exv10w2



 




Exhibit 10.2






EXECUTION
VERSION




JUNIOR SUBORDINATED INDENTURE




between




COMSTOCK HOMEBUILDING COMPANIES, INC.




and




WELLSFARGO BANK, N.A., 
as
Trustee




 






Dated as of May 4,2006




 







 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
	 	 	1	 
	Section 1.1 Definitions
	 	 	1	 
	Section 1.2 Compliance Certificate and Opinions
	 	 	11	 
	Section 1.3 Forms of Documents Delivered to Trustee
	 	 	12	 
	Section 1.4 Acts of Holders
	 	 	12	 
	Section 1.5 Notices Etc. to Trustee and Company
	 	 	14	 
	Section 1.6 Notice to Holders; Waiver
	 	 	15	 
	Section 1.7 Effect of Headings and Table of Contents
	 	 	15	 
	Section 1.8 Successors and Assigns
	 	 	15	 
	Section 1.9 Separability
	 	 	15	 
	Section 1.10 Benefits of Indenture
	 	 	15	 
	Section 1.11 Governing Law
	 	 	16	 
	Section 1.12 Submission to Jurisdiction
	 	 	16	 
	Section 1.13 Non-Business Days
	 	 	16	 
	Section 1.14 Counterparts
	 	 	16	 
	ARTICLE II SECURITY FORMS
	 	 	16	 
	Section 2.1 Form of Security
	 	 	16	 
	Section 2.2 Restrictive Legend
	 	 	21	 
	Section 2.3 Form of Trustee’s Certificate of Authentication
	 	 	23	 
	Section 2.4 Temporary Securities
	 	 	24	 
	Section 2.5 Definitive Securities
	 	 	24	 
	ARTICLE III THE SECURITIES
	 	 	25	 
	Section 3.1 Payment of Principal and Interest
	 	 	25	 
	Section 3.2 Denominations
	 	 	27	 
	Section 3.3 Execution, Authentication, Delivery and Dating
	 	 	27	 
	Section 3.4 Global Securities
	 	 	28	 
	Section 3.5 Registration, Transfer and Exchange Generally
	 	 	30	 
	Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities
	 	 	31	 
	Section 3.7 Persons Deemed Owners
	 	 	32	 
	Section 3.8 Cancellation
	 	 	32	 






 









 








	 	 	 	 	 
	 	 	Page	 
	Section 3.9 Agreed Tax Treatment
	 	 	32	 
	Section 3.10 CUSIP Numbers
	 	 	32	 
	ARTICLE IV SATISFACTION AND DISCHARGE
	 	 	33	 
	Section 4.1 Satisfaction and Discharge of Indenture
	 	 	33	 
	Section 4.2 Application of Trust Money
	 	 	34	 
	ARTICLE V REMEDIES
	 	 	34	 
	Section 5.1 Events of Default
	 	 	34	 
	Section 5.2 Acceleration of Maturity Rescission and Annulment
	 	 	35	 
	Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	36	 
	Section 5.4 Trustee May File Proofs of Claim
	 	 	37	 
	Section 5.5 Trustee May Enforce Claim Without Possession of Securities
	 	 	37	 
	Section 5.6 Application of Money Collected
	 	 	37	 
	Section 5.7 Limitation on Suits
	 	 	38	 
	Section 5.8 Unconditional Right of Holders to Receive Principal, Premium, if any, and Interest
	 	 	38	 
	Section 5.9 Restoration of Rights and Remedies
	 	 	38	 
	Section 5.10 Rights and Remedies Cumulative
	 	 	39	 
	Section 5.11 Delay or Omission Not Waiver
	 	 	39	 
	Section 5.12 Control by Holders
	 	 	39	 
	Section 5.13 Waiver of Past Defaults
	 	 	39	 
	Section 5.14 Undertaking for Costs
	 	 	40	 
	Section 5.15 Waiver of Usury, Stay or Extension Laws
	 	 	40	 
	ARTICLE VI THE TRUSTEE
	 	 	41	 
	Section 6.1 Corporate Trustee Required
	 	 	41	 
	Section 6.2 Certain Duties and Responsibilities
	 	 	41	 
	Section 6.3 Notice of Defaults
	 	 	42	 
	Section 6.4 Certain Rights of Trustee
	 	 	42	 
	Section 6.5 May Hold Securities
	 	 	44	 
	Section 6.6 Compensation; Reimbursement; Indemnity
	 	 	44	 
	Section 6.7 Resignation and Removal; Appointment of Successor
	 	 	45	 
	Section 6.8 Acceptance of Appointment by Successor
	 	 	46	 






 ii





 









 








	 	 	 	 	 
	 	 	Page	 
	Section 6.9 Merger, Conversion, Consolidation or Succession to Business
	 	 	47	 
	Section 6.10 Not Responsible for Recitals or Issuance of Securities
	 	 	47	 
	Section 611 Appointment of Authenticating Agent
	 	 	47	 
	ARTICLE VII HOLDER’S LISTS AND REPORTS BY COMPANY
	 	 	49	 
	Section 7.1 Company to Furnish Trustee Names and Addresses of Holders
	 	 	49	 
	Section 7.2 Preservation of Information, Communications to Holders
	 	 	49	 
	Section 7.3 Reports by Company
	 	 	49	 
	ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
	 	 	50	 
	Section 8.1 Company May Consolidate, Etc., Only on Certain Terms
	 	 	50	 
	Section 8.2 Successor Company Substituted
	 	 	51	 
	ARTICLE IX SUPPLEMENTAL INDENTURES
	 	 	52	 
	Section 9.1 Supplemental Indentures without Consent of Holders
	 	 	52	 
	Section 9.2 Supplemental Indentures with Consent of Holders
	 	 	53	 
	Section 9.3 Execution of Supplemental Indentures
	 	 	53	 
	Section 9.4 Effect of Supplemental Indentures
	 	 	54	 
	Section 9.5 Reference in Securities to Supplemental Indentures
	 	 	54	 
	ARTICLE X COVENANTS
	 	 	54	 
	Section 10.1 Payment of Principal, Premium, if any, and Interest
	 	 	54	 
	Section 10.2 Money for Security Payments to be Held in Trust
	 	 	54	 
	Section 10.3 Statement as to Compliance
	 	 	55	 
	Section 10.4 Calculation Agent
	 	 	55	 
	Section 10.5 Additional Covenants
	 	 	56	 
	Section 10.6 Waiver of Covenants
	 	 	57	 
	Section 10.7 Treatment of Securities
	 	 	58	 
	Section 10.8 Limitation on Issuance of Securities
	 	 	58	 
	ARTICLE XI REDEMPTION OF SECURITIES
	 	 	58	 
	Section 11.1 Optional Redemption and Mandatory Redemption
	 	 	58	 
	Section 11.2 Special Event Redemption
	 	 	59	 
	Section 11.3 Election to Redeem; Notice to Trustee
	 	 	59	 
	Section 11.4 Selection of Securities to be Redeemed
	 	 	59	 






 iii




 









 








	 	 	 	 	 
	 	 	Page	 
	Section 11.5 Notice of Redemption
	 	 	60	 
	Section 11.6 Deposit of Redemption Price
	 	 	60	 
	Section 11.7 Payment of Securities Called for Redemption
	 	 	61	 
	ARTICLE XII SUBORDINATION OF SECURITIES
	 	 	61	 
	Section 12.1 Securities Subordinate to Senior Debt
	 	 	61	 
	Section 12.2 No Payment When Senior Debt in Default; Payment Over of Proceeds Upon Dissolution, Etc
	 	 	61	 
	Section 12 3 Payment Permitted if No Default
	 	 	63	 
	Section 12.4 Subrogation to Rights of Holders of Senior Debt
	 	 	63	 
	Section 12.5 Provisions Solely to Define Relative Rights
	 	 	63	 
	Section 12.6 Trustee to Effectuate Subordination
	 	 	64	 
	Section 12.7 No Waiver of Subordination Provisions
	 	 	64	 
	Section 12.8 Notice to Trustee
	 	 	64	 
	Section 12.9 Reliance on Judicial Order or Certificate of Liquidating Agent
	 	 	65	 
	Section 12.10 Trustee Not Fiduciary for Holders of Senior Debt
	 	 	65	 
	Section 12.11 Rights of Trustee as Holder of Senior Debt; Preservation of Trustee’s Rights
	 	 	65	 
	Section 12.12 Article Applicable to Paying Agents
	 	 	66	 
	ARTICLE XIII DEFEASANCE
	 	 	66	 
	Section 13.1 Defeasance and Discharge
	 	 	66	 
	Section 13.2 Conditions to Defeasance
	 	 	66	 
	Section 13.3 Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions
	 	 	67	 
	Section 13.4 Reinstatement
	 	 	68	 






SCHEDULE AND EXHIBIT




	 	 	 	 	 
	Schedule A

	 	—
	 	Determination of LIBOR
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Officer’s Financial Certificate pursuant to Section 7.3(b)
	 
	 	 	 	 
	Exhibit B

	 	—
	 	Form of Officer’s Certificate pursuant to Section 10.3






 iv




 









 








JUNIOR SUBORDINATED INDENTURE




     This JUNIOR SUBORDINATED INDENTURE, dated as of May 4, 2006, is between Comstock Homebuilding
Companies, Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, N.A., as Trustee
(in such capacity, the “Trustee”).



