION




and




WELLS FARGO BANK, N.A.,

as Trustee




 






Dated as of September 13, 2006




 






 









 






TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	1	 
	Section 1.1 Definitions
	 	 	1	 
	Section 1.2 Compliance Certificate and Opinions
	 	 	11	 
	Section 1.3 Forms of Documents Delivered to Trustee
	 	 	11	 
	Section 1.4 Acts of Holders
	 	 	12	 
	Section 1.5 Notices, Etc. to Trustee and Company
	 	 	14	 
	Section 1.6 Notice to Holders; Waiver
	 	 	14	 
	Section 1.7 Effect of Headings and Table of Contents
	 	 	14	 
	Section 1.8 Successors and Assigns
	 	 	15	 
	Section 1.9 Separability
	 	 	15	 
	Section 1.10 Benefits of Indenture
	 	 	15	 
	Section 1.11 Governing Law
	 	 	15	 
	Section 1.12 Submission to Jurisdiction
	 	 	15	 
	Section 1.13 Non-Business Days
	 	 	15	 
	Section 1.14 Counterparts
	 	 	16	 
	ARTICLE II SECURITY FORMS
	 	 	16	 
	Section 2.1 Form of Security
	 	 	16	 
	Section 2.2 Restrictive Legend
	 	 	21	 
	Section 2.3 Form of Trustee’s Certificate of Authentication
	 	 	23	 
	Section 2.4 Temporary Securities
	 	 	23	 
	Section 2.5 Definitive Securities
	 	 	24	 
	ARTICLE III THE SECURITIES
	 	 	24	 
	Section 3.1 Payment of Principal and Interest
	 	 	24	 
	Section 3.2 Denominations
	 	 	26	 
	Section 3.3 Execution, Authentication, Delivery and Dating
	 	 	26	 
	Section 3.4 Global Securities
	 	 	27	 
	Section 3.5 Registration, Transfer and Exchange Generally
	 	 	29	 
	Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities
	 	 	31	 
	Section 3.7 Persons Deemed Owners
	 	 	31	 
	Section 3.8 Cancellation
	 	 	32	 
	Section 3.9 Agreed Tax Treatment
	 	 	32	 






 









 






	 	 	 	 	 
	 	 	Page
	Section 3.10 CUSIP Numbers
	 	 	32	 
	ARTICLE IV SATISFACTION AND DISCHARGE
	 	 	32	 
	Section 4.1 Satisfaction and Discharge of Indenture
	 	 	32	 
	Section 4.2 Application of Trust Money
	 	 	34	 
	ARTICLE V REMEDIES
	 	 	34	 
	Section 5.1 Events of Default
	 	 	34	 
	Section 5.2 Acceleration of Maturity; Rescission and Annulment
	 	 	35	 
	Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	36	 
	Section 5.4 Trustee May File Proofs of Claim
	 	 	37	 
	Section 5.5 Trustee May Enforce Claim Without Possession of Securities
	 	 	37	 
	Section 5.6 Application of Money Collected
	 	 	37	 
	Section 5.7 Limitation on Suits
	 	 	38	 
	Section 5.8 Unconditional Right of Holders to Receive Principal, Premium, if
any, and Interest; Direct Action by Holders of Preferred Securities
	 	 	38	 
	Section 5.9 Restoration of Rights and Remedies
	 	 	39	 
	Section 5.10 Rights and Remedies Cumulative
	 	 	39	 
	Section 5.11 Delay or Omission Not Waiver
	 	 	39	 
	Section 5.12 Control by Holders
	 	 	39	 
	Section 5.13 Waiver of Past Defaults
	 	 	40	 
	Section 5.14 Undertaking for Costs
	 	 	40	 
	Section 5.15 Waiver of Usury, Stay or Extension Laws
	 	 	41	 
	ARTICLE VI THE TRUSTEE
	 	 	41	 
	Section 6.1 Corporate Trustee Required
	 	 	41	 
	Section 6.2 Certain Duties and Responsibilities
	 	 	41	 
	Section 6.3 Notice of Defaults
	 	 	43	 
	Section 6.4 Certain Rights of Trustee
	 	 	43	 
	Section 6.5 May Hold Securities
	 	 	45	 
	Section 6.6 Compensation; Reimbursement; Indemnity
	 	 	45	 
	Section 6.7 Resignation and Removal; Appointment of Successor
	 	 	46	 
	Section 6.8
Acceptance of Appointment by Successor
	 	 	47	 






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	 	 	Page
	Section 6.9 Merger, Conversion, Consolidation or Succession to Business
	 	 	48	 
	Section 6.10 Not Responsible for Recitals or Issuance of Securities
	 	 	48	 
	Section 6.11 Appointment of Authenticating Agent
	 	 	48	 
	ARTICLE VII HOLDER’S LISTS AND REPORTS BY COMPANY
	 	 	50	 
	Section 7.1 Company to Furnish Trustee Names and Addresses of Holders
	 	 	50	 
	Section 7.2 Preservation of Information, Communications to Holders
	 	 	50	 
	Section 7.3 Reports by Company
	 	 	50	 
	ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	51	 
	Section 8.1 Company May Consolidate, Etc., Only on Certain Terms
	 	 	51	 
	Section 8.2 Successor Company Substituted
	 	 	52	 
	ARTICLE IX SUPPLEMENTAL INDENTURES
	 	 	53	 
	Section 9.1 Supplemental Indentures without Consent of Holders
	 	 	53	 
	Section 9.2 Supplemental Indentures with Consent of Holders
	 	 	53	 
	Section 9.3 Execution of Supplemental Indentures
	 	 	54	 
	Section 9.4 Effect of Supplemental Indentures
	 	 	55	 
	Section 9.5 Reference in Securities to Supplemental Indentures
	 	 	55	 
	ARTICLE X COVENANTS
	 	 	55	 
	Section 10.1 Payment of Principal, Premium, if any, and Interest
	 	 	55	 
	Section 10.2 Money for Security Payments to be Held in Trust
	 	 	55	 
	Section 10.3 Statement as to Compliance
	 	 	56	 
	Section 10.4 Calculation Agent
	 	 	56	 
	Section 10.5 Additional Tax Sums
	 	 	57	 
	Section 10.6 Additional Covenants
	 	 	58	 
	Section 10.7 Waiver of Covenants
	 	 	59	 
	Section 10.8 Treatment of Securities
	 	 	59	 
	ARTICLE XI REDEMPTION OF SECURITIES
	 	 	60	 
	Section 11.1 Optional Redemption and Mandatory Redemption
	 	 	60	 
	Section 11.2 Special Event Redemption
	 	 	60	 
	Section 11.3 Election to Redeem; Notice to Trustee
	 	 	60	 
	Section 11.4 Selection of Securities to be Redeemed
	 	 	61	 






iii









 






	 	 	 	 	 
	 	 	Page
	Section 11.5 Notice of Redemption
	 	 	61	 
	Section 11.6 Deposit of Redemption Price
	 	 	62	 
	Section 11.7 Payment of Securities Called for Redemption
	 	 	62	 
	ARTICLE XII SUBORDINATION OF SECURITIES
	 	 	63	 
	Section 12.1 Securities Subordinate to Senior Debt
	 	 	63	 
	Section 12.2 No Payment When Senior Debt in Default; Payment Over of
Proceeds Upon Dissolution, Etc
	 	 	63	 
	Section 12.3 Payment Permitted if No Default
	 	 	64	 
	Section 12.4 Subrogation to Rights of Holders of Senior Debt
	 	 	65	 
	Section 12.5 Provisions Solely to Define Relative Rights
	 	 	65	 
	Section 12.6 Trustee to Effectuate Subordination
	 	 	65	 
	Section 12.7 No Waiver of Subordination Provisions
	 	 	66	 
	Section 12.8 Notice to Trustee
	 	 	66	 
	Section 12.9 Reliance on Judicial Order or Certificate of Liquidating Agent
	 	 	67	 
	Section 12.10 Trustee Not Fiduciary for Holders of Senior Debt
	 	 	67	 
	Section 12.11 Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee’s Rights
	 	 	67	 
	Section 12.12 Article Applicable to Paying Agents
	 	 	67	 
	ARTICLE XIII DEFEASANCE
	 	 	68	 
	Section 13.1 Defeasance and Discharge
	 	 	68	 
	Section 13.2 Conditions to Defeasance
	 	 	68	 
	Section 13.3 Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions
	 	 	69	 
	Section 13.4 Reinstatement
	 	 	69	 






	 	 	 	 	 
	SCHEDULE AND EXHIBIT
	Schedule A

	 	—
	 	Determination of LIBOR
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Officer’s Financial Certificate
	Exhibit B

	 	—
	 	Form of Officer’s Certificate pursuant to Section 10.3






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JUNIOR SUBORDINATED INDENTURE




     This JUNIOR SUBORDINATED INDENTURE (as further defined in Section 1.1, this
“Indenture”), dated as of September 13, 2006, is between NEW CENTURY FINANCIAL CORPORATION,
a Maryland corporation (the “Company”), and WELLS FARGO BANK, N.A., as Trustee (in
such capacity, the “Trustee”).



RECITALS OF THE COMPANY:




     WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance of its unsecured junior subordinated notes (the “Securities”)
issued to evidence a loan made to the Company of the proceeds from the issuance by New Century
Capital Trust I, a Delaware statutory trust (the “Trust”), of undivided preferred
beneficial interests in the assets of the Trust (the “Preferred Securities”) and undivided
common beneficial interests in the assets of the Trust (the “Common Securities” and,
collectively with the Preferred Securities, the “Trust Securities”), and to provide the
terms and conditions upon which the Securities are to be authenticated, issued and delivered; and



     WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



     For and in consideration of the premises and the purchase of the Securities by the Holders (as
defined below) thereof, it is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the Securities, 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) the terms defined in this Article I have the meanings assigned to them in this
Article I;



     (b) the words “include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation”;



     (c) all accounting terms used but not defined herein have the meanings assigned to them in
accordance with GAAP;



     (d) unless the context otherwise requires, any reference to an “Article,” a “Section,” a
“Schedule” or an “Exhibit” refers to an Article, a Section, a Schedule or an Exhibit, as the case
may be, of or to this Indenture;



 









 





     (e) the words “hereby,” “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;



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




     (g) the masculine, feminine or neuter genders used herein shall include the masculine,
feminine and neuter genders.



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



     “Additional Interest” means the interest, if any, that shall accrue on any amounts
payable on the Securities, the payment of which has not been made on the applicable Interest
Payment Date and which shall accrue at the rate per annum specified or determined as specified in
such Security, in each case to the extent legally enforceable.



     “Additional Tax Sums” has the meaning specified in Section 10.5.



     “Additional Taxes” means taxes, duties or other governmental charges imposed on the
Trust as a result of a Tax Event (which, for the sake of clarity, does not include amounts required
to be deducted or withheld by the Trust from payments made by the Trust to or for the benefit of
the Holder of, or any Person that acquires a beneficial interest in, the Securities).



     “Administrative Trustee” means, with respect to the Trust, each Person identified as
an “Administrative Trustee” in the Trust Agreement, solely in his or her capacity as an
Administrative Trustee of the Trust under the Trust Agreement and not in his or her individual
capacity, or his or her successor in interest in such capacity, or any successor Administrative
Trustee appointed as therein provided.



     “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.



     “Applicable Depositary Procedures” means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and procedures of the
Depositary for such Security, in each case to the extent applicable to such transaction and as in
effect from time to time.



     “Authenticating Agent” means any Person authorized by the Trustee pursuant to
Section 6.11 to act on behalf of the Trustee to authenticate the Securities.



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



2









 





     “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.



     “Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in the City of New York are authorized or required by law or executive order
to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee is closed for
business.



     “Calculation Agent” has the meaning specified in Section 10.4(a).



     “Change of Control” means (i) (A) any person (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), including a “group” as defined in Section 13(d)(3) of the Exchange
Act (but excluding a director or other fiduciary holding securities under an employee benefit plans
of the Company), becomes the beneficial owner of at least fifty percent (50%) of the Company’s
common stock then outstanding; provided, however, that any acquisition by any entity
pursuant to clause (ii) below will not constitute a Change of Control pursuant to this clause (i)
and (B) within one (1) year after the occurrence of the event described in clause (A) individuals
who immediately prior to such event constituted the Board of Directors of the Company cease to
constitute a majority thereof, unless the election or appointment, or the nomination for election
by the Company’s stockholders, of each new member was approved by each of the members of the Board
of Directors then still in office who were members of the Board of Directors immediately prior to
the event described in clause (A) (including for these purposes, new members whose election,
appointment or nomination was so approved); or (ii) approval by stockholders of the Company of, and
consummation of, the merger or other business combination of the Company, sale of all or
substantially all of the Company’s assets or combination of the foregoing transactions (a
“Transaction”), other than (A) in the case of the sale of all or substantially all of the
Company’s assets a sale in the ordinary course of business or (B) a Transaction immediately
following which the stockholders of the Company immediately prior to the Transaction continue to
have a majority of the voting power in the resulting entity.



     “Change of Control Election” has the meaning specified in Section 10.6(c).



     “Change of Control Event” means the occurrence of (i) a Change of Control and (ii) a
Ratings Downgrade as well as a deemed Change of Control Event pursuant to Section 10.6(c).



     “Change of Control Event Notice” has the meaning specified in Section 10.6(c).



     “Change of Control Notice” has the meaning specified in Section 10.6(c).



     “Code” means the Internal Revenue Code of 1986 or any successor statute thereto, in
each case as amended from time to time.



     “Commission” has the meaning specified in Section 7.3(c).



     “Common Securities” has the meaning specified in the first recital of this Indenture.



3









 





     “Company” means the Person named as the “Company” in the first paragraph of this
Indenture 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” and “Company Order” mean, respectively, the written request
or order signed in the name of the Company by its Chairman of the Board of Directors, its Vice
Chairman of the Board of Directors, its Chief Executive Officer, President or an Executive Vice
President, and by its Chief Financial Officer, 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 at which at any
particular time its corporate trust business shall be administered, which office at the date of
this Indenture is located at 919 North Market Street, Suite 700, Wilmington, Delaware 19801, Attn:
Corporate Trust Department—New Century Capital Trust I.



     “Debt” means, with respect to any Person, whether recourse is to all or a portion of
the assets of such Person, whether currently existing or hereafter incurred and whether or not
contingent and without duplication, (i) every obligation of such Person for money borrowed; (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property, assets or
businesses; (iii) every reimbursement obligation of such Person with respect to letters of credit,
bankers’ acceptances or similar facilities issued for the account of such Person; (iv) every
obligation of such Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or other accrued liabilities arising in the ordinary course
of business); (v) every capital lease obligation of such Person; (vi) all indebtedness of such
Person, whether incurred on or prior to the date of this Indenture or thereafter incurred, for
claims in respect of derivative products, including interest rate, foreign exchange rate and
commodity forward contracts, options and swaps and similar arrangements; (vii) every obligation of
the type referred to in clauses (i) through (vi) of another Person and all dividends of another
Person the payment of which, in either case, such Person has guaranteed or is responsible or liable
for, directly or indirectly, as obligor or otherwise; and (viii) any renewals, extensions,
refundings, amendments or modifications of any obligation of the types referred to in clauses (i)
through (vii).



     “Defaulted Interest” has the meaning specified in Section 3.1(c).



     “Defeasance” has the meaning specified in Section 13.1.



     “Defeasance Maturity Date” has the meaning specified in Section 13.2.



     “Delaware Trustee” means, with respect to the Trust, the Person identified as the
“Delaware Trustee” in the Trust Agreement, solely in its capacity as Delaware Trustee of the Trust
under the Trust Agreement and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware Trustee appointed as therein provided.



     “Depositary” means an organization registered as a clearing agency under the Exchange
Act that is designated as Depositary by the Company or any successor thereto. DTC will be the
initial Depositary.



