exv4w1



 





Exhibit 4.1




 





FRANKLIN BANK CORP.




Issuer




and




THE BANK OF NEW YORK TRUST COMPANY, N.A.




Trustee





 







Indenture




 






Dated
as of                       




 






SENIOR DEBT SECURITIES




 






 






 









 








FRANKLIN BANK CORP.




CERTAIN SECTIONS OF THIS INDENTURE RELATING TO

SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE

TRUST INDENTURE ACT OF 1939:




	 	 	 	 	 	 	 
	Trust Indenture	 	 	 	 
	Act Section	 	 	 	Indenture Section
	§310(a)(1)

	 	 	 	 	 	609
	(a)(2)

	 	 	 	 	 	609
	(a)(3)

	 	 	 	Not Applicable

	(a)(4)

	 	 	 	Not Applicable

	(b)

	 	 	 	 	 	608;610
	§311(a)

	 	 	 	 	 	613
	(b)

	 	 	 	 	 	613
	§312(a)

	 	 	 	 	 	701;702
	(b)

	 	 	 	 	 	702
	(c)

	 	 	 	 	 	702
	§313(a)

	 	 	 	 	 	703
	(b)

	 	 	 	 	 	703
	(c)

	 	 	 	 	 	703
	(d)

	 	 	 	 	 	703
	§314(a)

	 	 	 	 	 	704
	(a)(4)

	 	 	 	 	 	1004
	(b)

	 	 	 	Not Applicable

	(c)(1)

	 	 	 	 	 	102
	(c)(2)

	 	 	 	 	 	102
	(c)(3)

	 	 	 	Not Applicable

	(d)

	 	 	 	Not Applicable

	(e)

	 	 	 	 	 	102
	§315(a)

	 	 	 	 	 	601,603
	(b)

	 	 	 	 	 	602
	(c)

	 	 	 	 	 	601
	(d)

	 	 	 	 	 	601
	(e)

	 	 	 	 	 	514
	§316(a)

	 	 	 	 	 	101
	(a)(1)(A)

	 	 	 	 	 	502;512
	(a)(1)(B)

	 	 	 	 	 	513
	(a)(2)

	 	 	 	Not Applicable

	(b)

	 	 	 	 	 	508
	(c)

	 	 	 	 	 	104
	§317(a)(1)

	 	 	 	 	 	503
	(a)(2)

	 	 	 	 	 	504
	(b)

	 	 	 	 	 	1003
	§318(a)

	 	 	 	 	 	107








 




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





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TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I

	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

	 
	 	 	 	 	 	 
	Section 101.
	 	Definitions	 	 	1	 
	Section 102.
	 	Compliance Certificates and Opinions	 	 	7	 
	Section 103.
	 	Form of Documents Delivered to Trustee	 	 	8	 
	Section 104.
	 	Acts of Holders; Record Dates	 	 	8	 
	Section 105.
	 	Notices, Etc., to Trustee and the Company	 	 	9	 
	Section 106.
	 	Notice to Holders; Waiver	 	 	10	 
	Section 107.
	 	Conflict with Trust Indenture Act	 	 	10	 
	Section 108.
	 	Effect of Headings and Table of Contents	 	 	10	 
	Section 109.
	 	Successors and Assigns	 	 	10	 
	Section 110.
	 	Separability Clause	 	 	11	 
	Section 111.
	 	Benefits of Indenture	 	 	11	 
	Section 112.
	 	Governing Law	 	 	11	 
	Section 113.
	 	Legal Holidays	 	 	11	 
	Section 114.
	 	Language of Notices, Etc.	 	 	11	 
	Section 115.
	 	Interest Limitation	 	 	11	 
	Section 116.
	 	No Personal Liability of Officers, Directors, Employees or Shareholders	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE II

	SECURITY FORMS

	 
	 	 	 	 	 	 
	Section 201.
	 	Forms Generally	 	 	12	 
	Section 202.
	 	Form of Face of Security	 	 	13	 
	Section 203.
	 	Form of Reverse of Security	 	 	15	 
	Section 204.
	 	Global Securities	 	 	20	 
	Section 205.
	 	Form of Trustee's Certificate and Authorization	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE III

	THE SECURITIES

	 
	 	 	 	 	 	 
	Section 301.
	 	Amount Unlimited; Issuable in Series	 	 	21	 
	Section 302.
	 	Denominations	 	 	24	 
	Section 303.
	 	Execution, Authentication, Delivery and Dating	 	 	24	 
	Section 304.
	 	Temporary Securities	 	 	27	 
	Section 305.
	 	Registration, Registration of Transfer and Exchange	 	 	27	 
	Section 306.
	 	Mutilated, Destroyed, Lost and Stolen Securities	 	 	29	 
	Section 307.
	 	Payment of Interest; Interest Rights Preserved	 	 	29	 
	Section 308.
	 	Persons Deemed Owners	 	 	31	 
	Section 309.
	 	Cancellation	 	 	31	 
	Section 310.
	 	Computation of Interest	 	 	31	 
	Section 311.
	 	CUSIP Numbers	 	 	32	 






 









 






TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE V

	SATISFACTION AND DISCHARGE

	 
	 	 	 	 	 	 
	Section 401.
	 	Satisfaction and Discharge of Indenture	 	 	32	 
	Section 402.
	 	Application of Trust Money	 	 	33	 
	 
	 	 	 	 	 	 
	ARTICLE V

	REMEDIES

	 
	 	 	 	 	 	 
	Section 501.
	 	Events of Default	 	 	33	 
	Section 502.
	 	Acceleration of Maturity; Rescission and Annulment	 	 	34	 
	Section 503.
	 	Collection of Indebtedness and Suits for Enforcement by Trustee	 	 	35	 
	Section 504.
	 	Trustee May File Proofs of Claim	 	 	36	 
	Section 505.
	 	Trustee May Enforce Claims Without Possession of Securities	 	 	36	 
	Section 506.
	 	Application of Money Collected	 	 	36	 
	Section 507.
	 	Limitation on Suits	 	 	37	 
	Section 508.
	 	Unconditional Right of Holders to Receive Principal, Premium and Interest	 	 	37	 
	Section 509.
	 	Restoration of Rights and Remedies	 	 	38	 
	Section 510.
	 	Rights and Remedies Cumulative	 	 	38	 
	Section 511.
	 	Delay or Omission Not Waiver	 	 	38	 
	Section 512.
	 	Control by Holders	 	 	38	 
	Section 513.
	 	Waiver of Past Defaults	 	 	39	 
	Section 514.
	 	Undertaking for Costs	 	 	39	 
	 
	 	 	 	 	 	 
	ARTICLE VI

	THE TRUSTEE

	 
	 	 	 	 	 	 
	Section 601.
	 	Certain Duties and Responsibilities	 	 	39	 
	Section 602.
	 	Notice of Defaults	 	 	40	 
	Section 603.
	 	Certain Rights of Trustee	 	 	41	 
	Section 604.
	 	Not Responsible for Recitals or Issuance of Securities	 	 	42	 
	Section 605.
	 	May Hold Securities	 	 	42	 
	Section 606.
	 	Money Held in Trust	 	 	42	 
	Section 607.
	 	Compensation and Reimbursement	 	 	42	 
	Section 608.
	 	Disqualification; Conflicting Interests	 	 	43	 
	Section 609.
	 	Corporate Trustee Required; Eligibility	 	 	43	 
	Section 610.
	 	Resignation and Removal; Appointment of Successor	 	 	43	 
	Section 611.
	 	Acceptance of Appointment by Successor	 	 	45	 
	Section 612.
	 	Merger, Conversion, Consolidation or Succession to Business	 	 	46	 
	Section 613.
	 	Preferential Collection of Claims Against the Company	 	 	46	 
	Section 614.
	 	Appointment of Authenticating Agent	 	 	46	 






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TABLE OF CONTENTS

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE VII

	HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND THE COMPANY

	 
	 	 	 	 	 	 
	Section 701.
	 	The Company to Furnish Trustee Names and Addresses of Holders	 	 	48	 
	Section 702.
	 	Preservation of Information; Communications to Holders	 	 	48	 
	Section 703.
	 	Reports by Trustee	 	 	48	 
	Section 704.
	 	Reports by the Company	 	 	49	 
	 
	 	 	 	 	 	 
	ARTICLE VIII

	CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

	 
	 	 	 	 	 	 
	Section 801.
	 	The Company May Consolidate, Etc., Only on Certain Terms	 	 	49	 
	Section 802.
	 	Successor Substituted	 	 	50	 
	 
	 	 	 	 	 	 
	ARTICLE IX

	SUPPLEMENTAL INDENTURES

	 
	 	 	 	 	 	 
	Section 901.
	 	Supplemental Indentures Without Consent of Holders	 	 	50	 
	Section 902.
	 	Supplemental Indentures with Consent of Holders	 	 	51	 
	Section 903.
	 	Execution of Supplemental Indentures	 	 	52	 
	Section 904.
	 	Effect of Supplemental Indentures	 	 	52	 
	Section 905.
	 	Conformity with Trust Indenture Act	 	 	52	 
	Section 906.
	 	Reference in Securities to Supplemental Indentures	 	 	52	 
	 
	 	 	 	 	 	 
	ARTICLE X

	COVENANTS

	 
	 	 	 	 	 	 
	Section 1001.
	 	Payment of Principal, Premium and Interest	 	 	53	 
	Section 1002.
	 	Maintenance of Office or Agency	 	 	53	 
	Section 1003.
	 	Money for Securities Payments to Be Held in Trust	 	 	53	 
	Section 1004.
	 	Statement by Officers as to Default	 	 	54	 
	Section 1005.
	 	Waiver of Certain Covenants	 	 	55	 
	 
	 	 	 	 	 	 
	ARTICLE XI

	REDEMPTION OF SECURITIES

	 
	 	 	 	 	 	 
	Section 1101.
	 	Applicability of Article	 	 	55	 
	Section 1102.
	 	Election to Redeem; Notice to Trustee	 	 	55	 
	Section 1103.
	 	Selection by Trustee of Securities to be Redeemed	 	 	55	 
	Section 1104.
	 	Notice of Redemption	 	 	56	 
	Section 1105.
	 	Deposit of Redemption Price	 	 	56	 
	Section 1106.
	 	Securities Payable on Redemption Date	 	 	57	 
	Section 1107.
	 	Securities Redeemed in Part	 	 	57	 






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TABLE OF CONTENTS

(CONTINUED)




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE XII

	SINKING FUNDS

	 
	 	 	 	 	 	 
	Section 1201.
	 	Applicability of Article	 	 	57	 
	Section 1202.
	 	Satisfaction of Sinking Fund Payments with Securities	 	 	58	 
	Section 1203.
	 	Redemption of Securities for Sinking Fund	 	 	58	 
	

	 	 	 	 	 	 
	ARTICLE XIII

	DEFEASANCE

	

	 	 	 	 	 	 
	Section 1301.
	 	Applicability of Article	 	 	58	 
	Section 1302.
	 	Legal Defeasance	 	 	58	 
	Section 1303.
	 	Covenant Defeasance	 	 	60	 
	Section 1304.
	 	Application by Trustee of Funds Deposited for Payment of Securities	 	 	61	 
	Section 1305.
	 	Repayment to the Company	 	 	62	 
	Section 1306.
	 	Reinstatement	 	 	62	 






-v-




 









 





     INDENTURE
dated as of                       , between FRANKLIN BANK CORP., a Delaware
corporation (the “Company”), having its principal office at 9800 Richmond Avenue, Suite 680,
Houston, TX 77042, and THE BANK OF NEW YORK TRUST COMPANY, N.A., as Trustee (the “Trustee”).