RECITALS OF THE COMPANY




     WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance of its junior subordinated notes, and to provide the terms and conditions
upon which such junior subordinated notes are to be authenticated, issued and delivered; and



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



     NOW, THEREFORE, THIS INDENTURE WITNESSETH:



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



ARTICLE I




DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION




     Section 1.1 Definitions.



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



     (a) the terms defined in this Article I have the meanings assigned to them in this Article I;



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



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



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



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



 









 





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



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



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



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



     “Affiliate” of any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified Person. For the
purposes of this definition, “control.” when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” have meanings correlative to the foregoing.



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



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



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



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



     “Breakage Costs” means any and all reasonable costs and fees of any Holder of Securities
(including, without limitation, the reasonable fees and expenses of any counsel engaged by such
Holder to enforce the obligations of the Company hereunder) (as determined by such Holder),
directly associated or incurred in connection with unwinding, terminating, modifying or otherwise
breaking of any interest rate swap or other interest rate hedging arrangement entered into with
respect to the interest rate on the Securities prior to the expiration
of the Fixed Rate Period
where such unwinding, termination, modification or breaking is caused by the payment or defeasance
of principal on the Securities prior to the expiration of the Fixed Rate Period in connection with
a Change-in-Control Election.



     “Breakage Gains” means the amount of gain actually realized by any Holder of Securities (as
determined by such Holder), directly associated or incurred in connection with unwinding,
terminating, modifying or otherwise breaking any interest rate swap or other interest rate hedging
arrangement entered into with respect to the interest rate on the Securities prior to the
expiration



2









 




of the Fixed Rate Period where such unwinding, termination, modification or breaking is caused by
the payment or defeasance of principal on the Securities prior to the expiration of the Fixed Rate
Period in connection with a Change-in-Control Election.




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



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



     “Capital Lease” means lease of (or other agreement conveying the right to use) any real or
personal property by a Person that, in conformity with GAAP, is accounted for as a capital lease
on the balance sheet of such Person



     “Change-in-Control” means (i) any person (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), including a “group” as defined in Section 13(d)(3) of the Exchange Act
(but excluding a director or other fiduciary holding securities under an employee benefit plan of
the Company), becomes the beneficial owner of Equity Interests of the Company having at least fifty
percent (50%) of the total number of votes that may be cast for the election of directors of the
Company; (ii) the merger or other business combination of the Company, sale of all or substantially
all of the Company’s assets or combination of the foregoing transactions (a “Transaction”), other
than a Transaction immediately following which the shareholders of the Company immediately prior to
the Transaction continue to have a majority of the voting power in the resulting entity (excluding
for this purpose any shareholder owning directly or indirectly more than ten percent (10%) of the
shares of the other company involved in the Transaction); or (iii) the persons who were directors
of the Company on the date hereof (the “Incumbent Directors”) shall cease to constitute at least a
majority of the Board or a majority of the board of directors of any successor to the Company;
provided, that, any director who was not a director as of the date hereof shall be deemed
to be an Incumbent Director if such director was elected to the Board by, or on the recommendation
of or with the approval of, at least two-thirds of the directors who then qualified as Incumbent
Directors either actually or by prior operation of this provision, unless such election,
recommendation or approval was the result of an actual or threatened election contest of the type
contemplated by Regulation 14a-ll promulgated under the Exchange Act or any successor provision.



     “Change-in-Control Election” has the meaning specified in Section 10.5(b).



     “Change-in-Control Event” means the occurrence of (i) a Change-in-Control and (ii) a
Ratings Downgrade.



     “Change-in-Control
Event Notice” has the meaning specified in Section 10.5(b).



     “Change-in-Control Notice” has the meaning specified in
Section 10.(b).



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



3









 





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



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



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



     “Consolidated Tangible Net Worth” means (i) the consolidated net worth of the Company
and its consolidated subsidiaries minus (ii) the consolidated intangibles of the Company and its
consolidated subsidiaries including, without limitation, goodwill, trademarks, trade names,
copyrights, patents, patent applications, licenses, and rights in any of the foregoing and other
items treated as intangibles in accordance with generally accepted accounting principles.



     “Corporate Trust Office” means the principal office of the Trustee at which at any
particular time its corporate trust business shall be administered, which office at the date of
this Indenture is located at 919 North Market Street, Suite 700, Wilmington, Delaware 19801.



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



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



     “Defeasance” has the meaning specified in Section 13.1.



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



4









 





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



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



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



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



     “EBITDA” means, for any period, the net income (or loss) of the Company and its Subsidiaries
for such period, excluding (a) any gains from the sale, lease, assignment or other
transfer for value (each, a “Disposition”) by the Company or any Subsidiary to any Person (other
than the Company or any Subsidiary) of any asset or right of the Company or such Subsidiary
(including, the loss, destruction or damage of any thereof or any actual or threatened (in writing
to the Company or any Subsidiary) condemnation, confiscation, requisition, seizure or taking
thereof) other than (i) the Disposition of any asset which is to be replaced, and is in fact
replaced, within thirty (30) days with another asset performing the same or a similar function,
(ii) the sale or lease of inventory in the ordinary course of business and (iii) other
Dispositions in any fiscal year the aggregate cash proceeds (including cash proceeds received
pursuant to policies of insurance or by way of deferred payment of principal pursuant to a note,
installment receivable or otherwise, but only as and when received) received by the Company or any
Subsidiary pursuant to such Disposition net of (A) the direct costs relating to such sale,
transfer or other disposition (including sales commissions and legal, accounting and investment
banking fees),
(B) taxes paid or reasonably estimated by the Company to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing arrangements) and
(C) amounts required to be applied to the repayment of any Debt secured by a Lien on the asset
subject to such Disposition (other than the Securities)) do not in the aggregate exceed
$1,000,000, (b) any extraordinary gains and (c) any gains from discontinued operations,
plus, to
the extent deducted in determining such net income (or loss), Interest Expense, income tax
expense, depreciation and amortization and non-cash management compensation expense for
such period.



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



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



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




5









 









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



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



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



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



     “Fixed Charge Coverage Ratio” means, for each period of four consecutive fiscal
quarters ending on the last day of a fiscal quarter, the ratio of (a) the total for such period of
EBITDA minus the sum of (i) income taxes paid in cash by the Company and each of its
Subsidiaries and (ii) all unfinanced expenditures which, in accordance with GAAP, would be required
to be capitalized and shown on the consolidated balance sheet of the Company, including
expenditures in respect of any Capital Lease to (b) the sum for such period of (i) cash Interest
Expense plus (ii) required payments of principal of all Debt of the Company and its
Subsidiaries that matures more than one year from the date of its creation (or is renewable or
extendible, at the option of such Person, to a date more than one year from such date) (including
the Securities) plus (iii) management fees paid in cash.



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



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



     “Government Obligation” means (a) any security that is (i) a direct obligation of the
United States of America of which the full faith and credit of the United States of America is
pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of America, which, in either
case of clause (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and
(b) any depositary receipt issued by a “bank” (as defined in Section 3(a)(2) of the Securities
Act) as custodian with respect to any Government Obligation that is specified in clause (a) above
and held by such bank for the account of the holder of such depositary receipt, or with respect to
any specific payment of principal of or interest on any Government Obligation that is so specified
and held; provided, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the Government Obligation or the specific payment
of principal or interest evidenced by such depositary receipt.



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



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



6









 





     “Interest Expense” means consolidated interest expense of the Company and its
Subsidiaries for such period (including all imputed interest on Capital Leases)



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



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



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



     “Leverage Ratio” means at any time, the ratio of Debt (excluding obligations related to
inventory not owned resulting from consolidations required pursuant to Financial Accounting
Standards Board Interpretation No. 46 entitled “Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB) No. 51” issued in January 2003 and revised
December 2003, as the same may be revised and amended from time to time) at such time to
Consolidated Tangible Net Worth (as reported in the Company’s balance sheet contained in the most
recent periodic report filed with the Commission) for the most recently ended four fiscal quarters
of the Company.



     “LIBOR” has the meaning specified in Schedule A.



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



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



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



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



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



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



7









 





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



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



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



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




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




     (ii) Securities for whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company and/or its Affiliate shall act as its own Paying Agent) for the Holders of
such Securities; provided, that if the Company is acting as Paying Agent,
Securities for which payment or redemption money has been so deposited in trust with
the Paying Agent shall be considered to remain Outstanding until such time as such
payment or redemption money has actually been paid in full to the Holders of such
Securities; and provided, further, that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this Indenture
or provision therefor satisfactory to the Trustee has been made; and




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


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




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



8









 





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



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



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



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



     “Purchase Agreement” means the Note Purchase Agreement, dated as of the date hereof,
between the Company and the Purchaser.



     “Purchaser” means Kodiak Warehouse LLC, a Delaware limited liability company.



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



     “Ratings Downgrade” means a downgrading in or withdrawal of the Company’s general
corporate rating or the rating accorded to the Company’s debt securities or preferred stock, if
any, by any two of the Rating Agencies as a result of a Change-in-Control.



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



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



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



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



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



9









 





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



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



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



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



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



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



     “Special Record Date” for the payment of any Defaulted Interest means a date fixed by
the Trustee pursuant to Section 3.l(c).