4









 





     “Depositary Participant” means a broker, dealer, bank, other financial institution or
other Person for whom from time to time a Depositary effects book-entry transfers and pledges of
securities deposited with the Depositary.



     “Distributions” means amounts payable in respect of the Trust Securities as provided
in the Trust Agreement and referred to therein as “Distributions.”



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



     “DTC” means The Depository Trust Company, a New York corporation, or any successor
thereto.



     “EDGAR” has the meaning specified in Section 7.3(c).



     “Electing Securities” means the Outstanding Securities corresponding to the Preferred
Securities held by the holder of Preferred Securities making a Change of Control Election.



     “Equity Interests” means (a) the partnership interests (both common and preferred
partnership interests) in a partnership (general or limited), (b) the membership interests in a
limited liability company (both common and preferred membership interests) and (c) the shares or
stock interest (both common stock and preferred stock) in a corporation.



     “ERISA” means the Employee Retirement Income Security Act of 1974 or any successor
statute thereto, in each case as amended from time to time.



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



     “Exchange Act” means the Securities Exchange Act of 1934 or any successor statute
thereto, in each case as amended from time to time.



     “Expiration Date” has the meaning specified in Section 1.4(h).



     “Fixed Rate Period” shall have the meaning specified in the form of Security set forth
in Section 2.1.



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



     “Global Security” means a Security that evidences all or part of the Securities, the
ownership and transfers of which shall be made through book entries by a Depositary.



     “Government Obligation” means (a) any security that is (i) a direct obligation of the
United States of America of which the full faith and credit of the United States of America is
pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of America, which, in either
case of clause (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and
(b)



5









 







any depositary receipt issued by a “bank” (as defined in Section 3(a)(2) of the Securities
Act) as custodian with respect to any Government Obligation that is specified in clause (a) above
and held by such bank for the account of the holder of such depositary receipt, or with respect to
any specific payment of principal of or interest on any Government Obligation that is so specified
and held; provided, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Government Obligation or the specific payment of
principal or interest evidenced by such depositary receipt.



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



     “Indenture” means this Junior Subordinated Indenture as originally executed or as it
may from time to time be amended or supplemented by one or more amendments or indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.



     “Interest Payment Date” means March 30, June 30, September 30 and December 30 of each
year, commencing on September 30, 2006, during the term of this Indenture.



     “Investment Company Act” means the Investment Company Act of 1940 or any successor
statute thereto, in each case as amended from time to time.



     “Investment Company Event” means the receipt by the Company of an Opinion of Counsel
experienced in such matters to the effect that, as a result of the occurrence of a change in law or
regulation (including any announced prospective change) or a written change in interpretation or
application of law or regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Trust is or, within ninety (90) days
of the date of such opinion will be, considered an “investment company” that is required to be
registered under the Investment Company Act, which change or prospective change becomes effective
or would become effective, as the case may be, on or after the date of the issuance of the
Securities.



     “LIBOR” has the meaning specified in Schedule A.



     “LIBOR Business Day” has the meaning specified in Schedule A.



     “LIBOR Determination Date” has the meaning specified in Schedule A.



     “Liquidation Amount” has the meaning specified in the Trust Agreement.



     “Mandatory Redemption Price” has the meaning set forth in Section 11.1(b).



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



     “Notice of Default” means a written notice of the kind specified in Section
5.1(c).



6









 





     “Officers’ Certificate” means a certificate signed by the Chairman of the Board, a
Vice Chairman of the Board, the Chief Executive Officer, the President or an Executive Vice
President, and by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary, of the Company and delivered to the Trustee.



     “Opinion of Counsel” means a written opinion of counsel, who may be counsel for or an
employee of the Company or any Affiliate of the Company.



     “Optional Redemption Price” has the meaning set forth in Section 11.1.



     “Original Issue Date” means the date of original issuance of each Security.



     “Outstanding” means, when used in reference to any Securities, as of the date of
determination, all Securities theretofore authenticated and delivered under this Indenture, except:




     (i) Securities theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;




     (ii) Securities for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent in trust or set
aside and segregated in trust by the Company (if the Company and/or its Affiliate
shall act as its own Paying Agent) for the Holders of such Securities;
provided, that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and




     (iii) Securities that have been paid or in substitution for or in lieu of which
other Securities have been authenticated and delivered pursuant to the provisions of
this Indenture, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Holders in whose hands such Securities are valid, binding and
legal obligations of the Company;


provided, that in determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed not to be
Outstanding unless the Company shall hold all Outstanding Securities, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities that a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned that have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not
the Company or any other obligor upon the Securities or any Affiliate of the Company or such other
obligor. Notwithstanding anything herein to the contrary, Securities initially issued to the Trust
that are owned by the Trust shall be deemed to be Outstanding notwithstanding the ownership by the
Company or an Affiliate of any beneficial interest in the Trust.




7









 








     “Paying Agent” means the Trustee or any Person authorized by the Company to pay the
principal of or any premium or interest on, or other amounts in respect of, any Securities on
behalf of the Company.



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



     “Place of Payment” means, with respect to the Securities, the Corporate Trust Office
of the Trustee.



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



     “Preferred Securities” has the meaning specified in the first recital of this
Indenture.



     “Proceeding” has the meaning specified in Section 12.2(b).



     “Property Trustee” means the Person identified as the “Property Trustee” in the Trust
Agreement, solely in its capacity as Property Trustee of the Trust under the Trust Agreement and
not in its individual capacity, or its successor in interest in such capacity, or any successor
Property Trustee appointed as therein provided.



     “Purchase Agreement” means the Preferred Securities Purchase Agreement, dated as of
the date hereof, among the Company, the Trust and Kodiak Warehouse LLC, as may be amended or
supplemented from time to time.



     “Rating Agencies” shall mean (i) Standard & Poor’s Ratings Group, a division of The
McGraw-Hill Companies, Inc., (ii) Moody’s Investor Services, Inc. and (iii) Fitch/IBCA, or, in each
case its respective successor.



     “Ratings Downgrade” means the Company’s corporate credit rating issued by Standard &
Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and any other Rating Agency
shall be below B+ (or its equivalent) as determined pursuant to the ratings affirmation process
required by Section 10.6(c) (including by private letter rating, shadow rating or
otherwise).



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



     “Redemption Price” means, when used with respect to any Security to be redeemed, in
whole or in part, the Special Redemption Price, the Mandatory Redemption Price or the Optional
Redemption Price, as applicable, at which such Security or portion thereof is to be redeemed as
fixed by or pursuant to this Indenture.



8









 





     “Reference Banks” has the meaning specified in Schedule A.



     “Regular Record Date” for the interest payable on any Interest Payment Date with
respect to the Securities means the date that is fifteen (15) days preceding such Interest Payment
Date (whether or not a Business Day).



     “Responsible Officer” means, when used with respect to the Trustee, the officer in the
corporate trust department of the Trustee having direct responsibility for the administration of
this Indenture.



     “Rights Plan” means a plan of the Company providing for the issuance by the Company to
all holders of its common Equity Interests of rights entitling the holders thereof to subscribe for
or purchase shares or units of any class or series of Equity Interests in the Company which rights
(i) are deemed to be transferred with such Equity Interests and (ii) are also issued in respect of
future issuances of such Equity Interests, in each case until the occurrence of a specified event
or events.



     “Securities” or “Security” means any debt securities or debt security, as the
case may be, authenticated and delivered under this Indenture.



     “Securities Act” means the Securities Act of 1933 or any successor statute thereto, in
each case as amended from time to time.



     “Securities Register” and “Securities Registrar” have the respective meanings
specified in Section 3.5(a).



     “Senior Debt” means the principal of and any premium and interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for reorganization
relating to the Company, whether or not such claim for post-petition interest is allowed in such
proceeding) all Debt of the Company, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless it is provided in the instrument creating or evidencing such Debt or
pursuant to which such Debt is outstanding, that such obligations are not superior in right of
payment to the Securities issued under this Indenture; provided, that Senior Debt shall not
be deemed to include (x) any other debt securities (and guarantees, if any, in respect of such debt
securities) issued to any trust other than the Trust (or a trustee of any such trust), partnership
or other entity affiliated with the Company that is a financing vehicle of the Company (a
“financing entity”) in connection with the issuance by such financing entity of equity
securities or other securities pursuant to an instrument that are, or securities that are treated
as equity capital that are, not superior in right of payment to the Securities issued under this
Indenture or (y) any junior subordinated notes, bonds or debentures issued by the Company to any
third party that is not affiliated with the Company, that have terms and conditions that are
substantially similar to the Securities issued under this Indenture and are not superior in right
of payment to the Securities issued under this Indenture.



     “Special Event” means the occurrence of 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 3.1(c).



9









 





     “Special Redemption Price” has the meaning specified in Section 11.2.



     “Stated Maturity” means September 30, 2036.



     “Subsidiary” means a Person more than fifty percent (50%) of the outstanding voting
stock or other voting interests of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For purposes of
this definition, “voting stock” means stock that ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.



     “Tax Event” means the receipt by the Company of an Opinion of Counsel experienced in
such matters 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 or (b) any judicial decision or any
official administrative pronouncement (including any private letter ruling, technical advice
memorandum or field service advice) or regulatory procedure, including any notice or announcement
of intent to adopt any such pronouncement or procedure (an “Administrative Action”),
regardless of whether such judicial decision or Administrative Action is issued to or in connection
with a proceeding involving the Company or the Trust and whether or not subject to review or
appeal, which amendment, change, judicial decision or Administrative Action is enacted, promulgated
or announced, in each case, on or after the date of issuance of the Securities, there is more than
an insubstantial risk that (i) the Trust is, or will be within ninety (90) days of the date of such
opinion, subject to United States federal income tax with respect to income received or accrued on
the Securities, (ii) interest payable by the Company on the Securities is not, or within ninety
(90) days of the date of such opinion, will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes or (iii) the Trust is, or will be within ninety (90)
days of the date of such opinion, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.



     “Trust” has the meaning specified in the first recital of this Indenture.



     “Trust Agreement” means the Amended and Restated Trust Agreement executed and
delivered by the Company, the Property Trustee, Wells Fargo Delaware Trust Company, as Delaware
Trustee and the Administrative Trustees named therein, contemporaneously with the execution and
delivery of this Indenture, for the benefit of the holders of the Trust Securities, as amended or
supplemented from time to time.



     “Trustee” means the Person named as the “Trustee” in the first paragraph of this
Indenture, solely in its capacity as such and not in its individual capacity, until a successor
Trustee shall have become such pursuant to the applicable provisions of this Indenture, and,
thereafter, “Trustee” shall mean or include each Person who is then a Trustee hereunder.



     “Trust Indenture Act” means the Trust Indenture Act of 1939 or any successor statute
thereto, in each case as amended from time to time.



     “Trust Securities” has the meaning specified in the first recital of this Indenture.



10









 





     Section 1.2 Compliance Certificate and Opinions.



     (a) Upon any application or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee
an Officers’ Certificate stating that all conditions precedent (including covenants compliance with
which constitutes a condition precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent (including covenants compliance with which constitutes a
condition precedent), if any, have been complied with, except that, in the case of any such
application or request as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.



     (b) Every certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than the certificate provided pursuant to Section
10.3) shall include:




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




     (ii) a brief statement as to the nature and scope of the review or inquiry upon which
the statements or opinions of such individual contained in such certificate or opinion are
based;




     (iii) a statement that, in the opinion of such individual, he or she has made such
review or inquiry as is necessary to enable him or her to express an informed opinion as to
whether or not such condition or covenant has been complied with; and




     (iv) a statement as to whether, in the opinion of such individual, such condition or
covenant has been complied with in all material respects.



     Section 1.3 Forms of Documents Delivered to Trustee.



     (a) 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.



     (b) 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 after reasonable inquiry should know, that the certificate or opinion or
representations with respect to matters upon which his or her 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



11









 







of the Company, unless such counsel knows, or after reasonable inquiry should know, that the
certificate or opinion or representations with respect to such matters are erroneous.



     (c) 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.



     (d) Whenever, subsequent to the receipt by the Trustee of any Board Resolution, Officers’
Certificate, Opinion of Counsel or other document or instrument, a clerical, typographical or other
inadvertent or unintentional error or omission shall be discovered therein, a new document or
instrument may be substituted therefor in corrected form with the same force and effect as if
originally received in the corrected form and, irrespective of the date or dates of the actual
execution and/or delivery thereof, such substitute document or instrument shall be deemed to have
been executed and/or delivered as of the date or dates required with respect to the document or
instrument for which it is substituted. Without limiting the generality of the foregoing, any
Securities issued under the authority of such defective document or instrument shall nevertheless
be the valid obligations of the Company entitled to the benefits of this Indenture equally and
ratably with all other Outstanding Securities.



     Section 1.4 Acts of Holders.



     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given to 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 thereof duly appointed in writing and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments (including any appointment of an
agent) is or 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 conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section 1.4.



     (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 the certificate of any 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 or her the execution thereof. Where such
execution is by a Person acting in other than his or her individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his or her authority. The fact and date of the
execution by any Person 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 deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.



     (c) The ownership of Securities shall be proved by the Securities Register.



     (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by
the Holder of any Security shall bind every future Holder of the same Security and the



12









 







Holder of every Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done 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 Security.



     (e) Without limiting the foregoing, a Holder entitled to take any action hereunder with regard
to any particular Security may do so with regard to all or any part of the principal amount of such
Security 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.



     (f) Except as set forth in paragraph (g) of this Section 1.4, the Company may set any
day as a record date for the purpose of determining the Holders of Outstanding Securities entitled
to give, make or take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken by Holders of
Securities. If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities on such record date, and no other Holders, shall be entitled to take the relevant
action, whether or not such Holders remain Holders after such record date; provided, that
no such action shall be effective hereunder unless taken on or prior to the applicable Expiration
Date by Holders of the requisite principal amount of Outstanding Securities on such record date.
Nothing in this paragraph shall be construed to prevent the Company from setting a new record date
for any action for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action by any Person be
canceled and of no effect). Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of
Securities in the manner set forth in Section 1.6.



     (g) The Trustee may set any day as a record date for the purpose of determining the Holders of
Outstanding Securities entitled to join in the giving or making of (i) any Notice of Default, (ii)
any declaration of acceleration or rescission or annulment thereof referred to in Section
5.2, (iii) any request to institute proceedings referred to in Section 5.7(b) or (iv)
any direction referred to in Section 5.12. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no other Holders, shall
be entitled to join in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided, that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite
principal amount of Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any action for which a record
date has previously been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be canceled and of no effect). Promptly after
any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall
cause notice of such record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Company in writing and to each Holder of Securities in the manner set forth in
Section 1.6.



     (h) With respect to any record date set pursuant to paragraph (f) or (g) of this Section
1.4, the party hereto that sets such record date may designate any day as the “Expiration
Date” and from time to time may change the Expiration Date to any earlier or later day;



13









 




provided, that no such change shall be effective unless notice of the proposed new
Expiration Date is given to the other party hereto in writing, and to each Holder of Securities in
the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant to this Section
1.4, the party hereto that set such record date shall be deemed to have initially designated
the ninetieth (90th) day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding
the foregoing, no Expiration Date shall be later than the one hundred eightieth (180th) day after
the applicable record date.




     Section 1.5 Notices, Etc. to Trustee and Company.



     Any request, demand, authorization, direction, notice, consent, waiver, 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, any holder of Preferred Securities or the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with and
received by the Trustee at its Corporate Trust Office; or



     (b) the Company by the Trustee, any Holder or any holder of Preferred Securities shall be
sufficient for every purpose hereunder if in writing and mailed, first class, postage prepaid, to
the Company addressed to it at New Century Financial Corporation, 18400 Von Karman, Suite 1000,
Irvine, California 92612, c/o General Counsel, 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 to the address of such Holder as it
appears in the Securities 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. If, by reason of the
suspension of or irregularities in regular mail service or for any other reason, it shall be
impossible or impracticable to mail notice of any event to Holders when said notice is required to
be given pursuant to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient 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. 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.