RECITALS OF THE COMPANY




     The Company has duly authorized the execution and delivery of this Indenture to provide for
the issuance from time to time of its unsecured debentures, notes or other evidences of
indebtedness (the “Securities”), to be issued in one or more series as in this Indenture provided.



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



     This Indenture is subject to the provisions of the Trust Indenture Act that are required to be
a part of this Indenture and, to the extent applicable, shall be governed by such provisions.



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



     For and in consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the
Securities or of any series thereof, as follows:



ARTICLE I




DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION




Section 101. Definitions




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



          (1) the terms defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;




          (2) all other terms used herein which are defined in the Trust Indenture Act, either directly,
or by reference therein, have the meanings assigned to them therein;




          (3) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States, and, except as
otherwise herein expressly provided, the term “generally accepted accounting principles” with
respect to any computation required or permitted hereunder shall mean such accounting principles as
are generally accepted in the United States at the date of such computation;




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




 









 








          (5) the words “Article” and “Section” refer to an Article and Section, respectively, of this
Indenture.




     “Act”, when used with respect to any Holder, has the meaning specified in Section 104.



     “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.



     “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 614 to
act on behalf of the Trustee to authenticate Securities of one or more series.



     “Authorized Newspaper” means a newspaper, in the English language or in an official language
of the country of publication, customarily published on each Business Day, whether or not published
on Saturdays, Sundays or holidays, and of general circulation in the place in connection with which
the term is used or in the financial community of such place.



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



     “Board of Directors” means the board of directors of the Company, or the executive or any
other committee of that board duly authorized to act in respect thereof.



     “Board Resolution” means a copy of a resolution certified by the Corporate Secretary of the
Company, the principal financial officer of the Company or any other authorized officer of the
Company or a Person duly authorized by any of them, to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification, and delivered to
the Trustee.



     “Business Day”, when used with respect to any Place of Payment or other location, means,
except as otherwise provided as contemplated by Section 301 with respect to any series of
Securities, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment or other location are authorized or obligated by law,
executive order or regulation to close.



     “Commission” means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.



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



-2-









 





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



     “Corporate Trust Office” means the office of the Trustee at which at any particular time its
corporate trust business shall be principally administered, which at
the date hereof is 601 Travis Street, 18th Floor, Houston, TX 77002.


     “Corporation” includes corporations, associations, partnerships (general or limited), limited
liability companies, joint-stock companies and business trusts.



     “Covenant defeasance” has the meaning specified in Section 1303.



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



     “Debt” means any debt for money borrowed.



     “Default” means, with respect to a series of Securities, any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to Securities of such
series.



     “Defaulted Interest” has the meaning specified in Section 307.



     “Defeasance” has the meaning specified in Section 1302.



     “Definitive Security” means a Security other than a Global Security or a temporary Security.



     “Depositary” means, with respect to Securities of any series issuable in whole or in part in
the form of one or more Global Securities, a clearing agency registered under the Exchange Act that
is designated to act as Depositary for such Securities as contemplated by Section 301, until a
successor Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter shall mean or include each Person which is then a Depositary hereunder,
and if at any time there is more than one such Person, shall be a collective reference to such
Persons.



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



     “Event of Default” has the meaning specified in Section 501.



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



     "Fiscal Year” means, with respect to the Company, each 12-month period beginning on January 1
and ending on December 31; provided, however, that, with respect to a series of Securities, the
first fiscal year will begin on the date such series of Securities is authenticated and delivered
under this Indenture. The Company will notify the Trustee if its fiscal year changes.




     “Global Security” means a Security in global form that evidences all or part of the Securities
of any series and is registered in the name of the Depositary for such Securities or a nominee
thereof.



-3-









 





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



     “Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument, and any such
supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively. The term “Indenture”
also shall include the terms of particular series of Securities established as contemplated by
Section 301.



     “Interest”, when used with respect to an Original Issue Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.



     “Interest Payment Date”, when used with respect to any Security, means the Stated Maturity of
an installment of interest on such Security.



     “Maturity”, when used with respect to any Security, means the date on which the principal of
such Security or an 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 501(3).



     “Officers’ Certificate” of a Person means a certificate signed by any two of the Chairman of
the Board, the Vice Chairman, the President or a Vice President of the Person, or if such Person is
a partnership, of its general partner, and delivered to the Trustee. One of the officers or such
other Persons (as applicable) signing an Officers’ Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Person, or if such Person is a
partnership, of its general partner.



     “Opinion of Counsel” means a written opinion of legal counsel, who may be an employee of or
counsel for the Company, which opinion shall comply with the provisions of Sections 102 and 103.
Such counsel shall be acceptable to the Trustee, whose acceptance shall not be unreasonably
withheld.



     “Original Issue Discount Security” means any Security which provides for an amount less than
the stated principal amount thereof to be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502.



     “Outstanding”, when used with respect to Securities, means, 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 (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act




-4-









 







as its own Paying Agent)for the Holders of such Securities; provided, however, that, if such Securities
are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or provision therefor has
been made;




          (iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of
which other Securities have been authenticated and delivered pursuant to this Indenture, other than
any such Securities in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and




          (iv) Securities, except to the extent provided in Sections 1302 and 1303, with respect to
which the Company has effected defeasance or covenant defeasance as provided in Article XIII;



provided, however, that in determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, (A) the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable
as of the date of such determination upon acceleration of the Maturity thereof on such date
pursuant to Section 502, (B) the principal amount of a Security denominated in one or more
currencies or currency units other than U.S. dollars shall be the U.S. dollar equivalent of such
currencies or currency units, determined in the manner provided as contemplated by Section 301 on
the date of original issuance of such Security, of the principal amount (or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent (as so determined) on the date of
original issuance of such Security, of the amount determined as provided in Clause (A) above) of
such Security, and (C) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only Securities which
the Trustee knows to be so owned shall be so disregarded. Securities so owned as described in
Clause (C) above which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect
to such Securities and that the pledgee is not the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor.




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



     “Periodic Offering” means an offering of Securities of a series from time to time, the
specific terms of which Securities, including, without limitation, the rate or rates of interest or
formula for determining the rate or rates of interest thereon, if any, the Stated Maturity or
Stated Maturities thereof, the original issue date or dates thereof, the redemption provisions, if
any, with respect thereto, and any other terms specified as contemplated by Section 301 with
respect thereto, are to be determined by the Company upon the issuance of such Securities.



     “Person” means any individual, corporation, partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.



-5-









 





     “Place of Payment”, when used with respect to the Securities of any series, means, unless
otherwise specifically provided for with respect to such series as contemplated by Section 301, the
office or agency of the Company in The City of New York and such other place or places where,
subject to the provisions of Section 1002, the principal of and any premium and interest on the
Securities of that series are payable as specified as contemplated by Section 301.



     “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; and, for the purposes
of this definition, any Security authenticated and delivered under Section 306 in exchange for or
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.



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



     “Redemption Price”, when used with respect to any Security to be redeemed, means the price at
which it is to be redeemed pursuant to this Indenture.



     “Regular Record Date” for the interest payable on any Interest Payment Date on the Securities
of any series means the date specified for that purpose as contemplated by Section 301.



     “Securities” has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.



     “Security Register” and “Security Registrar” have the respective meanings specified in Section
305.



     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by the
Trustee pursuant to Section 307.



     “Stated Maturity”, when used with respect to the principal of any Security or any installment
of principal thereof or interest thereon, means the date specified in such Security as the fixed
date on which the principal of such Security or such installment of principal or interest is due
and payable.



     “Subsidiary” means, with respect to any Person, any entity of which more than 50% of the total
voting power of the equity interests entitled, without regard to the occurrence of any contingency,
to vote in the election of directors, managers or trustees thereof; or any partnership of which
more than 50% of the partners’ equity interests, considering all partners’ equity interests as a
single class, is at the time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or combination thereof.



     “Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of
which this instrument was executed, except as otherwise provided in Section 905; provided, however,
that if the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to
the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.



-6-









 





     “Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument
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, and if at any time there is more than one such Person, “Trustee” as used with respect to
the Securities of any series shall mean each Trustee with respect to Securities of that series.



     “U.S. Government Obligations” means securities which are (i) direct obligations of the United
States for the payment of which its full faith and credit is pledged, or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of the United States,
the payment of which is unconditionally guaranteed as a full faith and credit obligation by the
United States, each of which are not callable or redeemable at the option of the issuer thereof.



     “Vice President”, when used with respect to the Company, means any vice president of the
Company, or when used with respect to the Trustee, means any vice president of the Trustee.



Section 102. Compliance Certificates and Opinions




     Upon any application or request by the Company to the Trustee to take or refrain from taking
any action under any provision of this Indenture, the Company shall furnish to the Trustee an
Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in
the opinion of the signers, all conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been complied with, and an Opinion of Counsel in
form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with. Each such certificate or opinion
shall be given in the form of an Officers’ Certificate, if to be given by officers of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the
Trust Indenture Act and any other requirements set forth in this Indenture.



     Every Officers’ Certificate or Opinion of Counsel (except for certificates provided for in
Section 1004) shall include:



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




          (2) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;




          (3) a statement that, in the opinion of each such individual, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and




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




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Section 103. Form of Documents Delivered to Trustee




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



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



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



Section 104. Acts of Holders; Record Dates




     Any request, demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed (either physically or by
means of a facsimile or an electronic transmission, provided that such electronic transmission is
transmitted through the facilities of a Depositary) by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such action shall



     become effective when such instrument or instruments are delivered (either physically or by
means of a facsimile or an electronic transmission, provided that such electronic transmission is
transmitted through the facilities of a Depositary) to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to
Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee and the Company, if made
in the manner provided in this Section.



     Without limiting the generality of the foregoing, a Holder, including a Depositary that is a
Holder of a Global Security, may make, give or take, by a proxy or proxies, duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver or other action
provided in this Indenture to be made, given or taken by Holders, and a Depositary that is a Holder
of a Global Security may provide its proxy or proxies to the beneficial owners of interests in any
such Global Security.



-8-









 





     The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient.



     The ownership, principal amount and serial numbers of Securities held by any Person, and the
date of commencement of such Person’s holding the same, shall be proved by the Security Register.



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



     Without limiting the foregoing, a Holder entitled hereunder to give or 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 different part of such principal amount.



     The Company may set any day as the record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this



     Indenture to be given or taken by Holders of Securities of such series, but the Company shall
have no obligation to do so. With regard to any record date set pursuant to this paragraph, the
Holders of Outstanding Securities of the relevant series on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to give or take the relevant action,
whether or not such Holders remain Holders after such record date.



Section 105. Notices, Etc., to Trustee and the Company




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



          (1) the Trustee by any Holder or by the Company shall be sufficient for every purpose
hereunder if made in writing and actually received by the Trustee at
its office at 601 Travis Street, 18th Floor, Houston, TX 77002, or at
any other address previously furnished in writing by the Trustee, or




          (2) the Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to the Company, addressed to it at 9800 Richmond Avenue, Suite 680,




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Houston, TX
77042, to the attention of the Corporate Secretary, or at any other address previously furnished in
writing to the Trustee by the Company.