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



     “Stated
Maturity” means June 30, 2036.



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



10









 





     “Tax Event” means the receipt by the Company of an Opinion of Counsel experienced in such
matters to the effect that, as a result of (a) any amendment to or change (including any announced
prospective change) in the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein or (b) any judicial decision or any official
administrative pronouncement (including any private letter ruling, technical advice memorandum or
field service advice) or regulatory procedure, including any notice or announcement of intent to
adopt any such pronouncement or procedure (an “Administrative Action”), regardless of
whether such judicial decision or Administrative Action is issued to or in connection with a
proceeding involving the Company and whether or not subject to review or appeal, which amendment,
change, judicial decision or Administrative Action is enacted, promulgated or announced, in each
case, on or after the date of issuance of the Securities, there is more than an insubstantial risk
that interest payable by the Company on the Securities is not, or within ninety (90) days of the
date of such opinion, will not be, deductible by the Company, in whole or in part, for United
States federal income tax purposes.



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



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



     Section 1.2 Compliance Certificate and Opinions.



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



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




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




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



11









 






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




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



     Section 1.3 Forms of Documents Delivered to Trustee.



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



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



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



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



     Section 1.4 Acts of Holders.



     (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given to or taken by Holders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders in person or by an
agent thereof duly appointed in writing and, except as herein otherwise expressly




12









 







provided, such action shall become effective when such instrument or instruments (including any
appointment of an agent) is or are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section 1.4.




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



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



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



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



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



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



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



     Section 1.5
Notices, Etc. to Trustee and Company.



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



     (a) the Trustee by any Holder or the Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with and received by the Trustee
at
its Corporate Trust Office; or



     (b) the Company by the Trustee or any Holder shall be sufficient for every purpose
hereunder if in writing and mailed, first class, postage prepaid, to the Company addressed to
it at
11465 Sunset Hills Road, Suite 510, Reston, Virginia 20190 or at any other address previously
furnished in writing to the Trustee by the Company.



14









 





     Section 1.6
Notice to Holders; Waiver.



     Where this Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first
class, postage prepaid, to each Holder affected by such event to the address of such Holder as it
appears in the Securities Register, not later than the latest date (if any), and not earlier than
the earliest date (if any), prescribed for the giving of such notice. If, by reason of the
suspension of or irregularities in regular mail service or for any other reason, it shall be
impossible or impracticable to mail notice of any event to Holders when said notice is required to
be given pursuant to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.



     Section 1.7 Effect of Headings and Table of Contents.



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



     Section 1.8 Successors and Assigns.



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



     Section 1.9 Separability.



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



     Section 1.10 Benefits of Indenture.



     Nothing in this Indenture or in the Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors and assigns, the holders of Senior Debt and the
Holders of the Securities, any benefit or any legal or equitable right, remedy or claim under this
Indenture.




15









 








     Section 1.11 Governing Law.



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



     Section 1.12 Submission to Jurisdiction.



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



     Section 1.13 Non-Business Days.



     If any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be
a Business Day, then (notwithstanding any other provision of this Indenture or the Securities)
payment of interest, premium, if any, or principal or other amounts in respect of such Security
shall not be made on such date, but shall be made on the next succeeding Business Day (and
interest shall accrue in respect of the amounts whose payment is so delayed for the period from
and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be,
until such next succeeding Business Day) except that, if such Business Day falls in the next
succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the Interest Payment Date or Redemption
Date or at the Stated Maturity.



     Section 1.14 Counterparts.



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



ARTICLE II




SECURITY FORMS




     Section 2.1 Form of Security.



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



COMSTOCK HOMEBUILDING COMPANIES, INC.




16









 








Junior Subordinated Note due 2036




			
	 	 	 
	No.                     
	 	$                     






     Comstock Homebuilding Companies, Inc., a corporation organized and existing under the laws
of Delaware (hereinafter 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 [PRINCIPAL AMOUNT]
($[                    ]) [IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT: or
such other principal amount represented hereby as may be set forth in the records of the
Securities Registrar hereinafter referred to in accordance with the Indenture] on June 30, 2036.
The Company further promises to pay interest on said principal sum from and including May 4,2006,
or from and including the most recent Interest Payment Date to which interest has been paid or
duly provided for, quarterly in arrears, to but excluding the succeeding Interest Payment Date, on
March 30, June 30, September 30 and December 30 of each year, commencing June 30, 2006, or if any
such day is not a Business Day, on the next succeeding Business Day (and interest shall accrue in
respect of the amounts whose payment is so delayed for the period from and after such Interest
Payment Date until such next succeeding Business Day), except that, if such Business Day falls in
the next succeeding calendar year, such payment shall be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on the Interest Payment
Date, at a fixed rate equal to 9.72% per annum through the Interest Payment Date in June 2011
(“Fixed Rate Period”) and thereafter at a variable rate, reset quarterly, equal to LIBOR plus
4.20% per annum, until the principal hereof is paid or duly provided for or made available for
payment; provided, that any overdue principal, premium, if any, and any overdue
installment of interest shall bear Additional Interest at a fixed rate equal to 9.72% per annum
through the interest payment date in June 2011 and thereafter at a variable rate, reset quarterly,
equal to LIBOR plus 4.20% per annum (to the extent that the payment of such interest shall be
legally enforceable), compounded quarterly, from and including the dates such amounts are due to
but excluding the dates such amounts are paid or made available for payment, and such interest
shall be payable on demand.



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




17









 







Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior
to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange or automated quotation system on which the
Securities may be listed, traded or quoted and upon such notice as may be required by such
exchange or automated quotation system, all as more fully provided in the Indenture.




     During an Event of Default, the Company shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any
Equity Interests of the Company, (ii) vote in favor of or permit or otherwise allow any of its
Subsidiaries to declare or pay any dividends or distributions on, or redeem, purchase, acquire or
make a liquidation payment with respect to or otherwise retire, any preferred Equity Interests of
such Subsidiaries or other Equity Interests entitling the holders thereof to a stated rate of
return (for the avoidance of doubt, whether such preferred Equity Interests are perpetual or
otherwise) or (iii) make any payment of principal of or any interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rark pari passu in all respects
with or junior in interest to the Securities (other than (A) repurchases, redemptions or other
acquisitions of Equity Interests of the Company in connection with (1) any employment contract,
benefit plan or other similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, (2) a dividend reinvestment or Equity Interests purchase plan
or (3) the issuance of Equity Interests in the Company (or securities convertible into or
exercisable for such Equity Interests) as consideration in an acquisition transaction entered into
prior to the applicable Event of Default, (B) as a result of an exchange, conversion
reclassification or combination of any class or series of the Company’s Equity Interests (or any
Equity Interests in a Subsidiary of the Company) for, of or with any class or series of the
Company’s Equity Interests or of any class or series of the Company’s indebtedness for any class or
series of the Company’s Equity Interests, (C) the purchase of fractional interests in the Equity
Interests of the Company pursuant to the conversion or exchange provisions of such Equity Interests
or the security being converted or exchanged, (D) any declaration of a dividend in connection with
any Rights Plan, the issuance of rights, Equity Interests or other property under any Rights Plan
or the redemption or repurchase of rights pursuant thereto or (E) any dividend in the form of
Equity Interests, warrants, options or other rights where the dividend Equity Interest or the
Equity Interest issuable upon exercise of such warrants, options or other rights is the same Equity
Interest as that on which the dividend is being paid or ranks pari passu with or junior to such
Equity Interest).



     Payment of principal of, premium, if any, and interest on this Security shall be made in such
coin or currency of the United States of America as at the time of payment is legal tender for
payment of public and private debts. Payments of principal, premium, if any, and interest due at
the Maturity of this Security shall be made at the Place of Payment upon surrender of such
Securities to the Paying Agent, and payments of interest shall be made, subject to such surrender
where applicable, by wire transfer at such place and to such account at a banking institution in
the United States as may be designated in writing to the Paying Agent at least ten (10) Business
Days prior to the date for payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case such payments shall
be made by check mailed to the address of such Person as such address shall appear in the Security
Register.



18









 





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



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



[FORM OF REVERSE OF SECURITY]




     This Security is one of a duly authorized issue of securities of the Company (the
“Securities”) issued under the Junior Subordinated Indenture, dated as of May 4, 2006 (the
“Indenture”), between the Company and Wells Fargo Bank, N.A., as Trustee (in such capacity,
the “Trustee,” which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the Holders of the Securities and the holders of Senior Debt, and of the terms upon which
the Securities are, and are to be, authenticated and delivered. All terms used in this Security
that are defined in the Indenture shall have the meanings assigned to them in the Indenture.



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



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



     Further, the Company shall, upon receipt of a Change-in-Control Election after June 30, 2011,
redeem the Securities in whole on a date no more than thirty (30) days after receipt of the




19









 







Change-in-Control Election, at a Redemption Price equal to one hundred percent (100%) of the
principal amount thereof, together, in the case of any such redemption, with accrued and unpaid
interest, including any Additional Interest, to but excluding the date fixed as the Redemption
Date.




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



     The Indenture permits, with certain exceptions as therein provided, the Company and the
Trustee at any time to enter into a supplemental indenture or indentures for the purpose of
modifying in any manner the rights and obligations of the Company and of the Holders of the
Securities, with the consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities. The Indenture also contains provisions permitting Holders of specified
percentages in principal amount of the Securities, on behalf of the Holders of all Securities, to
waive compliance by the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.