     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 of this Indenture.



14









 





     Section 1.8 Successors and Assigns.



     This Indenture shall be binding upon and shall inure to the benefit of any successor to the
Company and the Trustee, including any successor by operation of law. Except in connection with a
transaction involving the Company that is permitted under Article VIII and pursuant to
which the assignee agrees in writing to perform the Company’s obligations hereunder, the Company
shall not assign its obligations hereunder.



     Section 1.9 Separability.



     If any provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and there shall be deemed substituted for the provision at
issue a valid, legal and enforceable provision as similar as possible to the provision at issue.



     Section 1.10 Benefits of Indenture.



     Nothing in this Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors and assigns, the holders of Senior Debt, the
Holders of the Securities and, to the extent expressly provided in Sections 5.2,
5.8, 5.9, 5.11, 5.13, 9.2 and 10.7, the holders of
Preferred Securities, any benefit or any legal or equitable right, remedy or claim under this
Indenture.



     Section 1.11 Governing Law.



     This Indenture and the rights and obligations of each of the Holders, the Company and the
Trustee shall be construed and enforced in accordance with and governed by the laws of the State of
New York without reference to its conflict of laws provisions (other than Section 5-1401 of the
General Obligations Law).



     Section 1.12 Submission to Jurisdiction.



     ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING
OUT OF THIS INDENTURE MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND
FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS
INDENTURE, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR
LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE.



     Section 1.13 Non-Business Days.



     If any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be
a Business Day, then (notwithstanding any other provision of this Indenture or the Securities)
payment of interest, premium, if any, or principal or other amounts in respect of such



15









 







Security shall not be made on such date, but shall be made on the next succeeding Business Day
(and no interest shall accrue in respect of the amounts whose payment is so delayed for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be,
until such next succeeding Business Day) except that, if such Business Day falls 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 or Redemption Date
or at the Stated Maturity.



     Section 1.14 Counterparts.



     This Indenture 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.



ARTICLE II




SECURITY FORMS




     Section 2.1 Form of Security.



     Any Security issued hereunder shall be in substantially the following form:



NEW CENTURY FINANCIAL CORPORATION




Junior Subordinated Note due 2036




			
	 	 	 
	No.                     
	 	$                     






     New Century Financial Corporation, a corporation organized and existing under the laws of
Maryland (hereinafter called the “Company,” which term includes any successor Person under
the Indenture hereinafter referred to), for value received, hereby promises to pay to New Century
Capital Trust I, or registered assigns, the principal sum of [PRINCIPAL AMOUNT] ($[                    ])
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT: or such other principal amount represented
hereby as may be set forth in the records of the Securities Registrar hereinafter referred to in
accordance with the Indenture] on September 30, 2036. The Company further promises to pay interest
on said principal sum from and including September 13, 2006, or from and including the most recent
Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears to
but excluding and on March 30, June 30, September 30 and December 30 of each year, commencing
September 30, 2006, or if any such day is not a Business Day, on the next succeeding Business Day
(and no interest shall accrue in respect of the amounts whose payment is so delayed for the period
from and after such Interest Payment Date until such next succeeding Business Day), except that, if
such Business Day falls 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, at a fixed rate equal to 8.65% per annum through the Interest Payment Date
in September 2011 (“Fixed Rate Period”) and thereafter at a variable rate equal to LIBOR
plus 3.50% per annum, together with Additional Tax Sums, if any, as provided in Section 10.5 of the



16









 




Indenture, until the principal hereof is paid or duly provided for or made available for
payment; provided, that any overdue principal, premium, if any, or Additional Tax Sums and
any overdue installment of interest shall bear Additional Interest at a fixed rate equal to 8.65%
per annum through the interest payment date in September 2011 and thereafter at a variable rate
equal to LIBOR plus 3.50% per annum (to the extent that the payment of such interest shall be
legally enforceable), compounded quarterly, from and including the dates such amounts are due to
but excluding the dates such amounts are paid or made available for payment, and such interest
shall be payable on demand.




     During the Fixed Rate Period, the amount of interest payable for any interest period shall be
computed on the basis of a three hundred sixty (360)-day year of twelve (12) thirty (30)-day months
and the amount payable for any partial interest period shall be computed on the basis of the actual
number of days elapsed in a three hundred sixty (360)-day year of twelve (12) thirty (30)-day
months. Upon expiration of the Fixed Rate Period, the amount of interest payable for any interest
period will be computed on the basis of a three hundred sixty (360)-day year and the actual number
of days elapsed in the relevant interest period. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date shall, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest installment. Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) 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
Holders of Securities not less than ten (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
exchange or automated quotation system on which the Securities may be listed, traded or quoted and
upon such notice as may be required by such exchange or automated quotation system, all as more
fully provided in the Indenture.



     During an Event of Default of the type described in Section 5.1(a) or (b) of the Indenture or
an “Event of Default” of the type described in clause (b) of the definition of the term “Event of
Default” in the Trust Agreement, the Company shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any
of the Company’s Equity Interests or (ii) make any payment of principal of or any interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu in all respects with or junior in interest to the Securities (other than (a)
repurchases, redemptions or other acquisitions of the Company’s Equity Interests in connection with
(1) any employment contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, (2) a dividend reinvestment or
Equity Interests purchase plan, (3) the issuance of Equity Interests of the Company (or securities
convertible into or exercisable for such Equity Interests) as consideration in an acquisition
transaction entered into prior to the applicable Event of Default, or (4) actions taken pursuant to
the provisions of the charter of the Company which are designed to maintain the Company’s continued
status as a real estate investment trust for income tax purposes, (b) as a result of an exchange,
conversion, reclassification or combination of any class or series of the Company’s Equity
Interests (or any Equity Interests of a Subsidiary (as defined in the Indenture) of the Company)
for, of or with any class or series of the Company’s Equity Interests or of any class or



17









 







series of the Company’s indebtedness for any class or series of the Company’s Equity
Interests, (c) the purchase of fractional interests in the Company’s Equity Interests pursuant to
the conversion or exchange provisions of such Equity Interests or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any Rights Plan, the issuance of
rights, Equity Interests or other property under any Rights Plan, or the redemption or repurchase
of rights pursuant thereto or (e) any dividend in the form of Equity Interests, warrants, options
or other rights where the dividend Equity Interest or the Equity Interest issuable upon exercise of
such warrants, options or other rights is the same Equity Interest as that on which the dividend is
being paid or ranks pari passu with or junior to such Equity Interest).



     Payment of principal of, premium, if any, and interest on this Security shall be made 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. Payments of principal, premium, if any, and interest due at
the Maturity of this Security shall be made at the Place of Payment upon surrender of such
Securities to the Paying Agent, and payments of interest shall be made, subject to such surrender
where applicable, by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Paying Agent at least ten (10) Business
Days prior to the date for payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case such payments shall
be made by check mailed to the address of such Person as such address shall appear in the Security
Register. Notwithstanding the foregoing, so long as the Holder of this Security is the Property
Trustee, payment of principal of, premium, if any, and interest (including any overdue installment
of interest and Additional Tax Sums, if any) on this Security will be made at such place and to
such account as may be designated by the Property Trustee.



     The indebtedness evidenced by this Security is, to the extent provided in the Indenture,
subordinate and junior in right of payment to the prior payment in full of all Senior Debt, and
this Security is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his, her or its behalf to take such actions
as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his, her or its attorney-in-fact for any and all such purposes. Each Holder hereof, by
his, her or its acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior Debt, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.



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


[FORM OF REVERSE OF SECURITY]




     This Security is one of a duly authorized issue of securities of the Company (the
“Securities”) issued under the Junior Subordinated Indenture, dated as of September 13,
2006 (the “Indenture”), between the Company and Wells Fargo Bank, N.A., as Trustee (in such
capacity, 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




18









 




respective rights, limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the Holders of the Securities, the holders of Senior Debt and the holders of the Preferred
Securities, and of the terms upon which the Securities are, and are to be, authenticated and
delivered.




     All terms used in this Security that are defined in the Indenture or in the Amended and
Restated Trust Agreement, dated as of September 13, 2006 (as modified, amended or supplemented from
time to time, the “Trust Agreement”), relating to New Century Capital Trust I (the
“Trust”) among the Company, as Depositor, the Trustees named therein and the Holders from
time to time of the Trust Securities issued pursuant thereto, shall have the meanings assigned to
them in the Indenture or the Trust Agreement, as the case may be.



     The Company may, on any Interest Payment Date, at its option, upon not less than thirty (30)
days’ nor more than sixty (60) days’ written notice to the Holders of the Securities (unless a
shorter notice period shall be satisfactory to the Trustee) on or after September 30, 2011 and
subject to the terms and conditions of Article XI of the Indenture, redeem this Security in whole
at any time or in part from time to time at a Redemption Price equal to one hundred percent (100%)
of the principal amount hereof, together, in the case of any such redemption, with accrued
interest, including any Additional Interest, through but excluding the date fixed as the Redemption
Date



     In addition, prior to September 30, 2011, upon the occurrence and during the continuation of a
Special Event, the Company may, at its option, upon not less than thirty (30) days’ nor more than
sixty (60) days’ written notice to the Holders of the Securities (unless a shorter notice period
shall be satisfactory to the Trustee), redeem this Security, in whole but not in part and subject
to the terms and conditions of Article XI of the Indenture, at a Redemption Price equal to one
hundred seven and one-half percent (107.5%) of the principal amount hereof, together, in the case
of any such redemption, with accrued interest, including any Additional Interest, through but
excluding the date fixed as the Redemption Date.



     Further, the Company shall, upon receipt of a Change of Control Election with respect to a
Change of Control which occurs after the expiration of the Fixed Rate Period, redeem the Securities
in whole on a date no more than thirty (30) days after receipt of the Change of Control Election,
at a Redemption Price equal to one hundred percent (100%) of the principal amount thereof,
together, in the case of any such redemption, with accrued and unpaid interest, including any
Additional Interest, to but excluding the date fixed as the Redemption Date.



     In the event of redemption of this Security in part only, a new Security or Securities for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation
hereof. If less than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the
Trustee from the Outstanding Securities not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security.



     The Indenture permits, with certain exceptions as therein provided, the Company and the
Trustee at any time to enter into a supplemental indenture or indentures for the purpose of



19









 







modifying in any manner the rights and obligations of the Company and of the Holders of the
Securities, with the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities. The Indenture also contains provisions permitting Holders of specified
percentages in principal amount of the Securities, on behalf of the Holders of all Securities, 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
Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security 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 Security.



     No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of and any premium, if any, and interest, including any Additional Interest (to the
extent legally enforceable), on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.



     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is restricted to transfers to “Qualified Purchasers” (as such term is
defined in the Investment Company Act of 1940, as amended) and is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the office or agency of
the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Securities Registrar and duly executed by,
the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more
new Securities, of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.



     The Securities are issuable only in registered form without coupons in minimum denominations
of $100,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture
and subject to certain limitations therein set forth, Securities are exchangeable for a like
aggregate principal amount of Securities and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.



     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.



     The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.



     The Company and, by its acceptance of this Security or a beneficial interest herein, the
Holder of, and any Person that acquires a beneficial interest in, this Security agree that, for
United States federal, state and local tax purposes, it is intended that this Security constitute
indebtedness.



20









 





     This Security shall be construed and enforced in accordance with and governed by the laws of
the State of New York without reference to its conflict of laws provisions (other than Section
5-1401 of the General Obligations Law).



     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on this ___day
of ___, 20___.



	 	 	 	 	 
	 	NEW CENTURY FINANCIAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




     Section 2.2 Restrictive Legend.



     (a) Any Security issued hereunder shall bear a legend in substantially the following form:




[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.




UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]




THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND



21









 







SUCH SECURITIES, AND ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER
THE SECURITIES ACT.




THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO
THE COMPANY, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS (a) A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) AND (b) A “QUALIFIED
PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED), OR (III) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A “QUALIFIED
PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED) AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.




THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE
PRINCIPAL AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES
FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON
SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.




THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR SIMILAR LAW (EACH A
“PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY
PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER



22









 







OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE
AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION
3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER
PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.”



     (b) The above legends shall not be removed from any Security unless there is delivered to the
Company satisfactory evidence, which may include an Opinion of Counsel, as may be reasonably
required to ensure that any future transfers thereof may be made without restriction under or
violation of the provisions of the Securities Act and other applicable law. Upon provision of such
satisfactory evidence, the Company shall execute and deliver to the Trustee, and the Trustee shall
deliver, upon receipt of a Company Order directing it to do so, a Security that does not bear the
legend.



     Section 2.3 Form of Trustee’s Certificate of Authentication.



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



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



Dated:




	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., not in its individual

capacity, but solely as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




     Section 2.4 Temporary Securities.



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



     (b) If temporary Securities are issued, the Company will cause definitive Securities to be
prepared without unreasonable delay. After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for that purpose without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive
Securities of any authorized denominations having the same Original



23









 







Issue Date and Stated Maturity and having the same terms as such temporary Securities. Until
so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under
this Indenture as definitive Securities.



     Section 2.5 Definitive Securities.



     The Securities issued on the Original Issue Date shall be in definitive form. The definitive
Securities shall be printed, lithographed or engraved, or produced by any combination of these
methods, if required by any securities exchange on which the Securities may be listed, on a steel
engraved border or steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as determined by the
officers executing such Securities, as evidenced by their execution of such Securities.



ARTICLE III




THE SECURITIES




     Section 3.1 Payment of Principal and Interest.



     (a) The unpaid principal amount of the Securities shall bear interest at a fixed rate equal to
8.65% per annum to but excluding the Interest Payment Date in September 2011 and thereafter at a
variable rate equal to LIBOR plus 3.50% per annum until paid or duly provided for, such interest to
accrue from and including the Original Issue Date or from and including the most recent Interest
Payment Date to which interest has been paid or duly provided for, and any overdue principal,
premium, if any, or Additional Tax Sums and any overdue installment of interest shall bear
Additional Interest at the rate equal to a fixed rate equal to 8.65% per annum to but excluding the
Interest Payment Date in September 2011 and thereafter at a variable rate equal to LIBOR plus 3.50%
per annum compounded quarterly from and including the dates such amounts are due to but excluding
the dates such amounts are paid or funds for the payment thereof are made available for payment.



     (b) Interest and Additional Interest on any Security that is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, except that interest and any Additional Interest payable on
the Stated Maturity (or any date of principal repayment upon early maturity) of the principal of a
Security or on a Redemption Date shall be paid to the Person to whom principal is paid. The initial
payment of interest on any Security that is issued between a Regular Record Date and the related
Interest Payment Date shall be payable as provided in such Security.



     (c) Any interest on any Security that is due and payable, but is not timely paid or duly
provided for, on any Interest Payment Date for Securities (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the registered Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in paragraph (i) or (ii) below:



24









 






     (i) The Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities (or their respective Predecessor Securities) are registered at
the close of business on a special record date for the payment of such Defaulted Interest (a
“Special Record Date”), which shall be fixed in the following manner. At least
thirty (30) days prior to the date of the proposed payment, the Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment, 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. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which
shall be not more than fifteen (15) days and not less than ten (10) days prior to the date
of the proposed payment and not less than ten (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 of a Security at the address of such
Holder as it appears in the Securities Register not less than ten (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 Securities (or their respective Predecessor Securities) are
registered on such Special Record Date; or




     (ii) 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 Securities may be listed, traded or quoted and, upon such notice as may
be required by such exchange or automated quotation system (or by the Trustee if the
Securities are not listed), if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such payment shall be deemed practicable by the
Trustee.