Section 106. 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 (if international mail, by air mail), to each Holder affected by such
event, at his address as it appears in the Security Register, not later than the latest date (if
any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder, whether or not such
Holder actually receives such notice.



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



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



Section 107. Conflict with Trust Indenture Act




     If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act that is required under such Act to be a part of and govern this Indenture, the latter provision
shall control. If any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or excluded, as the case may be.



Section 108. Effect of Headings and Table of Contents




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



Section 109. Successors and Assigns




     All covenants and agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.



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Section 110. Separability Clause




     In case any provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.



Section 111. 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 hereunder and Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.



Section 112. Governing Law




     This Indenture and the Securities shall be governed by and construed in accordance with the
law of the State of New York.



Section 113. Legal Holidays




     In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities (other than a provision of the Securities of any
series which specifically states that such provision shall apply in lieu of this Section)) payment
of interest or principal (and premium, if any) need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.



Section 114. Language of Notices, Etc.




     Any request, demand, authorization, direction, notice, consent, waiver or Act required or
permitted under this Indenture shall be in the English language, except that any published notice
may be in an official language of the country of publication.



Section 115. Interest Limitation




     It is the intention of the Company to conform strictly to all applicable usury laws and any
subsequent revisions, repeals or judicial interpretations thereof. Accordingly, if the
transactions contemplated hereby would be usurious under any applicable law then, in that event,
notwithstanding anything to the contrary in the Securities or this Indenture, it is agreed as
follows: (i) the aggregate of all consideration which constitutes interest under applicable law
with respect to a Security shall under no circumstances exceed the maximum amount allowed by
applicable law, and any excess shall be credited to the principal amount of such Security (or, if
the principal amount of such Security shall have been paid in full, refunded to the Company), to
the extent permitted by applicable law; and (ii) in the event that the maturity of any Security is
accelerated or in the event of any redemption of such Security, then such consideration that
constitutes interest under applicable law may never include more than the maximum amount



-11-









 







allowed by
applicable law, and any excess shall be credited to the principal amount of such Security (or, if
the principal amount of such Security shall be paid in full, refunded to the Company), to the
extent permitted by applicable law. All calculations made to compute the rate of interest with
respect to a Security for the purpose of determining whether such rate exceeds the maximum amount
allowed by applicable law shall be made, to the extent permitted by such applicable law, by
allocating and spreading during the period of the full stated term of such Security all interest
any time contracted for, taken, reserved, charged or received by such Holder or by the Trustee on
behalf of any such Holder in connection therewith so that the amount or rate of interest charged
for any and all periods of time during the term of the Security does not exceed the maximum amount
or rate of interest allowed to be charged by law during the relevant period of time.
Notwithstanding any of the foregoing, if at any time applicable laws shall be changed so as to
permit a higher rate or amount of interest to be charged than that permitted prior to such change,
then unless prohibited by law, references in this Indenture or any Security to “applicable law”
when used in the context of determining the maximum interest or rate of interest that can be
charged shall be deemed to refer to such applicable law as so amended to allow the greater amount
or rate of interest.



     The right to accelerate maturity of any Security does not include the right to accelerate any
interest which has not otherwise accrued to the date of such acceleration, provided, however, that
the foregoing shall not prohibit the continuing accrual after acceleration of interest in
accordance with the terms of the Indenture and such Security.



Section 116. No Personal Liability of Officers, Directors, Employees or Shareholders




     Obligations of the Company under this Indenture and the Securities hereunder are payable only
out of cash flow and assets of the Company. The Trustee, and each Holder of a
Security by its acceptance thereof, will be deemed to have agreed in this Indenture that no
director, officer, employee, or shareholder, as such, of the Company, the Trustee, or any Affiliate
of any of the foregoing entities shall have any personal liability in respect of the obligations of
the Company under this Indenture or such Securities by reason of his, her or its status. The
agreements set forth in this Section are part of the consideration for the issuance of the
Securities.



ARTICLE II




SECURITY FORMS




Section 201. Forms Generally




     The Securities of each series shall be in substantially the form set forth in this Article, or
in such other form as shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with applicable laws or the rules of any securities exchange
or automated quotation system on which the Securities of such series may be listed or traded or of
any Depositary therefor or as may, consistently herewith, be determined by the



-12-









 







officers
executing such Securities, as evidenced by their execution of the Securities. If the form of Securities of
any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by an authorized officer or other authorized Person on
behalf of the Company and delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such Securities. Any form of
Security approved by or pursuant to a Board Resolution must be acceptable as to form by the
Trustee, such acceptance to be evidenced by the Trustee’s authentication of Securities in that
form.



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



Section 202. Form of Face of Security




     [Insert any legend required by the United States Internal Revenue Code and the regulations
thereunder.]



     [If a Global Security,—insert legend required by Section 204 of the Indenture]




     [If applicable, insert—UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS
MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]



FRANKLIN BANK CORP.




[TITLE OF SECURITY]




NO. U.S.$




[CUSIP No.          ]




     FRANKLIN BANK CORP., a Delaware corporation (herein called the “Company”, which term includes
any successor Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to      , or registered assigns, the principal sum of
United States Dollars [state other currency] on [if the
Security is to bear interest prior to Maturity, insert—, and to pay interest thereon from
        , or from the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on            and            in each year, commencing
        , at the rate of      % per



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annum, until the principal hereof is paid or made available for
payment [if applicable, insert—, and at the rate of      % per annum on any overdue principal and
premium and on any overdue installment of interest]. [If applicable, insert — The amount of
interest payable for any period shall be computed on the basis of twelve 30-day months and a
360-day year. The amount of interest payable for any partial period shall be computed on the basis
of a 360-day year of twelve 30-day months and the days elapsed in any partial month. In the event
that any date on which interest is payable on this Security is not a Business Day, then a payment
of the interest payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay) with the same force
and effect as if made on the date the payment was originally payable. A “Business Day” shall mean,
when used with respect to any Place of Payment, each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in that Place of Payment are authorized or
obligated by law, executive order or regulation to close.] The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in such 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, which shall be
the            or (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date. 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
of which shall be given to Holders of Securities of this series not less than 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
of this series may be listed or traded, and upon such notice as may be required by such exchange or
automated quotation system, all as more fully provided in such Indenture].



     [If the Security is not to bear interest prior to Maturity, insert—The principal of this
Security shall not bear interest except in the case of a default in payment of principal upon
acceleration, upon redemption or at Stated Maturity and in such case the overdue principal of this
Security shall bear interest at the rate of      % per annum, which shall accrue from the date
of such default in payment to the date payment of such principal has been made or duly provided
for. Interest on any overdue principal shall be payable on demand. Any such interest on any
overdue principal that is not so paid on demand shall bear interest at the rate of      % per
annum, which shall accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be payable on demand.]



     [If a Global Security, insert—Payment of the principal of [(and premium, if any)] and [if
applicable, insert—any such] interest on this Security will be made by transfer of immediately
available funds to a bank account in            designated by the Holder 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 [state other currency].]



     [If a Definitive Security, insert—Payment of the principal of [(and premium, if any)] and [if
applicable, insert—any such] interest on this Security will be made at the office or agency of



-14-









 







the Company maintained for that purpose in      , [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] [state other currency] [or subject to any laws or regulations applicable
thereto and to the right of the Company (as provided in the Indenture) to rescind the designation
of any such Paying Agent, at the [main] offices of            in            and
in      , or at such other offices or agencies as the Company may
designate, by [United States Dollar] [state other currency] check drawn on, or transfer to a
[United States Dollar] account maintained by the payee with, a bank in The City of New
York] (so long as the applicable Paying Agent has received proper transfer instructions in
writing at least [ ] days prior to the payment date)] [if applicable, insert—; provided,
however, that payment of interest may be made at the option of the Company by [United States
Dollar] [state other currency] check mailed to the addresses of the Persons entitled thereto as
such addresses shall appear in the Security Register] [or by transfer to a [United States Dollar]
[state other currency] account maintained by the payee with a bank in The City of New York [state
other Place of Payment] (so long as the applicable Paying Agent has received proper transfer
instructions in writing by the Record Date prior to the applicable Interest Payment Date)].]



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



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



     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.



	 	 	 	 	 	 	 
	Dated:                    
	 	 	 	 	 	 
	 	 	FRANKLIN BANK CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
 
	 
	 	 	Name:	 	 
	 	 	Title:	 	 






Section 203. Form of Reverse of Security




     This Security is one of a duly authorized issue of securities of the Company (the
“Securities”), issued and to be issued in one or more series under an Indenture dated as of
                       (the “Indenture”), between the Company and The Bank of New York Trust Company, N.A., as Trustee
(the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture
and all indentures supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are
to be, authenticated and delivered. As provided in the Indenture, the Securities may be issued in
one or more series, which different series may be issued in various



-15-









 







aggregate principal amounts,
may mature at different times, may bear interest, if any, at different rates, may be subject to
different redemption provisions, if any, may be subject to different sinking, purchase or analogous
funds, if any, may be subject to different covenants and Events of Default and may otherwise vary
as in the Indenture provided or permitted. This Security is one of the series designated on the
face hereof [if applicable, insert—, limited in aggregate principal amount to U.S.$       ].



     [If applicable, insert—The Securities of this series are subject to redemption upon not less
than 30 nor more than 60 days’ notice by mail, [if applicable, insert—(1) on in any year
commencing with the year            and ending with the year            through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any
time [if applicable, insert—on or after      , ], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as percentages of the
principal amount): If redeemed [if applicable, insert—on or before      , %, and
if redeemed] during the 12-month period beginning            of the years indicated,



	 	 	 	 	 	 	 
	  Year

	 	Redemption Price
	 	Year
	 	Redemption Price





and thereafter at a Redemption Price equal to      % of the principal amount, together in the
case of any such redemption [if applicable, insert—(whether through operation of the sinking fund
or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the relevant Record
Dates referred to on the face hereof, all as provided in the Indenture.]




     [If applicable, insert—The Securities of this series are subject to redemption upon not less
than 30 nor more than 60 days’ notice by mail, (1) on            in any year commencing
with the year            and ending with the year            through operation of the sinking fund for
this series at the Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below, and (2) at any
time [if applicable, insert—on or after ], as a whole or in part, at the election
of the Company, at the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning            of the years indicated,



	 	 	 	 	 
	 

	 	Redemption Price for
	 	Redemption Price for
	 

	 	Redemption Throughe
	 	Redemption Otherwise Than
	 

	 	Operation of the Sinking
	 	Through Operation
	     Year

	 	Fund
	 	of the Sinking Fund
	 
	 	 	 	 





-16-









 




and thereafter at a Redemption Price equal to      % of the principal amount, together in
the case of any such redemption (whether through operation of the sinking fund or otherwise) with
accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant Record Dates referred to
on the face hereof, all as provided in the Indenture.]




     [If applicable, insert—The sinking fund for this series provides for the redemption on
in each year beginning with the year            and ending with the year            of [if
applicable,—not less than $ (“mandatory sinking fund”) and not more than] $ aggregate principal
amount of Securities of this series. Securities of this series acquired or redeemed by the Company
otherwise than through [if applicable,—mandatory] sinking fund payments may be credited against
subsequent [if applicable,—mandatory] sinking fund payments otherwise required to be made [if
applicable,—in the inverse order in which they become due].]