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



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



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



20









 





     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.



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



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



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



     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on this [DAY]
day of [MONTH], [YEAR].



	 	 	 	 	 	 	 
	 	 	COMSTOCK HOMEBUILDING	 	 
	 	 	COMPANIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 






     Section 2.2 Restrictive Legend.



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




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



21









 






NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.




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




THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND SUCH
SECURITIES, AND ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY
SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES
ACT.




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




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



22









 






PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.




THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA’’), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR SIMILAR LAW (EACH A
“PLAN”). OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE “PLAN ASSETS” BY REASON OF
ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING
“PLAN ASSETS” OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE
SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3)
OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER
PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.”



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



     Section 2.3 Form of Trustee’s Certificate of Authentication.



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



23









 





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


Dated:



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

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






     Section 2.4 Temporary Securities.



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



     (b) If temporary Securities are issued, the Company will cause definitive Securities to
be prepared without unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon surrender of the
temporary Securities at the office or agency of the Company designated for that purpose
without
charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities,
the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor
one or more definitive Securities of any authorized denominations having the same Original
Issue Date and Stated Maturity and having the same terms as such temporary Securities. Until
so
exchanged, the temporary Securities shall in all respects be entitled to the same benefits
under
this Indenture as definitive Securities.



     Section 2.5 Definitive Securities.



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




24









 







ARTICLE III




THE SECURITIES




     Section
3.1 Payment of Principal and
Interest.



     (a) The unpaid principal amount of the Securities shall bear interest at a fixed
rate
equal to 9.72% per annum through the Interest Payment Date in June 2011 and
thereafter at a
variable rate equal to LIBOR plus 4.20% per annum until paid or duly provided for,
such interest
to accrue from and including the Original Issue Date or from and including the most
recent
Interest Payment Date to which interest has been paid or duly provided for to but
excluding the
succeeding Interest Payment Date, and any overdue principal, premium, if any, and
any overdue
installment of interest shall bear Additional Interest at the rate equal to a fixed
rate equal to
9.72% per annum through the Interest Payment Date in June 2011 and thereafter at a
variable
rate, reset quarterly, equal to LIBOR plus 4.20% per annum (to the extent that the
payment of
such interest shall be legally enforceable), compounded quarterly from and including
the dates
such amounts are due to but excluding the dates such amounts are paid or funds for
the payment
thereof are made available for payment.



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



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




     (i) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for the payment
of such Defaulted Interest (a “Special Record Date”), which shall be fixed in the
following manner. At least thirty (30) days prior to the date of the proposed
payment, the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest. Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest, which shall be not more than fifteen (15) days



25









 






and not less than ten (10) days prior to the date of the proposed payment
and not less than ten (10) days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first class, postage prepaid, to each Holder of
a Security at the address of such Holder as it appears in the Securities Register
not less than ten (10) days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Securities (or their respective Predecessor Securities) are
registered on such Special Record Date; or




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



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



     (e) Payment of principal of, premium, if any, and interest on the Securities shall be
made in such coin or currency of the United States of America as at the time of payment
is legal
tender for payment of public and private debts. Payments of principal, premium, if any,
and
interest due at the Maturity of such Securities shall be made at the Place of Payment
upon
surrender of such Securities to the Paying Agent and payments of interest shall be made,
subject
to such surrender where applicable, by wire transfer at such place and to such account at
a
banking institution in the United States as may be designated in writing to the Paying
Agent at
least ten (10) Business Days prior to the date for payment by the Person entitled thereto
unless
proper written transfer instructions have not been received by the relevant record date,
in which
case such payments shall be made by check mailed to the address of such Person as such
address
shall appear in the Security Register.



     (f) The parties hereto acknowledge and agree that the Holders have certain rights to
direct the Company to modify the Interest Payment Dates and corresponding Redemption Date
and Stated Maturity of the Securities or a portion of the Securities pursuant to the
Purchase
Agreement. In the event any such modifications are made to the Securities or a portion of
the
Securities, appropriate changes to the form of Security set forth in Article II
hereof shall be made



26









 




prior to the issuance and authentication of new or replacement Securities. Any such
modification of the Interest Payment Dates and corresponding Redemption Date and Stated
Maturity with respect to any Securities or tranche of Securities shall not require or be
subject to the consent of the Trustee.




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



     Section 3.2 Denominations.



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



     Section 3.3
Execution, Authentication, Delivery and Dating.



     (a) At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities in an aggregate principal amount (including
all
then Outstanding Securities) not in excess of Thirty Million Dollars ($30,000,000)
executed by
the Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance with the
Company
Order shall authenticate and deliver such Securities. In authenticating such
Securities, and
accepting the additional responsibilities under this Indenture in relation to such
Securities, the
Trustee shall be entitled to receive, and shall be fully protected in relying upon:




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




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



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




27










 







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



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



     Section 3.4 Global Securities.



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



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



28









 





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



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



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



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



     (g) No holder of any beneficial interest in any Global Security held on its behalf by a
Depositary shall have any rights under this Indenture with respect to such Global Security, and
such Depositary may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the owner of such Global Security for all purposes whatsoever. None of the Company,
the Trustee nor any agent of the Company or the Trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of beneficial ownership
interests of a Global Security or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving



29









 




effect to any written certification, proxy or other authorization furnished by a Depositary or
impair, as between a Depositary and such holders of beneficial interests, the operation of
customary practices governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.




     Section 3.5
Registration, Transfer and Exchange Generally.



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



     (b) Subject
to compliance with Section 2.2(b), upon surrender for registration of
transfer of any Security at the offices or agencies of the Company designated for that purpose the
Company shall execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any authorized denominations of
like tenor and aggregate principal amount.



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



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



     (e) Every Security presented or surrendered for transfer or exchange shall be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to the Company and the
Securities Registrar, duly executed by the Holder thereof or such Holder’s attorney duly authorized
in writing.



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



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



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



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



     (j) Neither the Trustee nor the Securities Registrar shall be responsible for ascertaining
whether any transfer hereunder complies with the registration provisions of or any exemptions from
the Securities Act, applicable state securities laws or the applicable laws of any other
jurisdiction, ERISA, the Code or the Investment Company Act; provided, that if a
certificate is specifically required by the express terms of this Section 3.5 to be
delivered to the Trustee or the Securities Registrar by a Holder or transferee of a Security, the
Trustee and the Securities Registrar shall be under a duty to receive and examine the same to
determine whether or not the certificate substantially conforms on its face to the requirements of
this Indenture and shall promptly notify the party delivering the same if such certificate does not
comply with such terms.



Section 3.6
Mutilated, Destroyed, Lost and Stolen Securities.




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



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



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



     (d) Upon
the issuance of any new Security under this Section 3.6, the Company may
require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.



     (e) Every new Security issued pursuant to this Section 3.6 in lieu of any mutilated,
destroyed, lost or stolen Security shall constitute an original additional contractual obligation
of



31









 




the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly issued
hereunder.





	(f) The provisions of this Section 3.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen
Securities.





     Section 3.7 Persons Deemed Owners.



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



     Section 3.8 Cancellation.



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



     Section 3.9 Agreed Tax Treatment.



     Each Security issued hereunder shall provide that the Company and, by its acceptance
or acquisition of a Security or a beneficial interest therein, the Holder of, and any
Person that acquires a direct or indirect beneficial interest in, such Security, intend
and agree to treat such Security as indebtedness of the Company for United States
federal, state and local tax purposes. The provisions of this Indenture shall be
interpreted to further this intention and agreement of the
parties.



     Section 3.10 CUSIP Numbers.



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



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ARTICLE IV




SATISFACTION AND DISCHARGE




     Section 4.1 Satisfaction and Discharge of Indenture.



     This Indenture shall, upon Company Request, cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities herein
expressly provided for and as otherwise provided in this
Section 4.1) and the
Trustee, on written demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when



     (a) either




     (i) all Securities theretofore authenticated and
delivered (other than (A) Securities that have been mutilated,
destroyed, lost or stolen and that have been replaced or paid as
provided in Section 3.6 and (B) Securities for whose payment
money has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or
discharged from such trust as provided in Section 10.2) have
been delivered to the Trustee for cancellation; or




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




     (A) have become due and payable; or




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




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




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



33









 





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



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


Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 6.6, the obligations of the Company to any
Authenticating Agent under Section 6.11 and, if money shall have been deposited
with the Trustee pursuant to subclause (a)(ii) of this Section 4.1, the
obligations of the Trustee under Section 4.2 and Section 10.2(e) shall
survive.




     Section 4.2 Application of Trust Money.



     Subject
to the provisions of Section 10.2(e), all money deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities and this Indenture, to the
payment in accordance with Section 3.1, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and interest
(including any Additional Interest) for the payment of which such money or obligations
have been deposited with or received by the Trustee. Moneys held by the Trustee under
this Section 4.2 shall not be subject to the claims of holders of Senior Debt
under Article XII.



ARTICLE V




REMEDIES




     Section 5.1 Events of Default.