     (d) Payments of interest on the Securities shall include interest accrued to but excluding the
respective Interest Payment Dates. During the Fixed Rate Period, the amount of interest payable
for any partial interest period shall be computed on the basis of a three hundred sixty (360)-day
year of twelve (12) thirty (30)-day months and the amount payable for any partial interest period
shall be computed on the basis of the actual number of days elapsed in a three hundred sixty
(360)-day year of twelve (12) thirty (30)-day months. Upon expiration of the Fixed Rate Period,
the amount of interest payable for any interest period will be computed on the basis of a three
hundred sixty (360)-day year and the actual number of days elapsed in the relevant interest period.



     (e) Payment of principal of, premium, if any, and interest on the Securities shall be made 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. Payments of principal, premium, if any, and interest due at
the Maturity of such Securities shall be made at the Place of Payment upon



25









 







surrender of such Securities to the Paying Agent and payments of interest shall be made,
subject to such surrender where applicable, by wire transfer at such place and to such account at a
banking institution in the United States as may be designated in writing to the Paying Agent at
least ten (10) Business Days prior to the date for payment by the Person entitled thereto unless
proper written transfer instructions have not been received by the relevant record date, in which
case such payments shall be made by check mailed to the address of such Person as such address
shall appear in the Security Register. Notwithstanding the foregoing, so long as the holder of the
Securities is the Property Trustee, the payment of principal of, premium, if any, and interest
(including any overdue installment of interest and Additional Tax Sums, if any) on the Securities
will be made at such place and to such account as may be designated by the Property Trustee.



     (f) The parties hereto acknowledge and agree that the holders of the Preferred Securities have
certain rights to direct the Company to modify the Interest Payment Dates and corresponding
Redemption Date and Stated Maturity of the Securities or a portion of the Securities pursuant to
Section 6(m) of the Purchase Agreement. In the event any such modifications are made to the
Securities or a portion of the Securities, appropriate changes to the form of Security set forth in
Article II hereof shall be made prior to the issuance and authentication of new or
replacement Securities. Any such modification of the Interest Payment Dates and corresponding
Redemption Date and Stated Maturity with respect to any Securities or tranche of Securities shall
not require or be subject to the consent of the Trustee. All expenses in connection with such
modification shall be paid by the Purchaser.



     (g) Subject to the foregoing provisions of this Section 3.1, each Security delivered
under this Indenture upon transfer of or in exchange for or in lieu of any other Security shall
carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other
Security.



     Section 3.2 Denominations.



     The Securities shall be in registered form without coupons and shall be issuable in minimum
denominations of One Hundred Thousand Dollars ($100,000) and any integral multiple of One Thousand
Dollars ($1,000) in excess thereof.



     Section 3.3 Execution, Authentication, Delivery and Dating.



     (a) At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities in an aggregate principal amount (including all then Outstanding
Securities) not in excess of Fifty-One Million Five Hundred Forty-Five Thousand Dollars
($51,545,000) executed by the Company to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities, and the Trustee in accordance with
the Company Order shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and shall be fully protected in relying upon:




     (i) a copy of any Board Resolution relating thereto; and



26









 






     (ii) an Opinion of Counsel stating that: (1) such Securities, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute, and the Indenture
constitutes, valid and legally binding obligations of the Company, each enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to or
affecting creditors’ rights and to general equity principles; (2) the Securities have been
duly authorized and executed by the Company and have been delivered to the Trustee for
authentication in accordance with this Indenture; (3) the Securities are not required to be
registered under the Securities Act; and (4) the Indenture is not required to be qualified
under the Trust Indenture Act.



     (b) The Securities shall be executed on behalf of the Company by its Chairman of the Board,
its Vice Chairman of the Board, its Chief Executive Officer, its President or one of its Executive
Vice Presidents. The signature of any of these officers on the Securities may be manual or
facsimile. Securities 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 Securities or did not hold such offices at the date of such Securities.



     (c) No Security shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Security a certificate of authentication
substantially in the form provided for herein executed by the Trustee by the manual signature of
one of its authorized signatories, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company shall have delivered
such Security to the Trustee for cancellation as provided in Section 3.8, for all purposes
of this Indenture such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.



     (d) Each Security shall be dated the date of its authentication.



     Section 3.4 Global Securities.



     (a) Upon the election of the Holder after the Original Issue Date, which election need not be
in writing, the Securities owned by such Holder shall be issued in the form of one or more Global
Securities registered in the name of the Depositary or its nominee. Each Global Security issued
under this Indenture shall be registered in the name of the Depositary designated by the Company
for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof
or custodian therefor, and each such Global Security shall constitute a single Security for all
purposes of this Indenture.



     (b) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged
in whole or in part for registered Securities, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (i) such Depositary advises the Trustee and the



27









 







Company in writing that such Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and no qualified successor is
appointed by the Company within ninety (90) days of receipt by the Company of such notice, (ii)
such Depositary ceases to be a clearing agency registered under the Exchange Act and no successor
is appointed by the Company within ninety (90) days after obtaining knowledge of such event, (iii)
the Company executes and delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary or (iv) an Event of Default shall have
occurred and be continuing. Upon the occurrence of any event specified in clause (i), (ii), (iii)
or (iv) above in this Section 3.4(b), the Trustee shall notify the Depositary and instruct
the Depositary to notify all owners of beneficial interests in such Global Security of the
occurrence of such event and of the availability of Securities to such owners of beneficial
interests requesting the same. The Trustee may conclusively rely, and be protected in relying,
upon the written identification of the owners of beneficial interests furnished by the Depositary,
and shall not be liable for any delay resulting from a delay by the Depositary. Upon the issuance
of such Securities and the registration in the Securities Register of such Securities in the names
of the Holders of the beneficial interests therein, the Trustees shall recognize such holders of
beneficial interests as Holders.



     (c) If any Global Security is to be exchanged for other Securities or canceled in part, or if
another Security is to be exchanged in whole or in part for a beneficial interest in any Global
Security, then either (i) such Global Security shall be so surrendered for exchange or cancellation
as provided in this Article III or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to (x) the portion thereof to be so exchanged or canceled or (y) the
principal amount of such other Security to be so exchanged for a beneficial interest therein, as
the case may be, by means of an appropriate adjustment made on the records of the Securities
Registrar, whereupon the Trustee, in accordance with the Applicable Depositary Procedures, shall
instruct the Depositary or its authorized representative to make a corresponding adjustment to its
records. Upon any such surrender or adjustment of a Global Security by the Depositary, accompanied
by registration instructions, the Company shall execute and, upon receipt of a Company Order, the
Trustee shall authenticate and deliver any Securities issuable in exchange for such Global Security
(or any portion thereof) in accordance with the instructions of the Depositary. The Trustee shall
not be liable for any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions.



     (d) Every Security authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, a Global Security or any portion thereof shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless such Security is registered in
the name of a Person other than the Depositary for such Global Security or a nominee thereof.



     (e) Securities distributed to holders of Book-Entry Preferred Securities (as defined in the
Trust Agreement) upon the dissolution of the Trust shall be distributed in the form of one or more
Global Securities registered in the name of a Depositary or its nominee, and deposited with the
Securities Registrar, as custodian for such Depositary, or with such Depositary, for credit by the
Depositary to the respective accounts of the beneficial owners of the Securities represented
thereby (or such other accounts as they may direct). Securities distributed to holders of Preferred
Securities other than Book-Entry Preferred Securities upon the dissolution of the Trust shall not



28









 







be issued in the form of a Global Security or any other form intended to facilitate book-entry
trading in beneficial interests in such Securities.



     (f) The Depositary or its nominee, as the registered owner of a Global Security, shall be the
Holder of such Global Security for all purposes under this Indenture and the Securities, and owners
of beneficial interests in a Global Security shall hold such interests pursuant to the Applicable
Depositary Procedures. Accordingly, any such owner’s beneficial interest in a Global Security
shall be shown only on, and the transfer of such interest shall be effected only through, records
maintained by the Depositary or its nominee or its Depositary Participants. The Securities
Registrar and the Trustee shall be entitled to deal with the Depositary for all purposes of this
Indenture relating to a Global Security (including the payment of principal and interest thereon
and the giving of instructions or directions by owners of beneficial interests therein and the
giving of notices) as the sole Holder of the Security and shall have no obligations to the owners
of beneficial interests therein. Neither the Trustee nor the Securities Registrar shall have any
liability in respect of any transfers effected by the Depositary.



     (g) The rights of owners of beneficial interests in a Global Security shall be exercised only
through the Depositary and shall be limited to those established by law and agreements between such
owners and the Depositary and/or its Depositary Participants.



     (h) No holder of any beneficial interest in any Global Security held on its behalf by a
Depositary shall have any rights under this Indenture with respect to such Global Security, and
such Depositary may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the owner of such Global Security for all purposes whatsoever. None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial ownership interests
of a Global Security or maintaining, supervising or reviewing any records relating to such
beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by a Depositary or impair, as between a
Depositary and such holders of beneficial interests, the operation of customary practices governing
the exercise of the rights of the Depositary (or its nominee) as Holder of any Security.



     Section 3.5 Registration, Transfer and Exchange Generally.



     (a) The Trustee shall cause to be kept at the Corporate Trust Office a register (the
“Securities Register”) in which the registrar and transfer agent with respect to the
Securities (the “Securities Registrar”), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Securities and of transfers and exchanges of
Securities. The Trustee shall at all times also be the Securities Registrar. The provisions of
Article VI shall apply to the Trustee in its role as Securities Registrar.



     (b) Subject to compliance with Section 2.2(b), upon surrender for registration of
transfer of any Security at the offices or agencies of the Company designated for that purpose the
Company shall execute, and the Trustee, upon receipt of a Company Order, shall authenticate



29









 







and deliver, in the name of the designated transferee or transferees, one or more new
Securities of any authorized denominations of like tenor and aggregate principal amount.



     (c) At the option of the Holder, Securities may be exchanged for other Securities of any
authorized denominations, of like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall, upon receipt of a Company Order,
authenticate and deliver, the Securities that the Holder making the exchange is entitled to
receive.



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



     (e) Every Security presented or surrendered for transfer or 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 Securities Registrar, duly executed by the Holder
thereof or such Holder’s attorney duly authorized in writing.



     (f) No service charge shall be made to a Holder for any transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of Securities.



     (g) Neither the Company nor the Trustee shall be required pursuant to the provisions of this
Section 3.5: (i) to issue, register the transfer of or exchange any Security during a
period beginning at the opening of business fifteen (15) days before the day of selection for
redemption of Securities pursuant to Article XI and ending at the close of business on the
day of mailing of the notice of redemption or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of any such Security
to be redeemed in part, any portion thereof not to be redeemed.



     (h) The Company shall designate an office or offices or agency or agencies where Securities
may be surrendered for registration or transfer or exchange. The Company initially designates the
Corporate Trust Office as its office and agency for such purposes. The Company shall give prompt
written notice to the Trustee and to the Holders of any change in the location of any such office
or agency.



     (i) The Securities may only be transferred to a “Qualified Purchaser” as such term is defined
in Section 2(a)(51) of the Investment Company Act.



     (j) Neither the Trustee nor the Securities Registrar shall be responsible for ascertaining
whether any transfer hereunder complies with the registration provisions of or any exemptions from
the Securities Act, applicable state securities laws or the applicable laws of any other
jurisdiction, ERISA, the Code or the Investment Company Act; provided, that if a
certificate is specifically required by the express terms of this Section 3.5 to be
delivered to the Trustee or the Securities Registrar by a Holder or transferee of a Security, the
Trustee and the Securities Registrar shall be under a duty to receive and examine the same to
determine whether



30









 







or not the certificate substantially conforms on its face to the requirements of this
Indenture and shall promptly notify the party delivering the same if such certificate does not
comply with such terms.



     Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities.



     (a) If any mutilated Security is surrendered to the Trustee together with such security or
indemnity as may be required by the Company or the Trustee to save each of the Company and the
Trustee harmless, the Trustee shall upon receipt of a Company Order authenticate and deliver in
exchange therefor a new Security of like tenor and aggregate principal amount and bearing a number
not contemporaneously outstanding.



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



     (c) If any such mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, the Company in its discretion may, instead of issuing a new Security, pay such
Security.



     (d) Upon the issuance of any new Security under this Section 3.6, 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.



     (e) Every new Security issued pursuant to this Section 3.6 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the mutilated, destroyed, lost or stolen Security 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 Securities duly issued hereunder.



     (f) The provisions of this Section 3.6 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 Securities.



     Section 3.7 Persons Deemed Owners.



     The Company, the Trustee and any agent of the Company or the Trustee shall treat the Person in
whose name any Security is registered as the owner of such Security for the purpose of receiving
payment of principal of and any interest on such Security and for all other purposes whatsoever,
and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected
by notice to the contrary.



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     Section 3.8 Cancellation.



     All Securities surrendered for payment, redemption, transfer or exchange shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee, and any such Securities and
Securities surrendered directly to the Trustee for any such purpose shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever,
and all Securities so delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided in this Section
3.8, except as expressly permitted by this Indenture. All canceled Securities shall be
retained or disposed of by the Trustee in accordance with its customary practices and the Trustee
shall deliver to the Company a certificate of such disposition.



     Section 3.9 Agreed Tax Treatment.



     Each Security issued hereunder shall provide that the Company and, by its acceptance or
acquisition of a Security or a beneficial interest therein, the Holder of, and any Person that
acquires a direct or indirect beneficial interest in, such Security, intend and agree to treat such
Security as indebtedness of the Company for United States federal, state and local tax purposes and
to treat the Preferred Securities (including but not limited to all payments and proceeds with
respect to the Preferred Securities) as an undivided beneficial ownership interest in the
Securities (and any other Trust property) (and payments and proceeds therefrom, respectively) for
United States federal, state and local tax purposes. The provisions of this Indenture shall be
interpreted to further this intention and agreement of the parties.



     Section 3.10 CUSIP Numbers.



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



ARTICLE IV




SATISFACTION AND DISCHARGE




     Section 4.1 Satisfaction and Discharge of Indenture.



     This Indenture shall, upon Company Request, cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein expressly provided
for and as otherwise provided in this Section 4.1) 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



32









 





(a) either





     (i) all Securities theretofore authenticated and delivered (other than (A) Securities
that have been mutilated, destroyed, lost or stolen and that have been replaced or paid as
provided in Section 3.6 and (B) Securities 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 10.2) have been
delivered to the Trustee for cancellation; or




     (ii) all such Securities not theretofore delivered to the Trustee for cancellation




     (A) have become due and payable; or




     (B) will become due and payable at their Stated Maturity within one (1) year of
the date of deposit; or




     (C) are to be called for redemption within one (1) year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the Trustee in
the name, and at the expense, of the Company;




and the Company, in the case of subclause (ii)(A), (B) or (C) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for such purpose (x) an amount in
the currency or currencies in which the Securities are payable, (y) Government Obligations
which through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than the due date of any payment, money
in an amount or (z) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge the entire indebtedness
on such Securities not theretofore delivered to the Trustee for cancellation, for principal
and any premium and interest (including any Additional Interest) to the date of such deposit
(in the case of Securities that have become due and payable) or to the Stated Maturity (or
any date of principal repayment upon early maturity) or Redemption Date, as the case may be;



     (b) the Company has paid or caused to be paid all other sums payable hereunder by the Company;
and



     (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel each stating that all conditions precedent herein provided for 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 6.6, the obligations of the Company to any Authenticating Agent
under Section 6.11 and, if money shall have been deposited with the Trustee pursuant to
subclause (a)(ii) of this Section 4.1, the obligations of the Trustee under Section
4.2 and Section 10.2(e) shall survive.



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     Section 4.2 Application of Trust Money.



     Subject to the provisions of Section 10.2(e), all money deposited with the Trustee
pursuant to Section 4.1 shall be held in trust and applied by the Trustee, in accordance
with the provisions of the Securities and this Indenture, to the payment in accordance with
Section 3.1, 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 any premium and interest (including any Additional Interest) for the payment of which
such money or obligations have been deposited with or received by the Trustee. Moneys held by the
Trustee under this Section 4.2 shall not be subject to the claims of holders of Senior Debt
under Article XII.