     [If the Security is subject to redemption in part of any kind, insert—In the event of
redemption of this Security in part only, a new Security or Securities of this series and of like
tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.]



     [If applicable, insert—The Securities of this series are not redeemable prior to Stated
Maturity.]



     [If the Security is not an Original Issue Discount Security, insert—If an Event of Default
with respect to Securities of this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture.]



     [If the Security is an Original Issue Discount Security, insert—If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to—insert formula for determining the
amount. Upon payment (1) of the amount of principal so declared due and payable, and (2) of
interest on any overdue principal and overdue interest, all of the Company’s obligations in respect
of the payment of the principal of and interest, if any, on the Securities of this series shall
terminate.]



     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of not less than the Holders of a majority in aggregate principal amount
of the Outstanding Securities of all series to be affected (voting as one class). The Indenture
also contains provisions permitting the Holders of a majority in aggregate principal amount of the
Outstanding Securities of all affected series (voting as one class), on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain provisions of the
Indenture. The Indenture permits, with certain exceptions as therein



-17-









 







provided, the Holders of a
majority in principal amount of Securities of any series then Outstanding to waive past defaults
under the Indenture with respect to such series 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.



     As provided in and subject to the provisions of the Indenture, the Holder of this Security
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing Event of Default with respect to
the Securities of this series, the Holders of not less than 25% in principal amount of the
Securities of this series at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered the Trustee
reasonable indemnity and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any payment of principal hereof or
[any premium or] interest hereon on or after the respective due dates expressed herein.



     No reference herein to the Indenture and no provision of this Security or of the Indenture
shall, without the consent of the Holder, alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and [any premium and] interest on this Security
at the times, place(s) and rate, and in the coin or currency, herein prescribed, except for Section
115 of the Indenture (which limits interest to the maximum amount permissible by law), the
provisions of which are incorporated herein by reference.



     [If a Global Security, insert—This Global Security or portion hereof may not be exchanged for
Definitive Securities of this series except in the limited circumstances provided in the Indenture.



     The holders of beneficial interests in this Global Security will not be entitled to receive
physical delivery of Definitive Securities except as described in the Indenture and will not be
considered the Holders thereof for any purpose under the Indenture.]



     [If a Definitive Security, insert—As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the office or agency of
the Company in [if applicable, insert — any place where the principal of and any premium and
interest on this Security are payable] [if applicable, insert— The City of New York [, or, subject
to any laws or regulations applicable thereto and to the right of the Company (limited as provided
in the Indenture) to rescind the designation of any such transfer agent, at the [main] offices of
in            and in            or at such
other offices or agencies as the Company may designate]], duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new



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Securities of this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or transferees.]



     The Securities of this series are issuable only in registered form without coupons in
denominations of U.S.$ [state other currency] and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series 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.



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



     Obligations of the Company under the Indenture and the Securities thereunder, including this
Security, are payable only out of cash flow and assets of the Company. The Trustee, and each Holder
of a Security by its acceptance hereof, will be deemed to have agreed in the Indenture that no
director, officer, employee, or shareholder, as such, of the Company, the Trustee, or any Affiliate
of any of the foregoing entities shall have any personal liability in respect of the obligations of
the Company under the Indenture or such Securities by reason of his, her or its status.



     The Indenture contains provisions that relieve the Company from the obligation to comply with
certain restrictive covenants in the Indenture and for satisfaction and discharge at any time of
the entire indebtedness upon compliance by the Company with certain conditions set forth in the
Indenture.



     This Security shall be governed by and construed in accordance with the laws of the State of
New York.



     All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.



     [If a Definitive Security, insert as a separate page—




     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
                    (Please Print or Typewrite Name and Address of Assignee) the within
instrument of FRANKLIN BANK CORP., and does hereby irrevocably constitute and appoint
                    Attorney to transfer said instrument on the books of the within-named
Company, with full power of substitution in the premises.



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Please Insert Social Security or

Other Identifying Number of Assignee:




	 	 	 	 	 	 	 
	Dated:

	 	 
	 	 
	 	(Signature)






Signature Guarantee:




(Participant in a Recognized Signature



Guaranty Medallion Program)




     NOTICE: The signature to this assignment must correspond with the name as written upon the
face of the within instrument in every particular, without alteration or enlargement or any change
whatever.]



Section 204. Global Securities




     Every Global Security authenticated and delivered hereunder shall bear a legend in
substantially the following form:




                    THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR
SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A
NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND
DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS
SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.



     If Securities of a series are issuable in whole or in part in the form of one or more Global
Securities, as contemplated by Section 301, then, notwithstanding Clause (9) of Section 301 and the
provisions of Section 302, any Global Security shall represent such of the Outstanding Securities
of such series as shall be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon and that the aggregate amount
of Outstanding Securities represented thereby may from time to time be reduced or increased, as the
case may be, to reflect exchanges. Any endorsement of a Global Security to reflect the amount, or
any reduction or increase in the amount, of Outstanding Securities represented thereby shall be
made in such manner and upon instructions given by such Person or Persons as shall be specified
therein or in a Company Order. Subject to the provisions of Sections 303, 304 and 305, the Trustee
shall deliver and redeliver any Global Security in the manner and upon instructions given by the
Person or Persons specified therein or in the applicable Company Order. Any instructions by the
Company with respect to endorsement or delivery or redelivery of a Global Security shall be in a
Company Order (which need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel).



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     The provisions of the last sentence of Section 303 shall apply to any Security represented by
a Global Security if such Security was never issued and sold by the Company and the Company
delivers to the Trustee the Global Security together with a Company Order (which need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel) with regard to the reduction
or increase, as the case may be, in the principal amount of Securities represented thereby,
together with the written statement contemplated by the last sentence of Section 303.



Section 205. Form of Trustee’s Certificate and Authorization




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



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



	 	 	 	 	 
	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.

As Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 



ARTICLE III




THE SECURITIES




Section 301. Amount Unlimited; Issuable in Series





     The aggregate principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.



     The Securities may be issued in one or more series. There shall be established in or pursuant
to a Board Resolution (and, subject to Section 303, to the extent established pursuant to rather
than set forth in a Board Resolution, in an Officers’ Certificate or Company Order setting forth,
or determining the manner of, such establishment) or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,



          (1) the form and title of the Securities of the series (which shall distinguish the Securities
of the series from Securities of any other series);




          (2) any limit upon the aggregate principal amount of the Securities of the series which may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series
pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and delivered hereunder);




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          (3) the Person to whom any interest on a Security of the series shall be payable, if other
than 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;




          (4) the date or dates on which the Securities will be issued and on which the principal of,
and premium, if any, on the Securities of the series is payable or the method of determination
thereof;




          (5) the rate or rates (which may be fixed or variable) at which the Securities of the series
shall bear interest, if any, or the method of determination thereof, the date or dates
from which such interest shall accrue, or the method of determination thereof, the Interest
Payment Dates on which any such interest shall be payable and the Regular Record Date for any
interest payable on any Interest Payment Date;




          (6) the place or places where, subject to the provisions of Section 1002, the principal of and
any premium and interest on Securities of the series shall be payable, Securities of the series may
be surrendered for registration of transfer, Securities of the series may be surrendered for
exchange and notices, and demands to or upon the Company in respect of the Securities of the series
and this Indenture may be served;




          (7) the period or periods, if any, within which, the price or prices at which and the terms
and conditions upon which Securities of the series may be redeemed, in whole or in part, at the
option of the Company or otherwise, if the Company is to have that option;




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




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




          (10) whether payment of principal of and premium, if any, and interest, if any, on the
Securities of the series shall be without deduction for taxes, assessments or governmental charges
paid by Holders of the series;




          (11) the currency, currencies or currency units in which payment of the principal of and any
premium and interest on any Securities of the series shall be denominated, payable, redeemable or
purchasable if other than the currency of the United States of America and the manner of
determining the equivalent thereof in the currency of the United States of America for purposes of
the definition of “Outstanding” in Section 101;




          (12) if the amount of payments of principal of or any premium or interest on any Securities of
the series may be determined with reference to an index, the manner in which such amounts shall be
determined;




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          (13) if the principal of or any premium or interest on any Securities of the series is to be
payable, at the election of the Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any premium and interest on
Securities of such series as to which such election is made shall be payable, and the periods
within which and the terms and conditions upon which such election is to be made;




          (14) the right, if any, of the Company to defer payments of interest by extending the interest
payment periods and specify the duration of such extension, the Interest Payment Dates on which
such interest shall be payable and whether and under what circumstances additional interest on
amounts deferred shall be payable;




          (15) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502 or provable in bankruptcy pursuant to Section 504 or the method of
determination thereof;




          (16) if and as applicable, that the Securities of the series shall be issuable in whole or in
part in the form of one or more Global Securities (and whether in temporary or permanent global
form) and, in such case, the Depositary or Depositaries for such Global Security or Global
Securities and any circumstances other than those set forth in Section 305 in which any such Global
Security may be transferred to, and registered and exchanged for Securities registered in the name
of, a Person other than the Depositary for such Global Security or a nominee thereof and in which
any such transfer may be registered;




          (17) any deletions from, modifications of or additions to the Events of Default set forth in
Section 501 or the covenants of the Company set forth in Article X pertaining to the Securities of
the series;




          (18) if and the terms and conditions upon which any Securities of the series may be converted
into or exchanged for securities, which may include, without limitation, capital stock, of any
class or series of the Company or any other issuer;




          (19) If the amount of payments of principal of or any premium or interest on any Securities of
the series may be determined with reference to an index, including, but not limited to an index
based on a currency or currencies other than that in which the Securities of that series are
payable, or any other type of index, the manner in which such amounts shall be determined;




          (20) if other than as provided in Sections 1302 and 1303, the terms and conditions upon which
and the manner in which such series of Securities may be defeased or discharged;




          (21) if other than the Trustee, the identity of any other trustee, the Security Registrar and
any Paying Agent;




-23-









 








          (22) any restrictions or other provisions with respect to the transfer or exchange of the
Securities; and




          (23) any other terms of the Securities of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by
Section 901(3)).




     All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to the Board Resolution or Officers’
Certificate referred to above or in any such indenture supplemental hereto.



     Any such Board Resolution or Officers’ Certificate referred to above with respect to
Securities of any series filed with the Trustee on or before the initial issuance of the Securities
of such series shall be incorporated herein by reference with respect to Securities of such series
and shall thereafter be deemed to be a part of the Indenture for all purposes relating to
Securities of such series as fully as if such Board Resolution or Officers’ Certificate were set
forth herein in full.



     All Securities of any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the Holders, for increases in the
aggregate principal amount of such series of Securities and issuances of additional Securities of
such series or for the establishment of additional terms with respect to the Securities of such
series.



     If any of the terms of the series are established by action taken by or pursuant to a Board
Resolution, a copy of an appropriate record of such action shall be certified by an authorized
officer or other authorized person of the Company and delivered to the Trustee at or prior to the
delivery of the Officers’ Certificate setting forth, or providing the manner for determining, the
terms of the series.