     “Event of Default” means, wherever used herein with respect to the
Securities, any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):



     (a) default in the payment of any interest upon any Security, including any Additional
Interest in respect thereof, when it becomes due and payable, and continuance of such default
for a period of thirty (30) days; or



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



     (c) default in the performance, or breach, of any covenant or warranty of the Company in
this Indenture or the Purchase Agreement and continuance of such default or breach for a
period of thirty (30) 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 the Holders of at least twenty-



34









 




five percent (25%) in aggregate principal amount of the Outstanding Securities a written
notice
specifying such default or breach and requiring it to be remedied and stating that such
notice is a “Notice of Default” hereunder (a “Notice
of Default”); provided that any default in the performance or breach of the covenant set forth in Section
10.8 shall constitute an Event of Default immediately upon such default or breach
(without any obligation of the Trustee or the Holders to deliver a Notice of Default)
and the Holders shall have the immediate right to exercise all remedies granted to the
Holders under this Indenture; or




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



     (e) the institution by the Company of proceedings to be adjudicated a bankrupt or
insolvent, or the consent by the Company to the institution of bankruptcy or insolvency
proceedings against it, or the filing by the Company of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or the consent by it to
the filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due and its willingness to be
adjudicated a bankrupt or insolvent, or the taking of corporate action by the Company in
furtherance of any such action.



     Section 5.2 Acceleration of Maturity; Rescission and Annulment.



     (a) If an Event of Default occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than twenty-five percent (25%) in aggregate
principal amount of the Outstanding Securities may declare the principal amount of all
the Securities to be immediately due and payable, by a notice in writing to the Company
(and to the Trustee if given by Holders).



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




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




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



35









 






     (B) any accrued Additional Interest on all Securities;




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




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




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


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





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



     (a) The Company covenants that if:




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




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


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




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



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



36









 





     Section 5.4 Trustee May File Proofs of Claim.



     In case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or similar judicial proceeding relative to the
Company (or any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise,
to take any and all actions authorized hereunder in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall be
authorized to collect and receive any moneys or other property payable or deliverable on
any such claims and to distribute the same; and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments directly to
the Holders, to first pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts owing the Trustee, any predecessor Trustee and other
Persons under Section 6.6.



     Section 5.5 Trustee May Enforce Claim Without Possession of Securities.



     All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the Securities or
the production
thereof in any proceeding relating thereto, and any such proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, subject to Article XII and after provision for the
payment of all the amounts owing the Trustee, any predecessor Trustee and other Persons
under Section 6.6, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.



     Section 5.6 Application of Money Collected.



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



     FIRST: To the payment of all amounts due the Trustee, any predecessor Trustee and
other Persons under Section 6.6;



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



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



37









 





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



     Section 5.7 Limitation on Suits.



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



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



     (b) the Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee hereunder;



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



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



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


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




     Section 5.8
Unconditional Right of Holders to Receive Principal, Premium, if
any, and Interest.



     Notwithstanding any other provision in this Indenture, the Holder of any Security
shall have the right, which is absolute and unconditional, to receive payment of the
principal of and premium, if any, on such Security at its Maturity and payment of
interest (including any Additional Interest) on such Security when due and payable and to
institute suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.



     Section 5.9 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 such Holder, then and in
every such case the



38









 




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




     Section 5.10 Rights and Remedies Cumulative.



     Except as otherwise provided in Section 3.6(f), no right or remedy herein
conferred upon or reserved to the Trustee or the Holders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion or employment of
any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
or employment of any other appropriate right or remedy.



     Section 5.11 Delay or Omission Not Waiver.



     No delay or omission of the Trustee or 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 V 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 the Holders, as the case may be.



     Section 5.12 Control by Holders.



     The Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee; provided, that:



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



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



     (c) subject
to the provisions of Section 6.2, the Trustee shall have the right to
decline to follow such direction if a Responsible Officer or Officers of the Trustee
shall, in good faith, reasonably determine that the proceeding so directed would be
unjustly prejudicial to the Holders not joining in any such direction or would involve
the Trustee in personal liability.



     Section 5.13 Waiver of Past Defaults.




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




     (i) in the payment of the principal of, premium, if any, or interest
(including any Additional Interest) on any Outstanding Security (unless such Event
of Default has been



39









 






cured and the Company has paid to or deposited with the Trustee a sum sufficient
to pay all installments of interest (including any Additional Interest) due and
past due and all principal of and premium, if any, on all Securities due otherwise
than by acceleration); or




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



     (b) Any such waiver shall be deemed to be on behalf of the Holders of all the Outstanding
Securities.



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



     Section 5.14 Undertaking for Costs.



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



     Section 5.15
Waiver of Usury, Stay or Extension Laws.



     The Company covenants (to the extent that it may lawfully do so) that it will not at
any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any usury, stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.



40









 





ARTICLE VI




THE TRUSTEE




     Section 6.1 Corporate Trustee
Required.



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



     Section 6.2 Certain Duties and Responsibilities.




     (a) Except during the continuance of an Event of Default:




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




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



     (b) If an Event of Default known to the Trustee has occurred and is continuing, the
Trustee shall, prior to the receipt of directions, if any, from the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities, exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and
skill in its exercise, as a prudent person would exercise or use under the circumstances
in the conduct of such person’s own affairs.



     (c) Notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the Trustee shall
be subject to the provisions of this Section 6.2. To the



41









 




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




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




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




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




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



     Section 6.3 Notice of Defaults.



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



     Section 6.4 Certain Rights of
Trustee.



     Subject to the provisions of Section
6.2:



     (a) the Trustee may conclusively rely and shall be fully protected in acting or
refraining from acting in good faith and in accordance with the terms hereof upon any
resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond,



42









 




debenture, note or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;




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



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



     (d) the Trustee may consult with counsel (which counsel may be counsel to the
Trustee, the Company or any of its Affiliates, and may include any of its employees) and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;



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



     (f) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, indenture, note or other paper or
document, but the Trustee in its discretion may make such inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to make such
inquiry or investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;



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



43









 





     (h) whenever in the administration of this Indenture the Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or right or taking
any other action with respect to enforcing any remedy or right hereunder, the Trustees
(i) may request instructions from the Holders (which instructions may only be given by
the Holders of the same aggregate principal amount of Outstanding Securities as would be
entitled to direct the Trustee under this Indenture in respect of such remedy, right or
action), (ii) may refrain from enforcing such remedy or right or taking such action until
such instructions are received and (iii) shall be protected in acting in accordance with
such instructions;



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



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



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



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



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



     Section 6.5 May Hold Securities.



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



     Section 6.6
Compensation; Reimbursement;
Indemnity.



     (a) The Company agrees:



44









 






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




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




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



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



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



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



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



     Section 6.7 Resignation and Removal; Appointment of Successor.



     (a)
 No resignation or removal of the
Trustee and no
appointment of a successor Trustee pursuant to this
Article VI shall become effective until the
acceptance of appointment by the successor Trustee
under Section 6.8.






45









 











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



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



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



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



     Section 6.8 Acceptance of Appointment by Successor.



     (a) In case of the appointment hereunder of a successor Trustee, each successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee; provided, that on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.



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



46









 





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



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



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



     Section 6.10 Not Responsible for Recitals or Issuance of Securities.



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



     Section 6.11 Appointment of Authenticating Agent.



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



47









 




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




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



     (c) An Authenticating Agent may resign at any time by giving written notice thereof to
the Trustee and to the Company. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.1.1, the Trustee may appoint a successor Authenticating
Agent eligible under the provisions of this Section 6.11, which shall be acceptable to
the Company, and shall give notice of such appointment to all Holders. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as if originally
named as an Authenticating Agent.



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



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


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




Dated:




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

	 	By:	 	 	 	 
	 

	 	 	 	 

Authenticating Agent
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Authorized Signatory	 	 






48









 






ARTICLE VII




HOLDER’S LISTS AND REPORTS BY COMPANY




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



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



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



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


in each case to the extent such information is in the possession or control of the
Company and has not otherwise been received by the Trustee in its capacity as Securities
Registrar.




     Section 7.2
Preservation of Information, Communications to Holders.



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



     (b) The rights of Holders to communicate with other Holders with respect to their
rights under this Indenture or under the Securities, and the corresponding rights and
privileges of the Trustee, shall be as provided in the Trust Indenture Act.



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



     Section 7.3 Reports by Company.



     (a) The Company shall furnish to the Holders and to prospective purchasers of
Securities, upon their request, the information required to be furnished pursuant to Rule
144A(d)(4) under the Securities Act. The delivery requirement set forth in the
preceding sentence may be satisfied by compliance with Section 7.3 (b).


     (b) The Company shall furnish to each of (i) the Trustee, (ii) the Holders and to
subsequent holders of Securities, (iii) Kodiak Capital Management Company LLC, 2107
Wilson Boulevard, Suite 450, Arlington, Virginia 22201, Attention: N. David Doyle or such
other address as designated by Kodiak Capital Management Company LLC) and (iv) any
beneficial owner of the Securities reasonably identified to the Company (which
identification may be made



49









 




either by such beneficial owner or by Kodiak Capital Management Company LLC), a
duly completed and executed officer’s financial certificate substantially and
substantively in the form attached hereto as Exhibit A, including the financial
statements referenced in such Exhibit, which certificate and financial statements shall
be so furnished by the Company not later than forty-five (45) days after the end of each
of the first three (3) fiscal quarters of each fiscal year of the Company and not later
than ninety (90) days after the end of each fiscal year of the Company, or, if
applicable, such shorter respective periods as may then be required by the Commission for
the filing by the Company of quarterly reports on Form 10-Q and annual reports on Form
10-K.