ARTICLE V




REMEDIES




     Section 5.1 Events of Default.



     “Event of Default” means, wherever used herein with respect to the Securities, any one
of the following events (whatever the reason for such Event of Default and whether it shall 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) default in the payment of any interest upon any Security, including any Additional
Interest in respect thereof, when it becomes due and payable, and continuance of such default for a
period of thirty (30) days; or



     (b) default in the payment of the principal of or any premium on any Security at its Maturity;
or



     (c) default in the performance, or breach, of any covenant or warranty of the Company in this
Indenture and continuance of such default or breach for a period of thirty (30) days (or ninety
(90) days in the case of Section 7.3(b)) after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of
at least twenty-five percent (25%) in aggregate principal amount of the Outstanding Securities a
written notice specifying such default or breach and requiring it to be remedied and stating that
such notice is a “Notice of Default” hereunder (a “Notice of Default”); or



     (d) the entry by a court having jurisdiction in the premises of a decree or order adjudging
the Company a bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the Company under any
applicable federal or state bankruptcy, insolvency, reorganization or other similar law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, 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 sixty (60) consecutive days; or



34









 





     (e) the institution by the Company of proceedings to be adjudicated a bankrupt or insolvent,
or the consent by the Company to the institution of bankruptcy or insolvency proceedings against
it, or the filing by the Company 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 it to the filing of 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 or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due and its willingness to be adjudicated a bankrupt or
insolvent, or the taking of corporate action by the Company in furtherance of any such action; or



     (f) the Trust shall have voluntarily or involuntarily liquidated, dissolved, wound-up its
business or otherwise terminated its existence, except in connection with (i) the distribution of
the Securities to holders of the Preferred Securities in liquidation of their interests in the
Trust, (ii) the redemption of all of the outstanding Preferred Securities or (iii) certain mergers,
consolidations or amalgamations, each as and to the extent permitted by the Trust Agreement.



     Section 5.2 Acceleration of Maturity; Rescission and Annulment.



     (a) If an Event of Default occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than twenty-five percent (25%) in aggregate principal amount of the
Outstanding Securities may declare the principal amount of all the Securities to be immediately due
and payable, by a notice in writing to the Company (and to the Trustee if given by Holders);
provided, that if, upon an Event of Default, the Trustee or the Holders of not less than
twenty-five percent (25%) in principal amount of the Outstanding Securities fail to declare the
principal of all the Outstanding Securities to be immediately due and payable, the holders of at
least twenty-five percent (25%) in aggregate Liquidation Amount of the Preferred Securities then
outstanding shall have the right to make such declaration by a notice in writing to the Property
Trustee, the Company and the Trustee; and upon any such declaration the principal amount of and the
accrued interest (including any Additional Interest) on all the Securities shall become immediately
due and payable.



     (b) At any time after such a declaration of acceleration with respect to Securities has been
made and before a judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter provided in this Article V, the Holders of a majority in aggregate principal
amount of the Outstanding Securities, by written notice to the Trustee, or the holders of a
majority in aggregate Liquidation Amount of the Preferred Securities then outstanding, by written
notice to the Property Trustee, the Company and the Trustee, may rescind and annul such declaration
and its consequences if:




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




     (A) all overdue installments of interest on all Securities;




     (B) any accrued Additional Interest on all Securities;



35









 






     (C) the principal of and any premium on any Securities that have become due
otherwise than by such declaration of acceleration and interest (including any
Additional Interest) thereon at the rate borne by the Securities; and




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




     (ii) all Events of Default with respect to Securities, other than the non-payment of
the principal of Securities that has become due solely by such acceleration, have been cured
or waived as provided in Section 5.13;


provided, that if the Holders of such Securities fail to rescind and annul such declaration
and waive such default, the holders of not less than a majority in aggregate Liquidation Amount of
the Preferred Securities then outstanding shall also have the right to rescind and annul such
declaration and its consequences by written notice to the Property Trustee, the Company and the
Trustee, subject to the satisfaction of the conditions set forth in paragraph (b) of this
Section 5.2. 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.



     (a) The Company covenants that if:




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




     (ii) default is made in the payment of the principal of and any premium on any Security
at the Maturity thereof;


the Company will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities for principal and any
premium and interest (including any Additional Interest) and, in addition thereto, all amounts
owing the Trustee under Section 6.6.




     (b) If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its
own name and as trustee of an express trust, may institute a judicial proceeding for the collection
of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree, and
may enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon the Securities, wherever situated.



     (c) If an Event of Default with respect to Securities occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights of the Holders of
Securities 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



36









 







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 receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or similar judicial proceeding relative to the Company (or any other
obligor upon the Securities), 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 authorized
hereunder 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
first 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 owing the Trustee, any
predecessor Trustee and other Persons under Section 6.6.



     Section 5.5 Trustee May Enforce Claim Without Possession of Securities.



     All rights of action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities 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, subject
to Article XII and after provision for the payment of all the amounts owing the Trustee,
any predecessor Trustee and other Persons under Section 6.6, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been recovered.



     Section 5.6 Application of Money Collected.



     Any money or property collected or to be applied by the Trustee with respect to the Securities
pursuant to this Article V 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 or property on account of
principal or any premium or interest (including any Additional Interest), upon presentation of the
Securities 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, any predecessor Trustee and other
Persons under Section 6.6;



     SECOND: To the payment of all Senior Debt of the Company if and to the extent required by
Article XII;



     THIRD: Subject to Article XII, to the payment of the amounts then due and unpaid upon
the Securities for principal and any premium and interest (including any Additional Interest) in
respect of which or for the benefit of which such money has been collected, ratably, without



37









 







preference or priority of any kind, according to the amounts due and payable on the Securities
for principal and any premium and interest (including any Additional Interest), respectively; and



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



     Section 5.7 Limitation on Suits.



     Subject to Section 5.8, no Holder of any Securities shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or for the appointment of a
custodian, receiver, assignee, trustee, liquidator, sequestrator (or other similar official) or for
any other remedy hereunder, unless:



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



     (b) the Holders of not less than a majority in aggregate principal amount of the Outstanding
Securities shall have made written request to the Trustee to institute proceedings in respect of
such 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 after its receipt of such notice, request and offer of indemnity has failed to
institute any such proceeding for sixty (60) days; and



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



it being understood and intended that no one or more of such Holders shall have any right in any
manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other Holders of Securities, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable benefit of all such
Holders.



     Section 5.8 Unconditional Right of Holders to Receive Principal, Premium, if any, and
Interest; Direct Action by Holders of Preferred Securities.



     Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of and premium,
if any, on such Security at its Maturity and payment of interest (including any Additional
Interest) on such Security when due and payable and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such Holder. Any
registered holder of the Preferred Securities shall have the right, upon the occurrence of an Event
of Default described in Section 5.1(a) or Section 5.1(b), to institute a suit
directly against the Company for enforcement of payment to such holder of principal of, premium, if
any, and interest (including any Additional Interest) on the Securities having a



38









 







principal amount equal to the aggregate Liquidation Amount of the Preferred Securities held by
such holder.



     Section 5.9 Restoration of Rights and Remedies.



     If the Trustee, any Holder or any holder of 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 Preferred Securities, then and in every such case the Company, the Trustee, such Holders
and such holder of Preferred Securities shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee, such Holder and such holder of Preferred Securities shall continue as
though no such proceeding had been instituted.



     Section 5.10 Rights and Remedies Cumulative.



     Except as otherwise provided in Section 3.6(f), no right or remedy herein conferred
upon or reserved to the Trustee or 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 of any Securities or any holder of any
Preferred Security to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article V or by law to the Trustee or to the
Holders and the right and remedy given to the holders of Preferred Securities by Section
5.8 may be exercised from time to time, and as often as may be deemed expedient, by the
Trustee, the Holders or the holders of Preferred Securities, as the case may be.



     Section 5.12 Control by Holders.



     The Holders of not less than a majority in aggregate principal amount of the Outstanding
Securities (or, as the case may be, the holders of a majority in aggregate Liquidation Amount of
the Preferred Securities then outstanding) shall 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:



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




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



     (c) subject to the provisions of Section 6.2, 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,



39









 







reasonably 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.



     (a) The Holders of not less than a majority in aggregate principal amount of the Outstanding
Securities or the holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities then outstanding may waive any past Event of Default hereunder and its
consequences except an Event of Default:




     (i) in the payment of the principal of, premium, if any, or interest (including any
Additional Interest) on any Outstanding Security (unless such Event of Default has been
cured and the Company has paid to or deposited with the Trustee a sum sufficient to pay all
installments of interest (including any Additional Interest) due and past due and all
principal of and premium, if any, on all Outstanding Securities due otherwise than by
acceleration); or




     (ii) in respect of a covenant or provision hereof that under Article IX cannot
be modified or amended without the consent of each Holder of any Outstanding Security.



     (b) Any such waiver shall be deemed to be on behalf of the Holders of all the Outstanding
Securities or, in the case of a waiver by holders of Preferred Securities issued by such Trust, by
all holders of Preferred Securities.



     (c) Upon any such waiver, such Event of Default shall cease to exist and any 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 Event of Default or impair any right consequent
thereon.



     Section 5.14 Undertaking for Costs.



     All parties to this Indenture agree, and each Holder of any Security by his or her acceptance
thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or defenses made by such
party litigant; provided, however, the provisions of this Section 5.14
shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than ten percent (10%) in aggregate principal
amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of or premium, if any, on the Security after the Stated Maturity or
any interest (including any Additional Interest) on any Security after it is due and payable.



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     Section 5.15 Waiver of Usury, 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
usury, stay or extension law wherever enacted, now or at any time hereafter in force, which 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 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.



ARTICLE VI




THE TRUSTEE




     Section 6.1 Corporate Trustee Required.



     There shall at all times be a Trustee hereunder with respect to the Securities. The Trustee
shall be a corporation or national banking association organized and doing business under the laws
of the United States or of any state thereof, authorized to exercise corporate trust powers, having
a combined capital and surplus of at least Fifty Million Dollars ($50,000,000), subject to
supervision or examination by federal or state authority and having an office within the United
States. If such entity publishes reports of condition at least annually, pursuant to law or to the
requirements of such supervising or examining authority, then, for the purposes of this Section
6.1, the combined capital and surplus of such entity 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 6.1,
it shall resign immediately in the manner and with the effect hereinafter specified in this
Article VI.



     Section 6.2 Certain Duties and Responsibilities.



     Except during the continuance of an Event of Default:




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




     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture; provided, that in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they substantially
conform on their face to the requirements of this Indenture.



     (b) If an Event of Default known to the Trustee has occurred and is continuing, the Trustee
shall, prior to the receipt of directions, if any, from the Holders of at least a majority in
aggregate principal amount of the Outstanding Securities (or, if applicable, from the holders of at



41









 







least a majority in aggregate Liquidation Amount of the Preferred Securities then
outstanding), exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in its exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.



     (c) 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 6.2.
To the extent that, at law or in equity, the Trustee has duties and liabilities relating to the
Holders, the Trustee shall not be liable to any Holder or any holder of Preferred Securities for
the Trustee’s good faith reliance on the provisions of this Indenture. The provisions of this
Indenture, to the extent that they restrict the duties and liabilities of the Trustee otherwise
existing at law or in equity, are agreed by the Company and the Holders and the holders of
Preferred Securities to replace such other duties and liabilities of the Trustee.



     (d) No provisions of this Indenture shall be construed to relieve the Trustee from liability
with respect to matters that are within the authority of the Trustee under this Indenture for its
own negligent action, negligent failure to act or willful misconduct, except that:




     (i) the Trustee shall not be liable for any error or judgment made in good faith by an
authorized officer of the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts;




     (ii) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities (or such other
percentage as may be required by the terms hereof) (or, as the case may be, the holders of a
majority in aggregate Liquidation Amount of the Preferred Securities then outstanding)
relating to the time, method and place of conducting any proceeding for any remedy available
to the Trustee under this Indenture; and




     (iii) 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 and money held by the
Trustee in trust hereunder need not be segregated from other funds except to the extent
required by law.



     (e) If at any time the Trustee hereunder is not the same Person as the Property Trustee under
the Trust Agreement:




     (i) whenever a reference is made herein to the dissolution, termination or liquidation
of the Trust, the Trustee shall be entitled to assume that no such dissolution, termination
or liquidation has occurred so long as the Securities are or continue to be registered in
the name of such Property Trustee, and the Trustee shall be charged with



42









 







notice or knowledge of such dissolution, termination or liquidation only upon written
notice thereof given to the Trustee by the Depositor under the Trust Agreement; and




     (ii) the Trustee shall not be charged with notice or knowledge that any Person is a
holder of Preferred Securities or Common Securities issued by the Trust or whether any group
of holders of Preferred Securities constitutes any specified percentage of all outstanding
Preferred Securities for any purpose under this Indenture, unless and until the Trustee is
furnished with a list of holders by such Property Trustee and the aggregate Liquidation
Amount of the Preferred Securities then outstanding. The Trustee may conclusively rely and
shall be protected in relying on such list.



     (f) Notwithstanding Section 1.10, the Trustee shall not, and shall not be deemed to,
owe any fiduciary duty to the holders of any of the Trust Securities issued by the Trust and shall
not be liable to any such holder (other than for the willful misconduct or negligence of the
Trustee) if the Trustee in good faith (i) pays over or distributes to a registered Holder of the
Securities or to the Company or to any other Person, cash, property or securities to which such
holders of such Trust Securities shall be entitled or (ii) takes any action or omits to take any
action at the request of the Holder of such Securities. Nothing in this paragraph shall affect the
obligation of any other such Person to hold such payment for the benefit of, and to pay such amount
over to, such holders of Preferred Securities or Common Securities or their representatives.



     Section 6.3 Notice of Defaults.



     Within ninety (90) days after the occurrence of any default actually known to the Trustee, the
Trustee shall give the Holders notice of such default unless such default shall have been cured or
waived; provided, that except in the case of a default in the payment of the principal of
or any premium or interest on any Securities, the Trustee shall be fully protected in withholding
the notice if and so long as the board of directors, the executive committee or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith determines that withholding
the notice is in the interest of Holders of Securities; and provided, further, that
in the case of any default of the character specified in Section 5.1(c), no such notice to
Holders shall be given until at least thirty (30) days after the occurrence thereof. For the
purpose of this Section 6.3, the term “default” means any event which is, or after
notice or lapse of time or both would become, an Event of Default.



     Section 6.4 Certain Rights of Trustee. 




     Subject to the provisions of Section 6.2:



     (a) the Trustee may conclusively rely and shall be fully protected in acting or refraining
from acting in good faith and in accordance with the terms hereof upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note 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) if (i) in performing its duties under this Indenture the Trustee is required to decide
between alternative courses of action, (ii) in construing any of the provisions of this Indenture



43









 







the Trustee finds ambiguous or inconsistent with any other provisions contained herein or
(iii) the Trustee is unsure of the application of any provision of this Indenture, then, except as
to any matter as to which the Holders are entitled to decide under the terms of this Indenture, the
Trustee shall deliver a notice to the Company requesting the Company’s written instruction as to
the course of action to be taken and the Trustee shall take such action, or refrain from taking
such action, as the Trustee shall be instructed in writing to take, or to refrain from taking, by
the Company; provided, that if the Trustee does not receive such instructions from the
Company within ten (10) Business Days after it has delivered such notice or such reasonably shorter
period of time set forth in such notice the Trustee may, but shall be under no duty to, take such
action, or refrain from taking such action, as the Trustee shall deem advisable and in the best
interests of the Holders, in which event the Trustee shall have no liability except for its own
negligence, bad faith or willful misconduct;



     (c) any request or direction of the Company 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;



     (d) the Trustee may consult with counsel (which counsel may be counsel to the Trustee, the
Company or any of its Affiliates, and may include any of its employees) 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 or any holder of Preferred
Securities pursuant to this Indenture, unless such Holders (or such holders of Preferred
Securities) shall have offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities
that might be incurred by it in compliance with such request or direction, including reasonable
advances as may be requested by the Trustee;



     (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, indenture, note or other paper or document, but the Trustee in its discretion
may make such inquiry or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such inquiry or investigation, it shall be entitled to examine 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, attorneys, custodians or nominees and the
Trustee shall not be responsible for any misconduct or negligence on the part of any such agent,
attorney, custodian or nominee appointed with due care by it hereunder;



     (h) whenever in the administration of this Indenture the Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking any other action with
respect to enforcing any remedy or right hereunder, the Trustees (i) may request instructions from
the Holders (which instructions may only be given by the Holders of the same



44









 







aggregate principal amount of Outstanding Securities as would be entitled to direct the
Trustee under this Indenture in respect of such remedy, right or action), (ii) may refrain from
enforcing such remedy or right or taking such action until such instructions are received and (iii)
shall be protected in acting in accordance with such instructions;



     (i) except as otherwise expressly provided by this Indenture, the Trustee shall not be under
any obligation to take any action that is discretionary under the provisions of this Indenture;



     (j) without prejudice to any other rights available to the Trustee under applicable law, when
the Trustee incurs expenses or renders services in connection with any bankruptcy, insolvency or
other proceeding referred to in clauses (d) or (e) of the definition of Event of Default specified
in Section 5.1, such expenses (including legal fees and expenses of its agents and counsel)
and the compensation for such services are intended to constitute expenses of administration under
any bankruptcy laws or law relating to creditors rights generally;



     (k) 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, conclusively rely upon an Officers’ Certificate addressing such matter, which, upon
receipt of such request, shall be promptly delivered by the Company;



     (l) the Trustee shall not be charged with knowledge of any Event of Default unless either (i)
a Responsible Officer of the Trustee shall have actual knowledge or (ii) the Trustee shall have
received written notice thereof from the Company or a Holder; and



     (m) in the event that the Trustee is also acting as Paying Agent, Authenticating Agent or
Securities Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this
Article VI shall also be afforded such Paying Agent, Authenticating Agent or Securities
Registrar.



     Section 6.5 May Hold Securities.



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



Section 6.6 Compensation; Reimbursement; Indemnity. 




     (a) The Company agrees:




     (i) to pay to the Trustee from time to time reasonable compensation for all services
rendered by it hereunder in such amounts as the Company and the Trustee shall agree from
time to time (which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);



45









 






     (ii) to reimburse the Trustee upon its request for all reasonable expenses,
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, bad faith or willful misconduct; and




     (iii) to the fullest extent permitted by applicable law, to indemnify the Trustee and
its Affiliates, and their officers, directors, stockholders, agents, representatives and
employees for, and to hold them harmless against, any loss, damage, liability, tax (other
than income, franchise or other taxes imposed on amounts paid pursuant to clause (i) or (ii)
of this Section 6.6(a)), penalty, expense or claim of any kind or nature whatsoever
incurred without negligence, bad faith or willful misconduct on its part arising out of or
in connection with the acceptance or administration of the Trust or the performance of the
Trustee’s duties hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its powers or
duties hereunder.



     (b) To secure the Company’s payment obligations in this Section 6.6, the Company
hereby grants and pledges to the Trustee and the Trustee shall have a lien prior to the Securities
on all money or property held or collected by the Trustee, other than money or property held in
trust to pay principal and interest on particular Securities. Such lien shall survive the
satisfaction and discharge of this Indenture or the resignation or removal of the Trustee.



     (c) The obligations of the Company under this Section 6.6 shall survive the
satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee.



     (d) In no event shall the Trustee be liable for any indirect, special, punitive or
consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits,
even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the
form of action.



     (e) In no event shall the Trustee be liable for any failure or delay in the performance of its
obligations hereunder because of circumstances beyond its control, including, but not limited to,
acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo,
government action, including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by this Indenture.



     Section 6.7 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 VI shall become effective until the acceptance of appointment by
the successor Trustee under Section 6.8.



     (b) The Trustee may resign at any time by giving written notice thereof to the Company.



46









 





     (c) Unless an Event of Default shall have occurred and be continuing, the Trustee may be
removed at any time by the Company by a Board Resolution. If an Event of Default shall have
occurred and be continuing, the Trustee may be removed by Act of the Holders of a majority in
aggregate principal amount of the Outstanding Securities, delivered to the Trustee and to the
Company.



     (d) 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 reason, at a time when no Event of Default shall have
occurred and be continuing, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee, and such successor Trustee and the retiring Trustee shall comply with the applicable
requirements of Section 6.8. 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 reason, at a time when an
Event of Default shall have occurred and be continuing, the Holders, by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities, shall promptly appoint a
successor Trustee, and such successor Trustee and the retiring Trustee shall comply with the
applicable requirements of Section 6.8. If no successor Trustee shall have been so
appointed by the Company or the Holders and accepted appointment within sixty (60) days after the
giving of a notice of resignation by the Trustee or the removal of the Trustee in the manner
required by Section 6.8, any Holder who has been a bona fide Holder of a Security for at
least six (6) months (or, if the Securities have been Outstanding for less than six (6) months, the
entire period of such lesser time) may, on behalf of such Holder and all others similarly situated,
and any resigning Trustee may, at the expense of the Company, petition any court of competent
jurisdiction for the appointment of a successor Trustee.



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



     Section 6.8 Acceptance of Appointment by Successor.



     (a) In case of the appointment hereunder of a successor Trustee, each successor Trustee so
appointed 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 the 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.



     (b) Upon request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor Trustee all
rights, powers and trusts referred to in paragraph (a) of this Section 6.8.



47









 





     (c) 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 VI.



     Section 6.9 Merger, Conversion, Consolidation or Succession to Business.



     Any Person into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the parties hereto;
provided, that such Person shall be otherwise qualified and eligible under this Article
VI. In case any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation or as otherwise provided above
in this Section 6.9 to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated, and in case any Securities shall not have been
authenticated, any successor to the Trustee may authenticate such Securities either in the name of
any predecessor Trustee or in the name of such successor Trustee, and in all cases the certificate
of authentication shall have the full force which it is provided anywhere in the Securities or in
this Indenture that the certificate of the Trustee shall have.



     Section 6.10 Not Responsible for Recitals or Issuance of Securities.



     The recitals contained herein and in the Securities, except the Trustee’s certificates of
authentication, shall be taken as the statements of the Company, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the Securities. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or application by the
Company of the Securities or the proceeds thereof.



     Section 6.11 Appointment of Authenticating Agent.



     (a) The Trustee may appoint an Authenticating Agent or Agents with respect to the Securities,
which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon
original issue and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be an
entity organized and doing business under the laws of the United States of America, or of any State
or Territory thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than Fifty Million Dollars
($50,000,000) and subject to supervision or examination by federal or state authority. If such
Authenticating Agent 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
6.11 the combined capital and surplus of such Authenticating Agent shall be deemed



48









 







to be its combined capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 6.11, such Authenticating Agent shall resign immediately in
the manner and with the effect specified in this Section 6.11.



     (b) Any Person into which an Authenticating Agent may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or consolidation to which
such Authenticating Agent shall be a party, or any Person succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor Authenticating Agent
hereunder; provided, that such Person shall be otherwise eligible under this Section
6.11, without the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.



     (c) An Authenticating Agent may resign at any time by giving written notice thereof to the
Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating
Agent by giving written notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the provisions of this
Section 6.11, the Trustee may appoint a successor Authenticating Agent eligible under the
provisions of this Section 6.11, which shall be acceptable to the Company, and shall give
notice of such appointment to all Holders. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an Authenticating Agent.



     (d) The Company agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services under this Section 6.11 in such amounts as the Company and
the Authenticating Agent shall agree from time to time.



     (e) If an appointment of an Authenticating Agent is made pursuant to this Section
6.11, the Securities may have endorsed thereon, in addition to the Trustee’s certificate of
authentication, an alternative certificate of authentication in the following form:



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



Dated:




	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., not in its
 individual capacity, but solely as Trustee

 	 
	 	By:  	 	 
	 	 	Authenticating Agent 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 



49









 






	 	 	 	 	 



ARTICLE VII




HOLDER’S LISTS AND REPORTS BY 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) semiannually, on or before June 30 and December 31 of each year, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders as of a date not more
than fifteen (15) days prior to the delivery thereof; and



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



in each case to the extent such information is in the possession or control of the Company and has
not otherwise been received by the Trustee in its capacity as Securities 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 Securities 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 Securities, and the corresponding rights and privileges of the Trustee,
shall be as provided in the Trust Indenture Act.



     (c) Every Holder of Securities, 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 the disclosure of information as to the names and addresses of the Holders
made pursuant to the Trust Indenture Act.



     Section 7.3 Reports by Company.



     (a) The Company shall, during any period in which it is not subject to Section 13 or 15(d) of
the Exchange Act, furnish to the Holders and to prospective purchasers of Securities, upon their
request, the information required to be furnished pursuant to Rule 144A(d)(4) under the Securities
Act. The delivery requirement set forth in the preceding sentence may be satisfied by compliance
with Section 7.3(b).



     (b) The Company shall furnish to each of (i) the Trustee, (ii) the Holders and to subsequent
holders of Securities reasonably identified to the Company, (iii) Kodiak Capital Management Company
LLC, 2107 Wilson Boulevard, Suite 450, Arlington, Virginia 22201, Attention: Robert M. Hurley or
such other address as designated by Kodiak Capital Management



50









 







Company LLC) and (iv) any beneficial owner of the Securities reasonably identified to the
Company (which identification may be made either by such beneficial owner or by Kodiak Capital
Management Company LLC), a duly completed and executed officer’s financial certificate
substantially and substantively in the form attached hereto as Exhibit A, including the
financial statements referenced in such Exhibit, which certificate and financial statements shall
be so furnished by the Company not later than forty-five (45) days after the end of each of the
first three (3) fiscal quarters of each fiscal year of the Company and not later than ninety (90)
days after the end of each fiscal year of the Company; provided, however, that so
long as the Company is a publicly reporting company, the Company has filed with the Commission the
relevant annual or quarterly report referenced in such certificate and such report is publicly
available on the EDGAR system, then the Company shall not be required to furnish such certificate
and financial statements. The delivery requirements under this Section 7.3(b) may be
satisfied by compliance with Section 8.16(b) of the Trust Agreement.



     (c) If the Company does not intend to file its annual and quarterly information with the
Securities and Exchange Commission (the “Commission”) in electronic form pursuant to
Regulation S-T of the Commission using the Commission’s Electronic Data Gathering, Analysis and
Retrieval (“EDGAR”) system, the Company shall notify the Trustee in the manner prescribed
herein of each such annual and quarterly filing. The Trustee is hereby authorized and directed to
access the EDGAR system for purposes of retrieving the financial information so filed. Compliance
with the foregoing shall constitute delivery by the Company of its financial statements to the
Trustee in compliance with the provisions of Section 314(a) of the Trust Indenture Act, if
applicable. The Trustee shall have no duty to search for or obtain any electronic or other filings
that the Company makes with the Commission, regardless of whether such filings are periodic,
supplemental or otherwise. Delivery of reports, information and documents to the Trustee pursuant
to this Section 7.3(c) shall be solely for purposes of compliance with this Section
7.3(c) and, if applicable, with Section 314(a) of the Trust Indenture Act. The Trustee’s
receipt of such reports, information and documents shall not constitute notice to it of the content
thereof or any matter determinable from the content thereof, including the Company’s compliance
with any of its covenants hereunder, as to which the Trustee is entitled to rely upon Officers’
Certificates.



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 into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:



     (a) if the Company shall consolidate with or merge into another Person or convey, transfer or
lease its properties and assets substantially as an entirety to any Person, the entity formed by
such consolidation or into which the Company is merged or the Person that acquires by conveyance or
transfer, or that leases, the properties and assets of the Company substantially



51









 







as an entirety shall be an entity organized and existing under the laws of the United States
of America or any State or Territory 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 any
premium and interest (including any Additional Interest) on all the Securities and the performance
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, no Event of Default, and no event
that, after notice or lapse of time, or both, would constitute an Event of Default, shall have
happened 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, any such supplemental
indenture, comply with this Article VIII and that all conditions precedent herein provided
for relating to such transaction have been complied with; and the Trustee may rely upon such
Officers’ Certificate and Opinion of Counsel as conclusive evidence that such transaction complies
with this Section 8.1.



     Section 8.2 Successor Company Substituted.



     (a) Upon any consolidation or merger by the Company with or into any other Person, or any
conveyance, transfer or lease by the Company of its properties and assets substantially as an
entirety to any Person in accordance with Section 8.1 and the execution and delivery to the
Trustee of the supplemental indenture described in Section 8.1(a), the successor entity
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 in the event of any such conveyance or transfer, following
the execution and delivery of such supplemental indenture, the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities.



     (b) Such successor Person to the Company may cause to be executed, and may issue either in its
own name or in the name of the Company, any or all of the Securities issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the
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 deliver any
Securities that previously shall have been signed and delivered by the officers of the Company to
the Trustee for authentication, and any Securities that such successor Person thereafter shall
cause to be executed and delivered to the Trustee on its behalf. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture.



     (c) In case of any such consolidation, merger, sale, conveyance or lease, such changes in
phraseology and form may be made in the Securities thereafter to be issued as may be appropriate to
reflect such occurrence.



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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 Securities; or



     (b) to evidence and provide for the acceptance of appointment hereunder by a successor
trustee; or



     (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 or amend any other provisions with
respect to matters or questions arising under this Indenture, which shall not be inconsistent with
the other provisions of this Indenture; provided, that such action pursuant to this clause
(c) shall not adversely affect in any material respect the interests of any Holders or the holders
of the Preferred Securities; or



     (d) to comply with the rules and regulations of any securities exchange or automated quotation
system on which any of the Securities may be listed, traded or quoted; or



     (e) to add to the covenants, restrictions or obligations of the Company or to add to the
Events of Default; provided, that such action pursuant to this clause (e) shall not
adversely affect in any material respect the interests of any Holders or the holders of the
Preferred Securities; or



     (f) to modify, eliminate or add to any provisions of the Indenture or the Securities to such
extent as shall be necessary to ensure that the Securities are treated as indebtedness of the
Company for United States federal income tax purposes; provided, that such action pursuant
to this clause (f) shall not adversely affect in any material respect the interests of any Holders
or the holders of the Preferred Securities.



     Section 9.2 Supplemental Indentures with Consent of Holders.



     (a) With the consent of the Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities, 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 of Securities under this Indenture; provided, that no such
supplemental indenture shall, without the consent of the Holder of each Outstanding Security:



53









 






     (i) change the Stated Maturity of the principal or any premium of any Security or
change the date of payment of any installment of interest (including any Additional
Interest) on any Security, or reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof or change the place of payment
where, or the coin or currency in which, any Security or interest thereon is payable, or
restrict or impair the right to institute suit for the enforcement of any such payment on or
after such date; or




     (ii) reduce the percentage in aggregate principal amount of the Outstanding Securities,
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 any provision of this
Indenture or of defaults hereunder and their consequences provided for in this Indenture; or




     (iii) modify any of the provisions of this Section 9.2, Section 5.13 or
Section 10.7, except to increase any percentage in aggregate principal amount of the
Outstanding Securities, the consent of whose Holders is required for any reason, or to
provide that certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Security;


provided, further, that, so long as any Preferred Securities remain outstanding, no
amendment under this Section 9.2 shall be effective until the holders of a majority in
Liquidation Amount of the Preferred Securities then outstanding shall have consented to such
amendment; and provided, further, that if the consent of the Holder of each
Outstanding Security is required for any amendment under this Indenture, such amendment shall not
be effective until the holder of each Preferred Security then outstanding shall have consented to
such amendment.