     With respect to Securities of a series subject to a Periodic Offering, such Board Resolution
or Officers’ Certificate may provide general terms for Securities of such series and provide either
that the specific terms of particular Securities of such series shall be specified in a Company
Order, or that such terms shall be determined by the Company, or one or more of the Company’s
agents designated in an Officers’ Certificate, in accordance with a Company Order.



Section 302. Denominations




     The Securities of each series shall be issuable only in registered form without coupons in
such denominations as shall be specified as contemplated by Section 301. In the absence of any
such specified denomination with respect to the Securities of any series, the Securities of such
series shall be issuable in denominations of $1,000 and any integral multiple thereof.



Section 303. Execution, Authentication, Delivery and Dating




     The Securities shall be executed on behalf of the Company by the Chairman of the Board, Vice
Chairman, Chief Executive Officer, Chief Financial Officer, President or any Vice President of the
Company and need not be attested. The signature of any of these officers on the Securities may be
manual or facsimile.



-24-









 





     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.



     At any time and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series 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; provided, however, that in the case of Securities offered in a Periodic Offering,
the Trustee shall authenticate and deliver such Securities from time to time in accordance with
such other procedures (including, without limitation, the receipt by the Trustee of oral or
electronic instructions from the Company or its duly authorized agents, thereafter promptly
confirmed in writing) acceptable to the Trustee as may be specified by or pursuant to a Company
Order delivered to the Trustee prior to the time of the first authentication of Securities of such
series. If the form or terms of the Securities of the series have been established in or pursuant
to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, in addition to any Officers’ Certificate and
Opinion of Counsel required to be furnished to the Trustee pursuant to Section 102, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating,



          (1) the form and terms (or the manner of determining the terms) of such Securities have been
established by or pursuant to Board Resolution as permitted by Section 201, that such form or forms
have been established in conformity with the provisions of this Indenture;




          (2) if the terms of such Securities have been, or in the case of Securities of a series
offered in a Periodic Offering, will be, established by or pursuant to a Board Resolution as
permitted by Section 301, that such terms have been, or in the case of Securities of a series
offered in a Periodic Offering, will be, established in conformity with the provisions of this
Indenture, subject, in the case of Securities of a series offered in a Periodic Offering, to any
conditions specified in such Opinion of Counsel (which conditions are reasonably acceptable to the
Trustee);




          (3) that 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, which
conditions are reasonably acceptable to the Trustee, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their 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 and
entitled to the benefits of this Indenture, equally and ratably with all other Securities, if any,
of such series Outstanding; and




          (4) such other matters as the Trustee may reasonably request;




-25-









 







and, if the authentication and delivery relates to a new series of Securities created by an
indenture supplemental hereto, also stating that all conditions precedent to the execution of the
supplemental indenture with respect to that series of Securities have been complied with, the
Company has the power to execute and deliver any such supplemental indenture and has taken all
necessary action for those purposes and any such supplemental indenture has been executed and
delivered and constitutes the legal, valid and binding obligation of the Company enforceable in
accordance with its terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other laws and legal principles
affecting creditors’ rights generally from time to time in effect and to general equitable
principles, whether applied in an action at law or in equity).




     If such form or forms or terms have been so established, the Trustee shall not be required to
authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect
the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.



     Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all
Securities of a series are not to be originally issued at one time, it shall not be necessary to
deliver the Officers’ Certificate otherwise required pursuant to Section 301 or the Company Order
and Opinion of Counsel or Board Resolution or supplemental indenture otherwise required pursuant to
such preceding paragraph at or prior to the time of authentication of each Security of such series
if such documents are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.



     With respect to Securities of a series not to be originally issued at one time, the Trustee
may rely upon the Opinion of Counsel and the other documents delivered pursuant to Sections 201 and
301 and this Section, as applicable, in connection with the first authentication of Securities of
such series and any subsequent request by the Company to the Trustee to authenticate Securities of
such series upon original issuance shall constitute a representation and warranty by the Company
that as of the date of such request, the statements made in the Officers’ Certificate shall be true
and correct as if made on such date.



     Each Security shall be dated the date of its authentication.



     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 manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Security to the Trustee for cancellation as provided in Section 309 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.



-26-









 





Section 304. Temporary Securities




     Pending the preparation of Definitive Securities of any series, the Company may execute, and
upon receipt of the documents required by Section 303, together with a Company Order, the Trustee
shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of
the Definitive Securities of like series 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.



     If temporary Securities of any series are issued, the Company will cause Definitive Securities
of that series to be prepared without unreasonable delay. After the preparation of Definitive
Securities of such series, the temporary Securities of such series shall be exchangeable for
Definitive Securities of such series upon surrender of the temporary Securities of such series at
the office or agency of the Company maintained pursuant to Section 1002 for the purpose of
exchanges of Securities of such series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or more Definitive Securities
of the same series, of any authorized denominations and of a like aggregate principal amount and
tenor. Until so exchanged the temporary Securities of any series shall in all respects be entitled
to the same benefits under this Indenture as Definitive Securities of such series and tenor.



Section 305. Registration, Registration of Transfer and Exchange




     The Company shall cause to be kept at an office or agency of the Security Registrar in The
City of New York a register (the register maintained in such office or in any other office or
agency of the Company in a Place of Payment being herein sometimes referred to as the “Security
Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The Company shall,
prior to the issuance of any Securities hereunder, appoint the Trustee as the initial “Security
Registrar” for the purpose of registering Securities and transfers of Securities as herein provided
and its office located at 101 Barclay New York, NY, as the initial
office or agency in The City of New York where the Security Register will be maintained. The
Company may at any time replace such Security Registrar, change such office or agency or act as its
own Security Registrar. The Company will give prompt written notice to the Trustee of any change
of the Security Registrar or of the location of such office or agency. At all reasonable times the
Security Register shall be available for inspection by the Trustee.



     Upon surrender for registration of transfer of any Security of any series at the office or
agency of the Company maintained pursuant to Section 1002 for such purpose, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Securities of the same series, of any authorized denominations and
of a like aggregate principal amount and tenor.



     At the option of the Holder, Securities of any series (except a Global Security) may be
exchanged for other Securities of the same series, of any authorized denominations and of a like



-27-









 







aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.



     All Securities issued upon any registration of 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 registration of transfer or exchange.



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



     No service charge shall be made for any registration of transfer or exchange of Securities,
but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304 or 1107 not involving any transfer.



     Neither the Trustee nor the Company shall be required (1) to issue, register the transfer of
or exchange Securities of any series (or of any series and specified tenor, as the case may be)
during a period beginning at the opening of business 15 days before the day of mailing of a notice
of redemption of Securities of that series selected for redemption under Section 1103 and ending at
the close of business on the day of such mailing, or (2) to register the transfer of or exchange
any Security so selected for redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.



     Notwithstanding any other provision in this Indenture and except as otherwise specified as
contemplated by Section 301, no Global Security may be transferred to, or registered or exchanged
for Securities registered in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, except as provided in this
paragraph. Every Security authenticated and delivered upon registration or transfer of, or in
exchange for or in lieu of, a Global Security shall be a Global Security, except as provided in
this paragraph. If (1) (A) the Depositary for a Global Security notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or ceases to be a clearing
agency registered under the Exchange Act, and (B) a successor Depositary is not appointed by the
Company within 90 days, (2) an Event of Default has occurred and is continuing with respect to the
Securities of such series and the Security Registrar has received a request from the Depositary to
issue certificated securities in lieu of all or a portion of the Global Securities of such series
(in which case the Company shall deliver certificated securities within 30 days of such request) or
(3) the Company determines in its sole discretion that Securities of a series issued in global form
shall no longer be represented by a
Global Security, then such Global Security may be exchanged by such Depositary for Definitive
Securities of the same series, of any authorized denomination and of a like aggregate principal
amount and tenor, registered in the names of, and the transfer of such Global Security or portion
thereof may be registered to, such Persons as such Depositary shall direct.



-28-









 





Section 306. Mutilated, Destroyed, Lost and Stolen Securities




     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 them and any agent of
either of them harmless, the Company shall execute and upon its request the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series and of like tenor
and principal amount and bearing a number not contemporaneously Outstanding.



     If there shall be delivered to the Company and the Trustee (1) evidence to their satisfaction
of the destruction, loss or theft of any Security and (2) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series
and of like tenor and principal amount and bearing a number not contemporaneously Outstanding. If,
after the delivery of such new Security, a bona fide purchaser of the original Security in lieu of
which such new Security was issued presents for payment or registration such original Security, the
Trustee shall be entitled to recover such new Security from the party to whom it was delivered or
any party taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred
by the Company and the Trustee in connection therewith.



     In case 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.



     Upon the issuance of any new Security under this Section, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee) connected
therewith. Every new Security of any series issued pursuant to this Section in exchange for any
mutilated Security or in lieu of any 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 of
that series duly issued hereunder.



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



Section 307. Payment of Interest; Interest Rights Preserved




     Except as otherwise provided as contemplated by Section 301 with respect to any series of
Securities, interest on any Security which 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



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or
more Predecessor Securities) is registered at the close of business on the Regular Record Date for
such interest.



     Any interest on any Security of any series which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the 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 Clause (1) or (2) below:



          (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities) are registered at
the close of business on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the 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 Securities of such series at
his address as it appears in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities of such series (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).




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




     Subject to the foregoing provisions of this Section and Section 305, each Security delivered
under this Indenture upon registration of transfer of or in exchange for or in lieu of any other
Security, shall carry the rights to interest accrued and unpaid, and to accrue, which were carried
by such other Security.



     For each series of Securities, the Company shall, prior to 10:30 a.m. (New York City time) on
each payment date for principal and premium, if any, and interest, if any, deposit with



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the Trustee
money in immediately available funds sufficient to make cash payments due on the applicable payment
date.



Section 308. Persons Deemed Owners




     Except as otherwise provided as contemplated by Section 301 with respect to any series of
Securities, prior to due presentment of a Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of receiving payment of
principal of and any premium and (subject to Sections 305 and 307) any interest on such Security
and for all other purposes whatsoever, whether or not such Security is overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.



     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 for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.



Section 309. Cancellation




     All Securities surrendered for payment, redemption, registration of transfer or exchange or
for credit against any sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by it. The Company may at any
time deliver to the Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold, 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, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall be disposed of in
accordance with its customary procedures, and the Trustee shall
thereafter, from time to time upon written request, deliver to the Company a
certificate with respect to such disposition.



Section 310. Computation of Interest




     Except as otherwise specified as contemplated by Section 301 for Securities of any series,
interest on the Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months and interest on the Securities of each series for any partial period shall be
computed on the basis of a 360-day year of twelve 30-day months and the number of days elapsed in
any partial month.



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Section 311. CUSIP Numbers




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



ARTICLE IV




SATISFACTION AND DISCHARGE




Section 401. Satisfaction and Discharge of Indenture




     This Indenture shall upon Company Request cease to be of further effect with respect to
Securities of any series (except as to any surviving rights of registration of transfer or exchange
of such Securities herein expressly provided for), and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with
respect to such Securities, when



          (1) either




                    (A) all such Securities theretofore authenticated and delivered (other than (i) such
Securities which have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, and (ii) such 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 1003) have been delivered to the
Trustee for cancellation; or



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



                              (i) have become due and payable,



                              (ii) will become due and payable at their Stated Maturity within one year, or



                              (iii) are to be called for redemption within one 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 (i), (ii) or (iii) above, has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for this purpose an amount of money in the
currency or currency units in which such Securities are payable sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee for


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 cancellation,
for principal and any premium and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may
be;




          (2) the Company has paid or caused to be paid all other sums payable hereunder by the Company
with respect to such Securities; and




          (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture with respect to such Securities have been complied
with.