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



ARTICLE VIII




CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE




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



     The Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any Person,
and no Person shall consolidate with or merge into the Company or convey, transfer or
lease its properties and assets substantially as an entirety to the Company, unless:



     (a) if the Company shall consolidate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any Person,
the entity formed by such consolidation or into which the Company is merged or the Person
that acquires by conveyance or transfer, or that leases, the properties and assets of the
Company substantially as an entirety shall be an entity organized and existing under the
laws of the United States of America or any State or Territory thereof or the District of
Columbia and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the Trustee, in form
reasonably



50









 




satisfactory to the Trustee, the due and punctual payment of the principal of and
any premium and interest (including any Additional Interest) on all the Securities and
the performance of every covenant of this Indenture on the part of the Company to be performed or observed;




     (b) immediately after giving effect to such transaction, no Event of Default, and no
event that, after notice or lapse of time, or both, would constitute an Event of Default,
shall have happened and be continuing; and



     (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease
and, if a supplemental indenture is required in connection with such transaction, any
such supplemental indenture, comply with this Article VIII and that all
conditions precedent herein provided for relating to such transaction have been complied
with; and the Trustee may rely upon such Officers’ Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section 8.1.



     (d) Notwithstanding the foregoing, if the Company shall consolidate with or merge
into an unaffiliated entity or convey, transfer or lease its properties and assets
substantially as an entirety to an unaffiliated entity, the rights granted to the
Purchaser under Sections 60(j) of the Purchase Agreement and Section 10.8 shall
automatically terminate upon the closing of such consolidation or merger or conveyance,
transfer or lease of its properties and assets so long as the aggregate amount of
Securities or junior subordinated notes, trust preferred securities or other securities
convertible into, or exercisable or exchangeable for Securities or other junior
subordinated notes or trust preferred securities of the successor entity does not exceed
five percent (5%) of the Consolidated Tangible Net Worth of such successor entity as of
the date of such consolidation or merger or conveyance, transfer or lease of its
properties and assets.



     Section 8.2 Successor Company Substituted.



     (a) Upon any consolidation or merger by the Company with or into any other Person,
or any conveyance, transfer or lease by the Company of its properties and assets
substantially as an entirety to any Person in accordance with Section 8.1 and the
execution and delivery to the Trustee of the supplemental indenture described in
Section 8.l(a), the successor entity formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person had been
named as the Company herein; and in the event of any such conveyance or transfer,
following the execution and delivery of such supplemental indenture, the Company shall be
discharged from all obligations and covenants under the Indenture and the Securities.



     (b) Such successor Person to the Company may cause to be executed, and may issue
either in its own name or in the name of the Company, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead of the
Company and subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities that
previously shall have been signed and delivered by the officers of the Company to the
Trustee for authentication, and any Securities that such successor



51









 




Person thereafter shall cause to be executed and delivered to the Trustee on its
behalf. All the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture.




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



ARTICLE IX




SUPPLEMENTAL INDENTURES




     Section 9.1 Supplemental
Indentures without Consent of Holders.



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



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



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



     (c) to cure any ambiguity, to correct or supplement any provision herein that may be
defective or inconsistent with any other provision herein, or to make or amend any other
provisions with respect to matters or questions arising under this Indenture, which shall not
be inconsistent with the other provisions of this Indenture;
provided, that such
action pursuant to this clause (c) shall not be effected unless the Company has delivered a
written notice of such amendment to the Holders at least twenty (20) days prior to the
effective date of such amendment; provided, further, that such action pursuant to this
clause (c) shall not adversely affect in any material respect the interests of any Holders; or



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



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



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




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     Section 9.2 Supplemental Indentures with Consent of Holders.



     (a) Subject to Section 9.1, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of Securities under
this Indenture; provided, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security:




     (i)
except as set forth in Section 3.1(f), change the Stated Maturity
of the principal or any premium of any Security or change the date of payment of
any installment of interest (including any Additional Interest) on any Security,
or reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof or change the place of payment where,
or the coin or currency in which, any Security or interest thereon is payable, or
restrict or impair the right to institute suit for the enforcement of any such
payment on or after such date; or




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




     (iii)
modify any of the provisions of this Section 9.2, Section 5.13
or Section 10.6, except to increase any percentage in aggregate principal
amount of the Outstanding Securities, the consent of whose Holders is required for
any reason, or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Security.



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



     Section 9.3 Execution of Supplemental Indentures.



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



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     Section 9.4 Effect of Supplemental Indentures.



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



     Section 9.5 Reference in Securities to Supplemental Indentures.



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



ARTICLE X




COVENANTS




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



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



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



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



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



     (c) The Company will cause each Paying Agent for the Securities other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent
shall
agree with the Trustee, subject to the provisions of this
Section 10.2, that such
Paying Agent will
(i) comply with the provisions of this Indenture and the Trust Indenture Act applicable
to it as a



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




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



     (e) Any money deposited with the Trustee or any Paying Agent, or then held by the
Company in trust for the payment of the principal of and any premium or interest
(including any
Additional Interest) on any Security and remaining unclaimed for two (2) years after
such
principal and any premium or interest has become due and payable shall (unless
otherwise
required by mandatory provision of applicable escheat or abandoned or unclaimed
property law)
be paid on Company Request to the Company, or (if then held by the Company) shall
(unless
otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed
property law) be discharged from such trust; and the Holder of such Security shall
thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and all
liability of
the Trustee or such Paying Agent with respect to such trust money, and all liability
of the
Company as trustee thereof, shall thereupon cease; provided, that the
Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of the
Company
cause to be published once, in a newspaper published in the English language,
customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The
City of New York, notice that such money remains unclaimed and that, after a date
specified
therein, which shall not be less than thirty (30) days from the date of such
publication, any
unclaimed balance of such money then remaining will be repaid to the Company.



     Section 10.3 Statement as to Compliance.



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



     Section 10.4 Calculation Agent.



     (a) The Company hereby agrees that for so long as any of the Securities remain
Outstanding, there will at all times be an agent appointed to calculate LIBOR in respect
of each Interest Payment Date in accordance with the terms of Schedule A (the
“Calculation Agent”).



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The Company has initially appointed the Trustee as Calculation Agent for purposes
of determining LIBOR for each Interest Payment Date. Notwithstanding the foregoing, so
long as the Securities are Outstanding, the Calculation Agent shall be the Trustee. If
the Calculation Agent is unable or unwilling to act as such or is removed by the Company,
the Company will promptly appoint as a replacement Calculation Agent the London office of
a leading bank which is engaged in transactions in three (3)-month Eurodollar deposits in
the international Eurodollar market and which does not control or is not controlled by or
under common control with the Company or its Affiliates. The Calculation Agent may not
resign its duties without a successor having been duly appointed.




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



     Section 10.5 Additional Covenants.



     (a) The Company covenants and agrees with each Holder of Securities that if an Event
of Default shall have occurred and be continuing, it shall not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any Equity Interests of the Company, (ii) vote in favor of or permit or
otherwise allow any of its Subsidiaries to declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to or
otherwise retire, any preferred Equity Interests of such Subsidiaries or other Equity
Interests entitling the holders thereof to a stated rate of return (for the avoidance of
doubt, whether such preferred Equity Interests are perpetual or otherwise), or (iii) make
any payment of principal of or any interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Securities (other than (A) repurchases, redemptions or other
acquisitions of Equity Interests of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of any one or
more employees, officers, directors or consultants, in connection with a dividend
reinvestment or Equity Interests purchase plan or in connection with the issuance of
Equity Interests in the Company (or securities convertible into or exercisable for such
Equity Interests) as consideration in an acquisition transaction entered into prior to
the applicable Event of Default, (B) as a result of an exchange, conversion
reclassification or combination of any class or series of the



56









 




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




     (b) The Company shall notify in writing, within five (5) Business Days of the
occurrence thereof, the Trustee and each Holder of Securities of the occurrence of a
Change-in-Control (the “Change-in-Control Notice”). Within thirty (30) days of the
occurrence of a
Change-in-Control, the Depositor shall initiate a ratings affirmation process with
the Ratings
Agencies to determine if a Ratings Downgrade has occurred as a result of such
Change-in-Control. Within five (5) Business Days of the completions of such ratings
affirmation process,
the Company shall notify in writing the Trustee and each holder of Securities of the
occurrence
of a Change-in-Control Event (the “Change-in-Control Event
Notice”). If the
Company shall
have received, within thirty (30) days from the Holders of Securities’ receipt of
the Change-in-Control Event Notice, written notice from any Holder of Securities of such Holder’s
election to
cause the Defeasance or redemption, as applicable, of the Securities as provided in
this Section 10.5(b) (the “Change-in-Control
Election”), then the Company shall
(i) if such Change-in-Control Election is received on or prior to June 30, 2011, cause Article
XIII to be applied to the
Outstanding Securities or (ii) if such Change-in-Control Election is received after
June 30,2011,
redeem the Securities pursuant to Section ll.l(b).



     (c) The Company hereby covenants and agrees that the Company shall maintain, as
of the end of each fiscal quarter, a Consolidated Tangible Net Worth (as reported in
the
Company’s balance sheet contained in the most recent periodic report filed with the
Commission) in excess of $120,000,000.



     (d) The Company will not permit the Leverage Ratio, as of the end of each fiscal
quarter, to be greater than 3.00 to 1.00.



     (e) The Company will not permit the Fixed Charge Coverage Ratio, as of the end of
each fiscal quarter, to be less than 2.00 to 1.00.



     Section 10.6  Waiver of Covenants.



     The Company may omit in any particular instance to comply with any covenant or
condition contained in Section 10.5 if, before or after the time for such
compliance, the Holders of at least a majority in aggregate principal amount of the
Outstanding Securities shall, by Act of such Holders, either waive such compliance in
such instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the extent
so expressly waived, and, until such waiver shall become effective,




57










 






the obligations of the Company in respect of any such covenant or condition shall remain in
full force and effect.




     Section 10.7 Treatment of Securities.



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



     Section 10.8 Limitation on Issuance of Securities.



     The Company covenants and agrees with each Holder of Securities that the Company will not, without
the prior written consent of Holders of a majority in interest of Securities, offer, sell, contract
to sell, grant any option to purchase or otherwise dispose of, directly or indirectly, (i) any
Securities or other junior subordinated notes or trust preferred securities or (ii) any other
securities convertible into, or exercisable or exchangeable for, any Securities or other junior
subordinated notes or trust preferred securities unless the aggregate amount of Securities
outstanding together with such Securities or junior subordinated notes, trust preferred securities
or other securities proposed to be offered, sold, contracted for sale, granted or otherwise
disposed of does not exceed twenty-five percent (25%) of the aggregate of (x) the Company’s
Consolidated Tangible Net Worth (as reported in the Company’s balance sheet contained in the most
recent periodic report filed with the Commission and after taking into account such Securities,
junior subordinated notes, trust preferred securities or other securities proposed to be offered,
sold, granted or otherwise disposed of).



ARTICLE XI




REDEMPTION OF SECURITIES




     Section 11.1 Optional Redemption and Mandatory Redemption.



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



     (b) The
Company shall, upon receipt of a Change-in-Control Election after June 30, 2011,
redeem the Securities in whole on a date no more than thirty (30) days after receipt of the
Change-in-Control Election, at a Redemption Price equal to one hundred percent (100%) of the
outstanding principal amount thereof, together, in the case of any such redemption, with accrued
and unpaid interest, including any Additional Interest, to but excluding the date fixed as the
Redemption Date (the “Mandatory Redemption Price”).



58









 





     Section 11.2 Special Event Redemption.



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



     Section 11.3 Election to Redeem; Notice to Trustee.



     The election of the Company to redeem any Securities, in whole or in part, shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the Company, the
Company shall, not less than forty-five (45) days and not more than seventy-five (75) days prior to
the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee in writing of such date and of the principal amount of the Securities to be redeemed and
provide the additional information required to be included in the notice or notices contemplated by
Section 11.5. In the case of any redemption of Securities, in whole or in part, (a) prior
to the expiration of any restriction on such redemption provided in this Indenture or the
Securities or (b) pursuant to an election of the Company which is subject to a condition specified
in this Indenture or the Securities, the Company shall furnish the Trustee with an Officers’
Certificate and an Opinion of Counsel evidencing compliance with such restriction or condition.



     Section 11.4 Selection of Securities to be Redeemed.



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



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



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



59









 






     Section 11.5 Notice of Redemption.



     (a) Notice of redemption shall be given not later than the thirtieth (30th) day, and not
earlier than the sixtieth (60th) day, prior to the Redemption Date to each Holder of Securities to
be redeemed, in whole or in part.



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




     (i) the Redemption Date;




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




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




     (iv) that on the Redemption Date, the Redemption Price will become due and payable upon each such
Security or portion thereof, and that any interest (including any Additional Interest) on such
Security or such portion, as the case may be, shall cease to accrue on and after said date; and




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



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



     Section 11.6 Deposit of Redemption Price.



     Prior to 10:00 A.M., New York City time, on the Redemption Date specified in the notice of
redemption given as provided in Section 11.5, the Company will deposit with the Trustee or
with one or more Paying Agents (or if the Company is acting as its own Paying Agent, the Company
will segregate and hold in trust as provided in Section 10.2) an amount of money sufficient
to pay the Redemption Price of, and any accrued interest (including any Additional Interest) on,
all the Securities (or portions thereof) that are to be redeemed on that date.



60









 





     Section 11.7 Payment of Securities Called for Redemption.



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



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



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



ARTICLE XII




SUBORDINATION OF SECURITIES




     Section 12.1 Securities Subordinate to Senior Debt.



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



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



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



     (b) In the event of a bankruptcy, insolvency or other proceeding described in clause (d) or
(e) of the definition of Event of Default specified in Section 5.1 (each such event, if
any, herein sometimes referred to as a “Proceeding”), all Senior Debt (including any interest
thereon



61









 







accruing after the commencement of any such proceedings) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, shall be made to any Holder
of any of the Securities on account thereof. Any payment or distribution, whether in cash,
securities or other property (other than securities of the Company or any other entity provided for
by a plan of reorganization or readjustment the payment of which is subordinate, at least to the
extent provided in these subordination provisions with respect to the indebtedness evidenced by the
Securities, to the payment of all Senior Debt at the time outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment), which would otherwise
(but for these subordination provisions) be payable or deliverable in respect of the Securities
shall be paid or delivered directly to the holders of Senior Debt in accordance with the priorities
then existing among such holders until all Senior Debt (including any interest thereon accruing
after the commencement of any Proceeding) shall have been paid in full.



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



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



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



62









 





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



     Section 12.3 Payment Permitted if No Default.



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



     Section 12.4 Subrogation to Rights of Holders of Senior Debt.



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



     Section 12.5 Provisions Solely to Define Relative Rights.



     The provisions of this Article XII are and are intended solely for the purpose of defining
the relative rights of the Holders of the Securities on the one hand and the holders of Senior Debt
on the other hand. Nothing contained in this Article XII or elsewhere in this Indenture or
in the Securities is intended to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Securities the principal of and any premium and interest (including any Additional



63









 







Interest) on the Securities as and when the same shall become due and payable in accordance with
their terms, (b) affect the relative rights against the Company of the Holders of the Securities
and creditors of the Company other than their rights in relation to the holders of Senior Debt or
(c) prevent the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, including filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article XII of the holders of Senior
Debt to receive cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder.



     Section 12.6 Trustee to Effectuate Subordination.



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



     Section 12.7 No Waiver of Subordination Provisions.



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



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



     Section 12.8 Notice to Trustee.



     (a) The Company shall give prompt written notice to a Responsible Officer of the Trustee of any
fact known to the Company that would prohibit the making of any payment to or by the Trustee in
respect of the Securities. Notwithstanding the provisions of this Article XII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Company or a holder of Senior Debt or from any trustee,



64









 







agent or representative therefor; provided, that if the Trustee shall not have received the
notice provided for in this Section 12.8 at least two Business Days prior to the date upon
which by the terms hereof any monies may become payable for any purpose (including, the payment of
the principal of and any premium on or interest (including any Additional Interest) on any
Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have
full power and authority to receive such monies and to apply the same to the purpose for which they
were received and shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to such date.



     (b) The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself, herself or itself to be a holder of Senior Debt (or a trustee, agent,
representative or attorney-in-fact therefor) to establish that such notice has been given by a
holder of Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor). In the
event that the Trustee determines in good faith that further evidence is required with respect to
the right of any Person as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article XII, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, the
extent to which such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this
Article XII, and if such
evidence is not furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.



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



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



     Section 12.10 Trustee Not Fiduciary for Holders of Senior Debt.



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



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



     The Trustee in its individual capacity shall be entitled to all the rights set forth in this
Article XII with respect to any Senior Debt that may at any time be held by it, to the same
extent



65









 







as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any
of its rights as such holder.



     Section 12.12
Article Applicable to Paying Agents.



     If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term “Trustee” as used in this Article XII shall in such case
(unless the context otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article XII in addition to or in place of the Trustee; provided, that
Sections 12.8 and 12.11 shall not apply to the Company or any Affiliate of the
Company if the Company or such Affiliate acts as Paying Agent.



ARTICLE XIII




DEFEASANCE




     Section 13.1 Defeasance and Discharge.



          Upon the exercise of the option provided in Section 10.50(b) by a Holder of the Securities
as a result of the receipt of a Change-in-Control Election on or prior to June 30, 2011, to have
this Section 13.1 applied to the Outstanding Securities, the Company shall, within thirty
(30) days following its receipt of the Change-in-Control Election satisfy the conditions set forth
in Section 13.2. The Company shall be deemed to have been discharged from its obligations
with respect to the Outstanding Securities as provided in this Section 13.1 on and after
the date the conditions set forth in the Section 13.2 are satisfied (hereinafter called
“Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding Securities and to have
satisfied all of its other obligations under the Securities and this Indenture insofar as the
Securities are concerned (and the Trustee, upon written request and at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the following, which shall
survive until otherwise terminated or discharged hereunder (1) the rights of Holders of the
Securities to receive, solely from the trust fund described in Section 13.2 and as more
fully set forth in such Section 13.2, payments in respect of the principal of, premium, if
any, and interest on the Securities when payments are due, (2) the Company’s obligations with
respect to the Securities under Sections 2.4, 3.5,
3.6, and 10.2, (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (4) this Article XIII.




     Section 13.2 Conditions to Defeasance.



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





          (1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or
another trustee that satisfies the requirements contemplated by Section 6.1 and agree to
comply with the provisions of this Article XIII applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Outstanding



66









 







Securities, (A) money in an amount in Dollars, (B) Government Obligations that through the
scheduled payment of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an amount in Dollars,
or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other
qualifying Trustee) to pay and discharge, one hundred percent (100%) of the principal amount of the
Securities on June 30, 2011 (the “Defeasance Maturity Date”)plus interest on the
Securities due and payable on the Interest Payment Dates occurring prior to and including the
Defeasance Maturity Date and Breakage Costs, if any, less Breakage Gains, if any, in accordance
with the terms of this Indenture and the Securities.




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




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




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



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



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




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




          Anything in this Article XIII to the contrary notwithstanding, the Trustee shall deliver or
pay to the Company from time to time upon Company Request any money or Government Obligations held
by it as provided in Section 13.2 with respect to the Securities that,




67









 







in the opinion of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Defeasance with respect to the
Securities.




     Section 13.4 Reinstatement.



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




[signature page follows]




68









 








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



	 	 	 	 	 
	 	COMSTOCK HOMEBUILDING COMPANIES, INC.

 	 
	 	By:  	/s/ Bruce Labovitz
 	 
	 	Name:	Bruce Labovitz 	 
	 	Title:	Chief Financial Officer 	 
	 



	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Trustee

 	 
	 	By:  	/s/ Tracy Mclamb
 	 
	 	Name:	Tracy Mclamb 	 
	 	Title:	Vice President 	 



 









 






	 	 	 	 	 



Schedule A




DETERMINATION OF LIBOR





     With respect to the Securities, the London interbank offered rate (“LIBOR”) shall be determined by
the Calculation Agent in accordance with the following provisions (in each case rounded to the
nearest .000001%):


(1) On the second LIBOR Business Day (as defined below) prior to an Interest Payment Date
occurring after the expiration of the Fixed Rate Period (each such
day, a “LIBOR Determination Date”), LIBOR for any given security shall for the following interest payment period equal the
rate, as obtained by the Calculation Agent from Bloomberg Financial Markets Commodities News, for
three (3)-month Eurodollar deposits that appears on Dow Jones Telerate Page 3750 (as defined in the
International Swaps and Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange
Definitions, as the same may be amended from time to time), or such other page as may replace such
Page 3750 (as any such replacement may be amended from time to time), as of 11:00 A.M. (London
time) on such LIBOR Determination Date.



(2) If, on any LIBOR Determination Date, such rate does not appear on Dow Jones Telerate Page
3750 or such other page as may replace such Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks (as defined below) to leading
banks in the London interbank market for three (3)-month Eurodollar deposits in an amount
determined by the Calculation Agent by reference to requests for quotations as of approximately
11:00 A.M. (London time) on the LIBOR Determination Date made by the Calculation Agent to the
Reference Banks. If, on any LIBOR Determination Date, at least two of the Reference Banks provide
such quotations, LIBOR shall equal such arithmetic mean of such quotations. If, on any LIBOR
Determination Date, only one or none of the Reference Banks provide such quotations, LIBOR shall be
deemed to be the arithmetic mean of the offered quotations that leading banks in the City of New
York selected by the Calculation Agent are quoting on the relevant LIBOR Determination Date for
three (3)-month Eurodollar deposits in an amount determined by the Calculation Agent by reference
to the principal London offices of leading banks in the London
interbank market; provided,
that if the Calculation Agent is required but is unable to determine a rate in accordance with at
least one of the procedures provided above or adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis set forth above (due to changes arising in the interbank
Eurocurrency market or otherwise), then the Securities shall not bear interest in respect of LIBOR
but shall instead bear interest with reference to a floating rate equal to the Base Rate (as
defined below).



(3) As
used herein: “Reference Banks” means four (4) major banks in the London
interbank market selected by the Calculation Agent; “LIBOR
Business Day” means a day on
which commercial banks are open for business (including dealings in foreign exchange and foreign
currency deposits) in London; the “Base Rate” on any day shall equal the greater of the arithmetic
mean of (i) the “prime rate” for dollar denominated loans quoted by leading banks in the City of
New York selected by the Calculation Agent and (ii) the Federal Funds Rate (as defined below) plus
0.50% per annum; and the “Federal Funds Rate” on any day equals the rate per annum equal to
the weighted average (rounded upwards to the nearest 0.000001) of the rate on overnight federal
funds transactions with members of the Federal Reserve System only arranged by federal funds
brokers, as published as of such day by the Federal Reserve Bank of New York.




 









 








Schedule A-2




 









 








FORM OF OFFICER’S FINANCIAL CERTIFICATE




     The undersigned, the [CHIEF FINANCIAL OFFICER/TREASURER/ASSISTANT TREASURER/
SECRETARY/ASSISTANT SECRETARY, CHAIRMAN/VICE CHAIRMAN/CHIEF EXECUTIVE OFFICER/ PRESIDENT/VICE
PRESIDENT] of Comstock Homebuilding Companies, Inc. (the “Company”) hereby certifies, pursuant
to Section 7.3(b) of the Junior Subordinated Indenture, dated as of May 4, 2006 (the “Indenture”),
between the Company and Wells Fargo Bank, N.A., as trustee, that, as
of [DATE], [YEAR] , the
Company, if applicable, and its subsidiaries had the following ratios and balances:


As of [QUARTERLY/ANNUAL FINANCIAL DATE], [YEAR]




	 	 	 	 	 
	Senior secured indebtedness for borrowed money (“Debt”)
	 	$	—	 
	 
	Senior unsecured Debt
	 	$	—	 
	 
	Subordinated Debt
	 	$	—	 
	 
	Total Debt
	 	$	—	 
	 
	Ratio of (x) senior secured and unsecured Debt to (y) total Debt
	 	 	—	%





[FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial statements (including
the balance sheet, income statement and statement of cash flows, and notes thereto, together with
the report of the independent accountants thereon) of the Company and its consolidated subsidiaries
for the three (3) years ended [DATE], [YEAR].]



[FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and consolidating financial
statements (including the balance sheet and income statement) of the Company and its consolidated
subsidiaries for the fiscal quarter ended [DATE],
[YEAR].]



The financial statements fairly present in all material respects, in accordance with U.S.
generally accepted accounting principles (“GAAP”), the financial position of the Company and its
consolidated subsidiaries, and the results of operations and changes in financial condition as of
the date, and for the [QUARTER] [YEAR] ended [DATE], [YEAR], and such financial statements have
been prepared in accordance with GAAP consistently applied throughout the period involved (expect
as otherwise noted therein).




Exhibit A-2




 









 









     There has been no monetary default with respect to any indebtedness owed by the Company
and/or its subsidiaries (other than those defaults cured within thirty (30) days of the occurrence
of the same) [except as set forth below:].



     Attached hereto is a current organizational chart of the Company and its subsidiaries as of the
date hereof.



     IN WITNESS WHEREOF, the undersigned has executed this Officer’s Financial Certificate as of this
[DAY] day of [MONTH],
[YEAR].



	 	 	 	 	 	 	 
	 	 	COMSTOCK HOMEBUILDING COMPANIES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Comstock Homebuilding Companies, Inc.	 	 
	 

	 	 	 	11465 Sunset Hills Road	 	 
	 

	 	 	 	Suite 510	 	 
	 

	 	 	 	Reston, Virginia 20190	 	 
	 

	 	 	 	(703)883-1700	 	 






Schedule A-3




 









 








FORM OF

OFFICERS’ CERTIFICATE

PURSUANT TO SECTION 10.3




     Pursuant to Section 10.3 of the Junior Subordinated Indenture, dated as of May 4, 2006 (as
modified, supplemented or amended from time to time, the “Indenture”) among Comstock Homebuilding
Companies, Inc., a Delaware corporation (the “Company”) and Wells Fargo Bank, N.A., as Trustee,
each of the undersigned hereby certifies that, to the knowledge of the undersigned, the Company is
not in default in the performance or observance of any of the terms, provisions and conditions of
the Indenture (without regard to any period of grace or requirement of notice provided under the
Indenture) for the fiscal period ending on [DATE], [YEAR] [, except as follows: SPECIFY EACH SUCH
DEFAULT AND THE NATURE AND STATUS THEREOF].



     Capitalized terms used herein, and not otherwise defined herein, have the respective meanings
assigned thereto in the Indenture.



[signatures page follows]




Exhibit B-4




 









 








IN WITNESS WHEREOF, the undersigned have executed this Officers’ Certificate as of [DATE], [YEAR].




	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	[Must be the CHIEF EXECUTIVE OFFICER, the PRESIDENT or a SENIOR VICE PRESIDENT] of Comstock
Homebuilding Companies, Inc.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Title:	 	[Must be the CHIEF FINANCIAL OFFICER, the CHIEF ACCOUNTING OFFICER, the TREASURER or an
ASSISTANT TREASURER] of Comstock Homebuilding Companies, Inc.






Exhibit B-5