     (b) It shall not be necessary for any Act of Holders under this Section 9.2 to approve
the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act
shall approve the substance thereof.



     Section 9.3 Execution of Supplemental Indentures.



     In executing or accepting the additional trusts created by any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully protected in conclusively
relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that all conditions
precedent herein provided for relating to such action have been complied with. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that affects the Trustee’s
own rights, duties, indemnities or immunities under this Indenture or otherwise. Copies of the
final form of each supplemental indenture shall be delivered by the Trustee at the expense of the
Company to each Holder, and, if the Trustee is the Property Trustee, to each holder of Preferred
Securities, promptly after the execution thereof.



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     Section 9.4 Effect of Supplemental Indentures.



     Upon the execution of any supplemental indenture under this Article IX, 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 Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.



     Section 9.5 Reference in Securities to Supplemental Indentures.



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



ARTICLE X




COVENANTS




     Section 10.1 Payment of Principal, Premium, if any, and Interest.



     The Company covenants and agrees for the benefit of the Holders of the Securities that it will
duly and punctually pay the principal of and any premium and interest (including any Additional
Interest) on the Securities in accordance with the terms of the Securities and this Indenture.



     Section 10.2 Money for Security Payments to be Held in Trust.



     (a) If the Company shall at any time act as its own Paying Agent with respect to the
Securities, it will, on or before each due date of the principal of and any premium or interest
(including any Additional Interest) on the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal and any premium or interest
(including 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 in writing of its
failure so to act.



     (b) Whenever the Company shall have one or more Paying Agents, it will, prior to 10:00 A.M.,
New York City time, on each due date of the principal of and any premium or interest (including any
Additional Interest) on any Securities, deposit with a Paying Agent a sum sufficient to pay such
amount, such sum to be held as provided in the Trust Indenture Act and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its failure so to act.



     (c) The Company will cause each Paying Agent for the Securities 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 10.2, that such Paying Agent will (i)
comply with the provisions of this Indenture and the Trust Indenture Act applicable to it as a



55









 







Paying Agent and (ii) during the continuance of any default by the Company (or any other
obligor upon the Securities) in the making of any payment in respect of the Securities, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities.



     (d) 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 trusts 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.



     (e) 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 and any premium or interest (including any Additional
Interest) on any Security and remaining unclaimed for two (2) years after such principal and any
premium 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 on Company Request
to the Company, 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 such Security 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; provided, that the Trustee or such Paying Agent, before being required to make any
such repayment, may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than thirty (30) days
from the date of such publication, any unclaimed balance of such money then remaining will be
repaid to the Company.



     Section 10.3 Statement as to Compliance.



     The Company shall deliver to the Trustee, within one hundred twenty (120) days after the end
of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate
(substantially in the form of Exhibit B) covering the preceding calendar year, stating
whether or not to the knowledge of the signers thereof the Company is in default in the performance
or observance of any of the 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. The delivery requirements of this Section 10.3 may be satisfied by compliance
with Section 8.16(a) of the Trust Agreement.



     Section 10.4 Calculation Agent.



     (a) The Company hereby agrees that for so long as any of the Securities remain Outstanding,
there will at all times be an agent appointed to calculate LIBOR in respect of each



56









 







Interest Payment Date in accordance with the terms of Schedule A (the “Calculation
Agent”). The Company has initially appointed the Property Trustee as Calculation Agent for
purposes of determining LIBOR for each Interest Payment Date. The Calculation Agent may be removed
by the Company at any time. So long as the Property Trustee holds any of the Securities, the
Calculation Agent shall be the Property Trustee, except as described in the immediately preceding
sentence. If the Calculation Agent is unable or unwilling to act as such or is removed by the
Company, the Company will promptly appoint as a replacement Calculation Agent the London office of
a leading bank which is engaged in transactions in three (3)-month Eurodollar deposits in the
international Eurodollar market and which does not control or is not controlled by or under common
control with the Company or its Affiliates. The Calculation Agent may not resign its duties
without a successor having been duly appointed.



     (b) The Calculation Agent shall be required to agree that, as soon as possible after 11:00
A.M. (London time) on each LIBOR Determination Date (as defined in Schedule A), but in no
event later than 11:00 A.M. (London time) on the Business Day immediately following each LIBOR
Determination Date, the Calculation Agent will calculate the interest rate (the interest payment
shall be rounded to the nearest cent, with half a cent being rounded upwards) for the related
Interest Payment Date, and will communicate such rate and amount to the Company, the Trustee, the
Property Trustee (if the Property Trustee is not the Calculation Agent), each Paying Agent and the
Depositary. The Calculation Agent will also specify to the Company the quotations upon which the
foregoing rates and amounts are based and, in any event, the Calculation Agent shall notify the
Company before 5:00 P.M. (London time) on each LIBOR Determination Date that either: (i) it has
determined or is in the process of determining the foregoing rates and amounts or (ii) it has not
determined and is not in the process of determining the foregoing rates and amounts, together with
its reasons therefor. The Calculation Agent’s determination of the foregoing rates and amounts for
any Interest Payment Date will (in the absence of manifest error) be final and binding upon all
parties. For the sole purpose of calculating the interest rate for the Securities, “Business
Day” shall be defined as any day on which dealings in deposits in Dollars are transacted in the
London interbank market.



     Section 10.5 Additional Tax Sums.



     So long as no Event of Default has occurred and is continuing, if (a) the Trust is the Holder
of all of the Outstanding Securities and (b) a Tax Event described in clause (i) or (iii) in the
definition of Tax Event specified in Section 1.1 has occurred and is continuing, the
Company shall pay to the Trust (and its permitted successors or assigns under the Trust Agreement)
for so long as the Trust (or its permitted successor or assignee) is the registered holder of the
Outstanding Securities, such amounts as may be necessary in order that the amount of Distributions
(including any Additional Interest Amount (as defined in the Trust Agreement)) then due and payable
by the Trust on the Preferred Securities and Common Securities that at any time remain outstanding
in accordance with the terms thereof shall not be reduced as a result of any Additional Taxes
arising from such Tax Event (additional such amounts payable by the Company to the Trust, the
“Additional Tax Sums”). Whenever in this Indenture or the Securities there is a reference
in any context to the payment of principal of or any interest on the Securities, such mention shall
be deemed to include mention of the payments of the Additional Tax Sums provided for in this
Section 10.5 to the extent that, in such context, Additional Tax Sums are, were or would be
payable in respect thereof pursuant to the provisions of this Section 10.5 and



57









 







express mention of the payment of Additional Tax Sums (if applicable) in any provisions hereof
shall not be construed as excluding Additional Tax Sums in those provisions hereof where such
express mention is not made.



     Section 10.6 Additional Covenants.



     (a) The Company covenants and agrees with each Holder of Securities that if an Event of
Default of the type described in Section 5.1(a) or (b) or an “Event of Default” of
the type described in clause (b) of the definition of the term “Event of Default” in the Trust
Agreement shall have occurred and be continuing, it shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any
of the Company’s Equity Interests or (ii) make any payment of principal of or any interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank
pari passu in all respects with or junior in interest to the Securities (other than (A)
repurchases, redemptions or other acquisitions of the Company’s Equity Interests in connection with
(1) any employment contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, (2) with a dividend reinvestment or
Equity Interests purchase plan, (3) the issuance of Equity Interests in the Company (or securities
convertible into or exercisable for such Equity Interests) as consideration in an acquisition
transaction entered into prior to the applicable Event of Default or (4) actions taken pursuant to
the provisions of the charter of the Company which are designed to maintain the Company’s continued
status as a real estate investment trust for income tax purposes, (B) as a result of an exchange,
conversion reclassification or combination of any class or series of the Company’s Equity Interests
(or any Equity Interests in a Subsidiary of the Company) for, of or with any class or series of the
Company’s Equity Interests or of any class or series of the Company’s indebtedness for any class or
series of the Company’s Equity Interests, (C) the purchase of fractional interests in the Equity
Interests of the Company pursuant to the conversion or exchange provisions of such Equity Interests
or the security being converted or exchanged, (D) any declaration of a dividend in connection with
any Rights Plan, the issuance of rights, Equity Interests or other property under any Rights Plan
or the redemption or repurchase of rights pursuant thereto or (E) any dividend in the form of
Equity Interests, warrants, options or other rights where the dividend Equity Interest or the
Equity Interest issuable upon exercise of such warrants, options or other rights is the same Equity
Interest as that on which the dividend is being paid or ranks pari passu with or junior to such
Equity Interest).



     (b) The Company also covenants with each Holder of Securities (i) to hold, directly or
indirectly, one hundred percent (100%) of the Common Securities of the Trust; provided,
that any permitted successor of the Company hereunder may succeed to the Company’s ownership of
such Common Securities, (ii) as holder of such Common Securities, not to voluntarily dissolve,
wind-up or liquidate the Trust other than (A) in connection with a distribution of the Securities
to the holders of the Preferred Securities in liquidation of the Trust or (B) in connection with
certain mergers, consolidations or amalgamations permitted by the Trust Agreement and (iii) to use
its reasonable commercial efforts, consistent with the terms and provisions of the Trust Agreement,
to cause the Trust to continue to be taxable as a grantor trust and not as a corporation for United
States federal income tax purposes.



58









 





     (c) The Company shall notify in writing, within ten (10) Business Days after the occurrence
thereof, the Trustee and each holder of Preferred Securities of the occurrence of a Change of
Control (the “Change of Control Notice”). Within thirty (30) days after the occurrence of
a Change of Control, the Company shall initiate a ratings affirmation process with the Ratings
Agencies to determine if a Ratings Downgrade has occurred, such ratings affirmation process to will
consist only of the Company cooperating with the holders of the Preferred Securities in obtaining a
private letter rating or shadow rating if the Company is not rated at the time of such ratings
affirmation process. If such ratings affirmation process is not initiated within such 30-day
period, a Change of Control Event shall be deemed to have occurred. Within five (5) Business Days
after the completion of such ratings affirmation process, the Company shall notify in writing the
Trustee, each Holder of the Securities and each holder of Preferred Securities of the results of
such ratings affirmation process and whether a Ratings Downgrade has occurred (the “Change of
Control Event Notice”). If the Company and the Trustee shall have received, within thirty (30)
days after delivering the holders of the Preferred Securities of the Change of Control Event Notice
or the deemed occurrence of a Change of Control Event, written notice from any holder of Preferred
Securities of its election to cause the Defeasance or redemption, as applicable, of the Securities
as provided in this Section 10.6(c) (the “Change of Control Election”), then the
Company shall (i) if such Change of Control Election is received on or prior to the expiration of
the Fixed Rate Period, cause Article XIII to be applied to the Electing Securities or (ii)
if such Change of Control Election is received after the expiration of the Fixed Rate Period,
redeem the Electing Securities pursuant to Section 11.1(b).



     Section 10.7 Waiver of Covenants.



     The Company may omit in any particular instance to comply with any covenant or condition
contained in Section 10.6 if, before or after the time for such compliance, the Holders of
at least a majority in aggregate principal amount of the Outstanding Securities shall, by Act of
such Holders, and at least a majority of the aggregate Liquidation Amount of the Preferred
Securities then outstanding, by consent of such holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly waived, and, until
such waiver shall become effective, the obligations of the Company in respect of any such covenant
or condition shall remain in full force and effect.



     Section 10.8 Treatment of Securities.



     The Company will treat the Securities as indebtedness, and the amounts, other than payments of
principal, payable in respect of the principal amount of such Securities as interest, for all U.S.
federal income tax purposes. All payments in respect of the Securities will be made free and clear
of U.S. withholding tax to any beneficial owner thereof that has provided an Internal Revenue
Service Form W-9 or W-8BEN (or any substitute or successor form) establishing its U.S. or non-U.S.
status for U.S. federal income tax purposes, or any other applicable form establishing a complete
exemption from U.S. withholding tax.



59









 





ARTICLE XI




REDEMPTION OF SECURITIES




     Section 11.1 Optional Redemption and Mandatory Redemption.



     (a) The Company may, at its option, on any Interest Payment Date, on or after September 30,
2011, redeem the Securities in whole at any time or in part from time to time, at a Redemption
Price equal to one hundred percent (100%) of the principal amount thereof (or of the redeemed
portion thereof, as applicable), together, in the case of any such redemption, with accrued and
unpaid interest, including any Additional Interest, to but excluding the date fixed as the
Redemption Date (the “Optional Redemption Price”).



     (b) The Company shall, upon receipt of a Change of Control Election with respect to a Change
of Control Event which occurs after the expiration of the Fixed Rate Period, redeem the Securities
in whole on a date no more than thirty (30) days after receipt of the Change of Control Election,
at a Redemption Price equal to one hundred percent (100%) of the outstanding principal amount
thereof, together, in the case of any such redemption, with accrued and unpaid interest, including
any Additional Interest, to but excluding the date fixed as the Redemption Date (the “Mandatory
Redemption Price”).



     Section 11.2 Special Event Redemption.



     Prior to September 30, 2011, upon the occurrence and during the continuation of a Special
Event, the Company may, at its option, redeem the Securities, in whole but not in part, at a
Redemption Price equal to one hundred seven and one-half percent (107.5%) of the principal amount
thereof, together, in the case of any such redemption, with accrued and unpaid interest, including
any Additional Interest, to but excluding the date fixed as the Redemption Date (the “Special
Redemption Price”).



     Section 11.3 Election to Redeem; Notice to Trustee.



     The election of the Company to redeem any Securities, in whole or in part, shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election of the Company,
the Company shall, not less than thirty (30) days and not more than sixty (60) days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee
and the Property Trustee under the Trust Agreement in writing of such date and of the principal
amount of the Securities to be redeemed and provide the additional information required to be
included in the notice or notices contemplated by Section 11.5. In the case of any
redemption of Securities, in whole or in part, (a) prior to the expiration of any restriction on
such redemption provided in this Indenture or the Securities or (b) pursuant to an election of the
Company which is subject to a condition specified in this Indenture or the Securities, the Company
shall furnish the Trustee with an Officers’ Certificate and an Opinion of Counsel evidencing
compliance with such restriction or condition.



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     Section 11.4 Selection of Securities to be Redeemed.



     (a) If less than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be selected and redeemed on a pro rata basis not more than sixty (60) days prior to
the Redemption Date by the Trustee from the Outstanding Securities not previously called for
redemption; provided, that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.



     (b) The Trustee shall promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the case of any Security
redeemed or to be redeemed only in part, to the portion of the principal amount of such Security
that has been or is to be redeemed.



     (c) The provisions of paragraphs (a) and (b) of this Section 11.4 shall not apply with
respect to any redemption affecting only a single Security, whether such Security is to be redeemed
in whole or in part. In the case of any such redemption in part, the unredeemed portion of the
principal amount of the Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security.



     Section 11.5 Notice of Redemption.



     (a) Notice of redemption shall be given not later than the thirtieth (30th) day, and not
earlier than the sixtieth (60th) day, prior to the Redemption Date to each Holder of Securities to
be redeemed, in whole or in part (unless a shorter notice shall be satisfactory to the Property
Trustee under the Trust Agreement).



     (b) With respect to Securities to be redeemed, in whole or in part, each notice of redemption
shall state:




     (i) the Redemption Date;




     (ii) the Redemption Price or, if the Redemption Price cannot be calculated prior to the
time the notice is required to be sent, the estimate of the Redemption Price, as calculated
by the Company, together with a statement that it is an estimate and that the actual
Redemption Price will be calculated on the fifth Business Day prior to the Redemption Date
(and if an estimate is provided, a further notice shall be sent of the actual Redemption
Price on the date that such Redemption Price is calculated);




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




     (iv) that on the Redemption Date, the Redemption Price will become due and payable upon
each such Security or portion thereof, and that any interest (including any



61









 







Additional Interest) on such Security or such portion, as the case may be, shall cease
to accrue on and after said date; and




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



     (c) Notice of redemption of Securities to be redeemed, in whole or in part, 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 and shall be irrevocable. The notice if mailed in the manner
provided above shall be conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security.



     Section 11.6 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 11.5, the Company will deposit with the Trustee or
with one or more Paying Agents (or if the Company is acting as its own Paying Agent, the Company
will segregate and hold in trust as provided in Section 10.2) an amount of money sufficient
to pay the Redemption Price of, and any accrued interest (including any Additional Interest) on,
all the Securities (or portions thereof) that are to be redeemed on that date.



     Section 11.7 Payment of Securities Called for Redemption.



     (a) If any notice of redemption has been given as provided in Section 11.5, the
Securities or portion of Securities with respect to which such notice has been given shall become
due and payable on the date and at the place or places stated in such notice at the applicable
Redemption Price. On presentation and surrender of such Securities at a Place of Payment specified
in such notice, the Securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable Redemption Price.



     (b) Upon presentation of any Security redeemed in part only, the Company shall execute and the
Trustee, upon receipt of a Company Order, shall authenticate and deliver to the Holder thereof, at
the expense of the Company, a new Security or Securities, of authorized denominations, in aggregate
principal amount equal to the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms.



     (c) If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal of and any premium on such Security shall, until paid, bear interest from
and including the Redemption Date at the rate prescribed therefor in the Security.



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ARTICLE XII




SUBORDINATION OF SECURITIES




     Section 12.1 Securities Subordinate to Senior Debt.



     The Company covenants and agrees, and each Holder of a Security, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this
Article XII, the payment of the principal of and any premium and interest (including any
Additional Interest) on each and all of the Securities is hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior Debt.



     Section 12.2 No Payment When Senior Debt in Default; Payment Over of Proceeds Upon
Dissolution, Etc.



     (a) In the event and during the continuation of any default by the Company in the payment of
any principal of, premium, if any, or interest on any Senior Debt (following any grace period, if
applicable) when the same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration of acceleration or otherwise, then, upon written notice of such
default to the Company by the holders of such Senior Debt or any trustee therefor, unless and until
such default shall have been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) shall be made or agreed to be made
on account of the principal of or any premium or interest (including any Additional Interest) on
any of the Securities, or in respect of any redemption, repayment, retirement, purchase or other
acquisition of any of the Securities.



     (b) In the event of a bankruptcy, insolvency or other proceeding described in clause (d) or
(e) of the definition of Event of Default specified in Section 5.1 (each such event, if
any, herein sometimes referred to as a “Proceeding”), all Senior Debt (including any
interest thereon accruing after the commencement of any such proceedings) shall first be paid in
full before any payment or distribution, whether in cash, securities or other property, shall be
made to any Holder of any of the Securities on account thereof. Any payment or distribution,
whether in cash, securities or other property (other than securities of the Company or any other
entity provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior Debt at the time outstanding
and to any securities issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be payable or
deliverable in respect of the Securities shall be paid or delivered directly to the holders of
Senior Debt in accordance with the priorities then existing among such holders until all Senior
Debt (including any interest thereon accruing after the commencement of any Proceeding) shall have
been paid in full.



     (c) In the event of any Proceeding, after payment in full of all sums owing with respect to
Senior Debt, the Holders of the Securities, together with the holders of any obligations of the
Company ranking on a parity with the Securities, shall be entitled to be paid from the remaining
assets of the Company the amounts at the time due and owing on account of unpaid principal of and
any premium and interest (including any Additional Interest) on the Securities



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and such other obligations before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any Equity Interests or any obligations of the Company
ranking junior to the Securities and such other obligations. If, notwithstanding the foregoing, any
payment or distribution of any character on any security, whether in cash, securities or other
property (other than securities of the Company or any other entity provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to the extent provided
in these subordination provisions with respect to the indebtedness evidenced by the Securities, to
the payment of all Senior Debt at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment) shall be received by the Trustee or
any Holder in contravention of any of the terms hereof and before all Senior Debt shall have been
paid in full, such payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the Senior Debt at the
time outstanding in accordance with the priorities then existing among such holders for application
to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all such Senior
Debt (including any interest thereon accruing after the commencement of any Proceeding) in full. In
the event of the failure of the Trustee or any Holder to endorse or assign any such payment,
distribution or security, each holder of Senior Debt is hereby irrevocably authorized to endorse or
assign the same.



     (d) The Trustee and the Holders, at the expense of the Company, shall take such reasonable
action (including the delivery of this Indenture to an agent for any holders of Senior Debt or
consent to the filing of a financing statement with respect hereto) as may, in the opinion of
counsel designated by the holders of a majority in principal amount of the Senior Debt at the time
outstanding, be necessary or appropriate to assure the effectiveness of the subordination effected
by these provisions.



     (e) The provisions of this Section 12.2 shall not impair any rights, interests,
remedies or powers of any secured creditor of the Company in respect of any security interest.



     (f) The securing of any obligations of the Company, otherwise ranking on a parity with the
Securities or ranking junior to the Securities, shall not be deemed to prevent such obligations
from constituting, respectively, obligations ranking on a parity with the Securities or ranking
junior to the Securities.



     Section 12.3 Payment Permitted if No Default.



     Nothing contained in this Article XII or elsewhere in this Indenture or in any of the
Securities shall prevent (a) the Company, at any time, except during the pendency of the conditions
described in paragraph (a) of Section 12.2 or of any Proceeding referred to in Section
12.2, from making payments at any time of principal of, premium, if any, or interest (including
any Additional Interest) on the Securities or (b) the application by the Trustee of any moneys
deposited with it hereunder to the payment of or on account of the principal of, premium, if any,
or interest (including any Additional Interest) on the Securities or the retention of such payment
by the Holders, if, at the time of such application by the Trustee, it did not have knowledge (in
accordance with Section 12.8) that such payment would have been prohibited by the
provisions of this Article XII, except as provided in Section 12.8.



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     Section 12.4 Subrogation to Rights of Holders of Senior Debt.



     Subject to the payment in full of all amounts due or to become due on all Senior Debt, or the
provision for such payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, the Holders of the Securities shall be subrogated to the extent of the
payments or distributions made to the holders of such Senior Debt pursuant to the provisions of
this Article XII (equally and ratably with the holders of all indebtedness of the Company
that by its express terms is subordinated to Senior Debt of the Company to substantially the same
extent as the Securities are subordinated to the Senior Debt and is entitled to like rights of
subrogation by reason of any payments or distributions made to holders of such Senior Debt) to the
rights of the holders of such Senior Debt to receive payments and distributions of cash, property
and securities applicable to the Senior Debt until the principal of and any premium and interest
(including any Additional Interest) on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of any cash, property
or securities to which the Holders of the Securities or the Trustee would be entitled except for
the provisions of this Article XII, and no payments made pursuant to the provisions of this
Article XII to the holders of Senior Debt by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior Debt, and the Holders of
the Securities, be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.



     Section 12.5 Provisions Solely to Define Relative Rights.



     The provisions of this Article XII are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities 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 Securities is intended to or shall (a) impair, as between the Company and the
Holders of the Securities, the obligations of the Company, which are absolute and unconditional, to
pay to the Holders of the Securities the principal of and any premium and interest (including any
Additional Interest) on the Securities as and when the same shall become due and payable in
accordance with their terms, (b) affect the relative rights against the Company of the Holders of
the Securities and creditors of the Company other than their rights in relation to the holders of
Senior Debt or (c) prevent the Trustee or the Holder of any Security (or to the extent expressly
provided herein, the holder of any Preferred Security) from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, including filing and voting claims
in any Proceeding, subject to the rights, if any, under this Article XII of the holders of
Senior Debt to receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.



     Section 12.6 Trustee to Effectuate Subordination.



     Each Holder of a Security by his, her or its acceptance thereof authorizes and directs the
Trustee on his, her or its behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this Article XII and appoints the
Trustee his, her or its attorney-in-fact for any and all such purposes.



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     Section 12.7 No Waiver of Subordination Provisions.



     (a) 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 be otherwise charged with.



     (b) Without in any way limiting the generality of paragraph (a) of this Section 12.7,
the holders of Senior Debt may, at any time and from to time, without the consent of or notice to
the Trustee or the Holders of the Securities, without incurring responsibility to such Holders of
the Securities and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of such Holders of the Securities 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, Senior Debt, or otherwise amend or supplement in
any manner Senior Debt or any instrument evidencing the same or any agreement under which Senior
Debt is outstanding, (ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt, (iii) release any Person liable in any manner for the
payment of Senior Debt and (iv) exercise or refrain from exercising any rights against the Company
and any other Person.



     Section 12.8 Notice to Trustee.



     (a) The Company shall give prompt written notice to a Responsible Officer of the Trustee of
any fact known to the Company that would prohibit the making of any payment to or by the Trustee in
respect of the Securities. 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 that would prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Company or a holder of Senior Debt or from any trustee, agent or
representative therefor; provided, that if the Trustee shall not have received the notice
provided for in this Section 12.8 at least two Business Days prior to the date upon which
by the terms hereof any monies may become payable for any purpose (including, the payment of the
principal of and any premium on or interest (including any Additional Interest) on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be received by it within
two Business Days prior to such date.



     (b) The Trustee shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself, herself or itself to be a holder of Senior Debt (or a trustee, agent,
representative or attorney-in-fact therefor) to establish that such notice has been given by a
holder of Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor). With
respect to any Senior Debt that is a syndicated loan, all rights of the holders of such Senior Debt
(including, without limitation, the rights to give and receive notices) may be taken or exercised
on behalf of the holders of such Senior Debt by an administrative agent for such holders or an



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equivalent party to the extent set forth therein. 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 rights of such
Person under this Article XII, and if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the right of such Person to receive
such payment.



     Section 12.9 Reliance on Judicial Order or Certificate of Liquidating Agent.



     Upon any payment or distribution of assets of the Company referred to in this Article
XII, the Trustee and the Holders of the Securities shall be entitled to conclusively rely upon
any order or decree entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee for the benefit of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article XII.



     Section 12.10 Trustee Not Fiduciary for Holders of Senior Debt.



     The Trustee, in its capacity as trustee under this Indenture, shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or
to any other Person cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article XII or otherwise.



     Section 12.11 Rights of Trustee as Holder of Senior Debt; Preservation of Trustee’s
Rights.



     The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article XII with respect to any Senior Debt that may at any time be 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 only such of its obligations as are specifically set forth in
this Article XII, and no implied covenants or obligations with respect to the holders of
such Senior Debt shall be read into this Indenture against the Trustee. Nothing in this Article
XII shall apply to claims of, or payments to, the Trustee under or pursuant to Section
6.6.



     Section 12.12 Article Applicable to Paying Agents.



     If 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
XII 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



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were named in this Article XII in addition to or in place of the Trustee;
provided, that Sections 12.8 and 12.11 shall not apply to the Company or
any Affiliate of the Company if the Company or such Affiliate acts as Paying Agent.



ARTICLE XIII




DEFEASANCE




     Section 13.1 Defeasance and Discharge.



     Upon the exercise of the option provided in Section 10.6(c) by a holder of Preferred
Securities as a result of a Change of Control which occurs on or prior to the expiration of the
Fixed Rate Period, to have this Section 13.1 applied to the Electing Securities, the
Company shall, within thirty (30) days following its receipt of the Change of Control Election
satisfy the conditions set forth in Section 13.2. The Company shall be deemed to have been
discharged from its obligations with respect to the Electing Securities as provided in this
Section 13.1 on and after the date the conditions set forth in the Section 13.2 are
satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness represented by the
Electing Securities and to have satisfied all of its other obligations under such Electing
Securities and this Indenture insofar as such Electing Securities are concerned (and the Trustee,
upon request and at the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following, which shall survive until otherwise terminated or discharged
hereunder (a) the rights of Holders of the Electing Securities to receive, solely from the trust
fund described in Section 13.2 and as more fully set forth in such Section 13.2,
payments in respect of the principal of, premium, if any, and interest on the Electing Securities
when payments are due, (b) the Company’s obligations with respect to the Electing Securities under
Sections 2.4, 3.5, 3.6, 10.2 and any additional Tax Sums under
Section 10.5, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (d) this Article XIII.



     Section 13.2 Conditions to Defeasance.



      The following shall be the conditions to application of Section 13.1 to the Electing
Securities:




     (a) The Company shall irrevocably have deposited or caused to be deposited with the
Trustee (or another trustee that satisfies the requirements contemplated by Section
6.1 and agree to comply with the provisions of this Article XIII applicable to
it) as trust funds in trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of Electing
Securities, (i) money in an amount in Dollars, (ii) Government Obligations that through the
scheduled payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment, money in an
amount in Dollars, or (iii) a combination thereof, in each case sufficient, only the
calculation of which has been confirmed by a nationally recognized firm of independent
public accountants in a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other



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qualifying Trustee) to pay and discharge, one hundred percent (100%) of the principal
amount of the Electing Securities on September 30, 2011 (the “Defeasance Maturity
Date”) plus interest on the Electing Securities due and payable on the Interest Payment
Dates occurring prior to and including the Defeasance Maturity Date, in accordance with the
terms of this Indenture and the Electing Securities.




     (b) Such Defeasance shall not cause the Trustee to have a conflicting interest within
the meaning of the Trust Indenture Act.




     (c) Such Defeasance shall not result in the trust arising from such deposit
constituting an “investment company” within the meaning of the Investment Company Act of
1940, unless such trust shall be qualified or exempt from regulation thereunder.




     (d) The Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent with respect to such
Defeasance have been complied with.



  Section 13.3 Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions.



     Subject to the provisions of Section 10.2(e), all money and Government Obligations
(including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for
purposes of this Section 13.3 and Section 13.4, the Trustee and any such other
trustee are referred to collectively as the “Trustee”) pursuant to Section 13.2 in
respect of the Electing Securities shall be held in trust and applied by the Trustee, in accordance
with the provisions of the Electing Securities and this Indenture, to the payment, either directly
or through any such Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of the Electing Securities, of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but money so held in trust need not
be segregated from other funds except to the extent required by law.



     The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the Government Obligations deposited pursuant to Section 13.2 or the
principal and interest received in respect thereof other than any such tax, fee or other charge
that by law is for the account of the Holders of Electing Securities.



     Anything in this Article XIII to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money or Government
Obligations held by it as provided in Section 13.2 with respect to the Electing Securities
that, in the opinion of a nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Defeasance with respect to the
Electing Securities.



  Section 13.4 Reinstatement.



     If the Trustee or the Paying Agent is unable to apply any money in accordance with this
Article XIII with respect to the Electing Securities by reason of any order or judgment



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of any court or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company’s obligations under this Indenture and the Electing Securities shall
be revived and reinstated as though no deposit had occurred pursuant to this Article XIII
with respect to Electing Securities until such time as the Trustee or Paying Agent is permitted to
apply all money held in trust pursuant to Section 13.3 with respect to the Electing
Securities in accordance with this Article XIII; provided, however, that if the Company
makes any payment of principal of, premium, if any, or interest on any Electing Security following
the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders
of Electing Securities to receive such payment from the money so held in trust.



[Signature page follows.]




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



	 	 	 	 	 
	 	NEW CENTURY FINANCIAL CORPORATION

 	 
	 	By:  	/s/ Brad A. Morrice
 	 
	 	 	Name:  	Brad A. Morrice 	 
	 	 	Title:  	Vice Chairman, President and Chief Executive
Officer 	 
	 
	 	WELLS FARGO BANK, N.A., as Trustee

 	 
	 	By:  	/s/ Tracy M. McLamb
 	 
	 	 	Name:  	Tracy M. McLamb 	 
	 	 	Title:  	Vice President 	 
	 




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