     Notwithstanding the satisfaction and discharge of this Indenture with respect to Securities of
any series, (i) the obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and the right of the Trustee to resign
under Section 610 shall survive, and (ii) if money shall have been deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Company and/or the
Trustee under Sections 402, 606, 701 and 1002 and the last paragraph of Section 1003 shall survive.



Section 402. Application of Trust Money




     Subject to the provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine,
to the Persons entitled thereto, of the principal and any premium and interest for whose payment
such money has been deposited with the Trustee.



ARTICLE V




REMEDIES




Section 501. Events of Default




     “Event of Default”, wherever used herein with respect to Securities of any series, means 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):



          (1) default in the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days; or




          (2) default in the payment of the principal of (or premium, if any, on) any Security of that
series at its Maturity; or




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          (3) default in the performance, or breach, of any term, covenant or warranty of the Company in
this Indenture (other than a term, covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with or which has expressly been included in
this Indenture solely for the benefit of series of Securities other than that series), and
continuance of such default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by
Holders of at least 25% in principal amount of the Outstanding Securities of that series 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; or




          (4) the Company pursuant to or within the meaning of any Bankruptcy Law (A) commences a
voluntary case, (B) consents to the entry of any order for relief against it in an involuntary
case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its
property, or (D) makes a general assignment for the benefit of its creditors; or




          (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that
(A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the
Company or for all or substantially all of its property, or (C) orders the liquidation of the
Company; and the order or decree remains unstayed and in effect for 90 days; or




          (6) any other Event of Default provided as contemplated by Section 301 with respect to
Securities of that series.




Section 502. Acceleration of Maturity; Rescission and Annulment




     If an Event of Default with respect to Securities of any series at the time Outstanding occurs
and is continuing, then in every such case the Trustee or Holders of not less than 25% in
principal amount of the Outstanding Securities of that series may declare the principal amount
of (or, if any of the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount of such Securities as may be specified in the terms thereof) all of
the Securities of that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.



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



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




                    (A) all overdue interest on all Securities of that series,



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                    (B) the principal of (and premium, if any, on) any Securities of that series which have become
due otherwise than by such declaration of acceleration and any interest thereon at the rate or
rates prescribed therefor in such Securities,



                    (C) to the extent that payment of such interest is lawful, interest upon overdue interest at
the rate or rates prescribed therefor in such Securities, and



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



and




          (2) all Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Section 513.




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



Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee




          The Company covenants that if




          (1) default is made in the payment of any interest on any Security when such interest becomes
due and payable and such default continues for a period of 30 days, or




          (2) default is made in the payment of the principal of (or premium, if any, on) any Security
at the Maturity thereof,



the Company will, upon demand of the Trustee, pay to it, for the benefit of Holders of such
Securities, the whole amount then due and payable on such Securities for principal and any premium
and interest and, to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.




     If 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, 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 such Securities, wherever situated.



     If an Event of Default with respect to Securities of any series 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 of such series by such appropriate judicial proceedings as the Trustee shall



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deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.



Section 504. Trustee May File Proofs of Claim




     In case of any judicial proceeding relative to the Company, or any other obligor upon the
Securities, their property or their creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions authorized under the
Trust Indenture Act in order to have claims of 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
Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.



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



Section 505. Trustee May Enforce Claims 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, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of Holders of the Securities in
respect of which such judgment has been recovered.



Section 506. Application of Money Collected




     Any money or property collected or to be applied by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money or property on account of principal or any premium or 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 under Section 607;




     SECOND: To the payment of the amounts then due and unpaid for principal of and any premium
and interest on the Securities in respect of which or for the benefit of which such



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money has been
collected, ratably, without preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and any premium and interest, respectively; and



     THIRD: The balance, if any, to the Company.



Section 507. Limitation on Suits




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



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




          (2) Holders of not less than 25% in principal amount of the Outstanding Securities of that
series 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;




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




          (4) the Trustee for 60 days after its receipt of such notice, request and offer and, if
requested, provision of security or indemnity has failed to institute any such proceeding; and




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



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 of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, 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 of such Holders.




Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest




     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 any
premium and (subject to Sections 305 and 307) interest on such Security on the respective Stated
Maturity expressed in such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.




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Section 509. Restoration of Rights and Remedies




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



Section 510. Rights and Remedies Cumulative




     Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to 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 511. Delay or Omission Not Waiver




     No delay or omission of the Trustee or of any Holder of any Securities 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 or by law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.



Section 512. Control by Holders




     Subject to the provisions of Section 603, Holders of a majority in aggregate principal amount
of the Outstanding Securities of any series 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, with respect to the Securities of such series; provided,
however, that



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




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




          (3) subject to the provisions of Section 601, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall determine that the proceeding so
directed would involve the Trustee in personal liability or would otherwise be contrary to
applicable law.




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Section 513. Waiver of Past Defaults




     Holders of a majority in aggregate principal amount of the Outstanding Securities of any
series may on behalf of Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except



          (1) a continuing default in the payment of the principal of or any premium or interest on any
Security of such series, or




          (2) a default in respect of a covenant or provision hereof which under Article IX cannot be
modified or amended without the consent of the Holder of each Outstanding Security of such series
affected.




     Upon any such waiver, such 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 default or impair any right consequent thereon.



Section 514. Undertaking for Costs




     In any suit for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such suit, and may
assess costs against any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, however, that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an assessment in any
suit instituted by the Trustee, in any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% in principal amount of the Outstanding Securities of any series to
which the suit relates, or in any suit instituted by any Holder for the enforcement of the payment
of the principal of (or premium, if any) or interest on any Security on or after the respective
Stated Maturity expressed by such Security (or, in the case of redemption or repayment, on or after
the Redemption Date).



ARTICLE II




THE TRUSTEE




Section 601. Certain Duties and Responsibilities




          (a) Except during the continuance of an Event of Default with respect to any series of
Securities,





     (1) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture with respect to the Securities of such series, and
no implied covenants or obligations shall read into this Indenture against the Trustee; and




     (2) in the absence of bad faith on its part, the Trustee may, with respect to
Securities of such series, conclusively rely, as to the truth of the statements and



-39-









 







the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture.



          (b) In case an Event of Default with respect to any series of Securities has occurred and is
continuing, the Trustee shall exercise with respect to the Securities of such series such rights
and powers vested in it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent Person would exercise or use under the circumstances in the conduct of such
person’s own affairs.




          (c) No provisions of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that





     (1) this Subsection shall not be construed to limit the effect of Subsection (a) of
this Section;




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




     (3) 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 or a majority in
principal amount of the Outstanding Securities of any series relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture with respect
to the Securities of such series; and




     (4) 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.



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




Section 602. Notice of Defaults




     If a Default occurs and is continuing with respect to the Securities of any series, the
Trustee shall, within 90 days after it occurs, transmit, in the manner and to the extent provided
in Section 313(c) of the Trust Indenture Act, notice of all uncured or unwaived Defaults known to
it; provided, however, that, except in the case of a Default in payment on the Securities of any
series, the Trustee shall be protected in withholding the notice if and so long as the board of
directors, the executive committee or a trust committee of directors or responsible officers of the

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Trustee determine in good faith that withholding such notice is in the interests of Holders of
Securities of such series; provided, further, however, that, in the case of any default or breach
of the character specified in Section 501(3) with respect to the Securities of such series, no such
notice to Holders shall be given until at least 90 days after the occurrence thereof.




     The Trustee shall not be deemed to have notice or be charged with knowledge of any Default,
except a Default under Sections 501(1) or 501(2) herein, unless the Trustee shall have received
from the Company or from any Holder written notice thereof at its Corporate Trust Office, and such
notice references the Securities in this Indenture. In the absence of any such notice, the Trustee
may conclusively assume that no such Default exists.





Section 603. Certain Rights of Trustee




     Subject to the provisions of Section 601:



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



     (2) any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (or in the case of a Periodic
Offering, as agreed in procedures set forth in a Company Order pursuant to Section 303) and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;



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



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



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



     (6) the Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may, without obligation to do so, make such further inquiry or
investigation into such facts or matters as it may see fit; and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;



     (7) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not



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be responsible for any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and




          (8) the Trustee may request that the Company deliver an Officers’ Certificate setting forth
the names of individuals and/or titles of officers authorized at such time to take specified
actions pursuant to this Indenture, which Officers’ Certificate may be signed by any Person
authorized to sign an Officers’ Certificate, including any Person specified as so authorized in any
such certificate previously delivered and not superseded.




Section 604. 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 the Trustee or any
Authenticating Agent assumes no responsibility for their correctness. Neither the Trustee nor any
Authenticating Agent makes any 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 Securities or the proceeds thereof.



Section 605. May Hold Securities




     The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar
or such other agent.



Section 606. Money Held in Trust




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



Section 607. Compensation and Reimbursement




     The Company agrees:



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




          (2) 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
or bad faith; and




          (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or
expense incurred without gross negligence or bad faith on its part, arising out of or in




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connection with the acceptance or administration of the trust or trusts 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.




     The obligations of the Company under this Section to compensate the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder.



     Without limiting any rights available to the Trustee under applicable law, when the Trustee
incurs expenses or renders services in connection with an Event of Default specified in Section
501(4) or Section 501(5), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for such services are intended to constitute expenses of
administration under any applicable Bankruptcy Law.



     The provisions of this Section shall survive the satisfaction and discharge of this Indenture
and the defeasance of the Securities.



Section 608. Disqualification; Conflicting Interests




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



Section 609. Corporate Trustee Required; Eligibility




     There shall at all times be one or more Trustees hereunder with respect to the Securities of
each series, at least one of which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus required by the Trust Indenture
Act. If such Person publishes reports of condition at least annually, pursuant to law or to the
requirements of a supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.



Section 610. Resignation and Removal; Appointment of Successor




     No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to
this Article shall become effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.



     The Trustee may resign at any time with respect to the Securities of one or more series by
giving written notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Securities of such
series.



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     The Trustee may be removed at any time with respect to the Securities of any series by Act of
the Holders of a majority in principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of such notice of
removal, the removed Trustee may petition any court of competent jurisdiction for the appointment
of a successor Trustee.



     If at any time:



          (1) the Trustee shall fail to comply with Section 608 after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or




          (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after
written request therefor by the Company or by any such Holder, or




          (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (A) the Company, acting pursuant to the
authority of a Board Resolution, may remove the Trustee with respect to all Securities, or (B)
subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.




     If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall
occur in the office of Trustee for any cause, with respect to the Securities of one or more series,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of such series and
that at any time there shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the occurrence of such vacancy, a successor
Trustee with respect to the Securities of any series shall be appointed by Act of Holders of a
majority in principal amount of the Outstanding Securities of such series delivered to the Company
and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section 611, become the
successor Trustee with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities
of any series shall have been so appointed by the Company or Holders and accepted appointment in
the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of
such series for at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.



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     The Company shall give notice of each resignation and each removal of the Trustee with respect
to the Securities of any series and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders of Securities of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.



Section 611. Acceptance of Appointment by Successor




          (1) In case of the appointment hereunder of a successor Trustee with respect to all
Securities, every such 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; but, 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.




          (2) In case of the appointment hereunder of a successor Trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment and which (A)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
Trustee relates, (B) if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (C) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute
such Trustees as co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any
other such Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the extent provided
therein and each 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 with respect to the
Securities of that or those series to which the appointment of such successor Trustee relates, but,
on request of the Company, or any successor Trustee, such retiring Trustee shall, upon payment of
its charges, duly assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.




          (3) 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

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Trustee all such rights, powers and trusts referred to in paragraph (1) or (2) of this
Section, as the case may be.




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




Section 612. Merger, Conversion, Consolidation or Succession to Business




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



Section 613. Preferential Collection of Claims Against the Company




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



Section 614. Appointment of Authenticating Agent




     The Trustee (upon notice to the Company) may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original issue (in accordance with
procedures acceptable to the Trustee) and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, 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 and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business under the laws of the
United States of America, any State 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 $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, the combined
capital and surplus of such Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section,



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such Authenticating Agent shall resign immediately in the manner and with the effect specified
in this Section.




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



     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, the Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the Company. 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. No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section.



     Except with respect to an Authenticating Agent appointed at the request of the Company, the
Trustee agrees to pay to each Authenticating Agent from time to time reasonable compensation for
its services under this Section.



     If an appointment with respect to one or more series is made pursuant to this Section, the
Securities of such series 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 of the series designated therein referred to in the
within-mentioned Indenture.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.
	 	 	 	 	 	 	As Trustee
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

As Authenticating Agent
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Authorized Signatory
	 	 	 	 






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ARTICLE
VII




HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND THE COMPANY




Section 701. The Company to Furnish Trustee Names and Addresses of Holders




     The Company will furnish or cause to be furnished to the Trustee



          (1) semi-annually, not later than each Interest Payment Date in each year, a list for each
series of Securities, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities of such series as of the preceding Regular Record Date, and




          (2) at such other times as the Trustee may request in writing, within 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 15 days prior to the time such list is furnished;



provided, however, that if and so long as the Trustee shall be the Security Registrar for
Securities of a series, no such list need be furnished with respect to such series of Securities.




Section 702. Preservation of Information; Communications to Holders




     The Trustee shall comply with the obligations imposed upon it pursuant to Section 312 of the
Trust Indenture Act.



     The rights of the 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 by the Trust Indenture Act.



     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 any disclosure of information as to the names and addresses of Holders
made pursuant to the Trust Indenture Act.



Section 703. Reports by Trustee




     As promptly as practicable after each May 15 beginning with the May 15 following the date
of this Indenture, and in any event prior to July 15 in each year, the Trustee shall mail to each
Holder a brief report dated as of May 15 that complies with Trust Indenture Act Section 313(a).
The Trustee also shall comply with Trust Indenture Act Section 313(b). Prior to delivery to the
Holders, the Trustee shall deliver to the Company a copy of any report it delivers to Holders
pursuant to this Section 703; provided, however, that no recourse may be taken against the Trustee for its failure to
deliver a copy of such report to the Company prior to its delivery of the report to the Holders.



     A copy of each such report shall, at the time of such transmission to Holders, be filed by the
Trustee with each stock exchange upon which any Securities are listed, with the Commission and with
the Company. The Company will notify the Trustee when any Securities are listed on any stock
exchange.



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Section 704. Reports by the Company




     The Company shall:



          (1) file with the Trustee, within 15 days after the Company is required to file the same with
the Commission, copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act;




          (2) file with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and covenants of this Indenture as
may be required from time to time by such rules and regulations; and




          (3) transmit by mail to all Holders, as their names and addresses appear in the Security
Register, within 30 days after the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Company pursuant to paragraphs (1)
and (2) of this Section as may be required by rules and regulations prescribed from time to time by
the Commission.




ARTICLE
VIII




CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE




Section 801. The Comapany 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, unless:



          (1) the Person formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any State thereof or the District
of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal
of and any premium and interest on all the Securities and the performance or observance of every
other covenant of this Indenture on the part of the Company to be performed or observed;




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




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          (3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease,
properties or assets of the Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this Indenture, the Company or such
successor Person, as the case may be, shall take such steps as shall be necessary effectively to
secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and




          (4) 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 such
supplemental indenture comply with this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.




Section 802. Successor Substituted




     Upon any consolidation of the Company with, or merger of the Company into, any other Person or
any conveyance, transfer or lease of the properties and assets of the Company substantially as an
entirety in accordance with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as the Company herein and
thereafter, except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities and coupons and may liquidate and
dissolve.



ARTICLE
IX




SUPPLEMENTAL INDENTURES




Section 901. Supplemental Indentures Without Consent of Holders




     Without the consent of any Holders of Securities, the Company and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory
to the Trustee, for any of the following purposes:



          (1) to evidence the succession of another Person to the Company under this Indenture and the
Securities and the assumption by such successor Person of the obligations of the Company hereunder;




          (2) to add covenants and Events of Default for the benefit of the Holders of all or any series
of such Securities or to surrender any right or power conferred by this Indenture upon the Company
or to make any change that does not adversely affect the legal rights hereunder of any Holder in
any material respect;




          (3) to add to, change or eliminate any of the provisions of this Indenture, provided that any
such addition, change or elimination shall become effective only after there are no such Securities
of any series entitled to the benefit of such provision outstanding;




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          (4) to establish the forms or terms of the Securities of any series issued hereunder;




          (5) to cure any ambiguity or correct any defect or inconsistency in this Indenture;




          (6) to evidence the acceptance of appointment by a successor Trustee with respect to one or
more series of Securities or otherwise;




          (7) to qualify this Indenture under the Trust Indenture Act;




          (8) to provide for uncertificated securities in addition to certificated securities;




          (9) to supplement any provisions of this Indenture necessary to permit or facilitate the
defeasance and discharge of any series of Securities, provided that such action does not adversely
affect the interests of the Holders of Securities of such series or any other series; and




          (10) to comply with the rules or regulations of any securities exchange or automated quotation
system on which any of the Securities may be listed or traded.




Section 902. Supplemental Indentures with Consent of Holders




     With the consent of the Holders of not less than a majority in aggregate principal amount of
all Outstanding Securities affected by such supplemental indenture (voting as one class), the
Company 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 modifying in any manner the rights of Holders of Securities of such series
under this Indenture; provided that the Company and the Trustee may not, without the consent of the
Holder of each Outstanding Security affected thereby,



          (1) change the Stated Maturity of the principal of, or any installment of principal of or
interest, if any, on, any Security, or reduce the principal amount thereof or premium, if any, on
or the rate of interest thereon or alter the method of computation of interest;




          (2) reduce the percentage in principal amount of Securities required for any such supplemental
indenture or for any waiver provided for in this Indenture;




          (3) change the Company’s obligation to maintain an office or agency for payment of Securities
and the other matters specified herein;




          (4) impair the right to institute suit for the enforcement of any payment of principal of,
premium, if any, or interest on, any Security; or




          (5) modify any of the provisions of this Indenture relating to the execution of supplemental
indentures with the consent of Holders of Securities which are discussed in this Section or modify
any provisions relating to the waiver by Holders of Securities of past defaults and covenants,
except to increase any required percentage or to provide that other provisions of

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this Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby.




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



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



Section 903. Execution of Supplemental Indentures




     In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in
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. The Trustee shall enter into
any supplemental indenture which does not adversely affect the Trustee’s own rights, duties or
immunities under this Indenture or otherwise. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which adversely affects the Trustee’s own rights, duties
or immunities under this Indenture or otherwise.



Section 904. Effect of Supplemental Indentures




     Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.



Section 905. Conformity with Trust Indenture Act




     Every supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.



Section 906. Reference in Securities to Supplemental Indentures




     Securities of any series authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in
form approved by the Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities
of such series. Failure to make a notation or issue a new Security shall not affect the validity
and effect of any amendment, supplement or waiver.



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ARTICLE X




COVENANTS




Section 1001. Payment of Principal, Premium and Interest




     The Company covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay the principal of and any premium and interest on the Securities of that
series in accordance with the terms of the Securities and this Indenture.



Section 1002. Maintenance of Office or Agency




     The Company will maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.



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



     Except as otherwise specified with respect to a series of Securities as contemplated by
Section 301, the Company hereby initially designates as the Place of Payment for each series of
Securities The City of New York, and initially appoints the Trustee as Paying Agent at its
office at 101 Barclay, New York, NY, as the Company’s office or agency for each such purpose in such city.



Section 1003. Money for Securities Payments to Be Held in Trust




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



     Whenever the Company shall have one or more Paying Agents for any series of Securities, it
will, on or prior to each due date of the principal of or any premium or interest on any Securities
of that series, deposit with a Paying Agent a sum sufficient to pay such amount,



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such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or failure so to act.




     The Company will cause each Paying Agent for any series of 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, that such Paying Agent will (1) hold all sums
held by it for the payment of the principal of (and premium, if any) or interest, if any, on
Securities of that series in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee
notice of any default by the Company (or any other obligor upon the Securities of that series) in
the making of any payment of principal (and premium, if any) or interest, if any, on the Securities
of that series; and (3) during the continuance of any such default, 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 of that series.



     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.



     Any money deposited with the Trustee or any Paying Agent in trust for the payment of the
principal of or any premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable shall be paid to the
state which escheat laws control and the Trustee or any Paying Agent shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the state which escheat laws control 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, however, that the Trustee or such Paying Agent, before
being required to make any such payment, may at the expense of the Company cause to be published
once, in an Authorized Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be paid to the state whose escheat laws
control.



Section 1004. Statement by Officers as to Default




     The
Company will deliver to the Trustee, within 150 days after the
end of each Fiscal Year of
the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the
best knowledge of the signer or signers thereof the Company is in default in the performance and
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.



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Section 1005. Waiver of Certain Covenants




     The Company may omit in any particular instance to comply with any term, provision or
condition set forth in Sections 1002 through 1004 with respect to the Securities of any series if
before the time for such compliance Holders of at least a majority in aggregate principal amount of
the Outstanding Securities of all affected series (voting as one class) shall, by Act of such
Holders, either waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any such term, provision
or condition shall remain in full force and effect.



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



ARTICLE XI




REDEMPTION OF SECURITIES




Section 1101. Applicability of Article




     Securities of any series which are redeemable before their Stated Maturity shall be redeemable
in accordance with their terms and (except as otherwise specified as contemplated by Section 301
for Securities of any series) in accordance with this Article.



Section 1102. Election to Redeem; Notice to Trustee




     The election of the Company to redeem any Securities shall be evidenced by a Board Resolution.
In case of any redemption at the election of the Company of less than all the Securities of any
series, the Company shall, not less than 35 nor more than 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities (1) prior to the expiration of any restriction on such redemption provided
in the terms of such Securities or elsewhere in this Indenture, or (2) pursuant to an election of
the Company which is subject to a condition specified in the terms of such Securities, the Company
shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction
or condition.



Section 1103. Selection by Trustee of Securities to be Redeemed




     If less than all the Securities of any series are to be redeemed (unless all the Securities of
such series and of a specified tenor are to be redeemed), the particular Securities to be redeemed
shall be selected not more than 35 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, on a pro rata basis or



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by any other method which the Trustee deems fair and appropriate and which complies with any
securities exchange or other applicable requirements for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.




     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 Securities redeemed or to
be redeemed only in part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.



Section 1104. Notice of Redemption




     Notice of redemption shall be given by first-class mail (if international mail, by air mail),
postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the Security Register.



     All notices of redemption shall state:



          (1) the Redemption Date,




          (2) the Redemption Price,




          (3) if less than all the Outstanding Securities of any series and of a specified tenor are to
be redeemed, the identification (and, in the case of partial redemption of any Securities, the
principal amounts) of the particular Securities to be redeemed,




          (4) that on the Redemption Date the Redemption Price will become due and payable upon each
such Security to be redeemed and that interest thereon will cease to accrue on and after said date,




          (5) the place or places where such Securities are to be surrendered for payment of the
Redemption Price, and




          (6) that the redemption is for a sinking fund, if such is the case.




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



Section 1105. Deposit of Redemption Price




     On or prior to 10:30 a.m. New York City Time on any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money



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sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that
date.




Section 1106. Securities Payable on Redemption Date




     Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall,
on the Redemption Date, become due and payable at the Redemption Price therein specified, and from
and after such date (unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be paid by the Company
at the Redemption Price, together with accrued interest to the Redemption Date; provided, however,
that, unless otherwise specified as contemplated by Section 301, installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the close of business on
the relevant Record Dates according to their terms and the provisions of Section 307.



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



Section 1107. Securities Redeemed in Part




     Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment
therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new
Security or Securities of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.



ARTICLE XII




SINKING FUNDS




Section 1201. Applicability of Article




     The provisions of this Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section 301 for Securities
of such series.



     The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an “optional sinking fund payment.” If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to



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reduction as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of Securities of such series.




Section 1202. Satisfaction of Sinking Fund Payments with Securities




     The Company (1) may deliver Outstanding Securities of a series (other than any previously
called for redemption), and (2) may apply as a credit Securities of a series which have been
redeemed either at the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the terms of such
Securities as provided for by the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption through operation of
the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.



Section 1203. Redemption of Securities for Sinking Fund




     Not less than 45 days prior to each sinking fund payment date for any series of Securities
(unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the
Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 1202 and stating the basis
for such credit and that such Securities have not been previously so credited, and will also
deliver to the Trustee any Securities to be so delivered. Not less than 30 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.



ARTICLE XIII




DEFEASANCE




Section 1301. Applicability of Article




     The provisions of this Article shall be applicable to each series of Securities except as
otherwise specified as contemplated by Section 301 for Securities of such series.



Section 1302. Legal Defeasance




     In addition to discharge of the Indenture pursuant to Section 401, the Company shall be deemed
to have paid and discharged the entire indebtedness on all the Securities of such a series on the
91st day after the date of the deposit referred to in Clause (1) below, and the provisions of this
Indenture with respect to the Securities of such series shall no longer be in effect (except as



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to (i) rights of registration of transfer and exchange of Securities of such series and the
Company’s right of optional redemption, if any, (ii) substitution of mutilated, destroyed, lost or
stolen Securities, (iii) rights of Holders of Securities to receive payments of principal thereof
and interest thereon, upon the original stated due dates therefor or on the specified redemption
dates therefor (but not upon acceleration), and remaining rights of the holders to receive
mandatory sinking fund payments, if any, (iv) the rights, obligations, duties and immunities of the
Trustee hereunder, and the Company’s obligations in connection therewith (including, but not
limited to, Section 607), (v) the rights, if any, to convert or exchange the Securities of such
series, (vi) the rights of Holders of Securities of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of them, and (vii) the
obligations of the Company under Section 1002), and the Trustee, at the expense of the Company,
shall, upon a Company Request, execute proper instruments acknowledging the same, if the conditions
set forth below are satisfied (hereinafter, “defeasance”):




          (1) The Company has irrevocably deposited or caused to be deposited with the Trustee as trust
funds in trust, for the purposes of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of Holders of the Securities of such series (A) cash in
an amount, or (B) in the case of any series of Securities the payments on which may only be made in
legal coin or currency of the United States, U.S. Government Obligations, maturing as to principal
and interest at such times and in such amounts as will insure the availability of cash, or (C) a
combination thereof, certified to be 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 (i) the principal and interest and premium, if any, on all Securities of such
series on each date that such principal, interest or premium, if any, is due and payable or on any
Redemption Date established pursuant to Clause (3) below, and (ii) any mandatory sinking fund
payments on the dates on which such payments are due and payable in accordance with the terms of
the Indenture and the Securities of such series;




          (2) The Company has delivered to the Trustee an Opinion of Counsel based on the fact that (A)
the Company has received from, or there has been published by, the Internal Revenue Service a
ruling, or (B) since the date hereof, there has been a change in the applicable federal income tax
law, in either case to the effect that, and such opinion shall confirm that, Holders of the
Securities of such series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and will be subject to federal income tax on
the same amount and in the same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred;




          (3) If the Securities are to be redeemed prior to Stated Maturity (other than from mandatory
sinking fund payments or analogous payments), notice of such redemption shall have been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee shall have been made;




          (4) No Event of Default or event which with notice or lapse of time or both would become an
Event of Default shall have occurred and be continuing on the date of such deposit;




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          (5) Such defeasance shall not cause the Trustee to have a conflicting interest within the
meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of
such Act);




          (6) Such defeasance shall not result in a breach or violation of, or constitute a default
under, any other agreement or instrument to which the Company is a party or by which it is bound;




          (7) 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, as amended, unless
such trust shall be registered under such Act or exempt from registration thereunder; and




          (8) The Company has delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with.




     For this purpose, such defeasance means that the Company and any other obligor upon the
Securities of such series shall be deemed to have paid and discharged the entire debt represented
by the Securities of such series, which shall thereafter be deemed to be “Outstanding” only for the
purposes of Section 1304 and the rights and obligations referred to in Clauses (i) through (vii),
inclusive, of the first paragraph of this Section, and to have satisfied all its other obligations
under the Securities of such series and this Indenture insofar as the Securities of such series are
concerned.



Section 1303. Covenant Defeasance




     The Company and any other obligor shall be released on the 91st day after the date of the
deposit referred to in Clause (1) below from its obligations under Sections 704 and 801 with
respect to the Securities of any series on and after the date the conditions set forth below are
satisfied (hereinafter, “covenant defeasance”), and the Securities of such series shall thereafter
be deemed to be not “Outstanding” for the purposes of any request, demand, authorization,
direction, notice, waiver, consent or declaration or other action or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall continue to be deemed
Outstanding for all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to the Securities of such series, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in any such Section,
whether directly or indirectly by reason of any reference elsewhere herein to such Section or by
reason of any reference in such Section to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default under Section 501,
but, except as specified above, the remainder of this Indenture and the Securities of such series
shall be unaffected thereby. The following shall be the conditions to application of this Section
1303:



          (1) The Company has irrevocably deposited or caused to be deposited with the Trustee 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 Holders of the Securities of such

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series, (A) cash in an amount, or (B) in the case of any series of Securities the payments on
which may only be made in legal coin or currency of the United States, U.S. Government Obligations,
maturing as to principal and interest at such times and in such amounts as will insure the
availability of cash, or (C) a combination thereof, 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 (i) the principal and interest and premium, if any, on all
Securities of such series on each date that such principal, interest or premium, if any, is due and
payable or on any Redemption Date established pursuant to Clause (2) below, and (ii) any mandatory
sinking fund payments on the day on which such payments are due and payable in accordance with the
terms of the Indenture and the Securities of such series;




          (2) If the Securities are to be redeemed prior to Stated Maturity (other than from mandatory
sinking fund payments or analogous payments), notice of such redemption shall have been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee shall have been made;




          (3) No Event of Default or event which with notice or lapse of time or both would become an
Event of Default shall have occurred and be continuing on the date of such deposit;




          (4) The Company has delivered to the Trustee an Opinion of Counsel which shall confirm that
Holders of the Securities of such series will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and covenant defeasance and will be subject to federal
income tax on the same amount and in the same manner and at the same time as would have been the
case if such deposit and covenant defeasance had not occurred;




          (5) Such covenant defeasance shall not cause the Trustee to have a conflicting interest within
the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning
of such Act);




          (6) Such covenant defeasance shall not result in a breach or violation of, or constitute a
default under, any other agreement or instrument to which the Company is a party or by which it is
bound;




          (7) Such covenant 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, as
amended, unless such trust shall be registered under such Act or exempt from registration
thereunder; and




          (8) The Company has delivered to the Trustee an Officers’ Certificate and Opinion of Counsel
stating that all conditions precedent provided for relating to the covenant defeasance contemplated
by this provision have been complied with.




Section 1304. Application by Trustee of Funds Deposited for Payment of Securities




     Subject to the provisions of the last paragraph of Section 1003, all moneys or U.S. Government
Obligations deposited with the Trustee pursuant to Section 1302 or 1303 (and all funds earned on
such moneys or U.S. Government Obligations) shall be held in trust and applied



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by it to the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to Holders of the particular Securities of such series for the
payment or redemption of which such moneys have been deposited with the Trustee, of all sums due
and to become due thereon for principal and interest; but such money need not be segregated from
other funds except to the extent required by law. Subject to Sections 1302 and 1303, the Trustee
shall promptly pay to the Company upon Company Order any moneys held by it at any time, which, in
the opinion of a nationally recognized firm of independent public accountants expressed in a
written certification delivered to the Trustee, are in excess of the amounts required to effect the
defeasance with respect to the Outstanding Securities in question.




Section 1305. Repayment to the Company




     The Trustee and any Paying Agent promptly shall pay or return to the Company upon Company
Request any money and U.S. Government Obligations held by them at any time that are not required
for the payment of the principal of and any interest on the Securities of any series for which
money or U.S. Government Obligations have been deposited pursuant to Section 1302 or 1303, which,
in the opinion of a nationally recognized firm of independent public accountants expressed in a
written certification delivered to the Trustee, are in excess of the amounts required to effect the
defeasance with respect to the Outstanding Securities in question.



     The provisions of the last paragraph of Section 1003 shall apply to any money held by the
Trustee or any Paying Agent under this Article that remains unclaimed for two years after the
Maturity of any series of Securities for which money or U.S. Government Obligations have been
deposited pursuant to Section 1302 or 1303.



Section 1306. Reinstatement




     If the Trustee or the Paying Agent is unable to apply any money or U. S. Government
Obligations in accordance with this Article by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the obligations of the Company under this Indenture and the
Securities of the applicable series shall be revived and reinstated as though no deposit had
occurred pursuant to this Indenture until such time as the Trustee or the Paying Agent is permitted
to apply all such money or U. S. Government Obligations in accordance with this Article; provided,
however, that if the Company has made any payment of principal of or interest on any Securities of
such series because of the reinstatement of its obligations, the Company shall be subrogated to the
rights of Holders of such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or the Paying Agent



[Remainder of Page Intentionally Left Blank]




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     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed in
multiple counterparts, each of which so executed shall be deemed to be an original, but all of
which shall together constitute but one and the same instrument, all as of the day and year first
above written.



	 	 	 	 	 	 	 
	 	 	FRANKLIN BANK CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK
TRUST COMPANY, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	  	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title: