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SALES AGENCY AGREEMENT

SALES AGENCY AGREEMENT, dated as of November 10, 2009 (this “Agreement”), by and between Inland Real Estate Corporation, a Maryland corporation (the “Company”), and BMO Capital Markets Corp., a registered broker-dealer organized under the laws of Delaware (“BMOCMC”).

W I T N E S S E T H:

WHEREAS, the Company has authorized and proposes to issue and sell in the manner contemplated by this Agreement Common Shares with an aggregate Sales Price of up to $100,000,000 upon the terms and subject to the conditions contained herein; and 

WHEREAS, BMOCMC has been appointed by the Company as its principal and agent to sell the Common Shares and agrees to use its commercially reasonable efforts consistent with customary trading and sales practices to sell the Common Shares offered by the Company upon the terms and subject to the conditions contained herein.

NOW THEREFORE, in consideration of the premises, representations, warranties, covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

1.1

Certain Definitions.  For purposes of this Agreement, capitalized terms used herein and not otherwise defined shall have the meanings set forth in Appendix A.

ARTICLE II

ISSUANCE AND SALE OF COMMON STOCK

2.1

Issuance.

(a)

Commercially Reasonable Efforts.  Upon the terms and subject to the conditions of this Agreement, the Company may issue Common Shares through BMOCMC and BMOCMC shall use its commercially reasonable efforts consistent with customary trading and sales practices to sell Common Shares, with an aggregate Sales Price of up to the Maximum Program Amount, based on and in accordance with such number of Issuance Notices as the Company shall choose to deliver during the Commitment Period until the aggregate Sales Price of the Common Shares sold under this Agreement equals the Maximum Program Amount or this Agreement is otherwise terminated.  Subject to the foregoing and the other terms and conditions of this Agreement, upon the delivery of an Issuance Notice, and unless the sale of the Issuance Shares described therein has been suspended, cancelled or otherwise terminated in accordance with the terms of this Agreement, BMOCMC will use its commercially reasonable efforts consistent with customary trading and sales practices to sell such Issuance Shares up to the amount specified into the Principal Market, and otherwise in accordance with the terms of such Issuance Notice.  BMOCMC will provide written confirmation to the Company no later than the opening of the Trading Day next following the Trading Day on which it has made sales of Issuance Shares hereunder setting forth the portion of the Actual Sold Amount for such Trading Day, the corresponding Sales Price and the Issuance Price payable to the Company in respect thereof.  BMOCMC may sell Issuance Shares in the manner described in Section 2.01(c) herein.  The Company acknowledges and agrees that (i) there can be no assurance that BMOCMC will be successful in selling Issuance Shares and (ii) BMOCMC will incur no liability or obligation to the Company or any other Person if it does not sell Issuance Shares for any reason other than a failure by BMOCMC to use its commercially reasonable efforts consistent with customary trading and sales practices to sell such Issuance Shares as required under this Section 2.01.  In acting hereunder, BMOCMC will be acting as agent for the Company and not as principal.

(b)

Method of Offer and Sale.  The Common Shares may be offered and sold in (1) privately negotiated transactions (if and only if the parties hereto have so agreed in writing), or (2) by any other method or payment permitted by law deemed to be an “at the market” offering as defined in Rule 415 of the Securities Act, including sales made directly on the Principal Market or sales made to or through a market maker or through an electronic communications network.  Nothing in this Agreement shall be deemed to require either party to agree to the method of offer and sale specified in clause (1) above, and either party may withhold its consent thereto in such party’s sole discretion.

(c)

Issuances.  Upon the terms and subject to the conditions set forth herein, on any Trading Day as provided in Section 2.03(b) hereof during the Commitment Period on which the conditions set forth in Sections 5.01 and 5.02 hereof have been satisfied, the Company may exercise an Issuance by the delivery of an Issuance Notice, executed by the Chief Executive Officer or the Chief Financial Officer of the Company, to BMOCMC.  The number of Issuance Shares that BMOCMC shall use its commercially reasonable efforts consistent with customary trading and sales practices to sell pursuant to such Issuance shall have an aggregate Sales Price equal to the Issuance Amount. Each Issuance will be settled on the applicable Settlement Date following the Issuance Date.

2.2

Effectiveness.  The effectiveness of this Agreement (the “Closing”) shall be deemed to take place concurrently with the execution and delivery of this Agreement by the parties hereto and the completion of the closing transactions set forth in the immediately following sentence.  At the Closing, the following closing transactions shall take place, each of which shall be deemed to occur simultaneously with the Closing: (i) the Company shall deliver to BMOCMC a certificate executed by the Secretary of the Company, signing in such capacity, dated the date of the Closing (A) certifying that attached thereto are true and complete copies of the resolutions duly adopted by the Board of Directors of the Company authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (including, without limitation, the issuance of the Common Shares pursuant to this Agreement), which authorization shall be in full force and effect on and as of the date of such certificate and (B) certifying and attesting to the office, incumbency, due authority and specimen signatures of each Person who executed the Agreement for or on behalf of the Company; (ii) the Company shall deliver to BMOCMC a certificate executed by the Chief Executive Officer, the President or any Senior Vice-President of the Company and by the Chief Financial Officer of the Company, signing in such capacity, dated the date of the Closing, confirming that the representations and warranties of the Company contained in this Agreement are true and correct and that the Company has performed all of it obligations hereunder to be performed on or prior to the Closing Date and as to the matters set forth in Section 5.01(a) hereof; (iii) Shefsky & Froelich Ltd., counsel to the Company, shall deliver to BMOCMC an opinion, dated the date of the Closing and addressed to BMOCMC, substantially in the form of Exhibit B attached hereto; (iv) Venable LLP, special Maryland counsel to the Company, shall deliver to BMOCMC an opinion, dated the date of the Closing and addressed to BMOCMC, substantially in the form of Exhibit C attached hereto; (v) KPMG LLP shall deliver to BMOCMC a letter, dated the Closing Date, in form and substance satisfactory to BMOCMC; and (vi) the Company shall pay the expenses set forth in Section 9.02(ii), (iv) and (viii) hereof by wire transfer to the account designated by BMOCMC in writing prior to the Closing.

2.3

Mechanics of Issuances.

(a)

Issuance Notice.  On any Trading Day during the Commitment Period, the Company may deliver an Issuance Notice to BMOCMC, subject to the satisfaction of the conditions set forth in Sections 5.01 and 5.02; provided, however, that (1) the Issuance Amount for each Issuance as designated by the Company in the applicable Issuance Notice shall in no event exceed the Maximum Program Amount and (2) notwithstanding anything in this Agreement to the contrary, BMOCMC shall have no further obligations with respect to any Issuance Notice if and to the extent the aggregate Sales Price of the Issuance Shares sold pursuant thereto, together with the aggregate Sales Price of the Common Shares previously sold under this Agreement, shall exceed the Maximum Program Amount.

(b)

Delivery of Issuance Notice.  An Issuance Notice shall be deemed delivered on the Trading Day that it is received by facsimile or otherwise (and the Company confirms such delivery by e-mail notice or by telephone (including voicemail message)) by BMOCMC.  No Issuance Notice may be delivered other than on a Trading Day during the Commitment Period.

(c)

Floor Price.  BMOCMC shall not sell Common Shares below the Floor Price during any Selling Period and such Floor Price may be adjusted by the Company at any time during any Selling Period upon notice to BMOCMC and confirmation to the Company.   

(d)

Determination of Issuance Shares to be Sold.  The number of Issuance Shares to be sold by BMOCMC with respect to any Issuance shall be the Actual Sold Amount during the Selling Period.

(e)

Trading Guidelines.  BMOCMC may, to the extent permitted under the Securities Act and the Exchange Act, purchase and sell Common Stock for its own account while this Agreement is in effect provided that no such purchase or sale shall take place while an Issuance Notice is in effect (except to the extent BMOCMC may engage in sales of Issuance Shares purchased or deemed purchased from the Company as a “riskless principal” or in a similar capacity). In addition, the Company hereby acknowledges and agrees that BMOCMC and its Affiliates may make markets in the Common Stock or other securities of the Company, in connection with which they may buy and sell, as agent or principal, for long or short account, shares of Common Stock or other securities of the Company, at the same time that BMOCMC is acting as agent pursuant to this Agreement.

2.4

Settlements.  Subject to the provisions of Article V, on or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Issuance Shares being sold by crediting BMOCMC or its designee's account at the Depository Trust Company through its Deposit/Withdrawal At Custodian (DWAC) System, or by such other means of delivery as may be mutually agreed upon by the parties hereto and, upon receipt of such Issuance Shares, which in all cases shall be freely tradeable, transferable, registered shares in good deliverable form, BMOCMC will deliver the related Issuance Price in same day funds delivered to an account designated by the Company prior to the Settlement Date.  If the Company defaults in its obligation to deliver Issuance Shares on a Settlement Date, the Company agrees that it will (i) hold BMOCMC harmless against any loss, claim, damage or expense (including, without limitation, penalties, interest and reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company, and (ii) pay to BMOCMC any Selling Commission to which it would otherwise have been entitled absent such default. The parties acknowledge and agree that, in performing its obligations under this Agreement, BMOCMC may borrow shares of Common Stock from stock lenders, and may use the Issuance Shares to settle or close out such borrowings.

2.5

Use of Free Writing Prospectus.  Neither the Company nor BMOCMC has prepared, used, referred to or distributed, or will knowingly prepare, use, refer to or distribute, without the other party’s prior written consent, any “written communication” which constitutes a “free writing prospectus” as such terms are defined in Rule 405 under the Securities Act. 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

The Company represents and warrants to, and agrees with, BMOCMC that as of the Closing Date, as of each Issuance Date, as of each Settlement Date and as of any time that the Registration Statement or the Prospectus shall be amended or supplemented (each of the times referenced above is referred to herein as a “Representation Date”), except as may be disclosed in the Prospectus (including any documents incorporated by reference therein and any supplements thereto) on or before a Representation Date: 

3.1

Registration.  The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is currently listed and quoted on the Principal Market under the trading symbol “IRC”, and the Common Shares have been listed on the Principal Market, subject to notice of issuance.  The Company (i) meets the requirements for the use of Form S-3 under the Securities Act and the rules and regulations thereunder for the registration of the transactions contemplated by this Agreement and (ii) has been subject to the requirements of Section 12 of the Exchange Act and has timely filed all the material required to be filed pursuant to Section 13 and 14 of the Exchange Act for a period of more than 12 calendar months.  The Company has filed with the Commission a registration statement on Form S-3 (Registration No. 333-158800) which registration statement, as amended, has been declared effective by the Commission for the registration of up to $300,000,000 aggregate amount of Common Shares and other securities under the Securities Act (of which $111,375,550 has been issued and sold prior to the date of this Agreement), and the offering thereof from time to time pursuant to Rule 415 promulgated by the Commission under the Securities Act.  Such registration statement (and any further registration statements that may be filed by the Company for the purpose of registering additional Common Shares to be sold pursuant to this Agreement), and the prospectus constituting a part of such registration statement, together with the Prospectus Supplement (as defined in Section 5.01(k)(i)) and any pricing supplement relating to a particular issuance of the Issuance Shares (each, an “Issuance Supplement”), including all documents incorporated or deemed to be incorporated therein by reference pursuant to Item 12 of Form S-3 under the Securities Act, in each case, as from time to time amended or supplemented, are referred to herein as the “Registration Statement” and the “Prospectus,” respectively, except that if any revised prospectus is provided to BMOCMC by the Company for use in connection with the offering of the Common Shares that is not required to be filed by the Company pursuant to Rule 424(b) promulgated by the Commission under the Securities Act, the term “Prospectus” shall refer to such revised prospectus from and after the time it is first provided to BMOCMC for such use.  Promptly after the execution and delivery of this Agreement, the Company will prepare and file the Prospectus Supplement relating to the Issuance Shares pursuant to Rule 424(b) promulgated by the Commission under the Securities Act, as contemplated by Section 5.01(k)(i) of this Agreement.  As used in this Agreement, the terms “amendment” or “supplement” when applied to the Registration Statement or the Prospectus shall be deemed to include the filing by the Company with the Commission of any document under the Exchange Act after the date hereof that is or is deemed to be incorporated therein by reference;

3.2

Incorporated Documents.  The documents incorporated or deemed to be incorporated by reference in the Registration Statement and the Prospectus pursuant to Item 12 of Form S-3 (collectively, the “Incorporated Documents”), as of the date filed with the Commission under the Exchange Act, conformed and will conform in all material respects to the requirements of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of such documents contained or will contain at such time an untrue statement of a material fact or omitted or will omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

3.3

Registration Statement; Prospectus.  No stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission.  The Registration Statement, as of the Effective Date, conformed or will conform in all material respects to the requirements of the Securities Act, and the rules and regulations of the Commission promulgated thereunder and, as of the Effective Date, does not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as of its original issue date, as of the date of any filing of an Issuance Supplement thereto pursuant to Rule 424(b) promulgated by the Commission under the Securities Act, as of each Applicable Time and as of the date of any other amendment or supplement thereto, conforms or will conform in all material respects to the requirements of the Securities Act and the rules and regulations of the Commission promulgated thereunder and, as of such respective dates, does not and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by BMOCMC expressly for use in the Prospectus.  As used herein, with respect to the Registration Statement, the term “Effective Date” means, as of a specified time, the later of (i) the date that the Registration Statement or the most recent post-effective amendment thereto was or is declared effective by the Commission under the Securities Act and (ii) the date that the Company’s Annual Report on Form 10-K for its most recently completed fiscal year is filed with the Commission under the Exchange Act;  

3.4

Not an Ineligible Issuer.  (i) At the earliest time when a bona fide offer (as used in Rule 164(h)(2) of the Securities Act) of the Common Shares is first made by the Company or BMOCMC, and (ii) as of the Closing Date, the Company was not and is not an Ineligible Issuer (as defined in Rule 405 of the Securities Act);

3.5

Changes.  Neither the Company nor any Subsidiary has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, (i) neither the Company nor any of its Subsidiaries has incurred any liabilities or obligations, direct or contingent, or entered into any transactions, not in the ordinary course of business, that are material to the Company and its Subsidiaries and (ii) there has not been any change in the capital stock, except for issuances of capital stock pursuant to the Company’s dividend reinvestment program and employee benefit plans existing on or prior to the date hereof, or long-term debt, other than the repayment of current maturities of long-term debt, of the Company or any of its Subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, assets, general affairs, management, financial position, prospects, shareholders’ equity or results of operations of the Company and its Subsidiaries, otherwise than as set forth or contemplated in the Prospectus;

3.6

Organizational Matters.  The Company has been duly incorporated and is validly existing as a real estate investment trust in good standing under the laws of the State of Maryland, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement and the Prospectus and to enter into and perform its obligations under this Agreement; the Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse Effect.  Each Subsidiary of the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement and the Prospectus.  As used in this Agreement, the term “Subsidiary” means any Person (other than a natural person), at least a majority of the outstanding Voting Stock of which is owned by the Company, by one or more Subsidiaries or by the Company and one or more Subsidiaries.  Except as disclosed in the Incorporated Documents, no Subsidiary constitutes a “significant subsidiary” within the meaning of Rule 1-02(w) of Regulation S-X;

3.7

Authorization; Enforceability.  The Company has the corporate power and authority to execute, deliver and perform the terms and provisions of this Agreement and has taken all necessary corporate action to authorize the execution, delivery and performance by it of, and the consummation of the transactions to be performed by it contemplated by, this Agreement.  No other corporate proceeding on the part of the Company is necessary, and no consent of any shareholder in its capacity as such of the Company is required, for the valid execution and delivery by the Company of this Agreement, and the performance and consummation by the Company of the transactions contemplated by this Agreement to be performed by the Company.  The Company has duly executed and delivered this Agreement.  This Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and by limitations imposed by law and public policy on indemnification or exculpation;

3.8

Capitalization.  As of the end of the most recently completed fiscal quarter for which the Company has filed a Quarterly Report on Form 10-Q or an Annual Report on Form 10-K, the Company had an authorized, issued and outstanding capitalization as set forth in its consolidated financial statements included in such Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be.  All of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; none of the outstanding shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any security holder of the Company; all of the issued shares of capital stock of each Subsidiary have been duly and validly authorized and issued and are fully paid and non-assessable; and all shares of capital stock of each Subsidiary (other than directors’ qualifying shares) are owned directly or indirectly by the Company, free and clear of any liens, encumbrances or security interests, except as described in the Registration Statement and the Prospectus.  The Common Shares (in an amount up to the Maximum Program Amount) have been duly and validly authorized by all necessary corporate action on the part of the Company. When issued against payment therefor as provided in this Agreement, the Common Shares will be validly issued, fully paid and nonassessable, free and clear of all preemptive rights, claims, liens, charges, encumbrances and security interests of any nature whatsoever, other than any of the foregoing created by BMOCMC.  The capital stock of the Company, including the Common Shares, conforms to the description contained in the Registration Statement.  Except as set forth in the Prospectus, and except for the conversion rights of the holders of the Company’s 4.625% Convertible Senior Notes Due 2026, there are no outstanding options, warrants, conversion rights, subscription rights, preemptive rights, rights of first refusal or other rights or agreements of any nature outstanding to subscribe for or to purchase any shares of Common Stock of the Company or any other securities of the Company of any kind binding on the Company (except pursuant to dividend reinvestment, stock purchase or ownership, stock option, director or employee benefit plans) and there are no outstanding securities or instruments of the Company containing anti-dilution or similar provisions that will be triggered by the issuance of the Common Shares as described in this Agreement.  Except as described in Article VIII of the Company’s charter and Section 2 of Article VI of the Company’s bylaws, there are no restrictions upon the voting or transfer of any shares of the Company's Common Stock in the Company's Articles of Incorporation or Bylaws.  There are no agreements or other obligations (contingent or otherwise) that may require the Company to repurchase or otherwise acquire any shares of its Common Stock.  No Person has the right, contractual or otherwise, to cause the Company to issue to it, or to register pursuant to the Securities Act, any shares of capital stock or other securities of the Company upon the filing of the Registration Statement or the issuance or sale of the Common Shares hereunder;

3.9

No Conflicts.  The issuance and sale of the Common Shares, the compliance by the Company with all of the provisions of this Agreement and the consummation of the transactions contemplated herein do not and will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the imposition of a lien or security interest under, any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of the property or assets used in the conduct of the business of the Company or any Subsidiary is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation or the by-laws of the Company or any Subsidiary, or except to the extent that such action results in any Person Beneficially Owning shares of Equity Stock in excess of the Ownership Limit (as each of those terms is used in the Company’s charter), or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any Subsidiary or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the consummation by the Company of the transactions contemplated by this Agreement or in connection with the issuance and sale of the Common Shares hereunder, except such as have been, or will have been prior to the Closing Date, obtained under the Securities Act, and for such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or blue sky laws, as the case may be, and except in any case where the failure to obtain such consent, approval, authorization, order, registration or qualification would not have a Material Adverse Effect;

3.10

Legal Proceedings.  Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries is a party or of which any property of the Company or any of its Subsidiaries is the subject which, if determined adversely to the Company or any of its Subsidiaries, would individually or in the aggregate have a Material Adverse Effect and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

3.11

Sale of Common Shares.  Immediately after any sale of Common Shares by the Company hereunder, the aggregate amount of Common Stock that has been issued and sold by the Company hereunder will not exceed the aggregate amount of Common Stock registered under the Registration Statement (in this regard, the Company acknowledges and agrees that BMOCMC shall have no responsibility for maintaining records with respect to the aggregate amount of Common Shares sold, or of otherwise monitoring the availability of Common Stock for sale, under the Registration Statement); 

3.12

Permits.  Each of the Company and the Subsidiaries has such permits, licenses, franchises and authorizations of governmental or regulatory authorities (the “Permits”) as are necessary to own its respective properties and to conduct its business in the manner described in the Prospectus, except where the failure to obtain such Permits would not reasonably be expected to have a Material Adverse Effect; to the best knowledge of the Company after due inquiry, each of the Company and the Subsidiaries has fulfilled and performed all its material obligations with respect to such Permits, except where the failure to fulfill or perform any such obligation would not reasonably be expected to have a Material Adverse Effect; and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination of any material Permits or would result in any other material impairment of the rights of the holder of any such material Permits, subject in each case to such qualifications as may be set forth in the Prospectus;

3.13

Investment Company.  The Company is not, and after giving effect to the offering and sale of the Common Shares, will not be, an “investment company” within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”);

3.14

Financial Condition; No Adverse Changes.

(a)

Financial Statements.  The financial statements, together with related schedules and notes, included or incorporated by reference in the Registration Statement and the Prospectus, present fairly the consolidated financial position, results of operations and changes in financial position of the Company and the Subsidiaries on the basis stated in the Registration Statement and the Prospectus at the respective dates or for the respective periods to which they apply; such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; and the other financial and statistical information and data included or incorporated by reference in the Registration Statement and the Prospectus are accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company and the Subsidiaries.  No other financial statements are required to be set forth or to be incorporated by reference in the Registration Statement or the Prospectus under the Securities Act;

(b)

Internal Controls.  The Company and its Subsidiaries maintain systems of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences; and (v) material information relating to the Company and its subsidiaries is made known to the Company by its officers and employees.  The Company’s internal control over financial reporting was effective as of the date of the latest audited financial statements included or incorporated by reference in the Prospectus, and the Company is not aware of any material weaknesses therein.  Since the date of the latest audited financial statements included or incorporated by reference in the Prospectus, there has been no change that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;

(c)

Disclosure Controls and Procedures.  The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed to ensure that material information relating to the Company and its Subsidiaries is communicated to the Company’s principal executive officer and principal financial officer.  The Company’s disclosure controls and procedures were effective as of the date of the latest financial statements included or incorporated by reference in the Prospectus;

(d)

External Auditor.  KPMG LLP, who has audited the financial statements of the Company and its Subsidiaries that are incorporated by reference in the Registration Statement and the Prospectus and has audited the Company’s internal control over financial reporting and management’s assessment thereof, is an independent registered public accounting firm as required by the Securities Act and the rules and regulations of the Commission promulgated thereunder and the Public Company Accounting Oversight Board;

3.15

Stabilization.  Neither the Company nor any of its Subsidiaries, nor any of the officers, directors, trustees or partners thereof, has taken, nor will any of them take, directly or indirectly, any action resulting in a violation of Regulation M under the Exchange Act or designed to cause or result in, or which has constituted or which reasonably might be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Common Shares;

3.16

Use of Proceeds.  The Company will use the net proceeds from the offering of Common Shares in the manner specified in the Prospectus under “Use of Proceeds”; 

3.17

Environmental Matters.  Other than as set forth in the Prospectus, (a) the Company and its Subsidiaries are in compliance with all applicable state and federal environmental laws, except for instances of noncompliance that, individually or in the aggregate, would not have a Material Adverse Effect, and (b) no event or condition has occurred that may interfere with the compliance by the Company and its Subsidiaries with any environmental law or that may give rise to any liability under any environmental law, in each case that, individually or in the aggregate, would have a Material Adverse Effect;

3.18

Intellectual Property.  Except as may be described in the Prospectus or would not have a Material Adverse Effect, the Company and its Subsidiaries own or possess the intellectual property necessary to carry on the business now operated by them, and neither the Company nor, to the knowledge of the Company, any of its respective subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any such intellectual property or of any facts or circumstances which would render any such intellectual property invalid or inadequate to protect the interest of the Company or any of its respective subsidiaries therein, and which infringement or conflict or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect;

3.19

Insurance.  Each of the Company and its Subsidiaries is insured against such losses and risks and in such amounts as management of the Company believes to be prudent;   

3.20

Officer’s Certificate.  Any certificate signed by any officer of the Company and delivered to BMOCMC or to counsel for BMOCMC in connection with an Issuance or pursuant to or in connection with this Agreement shall be deemed a representation and warranty by the Company to BMOCMC as to the matters covered thereby on the date of such certificate;  

3.21

Finder’s Fees.  The Company has not incurred (directly or indirectly) nor will it incur, directly or indirectly, any liability for any broker’s, finder’s, financial advisor’s or other similar fee, charge or commission in connection with this Agreement or the transactions contemplated hereby; and

3.22

Non-affiliated Market Capitalization.  As of the Effective Date, (a) the aggregate market value of the Common Stock held by non-affiliates of the Company (computed using the price at which the Common Stock was last sold, or the average bid and asked price of the Common Stock, as of the last business day of the Company’s most recently completed second fiscal quarter) exceeded $150 million; (b) and the aggregate market value of the Common Stock held by non-affiliates of the registrant is $75 million or more (computed using the price at which the common equity was last sold, or the average of the bid and asked prices of such common equity, in the principal market for such common equity as of a date within 60 days prior to the date of filing).

ARTICLE IV

COVENANTS

The Company covenants and agrees during the term of this Agreement with BMOCMC as follows:

4.1

Registration Statement and Prospectus.  (i) To make no amendment or supplement to the Registration Statement or the Prospectus after the date of delivery of an Issuance Notice and prior to the related Settlement Date that is reasonably disapproved by BMOCMC promptly after reasonable notice thereof; (ii) to prepare, with respect to any Issuance Shares to be sold pursuant to this Agreement, an Issuance Supplement with respect to such Common Shares in a form previously approved by BMOCMC and to file such Issuance Supplement pursuant to Rule 424(b) promulgated by the Commission under the Securities Act within the time period required thereby and to deliver such number of copies of each Issuance Supplement to each exchange or market on which such sales were effected, in each case unless delivery and filing of such an Issuance Supplement is not required by applicable law or by the rules and regulations of the Commission; (iii) to make no amendment or supplement to the Registration Statement or the Prospectus (other than an amendment or supplement relating solely to the issuance or offering of securities other than the Common Shares) at any time prior to having afforded BMOCMC a reasonable opportunity to review and comment thereon; (iv) to file within the time periods required by the Exchange Act all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required under the Securities Act or under the blue sky or securities laws of any jurisdiction in connection with the offering or sale of the Common Shares, and during such same period to advise BMOCMC, promptly after the Company receives notice thereof, of the time when any amendment to the Registration Statement has been filed or has become effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Common Shares, of the suspension of the qualification of the Common Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, of any request by the Commission for the amendment or supplement of the Registration Statement or the Prospectus or for additional information, or the receipt of any comments from the Commission with respect to Registration Statement or the Prospectus (including, without limitation, any Incorporated Documents); and (v) in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any such prospectus or suspending any such qualification, to use promptly its commercially reasonable efforts to obtain its withdrawal;

4.2

Blue Sky.  To use its commercially reasonable efforts to cause the Common Shares to be listed on the Principal Market and promptly from time to time to take such action as BMOCMC may reasonably request to cooperate with BMOCMC in the qualification of the Common Shares for offering and sale under the blue sky or securities laws of such jurisdictions within the United States of America and its territories as BMOCMC may reasonably request and to use its commercially reasonable efforts to comply with such laws so as to permit the continuance of sales and dealings therein for as long as may be necessary to complete the sale of the Common Shares; provided, however, that in connection therewith the Company shall not be required to qualify as a foreign corporation, to file a general consent to service of process or to subject itself to taxation in respect of doing business in any jurisdiction;

4.3

Copies of Registration Statement and Prospectus.  To furnish BMOCMC with copies (which may be electronic copies) of the Registration Statement and each amendment thereto, and with copies of the Prospectus and each amendment or supplement thereto in the form in which it is filed with the Commission pursuant to the Securities Act or Rule 424(b) promulgated by the Commission under the Securities Act, both in such quantities as BMOCMC may reasonably request from time to time; and, if the delivery of a prospectus is required under the Securities Act or under the blue sky or securities laws of any jurisdiction at any time on or prior to the applicable Settlement Date for any Selling Period in connection with the offering or sale of the Common Shares and if at such time any event has occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it is necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, to notify BMOCMC and request BMOCMC to suspend offers to sell Common Shares (and, if so notified, BMOCMC shall cease such offers as soon as practicable); and if the Company decides to amend or supplement the Registration Statement or the Prospectus as then amended or supplemented, to advise BMOCMC promptly by telephone (with confirmation in writing) and to prepare and cause to be filed promptly with the Commission an amendment or supplement to the Registration Statement or the Prospectus as then amended or supplemented that will correct such statement or omission or effect such compliance; provided, however, that if during such same period BMOCMC is required to deliver a prospectus in respect of transactions in the Common Shares, the Company shall promptly prepare and file with the Commission such an amendment or supplement;

4.4

Rule 158.  To make generally available to its holders of the Common Shares as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) promulgated by the Commission under the Securities Act), an earnings statement of the Company and the Subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the rules and regulations of the Commission promulgated thereunder (including the option of the Company to file periodic reports in order to make generally available such earnings statement, to the extent that it is required to file such reports under Section 13 or Section 15(d) of the Exchange Act, pursuant to Rule 158 promulgated by the Commission under the Securities Act);

4.5

Information.  To furnish to BMOCMC (in paper or electronic format) copies of all publicly available reports or other communications (financial or other) furnished generally to stockholders and filed with the Commission pursuant to the Exchange Act, and deliver to BMOCMC (in paper or electronic format) (i) promptly after they are available, copies of any publicly available reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional publicly available information concerning the business and financial condition of the Company as BMOCMC may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its Subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission);

4.6

Representations and Warranties.  That each delivery of an Issuance Notice and each delivery of Common Shares on a Settlement Date shall be deemed to be (i) an affirmation to BMOCMC that the representations and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such Issuance Notice or of such Settlement Date, as the case may be, as though made at and as of each such date, except as may be disclosed in the Prospectus (including any documents incorporated by reference therein and any supplements thereto), and (ii) an undertaking that the Company will advise BMOCMC if any of such representations and warranties will not be true and correct as of the Settlement Date for the Common Shares relating to such Issuance Notice, as though made at and as of each such date (except that such representations and warranties shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Common Shares);

4.7

Opinions of Counsel.  That each time the Registration Statement or the Prospectus is amended or supplemented (other than by an Issuance Supplement or a Current Report on Form 8-K, unless reasonably requested by BMOCMC within 30 days of the filing thereof with the Commission), including by means of an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus, the Company shall as soon as practicable thereafter furnish or cause to be furnished forthwith to BMOCMC written opinions of Shefsky & Froelich Ltd., counsel to the Company, and Venable LLP, special Maryland counsel to the Company, each dated the date of such amendment, supplement or incorporation and in form reasonably satisfactory to BMOCMC, (i) if such counsel has previously furnished an opinion to the effect set forth in Exhibits B or C hereto, respectively, to the effect that BMOCMC may rely on such previously furnished opinion of such counsel to the same extent as though it were dated the date of such letter authorizing reliance (except that the statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such date) or (ii) if such counsel has not previously furnished an opinion to the effect set forth in Exhibits B or C hereto, of the same tenor as such an opinion of such counsel but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date;

4.8

Comfort Letters.  That each time the Registration Statement or the Prospectus is amended or supplemented, including by means of an Annual Report on Form 10-K, a Quarterly Report on Form 10-Q or a Current Report on Form 8-K (but only a Current Report on Form 8-K that contains financial statements of the Company filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus), in any case to set forth financial information included in or derived from the Company’s financial statements or accounting records), the Company shall as soon as practicable thereafter cause the independent registered public accounting firm who has audited the financial statements of the Company included or incorporated by reference in the Registration Statement forthwith to furnish to BMOCMC a letter, dated the date of such amendment, supplement or incorporation, as the case may be, in form reasonably satisfactory to BMOCMC, of the same tenor as the letter referred to in Section 5.01(h) hereof but modified to relate to the Registration Statement and the Prospectus as amended or supplemented to the date of such letter, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company, to the extent such financial statements and other information are available as of a date not more than five business days prior to the date of such letter; provided, however, that, with respect to any financial information or other matters, such letter may reconfirm as true and correct at such date as though made at and as of such date, rather than repeat, statements with respect to such financial information or other matters made in the letter referred to in Section 5.01(h) hereof that was last furnished to BMOCMC;

4.9

Officer’s Certificate.  That each time the Registration Statement or the Prospectus is amended or supplemented (other than by an Issuance Supplement or a Current Report on Form 8-K, unless reasonably requested by BMOCMC within 30 days of the filing thereof with the Commission), including by means of an Annual Report on Form 10-K or a Quarterly Report on Form 10-Q filed with the Commission under the Exchange Act and incorporated or deemed to be incorporated by reference into the Prospectus, the Company shall as soon as practicable thereafter furnish or cause to be furnished forthwith to BMOCMC a certificate, dated the date of such supplement, amendment or incorporation, as the case may be, in such form and executed by such officers of the Company as is reasonably satisfactory to BMOCMC, of the same tenor as the certificate referred to in Section 2.02(ii) but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to such date;  

4.10

Reasonable Efforts.  The Company will cooperate timely with any reasonable due diligence review conducted by BMOCMC from time to time in connection with the transactions contemplated hereby, including, without limitation, and upon reasonable notice providing information and making available documents and appropriate corporate officers, during regular business hours and at the Company’s principal offices, as BMOCMC may reasonably request;

4.11

BMOCMC Purchases.  The Company acknowledges and agrees that BMOCMC has informed the Company that BMOCMC may, to the extent permitted under the Securities Act and Exchange Act, purchase and sell shares of Common Stock for its own account and for the account of its clients while this Agreement is in effect;

4.12

NYSE Compliance.  In connection with the offering and sale of the Shares, the Company will file with the New York Stock Exchange, LLC all documents and notices, and make all certifications, required by the New York Stock Exchange, LLC of companies that have securities that are listed on the Exchange; and

4.13

Market Activities.  The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Common Shares or (ii) sell, bid for or purchase the Common Shares, or pay anyone any compensation for soliciting purchases of the Common Shares other than BMOCMC.

ARTICLE V

CONDITIONS TO DELIVERY OF ISSUANCE 

NOTICES AND TO SETTLEMENT

5.1

Conditions Precedent to the Right of the Company to Deliver an Issuance Notice and the Obligation of BMOCMC to Sell Common Shares During the Selling Period(s).  The right of the Company to deliver an Issuance Notice hereunder is subject to the satisfaction, on the date of delivery of such Issuance Notice, and the obligation of BMOCMC to sell Common Shares during the applicable Selling Period is subject to the satisfaction, on the applicable Settlement Date, of each of the following conditions:

(a)

Effective Registration Statement and Authorizations.  The Registration Statement shall remain effective and sales of all of the Common Shares (including all of the Issuance Shares issued with respect to all prior Issuances and all of the Issuance Shares expected to be issued in connection with the Issuance specified by the current Issuance Notice) may be made by BMOCMC thereunder, and (i) no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; (ii) no other suspension of the use or withdrawal of the effectiveness of the Registration Statement or Prospectus shall exist; (iii) all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of BMOCMC and (iv) no event specified in Section 4.03 hereof shall have occurred and be continuing without the Company amending or supplementing the Registration Statement or the Prospectus as provided in Section 4.03. The authorizations referred to in Section 3.08 of this Agreement shall have been issued and shall be in full force and effect, and such authorizations shall not be the subject of any pending or threatened application for rehearing or petition for modification, and are sufficient to authorize the issuance and sale of the Common Shares;

(b)

Accuracy of the Company's Representations and Warranties.  The representations and warranties of the Company shall be true and correct as of the Closing Date, as of the applicable date referred to in Section 4.09 that is prior to such Issuance Date or Settlement Date, as the case may be, and as of such Issuance Date and Settlement Date as though made at such time;

(c)

Performance by the Company.  The Company shall have performed, satisfied and complied with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to such date;

(d)

No Injunction.  No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby that prohibits or directly and materially adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement;

(e)

Material Adverse Changes.  Since the date of this Agreement, no event that had or is reasonably likely to have a Material Adverse Effect shall have occurred that has not been disclosed in the Registration Statement or the Prospectus (including the documents incorporated by reference therein and any supplements thereto); 

(f)

No Suspension of Trading In or Delisting of Common Stock; Other Events.  The trading of the Common Stock (including without limitation the Issuance Shares) shall not have been suspended by the Commission, the Principal Market or the Financial Industry Regulatory Authority since the immediately preceding Settlement Date or, if there has been no Settlement Date, the Closing Date, and the Common Shares (including without limitation the Issuance Shares) shall not have been delisted from the Principal Market.  There shall not have occurred (and be continuing in the case of occurrences under clause (i) and (ii) below) any of the following: (i) if trading generally on the American Stock Exchange, the New York Stock Exchange, the Pacific Stock Exchange or The Nasdaq Stock Market has been suspended or materially limited, or minimum and maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the Financial Industry Regulatory Authority or any other governmental authority, or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States; (ii) a general moratorium on commercial banking activities in New York declared by either federal or New York state authorities; or (iii) any material adverse change in the financial markets in the United States or in the international financial markets, any outbreak or escalation of hostilities or other calamity or crisis involving the United States or the declaration by the United States of a national emergency or war or any change or development involving a prospective change in national or international political, financial or economic conditions, if the effect of any such event specified in this clause (iii) in the sole judgment of BMOCMC makes it impracticable or inadvisable to proceed with the sale of Common Shares of the Company;  

(g)

NYSE Approval.  Issuance Shares shall have received approval for listing on the New York Stock Exchange prior to the Settlement Date pertaining to those Issuance Shares;

(h)

Comfort Letter.  On the Closing Date and on each applicable date referred to in Section 4.08 hereof that is on or prior to such Issuance Date or Settlement Date, as the case may be, the independent registered public accounting firm who has audited the financial statements of the Company included or incorporated by reference in the Registration Statement shall have furnished to BMOCMC a letter, dated the Closing Date or such applicable date, as the case may be, in form and substance satisfactory to BMOCMC to the effect required by Section 4.08;

(i)

Trading Cushion.  The Selling Period for any previous Issuance Notice shall have expired;

(j)

Maximum Issuance Amount.  The Company shall not have issued an Issuance Notice to sell an Issuance Amount to the extent that the sum of (x) the Sales Price of the requested Issuance Amount, plus (y) the aggregate Sales Price of all Common Shares issued under all previous Issuances effected pursuant to this Agreement, would exceed the Maximum Program Amount;

(k)

Prospectus Supplement and Issuance Supplement.

(i)  A supplement to the prospectus included in the Registration Statement (the “Prospectus Supplement”), in form and substance to be agreed upon by the parties, setting forth information regarding this Agreement including, without limitation, the Maximum Program Amount, shall have been filed with the Commission pursuant to Rule 424(b) promulgated by the Commission under the Securities Act within the time period required thereby and sufficient copies thereof delivered to BMOCMC on or prior to the Issuance Date;

(ii)  To the extent required by Section 4.01(ii), an Issuance Supplement, in form and substance to be agreed upon by the parties, shall have been filed with the Commission pursuant to Rule 424(b) promulgated by the Commission under the Securities Act within the time period required thereby and sufficient copies thereof delivered to BMOCMC on or prior to the Issuance Date;

(l)

Counsel Letter.  Each counsel specified in Section 4.07, or other counsel selected by the Company and reasonably satisfactory to BMOCMC, shall have furnished to BMOCMC their written opinion, dated the Closing Date and each applicable date referred to in Section 4.07 hereof that is on or prior to such Issuance Date or Settlement Date, as the case may be, to the effect required by Section 4.07;

(m)

Officers’ Certificate.  The Company shall have furnished or caused to be furnished to BMOCMC an officers’ certificate executed by the Chief Executive Officer, the President or any Senior Vice President of the Company and by the Chief Financial Officer of the Company, dated the Closing Date and each applicable date referred to in Section 4.09 hereof that is on or prior to such Issuance Date or Settlement Date, as the case may be, as to the matters specified in Section 2.02(ii);

(n)

Other Documents.  On the Closing Date and prior to each Issuance Date and Settlement Date, BMOCMC and its counsel shall have been furnished with such documents as they may reasonably require in order to evidence the accuracy and completeness of any of the representations or warranties, or the fulfillment of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Common Shares as herein contemplated shall be satisfactory in form and substance to BMOCMC and its counsel;

5.2

Documents Required to be Delivered on each Issuance Date.  BMOCMC's obligation to sell Common Shares pursuant to an Issuance hereunder shall additionally be conditioned upon the delivery to BMOCMC on or before the Issuance Date of a certificate in form and substance reasonably satisfactory to BMOCMC, executed by the Chief Executive Officer or the Chief Financial Officer of the Company, to the effect that all conditions to the delivery of such Issuance Notice shall have been satisfied as at the date of such certificate (which certificate shall not be required if the foregoing representations shall be set forth in the Issuance Notice); and

5.3

Suspension of Sales.  The Company or BMOCMC may, upon notice to the other party in writing or by telephone (confirmed immediately by verifiable facsimile transmission), suspend any sale of Issuance Shares, and the Selling Period shall immediately terminate; provided, however, that such suspension and termination shall not affect or impair either party's obligations with respect to any Issuance Shares sold hereunder prior to the receipt of such notice.  The Company agrees that no such notice shall be effective against BMOCMC unless it is made to one of the individuals named on Schedule 1 hereto, as such Schedule may be amended from time to time.  BMOCMC agrees that no such notice shall be effective against the Company unless it is made to one of the individuals named on Schedule 1 annexed hereto, as such Schedule may be amended from time to time.

ARTICLE VI

INDEMNIFICATION AND CONTRIBUTION

6.1

Indemnification by the Company.  The Company agrees to indemnify and hold harmless BMOCMC, its officers, directors, employees and agents, and each Person, if any, who controls BMOCMC within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, together with each such Person's respective officers, directors, employees and agents (collectively, the “Controlling Persons”), from and against any and all losses, claims, damages or liabilities, and any action or proceeding in respect thereof, to which BMOCMC, its officers, directors, employees and agents, and any such Controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus or any other prospectus relating to the Common Shares, or any amendment or supplement thereto, or any preliminary prospectus, or arise out of, or are based upon, any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus or any amendment or supplement thereto or any preliminary prospectus, in light of the circumstances in which they were made) not misleading, except insofar as the same are made in reliance upon and in conformity with information related to BMOCMC or its plan of distribution furnished in writing to the Company by BMOCMC expressly for use therein, and the Company shall reimburse BMOCMC, its officers, directors, employees and agents, and each Controlling Person for any reasonable legal and other expenses incurred thereby in investigating or defending or preparing to defend against any such losses, claims, damages or liabilities, or actions or proceedings in respect thereof, as such expenses are incurred.

6.2

Indemnification by BMOCMC.  BMOCMC agrees to indemnify and hold harmless the Company, its officers, directors, employees and agents and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, together with each such Person's respective officers, directors, employees and agents, from and against any losses, claims, damages or liabilities, and any action or proceeding in respect thereof, to which the Company, its officers, directors, employees or agents, any such controlling Person and any officer, director, employee or agent of such controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as losses, claims, damages or liabilities (or action or proceeding in respect thereof) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus or any other prospectus relating to the Common Shares, or any amendment or supplement thereto, or any preliminary prospectus, or arise out of, or are based upon, any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus or any other prospectus relating to the Common Shares, or any amendment or supplement thereto or any preliminary prospectus, in light of the circumstances in which they were made) not misleading in each case to the extent, but only to the extent that such untrue statement or alleged untrue statement or omission or alleged omission was made therein in reliance upon and in conformity with written information related to BMOCMC or its plan of distribution furnished to the Company by BMOCMC expressly for use therein, it being understood and agreed that such information consists solely of any statements BMOCMC may, by notice given to the Company in writing after the date of this Agreement, state have been furnished to the Company by BMOCMC specifically for inclusion in the Registration Statement, the Prospectus or any other prospectus relating to the Common Shares, or any amendment or supplement thereto, or any preliminary prospectus.

6.3

Conduct of Indemnification Proceedings.  Promptly after receipt by any Person (an “Indemnified Party”) of notice of any claim or the commencement of any action in respect of which indemnity may be sought pursuant to Section 6.01 or 6.02, the Indemnified Party shall, if a claim in respect thereof is to be made against the Person against whom such indemnity may be sought (an “Indemnifying Party”), notify the Indemnifying Party in writing of the claim or the commencement of such action.  In the event an Indemnified Party shall fail to give such notice as provided in this Section 6.03 and the Indemnifying Party to whom notice was not given was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice, the failure so to notify the Indemnifying Party will not relieve it from any liability which it may have to the Indemnified Party under Sections 6.01 or 6.02 above except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; provided, that the failure to notify the Indemnifying Party shall not relieve it from any liability that it may have to an Indemnified Party otherwise than under Sections 6.01 or 6.02.  If any such claim or action shall be brought against an Indemnified Party, the Indemnifying Party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified Indemnifying Party, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party.  After notice from the Indemnifying Party to the Indemnified Party of the Indemnifying Party’s election to assume the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided that the Indemnified Party shall have the right to employ separate counsel to represent the Indemnified Party, but the fees and expenses of such counsel shall be for the account of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) such Indemnified Party reasonably concludes that representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interest with the Company, it being understood, however, that the Indemnifying Party shall not, in connection with any one such claim or action or separate but substantially similar or related claims or actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all Indemnified Parties or for fees and expenses that are not reasonable.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnification could have been sought hereunder by such Indemnified Party unless such settlement includes an unconditional release of each such Indemnified Party from all losses, claims, damages or liabilities arising out of such claim or proceeding and such settlement does not admit or constitute an admission of fault, guilt, failure to act or culpability on the part of any such Indemnified Party.  Whether or not the defense of any claim or action is assumed by an Indemnifying Party, such Indemnifying Party will not be subject to any liability for any settlement made without its prior written consent, which consent will not be unreasonably withheld. 

6.4

Contribution.  If for any reason the indemnification provided for in this Article VI is unavailable to the Indemnified Parties in respect of any losses, claims, damages or liabilities referred to herein, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such losses, claims, damages or liabilities as between the Company, on the one hand, and BMOCMC, on the other hand, in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and BMOCMC, on the other hand, from the offering of the Common Shares to which such losses, claims, damages or liabilities relate.  If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law, then each Indemnifying Party shall contribute to such amount paid or payable by such Indemnifying Party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and of BMOCMC in connection with such statements or omissions, as well as any other relevant equitable considerations.  The relative benefits received by the Company, on the one hand, and by BMOCMC, on the other, shall be deemed to be in the same proportion as the total net proceeds from the sale of Common Shares (before deducting expenses) received by the Company bear to the total commissions received by BMOCMC in respect thereof.  The relative fault of the Company, on the one hand, and of BMOCMC, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by BMOCMC, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and BMOCMC agree that it would not be just and equitable if contribution pursuant to this Section 6.04 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the losses, claims, damages or liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 6.04, BMOCMC shall in no event be required to contribute any amount in excess of the commissions received by it under this Agreement.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  For purposes of this Section 6.04 each officer, director, employee and agent of BMOCMC, and each Controlling Person, shall have the same rights to contribution as BMOCMC, and each director of the Company, each officer of the Company who signed the Registration Statement, and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company.  The obligations of the Company and BMOCMC under this Article VI shall be in addition to any liability that the Company and BMOCMC may otherwise have.

ARTICLE VII

TERMINATION

7.1

Term.  Subject to the provisions of this Article VII, the term of this Agreement shall run until the end of the Commitment Period. 

7.2

Termination by BMOCMC.  BMOCMC may terminate the right of the Company to effect any Issuances under this Agreement upon one (1) Trading Day's notice if any of the following events shall occur:

(a)  The Company or any Subsidiary shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for all or substantially all of its property or business; or such a receiver or trustee shall otherwise be appointed;

(b)  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company or any of its Subsidiaries;

(c)  The Company shall fail to maintain the listing of the Common Stock on the Principal Market;  

(d)  Since the Effective Date, there shall have occurred any event, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or 

(e)  BMOCMC shall have given ten (10) days’ notice of its election to terminate this Agreement, in its sole discretion, at any time.

7.3

Termination by the Company.  The Company shall have the right, by giving thirty (30) days’ notice as hereinafter specified, to terminate this Agreement in its sole discretion at any time.  After delivery of such notice, the Company shall no longer have any right to deliver any Issuance Notices hereunder.  

7.4

Liability; Provisions that Survive Termination.  If this Agreement is terminated pursuant to this Article VII, such termination shall be without liability of any party to any other party except as provided in Section 9.02 and for the Company’s obligations in respect of all prior Issuance Notices, and provided further that in any case the provisions of Article VI, Article VIII and Article IX shall survive termination of this Agreement without limitation.

ARTICLE VIII

REPRESENTATIONS AND WARRANTIES TO SURVIVE DELIVERY

All representations and warranties of the Company herein or in certificates delivered pursuant hereto shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of BMOCMC and its officers, directors, employees and agents and any Controlling Persons, (ii) delivery and acceptance of the Common Shares and payment therefor or (iii) any termination of this Agreement.

ARTICLE IX

MISCELLANEOUS

9.1

Press Releases and Disclosure.  The Company may issue a press release describing the material terms of the transactions contemplated hereby as soon as practicable following the Closing Date, and may file with the Commission a Current Report on Form 8-K describing the material terms of the transactions contemplated hereby, and the Company shall consult with BMOCMC prior to making such disclosures, and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosures that is reasonably satisfactory to all parties. No party hereto shall issue thereafter any press release or like public statement (including, without limitation, any disclosure required in reports filed with the Commission pursuant to the Exchange Act) related to this Agreement or any of the transactions contemplated hereby without the prior written approval of the other party hereto, except as may be necessary or appropriate in the opinion of the party seeking to make disclosure to comply with the requirements of applicable law or stock exchange rules.  If any such press release or like public statement is so required, the party making such disclosure shall consult with the other party prior to making such disclosure, and the parties shall use all commercially reasonable efforts, acting in good faith, to agree upon a text for such disclosure that is reasonably satisfactory to all parties.

9.2

Expenses.  The Company covenants and agrees with BMOCMC that the Company shall pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with the preparation, printing and filing of the Registration Statement, the Prospectus and any Issuance Supplements and all other amendments and supplements thereto and the mailing and delivering of copies thereof to BMOCMC and the Principal Exchanges; (ii) BMOCMC’s reasonable documented out-of-pocket expenses, including the filing fees and reasonable fees, disbursements and expenses of counsel for BMOCMC relating to the qualification of the Common Shares for offering and sale under state securities laws as provided in Section 4.02 hereof and in connection with preparing any blue sky survey); (iii) the cost (other than those expenses described in clause (ii) above) of printing, preparing or reproducing this Agreement and any other documents in connection with the offering, purchase, sale and delivery of the Common Shares; (iv) all filing fees and expenses (other than those expenses described in clause (ii) above) in connection with the qualification of the Common Shares for offering and sale under state securities laws as provided in Section 4.02 hereof; (v) the cost of preparing the Common Shares; (vi) the fees and expenses of any transfer agent of the Company; (vii) the cost of providing any CUSIP or other identification numbers for the Common Shares; (viii) the fees and expenses incurred in connection with the listing or qualification of the Common Shares on the Principal Market and any filing fees incident to any required review by the Financial Industry Regulatory Authority of the terms of the sale of the Common Shares in connection with this Agreement and the Registration Statement (including the reasonable fees, disbursements and expenses of a single counsel for BMOCMC relating to such filings), and (ix) all other costs and expenses incident to the performance of the Company’s obligations hereunder that are not otherwise specifically provided for in this Section 9.02.  It is understood, however, that except as provided in this Section, BMOCMC will pay all of its own costs and expenses, including the fees of its counsel, transfer taxes on resale of any of the Common Shares by it, and any advertising expenses connected with any offers it may make.

9.3

Notices.  All notices, demands, requests, consents, approvals or other communications required or permitted to be given hereunder or that are given with respect to this Agreement shall be in writing and shall be personally served or deposited in the mail, registered or certified, return receipt requested, postage prepaid or delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, telegram, telex or facsimile, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice.

(i)  If to the Company, then to: 

Inland Real Estate Corporation 

2901 Butterfield Road

Oak Brook, Illinois 60523

Attention: Brett Brown

Facsimile No.: (630) 218-7357,

with a copy (which shall not constitute notice) to: 

Shefsky & Froelich Ltd.

111 East Wacker Drive, Suite 2800

Chicago, Illinois 60601, Attention: Michael J. Choate

Facsimile No.: (312) 275-7554. 

(ii)  If to BMOCMC, then to:

David M. Rubin

Managing Director and Sector Head

Real Estate & Construction

BMO Capital Markets

115 S. LaSalle St. 18W

Chicago, Illinois 60603

Telephone:  

(312) 293-8352

Email:

david.rubin@bmo.com

Facsimile:  

(312) 461-2968,

Stephan R. Richford

Vice President

Real Estate & Construction

BMO Capital Markets

115 S. LaSalle St. 18W

Chicago, Illinois 60603

Telephone:  

(312) 461-7425

Email:

stephan.richford@bmo.com

Facsimile:  

(312) 461-2968, and

Phil Winiecki

Managing Director

Equity Capital Markets

BMO Capital Markets

3 Time Square

New York, New York 10036

Telephone:  

(212) 885-4110

Email:

phil.winiecki@bmo.com

Facsimile:  

(212) 885-4165,

with a copy (which shall not constitute notice) to: 

Sidley Austin LLP, 787 Seventh Avenue

New York, New York 10019

Attention: J. Gerard Cummins and Samir A. Gandhi

Facsimile No.: (212) 839-5599. 

Except as set forth in Section 5.03, notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or confirmed facsimile. Notice otherwise sent as provided herein shall be deemed given on the third business day following the date mailed or on the next business day following delivery of such notice to a reputable air courier service for next day delivery.

9.4

Entire Agreement.  This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written, with respect to the subject matter hereof.

9.5

Amendment and Waiver.  This Agreement may not be amended, modified, supplemented, restated or waived except by a writing executed by the party against which such amendment, modification, supplement, restatement or waiver is sought to be enforced. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional.  No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained.  No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.

9.6

No Assignment; No Third Party Beneficiaries.  This Agreement and the rights, duties and obligations hereunder may not be assigned or delegated by the Company or BMOCMC.  Any purported assignment or delegation of rights, duties or obligations hereunder shall be void and of no effect.  This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and their respective successors and, to the extent provided in Article VI, the controlling persons, officers, directors, employees and agents referred to in Article VI. This Agreement is not intended to confer any rights or benefits on any Persons other than as set forth in Article VI or elsewhere in this Agreement.

9.7

Severability.  This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof.  Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible, valid and enforceable.

9.8

Further Assurances.  Each party hereto, upon the request of any other party hereto, shall do all such further acts and execute, acknowledge and deliver all such further instruments and documents as may be necessary or desirable to carry out the transactions contemplated by this Agreement.

9.9

Titles and Headings.  Titles, captions and headings of the sections of this Agreement are for convenience of reference only and shall not affect the construction of any provision of this Agreement.

9.10

Governing Law; Jurisdiction.  THIS AGREEMENT SHALL BE GOVERNED BY, INTERPRETED UNDER AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS THEREOF.  Any action, suit or proceeding to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any federal court located in the Southern District of the State of New York or any New York state court located in the Borough of Manhattan, and the Company agrees to the exclusive jurisdiction of such courts (and of the appropriate appellate courts therefrom) and each party waives (to the full extent permitted by law) any objection it may have to the laying of venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding has been brought in an inconvenient forum. 

9.11

Waiver of Jury Trial.  The Company and BMOCMC each hereby irrevocably waives any right it may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or any transaction contemplated hereby.

9.12

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.  Delivery of an executed Agreement by one party to the other may be made by facsimile transmission.

9.13

Adjustments for Stock Splits, etc.  The parties acknowledge and agree that share related numbers contained in this Agreement (including the minimum Floor Price) shall be equitably adjusted to reflect stock splits, stock dividends, reverse stock splits, combinations and similar events. 

9.14

No fiduciary duty.  The Company acknowledges and agrees that BMOCMC is acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of Common Shares contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person and will not claim that BMOCMC is acting in such capacity in connection with the offering of the Common Shares contemplated hereby.  Additionally, BMOCMC is not advising the Company or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction with respect to the offering of Common Shares contemplated hereby.  The Company shall consult with its own advisors concerning such matters and shall be responsible for making their own independent investigation and appraisal of the transactions contemplated hereby, and BMOCMC shall have no responsibility or liability to the Company with respect thereto.  Any review by BMOCMC of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of BMOCMC and shall not be on behalf of the Company.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

INLAND REAL ESTATE CORPORATION

By: 

Name:  Mark Zalatoris

Title:     President and Chief Executive 

         Officer

BMO CAPITAL MARKETS CORP.

By: 

Name:  David Rubin

Title:    Sector Head and Managing Director

By: 

Name:  Phil Winiecki

Title:    Managing Director

2

NY1 7036916v.8

APPENDIX A

DEFINITIONS

“Actual Sold Amount” shall mean the number of Issuance Shares that 

BMOCMC has sold during the Selling Period.

“Affiliate” of a Person shall mean another Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first- mentioned Person. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 

“1940 Act” shall have the meaning set forth in Section 3.13 hereof.

“Agreement” shall have the meaning set forth in the Preamble hereof.

“Applicable Time” shall mean the time of sale of any Common Shares pursuant to this Agreement.

“Closing” shall have the meaning set forth in Section 2.02 hereof.

“Closing Date” shall mean the date on which the Closing occurs.

“Commission” shall mean the United States Securities and Exchange Commission.

“Commitment Period” shall mean the period commencing on the date of this Agreement and expiring on the earliest to occur of (x) the date on which BMOCMC shall have sold the Maximum Program Amount pursuant to this Agreement, (y) the date this Agreement is terminated pursuant to Article VII and (z) the third anniversary of the date of this Agreement.

“Common Shares” shall mean shares of the Company’s Common Stock issued or issuable pursuant to this Agreement.

“Common Stock” shall mean the Company’s Common Stock, $.01 par value per share.

“Company” shall have the meaning set forth in the Preamble hereof. 

“Controlling Persons” shall have the meaning set forth in Section 6.01 hereof.

“Effective Date” shall have the meaning set forth in Section 3.03 hereof.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Floor Price” shall mean the minimum price set by the Company in the Issuance Notice below which BMOCMC shall not sell Common Shares during the Selling Period, which may be adjusted by the Company at any time during the Selling Period and which in no event shall be less than $1.00 without the prior written consent of BMOCMC, which may be withheld in BMOCMC’s sole discretion.

“Incorporated Documents” shall have the meaning set forth in Section 3.02 hereof.

“Indemnified Party” shall have the meaning set forth in Section 6.03 hereof.

“Indemnifying Party” shall have the meaning set forth in Section 6.03 hereof.

“Issuance” shall mean each occasion the Company elects to exercise its right to deliver an Issuance Notice requiring BMOCMC to use its commercially reasonable efforts consistent with customary trading and sales practices to sell the Common Shares as specified in such Issuance Notice, subject to the terms and conditions of this Agreement.

“Issuance Amount” shall mean the aggregate Sales Price of the Issuance Shares to be sold by BMOCMC with respect to any Issuance.

 “Issuance Date” shall mean any Trading Day during the Commitment Period that an Issuance Notice is deemed delivered pursuant to Section 2.03(b) hereof.

“Issuance Notice” shall mean a written notice to BMOCMC delivered in accordance with this Agreement in the form attached hereto as Exhibit A.

“Issuance Price” shall mean the Sales Price less the Selling Commission.

“Issuance Shares” shall mean all shares of Common Stock issued or issuable pursuant to an Issuance that has occurred or may occur in accordance with the terms and conditions of this Agreement.

“Issuance Supplement” shall have the meaning set forth in Section 3.01 hereof.

“Material Adverse Effect” shall mean a material adverse effect on the business, assets, operations, properties, prospects or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or any material adverse effect on the Company’s ability to consummate the transactions contemplated by, or to execute, deliver and perform its obligations under, this Agreement.

“Maximum Program Amount” shall mean Common Shares with an aggregate Sales Price of $100,000,000 (or, if less, the aggregate amount of Common Shares registered under the Registration Statement).

“Permit” shall have the meaning set forth in Section 3.11 hereof.

“Person” shall mean an individual or a corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental authority or other entity of any kind.

“Principal Market” shall mean the New York Stock Exchange. 

“Prospectus” shall have the meaning set forth in Section 3.01 hereof.

“Prospectus Supplement” shall have the meaning set forth in Section 5.01(a) hereof.

“Registration Statement” shall have the meaning set forth in Section 3.01 hereof.

“Representation Date” shall have the meaning set forth in the introductory paragraph of Article III hereof.

“Sales Price” shall mean the actual sale execution price of each Common Share sold by BMOCMC on the Principal Market hereunder in the case of ordinary brokers’ transactions, or as otherwise agreed by the parties in other methods of sale.

“Securities Act” shall mean the Securities Act of 1933, as amended.

“Selling Commission” shall mean 2.5% of the Sales Price of Common Shares sold during a Selling Period.

“Selling Period” shall mean the period of one to twenty consecutive Trading Days (as determined by the Company in the Company’s sole discretion and specified in the applicable Issuance Notice) following the Trading Day on which an Issuance Notice is delivered or deemed to be delivered pursuant to Section 2.03(b) hereof.

“Settlement Date” shall mean the third business day following each Trading Day during the Selling Period, when the Company shall deliver to BMOCMC the amount of Common Shares sold on such Trading Day and BMOCMC shall deliver to the Company the Issuance Price received on such sales.  Alternatively, the Company may settle all sales for each Selling Period on the business day following the last day of the Selling Period, whereon the Company shall deliver to BMOCMC the amount of Common Shares sold during the Selling Period and BMOCMC shall deliver to the Company the Issuance Price received on such sales.

“Subsidiary” shall have the meaning set forth in Section 3.06 hereof.

“Trading Day” shall mean any day which is a trading day on the New York Stock Exchange, other than a day on which trading is scheduled to close prior to its regular weekday closing time.

“Voting Stock” of any Person as of any date shall mean the capital stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

App A-1

EXHIBIT A

ISSUANCE NOTICE

[Date]

BMO CAPITAL MARKETS CORP.

[●]

[●]

Attn: [●]

Reference is made to that certain Sales Agency Agreement, dated as of [●] (the “Agreement”), by and between Inland Real Estate Corporation (the “Company”) and BMO Capital Markets Corp.  The Company confirms that all conditions to the delivery of this Issuance Notice are satisfied as of the date hereof.

Effective Date of Delivery of Issuance Notice (determined pursuant to Section 2.03(b) of the Agreement): _______________________

Number of Days in Selling Period:

First Date of Selling Period:

Last Date of Selling Period:

Settlement Date(s):

Issuance Amount:

$

Floor Price Limitation (Adjustable by Company during the Selling Period): $ ____ per share

Comments: 

  

INLAND REAL ESTATE CORPORATION

By: 

Name:

Title:       [CEO, Chief Financial Officer,

or Treasurer]

Exh A-1

EXHIBIT B  

Form of Opinion of Shefsky & Froelich Ltd., Counsel for the Company

Exh B-1

EXHIBIT C

Form of Opinion of Venable LLP., Special Maryland Counsel for the Company

Exh C-1

SCHEDULE 1

BMO CAPITAL MARKETS CORP.

David M. Rubin

Managing Director and Sector Head

Real Estate & Construction

BMO Capital Markets

115 S. LaSalle St. 18W

Chicago, Illinois 60603

Telephone:  

(312) 293-8352

Email:

david.rubin@bmo.com

Facsimile:  

(312) 461-2968

Stephan R. Richford

Vice President

Real Estate & Construction

BMO Capital Markets

115 S. LaSalle St. 18W

Chicago, Illinois 60603

Telephone:  

(312) 461-7425

Email:

stephan.richford@bmo.com

Facsimile:  

(312) 461-2968

Phil Winiecki

Managing Director

BMO Capital Markets 

Equity Capital Markets

3 Time Square

New York, New York 10036

Telephone:  

(212) 885-4110

Email:

phil.winiecki@bmo.com

Facsimile:  

(212) 885-4165

INLAND REAL ESTATE CORPORATION

Brett Brown

Senior Vice President, Chief Financial Officer and Treasurer

Inland Real Estate Corp.

2901 Butterfield Road

Oak Brook, IL  60523

Telephone:

(630) 218-7355

Facsimile:

(630) 218-7357

Sch 1-1exv4w2

Exhibit 4.2

EXECUTION COPY

 

FISCAL AGENCY AGREEMENT

between

SYMETRA FINANCIAL CORPORATION

 as Issuer

AND

U.S. BANK NATIONAL ASSOCIATION

as Fiscal Agent

6.125% Notes Due 2016

 

Dated as of March 30, 2006

 

 

 

 

	 	 	 	 	 
	TABLE OF CONTENTS	 	 	 	 
	 
	 	 	Page	 
	ARTICLE ONE
	 	 	 	 
	 
	 	 	 	 
	DEFINITIONS
	 	 	 	 
	 
	 	 	 	 
	Section 1.01. Definitions 
	 	 	1	 
	Section 1.02. Other Definitions 
	 	 	3	 
	Section 1.03. Rules of Construction 
	 	 	4	 
	 
	 	 	 	 
	ARTICLE TWO
	 	 	 	 
	 
	 	 	 	 
	THE SECURITIES
	 	 	 	 
	 
	 	 	 	 
	Section 2.01. Form and Dating
	 	 	5	 
	Section 2.02. Execution and Authentication
	 	 	7	 
	Section 2.03. Fiscal Agent, Registrar and Paying Agent
	 	 	7	 
	Section 2.04. Paying Agent to Hold Money in Trust
	 	 	8	 
	Section 2.05. Holder Lists
	 	 	8	 
	Section 2.06. Transfer and Exchange
	 	 	9	 
	Section 2.07. Replacement Securities
	 	 	14	 
	Section 2.08. Outstanding Securities
	 	 	14	 
	Section 2.09. Treasury Securities
	 	 	15	 
	Section 2.10. Temporary Securities
	 	 	15	 
	Section 2.11. Cancellation
	 	 	15	 
	Section 2.12. Defaulted Interest
	 	 	16	 
	Section 2.13. Persons Deemed Owners
	 	 	16	 
	Section 2.14. CUSIP Numbers
	 	 	16	 
	Section 2.15. Issuance of Additional Securities
	 	 	16	 
	Section 2.16. Legal Holidays
	 	 	17	 
	 
	 	 	 	 
	ARTICLE THREE
	 	 	 	 
	 
	 	 	 	 
	REDEMPTION
	 	 	 	 
	 
	 	 	 	 
	Section 3.01. Notice to Fiscal Agent of Election to Redeem 
	 	 	17	 
	Section 3.02. Selection of Securities to be Redeemed 
	 	 	17	 
	Section 3.03. Notice of Redemption 
	 	 	18	 
	Section 3.04. Payment of Securities Called for Redemption 
	 	 	19	 
	Section 3.05. Exclusion of Certain Securities from Eligibility for Selection for Redemption
	 	 	19	 
	Section 3.06. Optional Redemption
	 	 	19	 

i

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE FOUR
	 	 	 	 
	 
	 	 	 	 
	COVENANTS
	 	 	 	 
	 
	 	 	 	 
	Section 4.01. Certain Definitions 
	 	 	21	 
	Section 4.02. Payment of Securities 
	 	 	22	 
	Section 4.03. Limitation on Liens of Capital Stock 
	 	 	22	 
	Section 4.04. Limitation on Disposition of Stock 
	 	 	22	 
	Section 4.05. Compliance Certificate 
	 	 	23	 
	Section 4.06. Certain Financial Information of the Company 
	 	 	23	 
	 
	 	 	 	 
	ARTICLE FIVE
	 	 	 	 
	 
	 	 	 	 
	SUCCESSOR COMPANY
	 	 	 	 
	 
	 	 	 	 
	Section 5.01. When the Company May Merge, etc. 
	 	 	23	 
	 
	 	 	 	 
	ARTICLE SIX
	 	 	 	 
	 
	 	 	 	 
	DEFAULTS AND REMEDIES
	 	 	 	 
	 
	 	 	 	 
	Section 6.01. Events of Default 
	 	 	24	 
	Section 6.02. Acceleration 
	 	 	25	 
	Section 6.03. Other Remedies 
	 	 	26	 
	Section 6.04. Waiver of Past Defaults 
	 	 	26	 
	Section 6.05. Control by Majority 
	 	 	26	 
	Section 6.06. Limitation on Suits 
	 	 	26	 
	Section 6.07. Rights of Holders to Receive Payment 
	 	 	27	 
	Section 6.08. Collection Suit by Fiscal Agent 
	 	 	27	 
	Section 6.09. Fiscal Agent May File Proofs of Claim 
	 	 	27	 
	Section 6.10. Priorities 
	 	 	27	 
	Section 6.11. Undertaking for Costs 
	 	 	28	 
	Section 6.12. Notice to Holders by Fiscal Agent 
	 	 	28	 
	 
	 	 	 	 
	ARTICLE SEVEN
	 	 	 	 
	 
	 	 	 	 
	FISCAL AGENT
	 	 	 	 
	 
	 	 	 	 
	Section 7.01. Duties of Fiscal Agent
	 	 	28	 
	Section 7.02. Rights of Fiscal Agent 
	 	 	29	 
	Section 7.03. Individual Rights of Fiscal Agent 
	 	 	30	 
	Section 7.04. Fiscal Agent’s Disclaimer 
	 	 	30	 
	Section 7.05. Compensation and Indemnity 
	 	 	30	 
	Section 7.06. Replacement of Fiscal Agent 
	 	 	31	 
	Section 7.07. Successor Fiscal Agent by Merger, etc. 
	 	 	32	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE EIGHT
	 	 	 	 
	 
	 	 	 	 
	DEFEASANCE AND DISCHARGE
	 	 	 	 
	 
	 	 	 	 
	Section 8.01. Option to Effect Covenant Defeasance 
	 	 	32	 
	Section 8.02. Covenant Defeasance
	 	 	32	 
	Section 8.03. Conditions to Covenant Defeasance 
	 	 	32	 
	Section 8.04. Discharge 
	 	 	33	 
	Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions
	 	 	34	 
	Section 8.06. Repayment to Company 
	 	 	34	 
	Section 8.07. Reinstatement 
	 	 	35	 
	 
	 	 	 	 
	ARTICLE NINE
	 	 	 	 
	 
	 	 	 	 
	AMENDMENTS, SUPPLEMENTS AND WAIVERS
	 	 	 	 
	 
	 	 	 	 
	Section 9.01. Without Consent of Holders 
	 	 	35	 
	Section 9.02. With Consent of Holders 
	 	 	36	 
	Section 9.03. Revocation and Effect of Consents 
	 	 	36	 
	Section 9.04. Notation on or Exchange of Securities 
	 	 	37	 
	Section 9.05. Fiscal Agent to Sign Amendments, etc. 
	 	 	37	 
	 
	 	 	 	 
	ARTICLE TEN
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 
	 	 	 	 
	Section 10.01. Notices 
	 	 	37	 
	Section 10.02. Certificate and Opinion as to Conditions Precedent 
	 	 	38	 
	Section 10.03. Statements Required in Certificate or Opinion 
	 	 	38	 
	Section 10.04. Rules by Fiscal Agent, Paying Agent, Registrar 
	 	 	39	 
	Section 10.05. Governing Law 
	 	 	39	 
	Section 10.06. No Recourse Against Others 
	 	 	39	 
	Section 10.07. Successors 
	 	 	39	 
	Section 10.08. Execution in Counterparts 
	 	 	39	 
	 
	 	 	 	 
	SIGNATURES 
	 	 	53	 
	EXHIBIT A — FORM OF SECURITY
	 	 	 	 
	EXHIBIT B — FORM OF CERTIFICATE OF TRANSFER
	 	 	 	 
	EXHIBIT C — FORM OF CERTIFICATE TO BE DELIVERED UPON TERMINATION OF RESTRICTED PERIOD
	 	 	 	 

iii

 

     FISCAL AGENCY AGREEMENT dated as of March 30, 2006 (the “Agreement”), between SYMETRA
FINANCIAL CORPORATION, a Delaware corporation (the “Company”) and U.S. BANK NATIONAL
ASSOCIATION, as fiscal agent (the “Fiscal Agent”).

     Each party agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Holders of the Company’s Securities:

ARTICLE ONE

DEFINITIONS

Section 1.01. Definitions.

     “Additional Securities” means 6.125% Senior Notes due 2016 of the Company issued under this
Agreement after the Issuance Date in accordance with Sections 2.02 and 2.15 hereof, and having
identical terms and conditions to the Securities.

     “Affiliate ” means any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company.

     “Agent” means any Registrar or Paying Agent. See Section 2.03.

     “Agreement” means this Fiscal Agency Agreement as amended or supplemented from time to
time.

     “Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial
interests in any Global Security, the rules and procedures of the Depositary, Euroclear and
Clearstream that apply to such transfer or exchange.

     “Board of Directors” means the Board of Directors of the Company or any committee of the
Board of Directors duly authorized to act for it hereunder.

     “Board Resolution” means a resolution of the Board of Directors, which may be evidenced by a
certificate of the Secretary or an Assistant Secretary of the Company stating that such
resolution has been duly adopted by the Board of Directors and is in full force and effect.

     “Capital Stock” shall mean (i) in the case of a corporation, corporate stock; (ii) in the
case of an association or business entity that is not a corporation, any and all shares,
interests, participations, rights or other equivalents (however designated) of corporate stock;
(iii) in the case of a limited partnership or limited liability company, partnership interests
(whether general or limited) or membership interests; and (iv) any other interest of
participation that confers on a person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing person, but excluding from the foregoing any debt
securities convertible into Capital Stock, whether or not such debt securities include any right
of participation in Capital Stock.

     “Company” means the party named as such in this Agreement until a successor replaces it
pursuant to this Agreement and thereafter means the successor.

1

 

     “Default” means any event which is, or after notice or passage of time or both would be, an
Event of Default.

     “Depositary” shall mean, with respect to the Securities issuable or issued in whole or in
part in the form of one or more Global Securities, the person designated as Depositary by the
Company, which Depositary shall be a clearing agency registered under the Exchange Act.

     “Distribution Compliance Period” shall mean the period that begins on the closing of any
offering of Securities (including any Additional Securities) and ends 40 days later.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Fiscal Agent” means the party named as such in this Agreement until a successor replaces it
pursuant to this Agreement and thereafter means the successor.

     “Global Security” or “Global Securities’” means a Security or Securities, as the case may
be, in the form prescribed in Section 2.01 of this Agreement evidencing all or part of the
Securities, issued to the Depositary or its nominee and registered in the name of such Depositary
or nominee.

     “guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any indebtedness of any other Person and any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such indebtedness of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for purposes of assuring in any other manner the obligee of such
indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term “guarantee” will not include endorsements for
collection or deposit in the ordinary course of business. The term “guarantee” used as a verb has
a corresponding meaning.

     “Holder” or “Securityholder” or “Holder of Securities” or “Noteholder” means a person in
whose name a Security is registered on the Registrar’s books.

     “Indirect Participant” means a Person who holds a beneficial interest in a Global Security
through a Participant.

     “Issuance Date” means March 30, 2006.

     “Officer” means the Chairman of the Board of Directors, the President, any Vice President,
the Treasurer, the Secretary or the Controller of the Company.

     “Officers’ Certificate” means a certificate signed by two Officers or by an Officer and an
Assistant Treasurer, Assistant Secretary or Assistant Controller of the Company.

2

 

     “Opinion of Counsel” means a written opinion from legal counsel who may be an employee
of or counsel to the Company, or who may be other counsel reasonably satisfactory to the Fiscal
Agent.

     “Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to
DTC, shall include Euroclear and Clearstream).

     “Person” means any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.

     “Place of Payment” means, when used with respect to Securities, the place or places where the
principal of, premium, if any, and interest, if any, on the Securities are payable.

     “Qualified Institutional Buyer” means a “qualifed institutional buyer” as defined in Rule
144A.

     “Responsible Officer” means any officer in the Corporate Trust Division of the Fiscal Agent
or any other officer of the Fiscal Agent assigned by the Fiscal Agent to administer its corporate
trust matters.

     “Rule 144” means Rule 144 promulgated under the Securities Act.

     “Rule 144A” means Rule 144A promulgated under the Securities Act.

     “Rule 903” means Rule 903 promulgated under the Securities Act.

     “Rule 904” means Rule 904 promulgated the Securities Act.

     “SEC” means the Securities and Exchange Commission.

     “Securities” means the 6.125% Senior Notes due 2016 of the Company (including, without
limitation, any Additional Securities) issued under this Agreement.

     “Securities Act” means the Securities Act of 1933, as amended from time to time.

     “Securities Custodian” means the Fiscal Agent, as custodian with respect to the Securities
in global form, or any successor entity thereto.

     “U.S. Government Obligations” means direct obligations of the United States for the payment
of which the full faith and credit of the United States is pledged.

Section 1.02. Other Definitions.

3

 

	 	 	 	 	 
	Term	 	Defined in Section
	“Bankruptcy Law” 
	 	 	6.01	 
	“Cash Equivalents” 
	 	 	8.03	 
	“Comparable Treasury Issue” 
	 	 	3.06	 
	“Comparable Treasury Price” 
	 	 	3.06	 
	“Covenant Defeasance” 
	 	 	8.03	 
	“Custodian” 
	 	 	6.01	 
	“Definitive Securities”
	 	 	2.01	 
	“Discharge” 
	 	 	8.05	 
	“DTC” 
	 	 	2.01	 
	“DTC Participants” 
	 	 	2.01	 
	“Event of Default” 
	 	 	6.01	 
	“Fair Value” 
	 	 	4.04	 
	“Indebtedness”
	 	 	4.01	 
	“Insurance Subsidiaries” 
	 	 	4.01	 
	“Legal Holiday” 
	 	 	2.16	 
	“Lien” 
	 	 	4.01	 
	“Make Whole Amount” 
	 	 	3.06	 
	“Notice of Default” 
	 	 	6.01	 
	“Obligations” 
	 	 	11.01	 
	“Outstanding Securities 
	 	 	2.08	 
	“144A Global Security” 
	 	 	2.01	 
	“Paying Agent” 
	 	 	2.03	 
	“Payor” 
	 	 	4.02	 
	“Private Placement Legend” 
	 	 	2.06	 
	“Quotation Agent” 
	 	 	3.06	 
	“Redemption Date”
	 	 	3.06	 
	“Reference Treasury Dealer” 
	 	 	3.06	 
	“Reference Treasury Dealer Quotations” 
	 	 	3.06	 
	“Register” 
	 	 	2.03	 
	“Registrar” 
	 	 	2.03	 
	“Regulation S Global Security” 
	 	 	2.01	 
	“Subsidiary” 
	 	 	4.01	 
	“Successor Company”
	 	 	5.01	 
	“Symetra Life” 
	 	 	4.01	 
	“Taxes” 
	 	 	4.02	 
	“Temporary Regulation S Global Security” 
	 	 	2.01	 
	“Treasury Rate” 
	 	 	3.06	 
	“United States” 
	 	 	4.01	 

     All other terms used in this Agreement that are defined by SEC rule have the meanings
assigned to them.

Section 1.03. Rules of Construction.

     Unless the context otherwise requires:

     (1) a term has the meaning assigned to it;

4

 

     (2) an accounting term, not otherwise defined, has the meaning assigned to it in
accordance with generally accepted accounting principles;

     (3) “or” is not exclusive; and

     (4) words in the singular include the plural, and in the plural include the singular.

ARTICLE TWO

The Securities

Section 2.01. Form and Dating.

          (a) General Form of Securities. The Securities and the Fiscal Agent’s certificate of
authentication shall be substantially in the form of Exhibit A hereto, which Exhibit is part of
this Agreement. The Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Security shall be dated the date of its authentication. The
Securities shall be in minimum denominations of $2,000 and integral multiples of $1,000. The terms
and provisions contained in the Securities shall constitute, and are hereby expressly made, a part
of this Agreement and the Company and the Fiscal Agent, by their execution and delivery of this
Agreement, expressly agree to such terms and provisions and to be bound thereby.

          Securities offered and sold to Qualified Institutional Buyers in reliance on Rule 144A under
the Securities Act will initially be issued only in the form of one or more global Securities in
definitive, fully registered form without interest coupons (each a “144A Global Security”). The
144A Global Securities shall be substantially in the form of Exhibit A attached hereto, with such
applicable legends as are provided for herein.

          Securities offered and sold outside the United States in reliance on Regulation S under the
Securities Act will initially be issued in the form of one or more temporary global Securities (the
“Temporary Regulation S Global Security”), without interest coupons. Temporary Regulation S Global
Securities shall be substantially in the form of Exhibit A attached hereto, with such applicable
legends as are provided for herein. The Temporary Regulation S Global Securities, which will be
deposited on behalf of the purchasers of the Securities represented thereby with the Fiscal Agent,
as custodian for DTC, and registered in the name of DTC or a nominee of DTC for the accounts of
Euroclear and Clearstream, shall be duly executed by the Company and authenticated by the Fiscal
Agent as hereinafter provided. Beneficial interests in the Temporary Regulation S Global Security
will be exchanged for beneficial interests in one or more corresponding permanent global
Securities, in definitive, fully registered form without interest coupons (each a “Regulation S
Global Security”; collectively with 144A Global Securities, the “Global Securities”), substantially
in the form of Exhibit A attached hereto, with such applicable legends as are provided for herein
within a reasonable period after the expiration of the Distribution Compliance Period (as defined
below) upon delivery of a certificate in the form of Exhibit C hereto. Prior to the expiration of
the Distribution Compliance Period, interests in the Temporary Regulation S Global Security may
only be

5

 

transferred to non-U.S. persons pursuant to Regulation S, unless exchanged for interests in a
Global Security in accordance with the transfer and certification requirements described herein.

	 	(b)	 	Form of Global Securities.
	 
	 	(i)	 	Each Global Security (A) shall represent such portion of the
outstanding Securities as shall be specified therein, (B) shall provide that
it shall represent the aggregate amount of outstanding Securities from time
to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased,
as appropriate, to reflect exchanges and redemptions, (C) shall be registered
in the name of the Depositary or its nominee, duly executed by the Company
and authenticated by the Fiscal Agent as provided herein, for credit to the
respective accounts of the Holders (or such accounts as they may direct) at
the Depositary, (D) shall be delivered by the Fiscal Agent or its Agent to
the Depositary or a Securities Custodian pursuant to the Depositary’s
instructions and (E) shall bear the applicable legends required by Section
2.06(d) hereof.
	 
	 	(ii)	 	Members of, or participants in, the Depositary (“DTC
Participants”) shall have no rights under this Agreement with respect to any
Global Security held on their behalf by the Depositary, and the Depositary
may be treated by the Company, the Fiscal Agent, and any agent of the Company
or the Fiscal Agent as the absolute owner of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Fiscal Agent, or any agent of the Company or the
Fiscal Agent from giving effect to any written certification, proxy or other
authorization furnished to the Depositary or impair, as between the
Depositary and its agent members, the operation of customary practices
governing the exercise of the rights of a Holder of any Security.

          Any endorsement of a Global Security to reflect the amount of any increase or decrease in the
amount of outstanding Securities represented thereby shall be made by the Fiscal Agent or the
Securities Custodian, at the direction of the Fiscal Agent, in accordance with instructions given
by the Holder thereof as required by Section 2.06 hereof.

          (c) Form of Definitive Securities. Subject to the provisions of Section 2.06 hereof,
Definitive Securities may be produced in any manner determined by the Officers of the Company
executing such Securities, as evidenced by their execution of such Securities. The Fiscal Agent
must register Definitive Securities so issued in the name of, and cause the same to be delivered
to, such Person (or its nominee).

          (d) Provisions Applicable to Forms of Securities. The Securities may also have such
additional provisions, omissions, variations or substitutions as are not inconsistent with the
provisions of this Agreement, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply with this Agreement,
any applicable law or with any rules made pursuant there to or with the

6

 

rules of any securities exchange or governmental agency or as may be determined consistently
herewith by the Officer of the Company executing such Securities, as conclusively evidenced by
their execution of such Securities. All Securities shall be otherwise substantially identical
except as provided herein.

          Subject to the provisions of this Article 2, a registered Holder in a Global Security may
grant proxies and otherwise authorize any Person to take any action that a Holder is entitled to
take under this Agreement or the Securities.

Section 2.02. Execution and Authentication.

          An Officer shall sign the Securities for the Company by manual or facsimile signature. The
Company’s seal may be reproduced on the Securities and may be in facsimile form.

          If an Officer whose signature is on a Security no longer holds that office at the time a
Security is authenticated, the Security shall nevertheless be valid.

          A Security shall not be valid or obligatory for any purpose or entitled to the benefits of
this Agreement until authenticated by the manual signature of the Fiscal Agent or its
authenticating agent. The signature shall be conclusive evidence that the Security has been
authenticated under this Agreement.

          The Fiscal Agent shall authenticate Securities for original issue up to an initial maximum
aggregate principal amount of $300,000,000 on the Issuance Date. Any Additional Securities issued
by the Company in accordance with Section 2.15 hereof shall be authenticated by the Fiscal Agent
on the date of their issuance in an aggregate principal amount specified in a Board Resolution
and an Officers’ Certificate provided pursuant to Section 2.15.

          The Fiscal Agent may appoint an authenticating agent reasonably acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities whenever the Fiscal
Agent may do so. Each reference in this Agreement to authentication by the Fiscal Agent includes
authentication by such agent. An authenticating agent has the same rights as an Agent to deal with
the Company or an Affiliate of the Company.

Section 2.03. Fiscal Agent, Registrar and Paying Agent.

          The Company hereby appoints U.S. Bank National Association, at its principal office in
Cincinnati, Ohio, as the Fiscal Agent hereunder and U.S. Bank National Association hereby accepts
such appointment. The Fiscal Agent shall have the powers and authority granted to and conferred
upon it in the Securities and hereby and such further powers and authority to act on behalf of
the Company as may be mutually agreed upon by the Company and the Fiscal Agent, and the Fiscal
Agent shall keep a copy of this Agreement available for inspection during normal business hours
at its principal office in Cincinnati, Ohio.

          The Company shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (“Registrar”) and an office or agency where Securities
may be presented for payment (“Paying Agent”). The Registrar shall keep a register

7

 

(“Register”) of the Securities and of their transfer and exchange. The Company may also from time
to time appoint one or more co-registrars and one or more additional paying agents. The term
“Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying
agent. The Company may change any Paying Agent or Registrar upon notice to the Holders. The
Company shall notify the Fiscal Agent in writing of the name and address of any Agent not a party
to this Agreement. If the Company fails to appoint or maintain another entity as Registrar or
Paying Agent, the Fiscal Agent shall act, subject to the penultimate paragraph of this Section
2.03, as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar;
provided, however, that none of the Company, its Subsidiaries or the Affiliates of the foregoing
shall act as Paying Agent or Registrar if a Default or Event of Default has occurred and is
continuing.

          The Company initially appoints the Fiscal Agent to act as the Registrar and Paying Agent and
to act as Securities Custodian with respect to the Global Securities.

          All of the terms and provisions with respect to such powers and authority contained in the
Securities are subject to and governed by the terms and provisions hereof.

          The Fiscal Agent may resign as Registrar or Paying Agent upon 30 days prior written notice
to the Company.

          The Company initially appoints DTC to act as Depositary with respect to the Global
Securities.

Section 2.04. Paying Agent to Hold Money in Trust.

          The Company shall require each Paying Agent other than the Fiscal Agent to agree in writing
that the Paying Agent will hold in trust for the benefit of Holders or the Fiscal Agent all money
and Cash Equivalents held by the Paying Agent for the payment of principal of, or premium, if any,
or interest on, the Securities, and shall notify the Fiscal Agent of any default by the Company in
making any such payment. While any such default continues, the Fiscal Agent may require a Paying
Agent to pay all money and Cash Equivalents held by it to the Fiscal Agent. The Company at any
time may require a Paying Agent to pay all money and Cash Equivalents held by it to the Fiscal
Agent. Upon payment of all such money and Cash Equivalents over to the Fiscal Agent, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further liability for the money
and Cash Equivalents. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and
hold in a separate trust fund for the benefit of the Holders, all money and Cash Equivalents held
by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company,
the Fiscal Agent shall serve as Paying Agent for the Securities.

Section 2.05. Holder Lists.

          The Fiscal Agent shall preserve in as current a form as is reasonably practicable the most
recent list available to it of the names and addresses of all Holders. If the Fiscal Agent is not
the Registrar, the Company shall furnish to the Fiscal Agent at least seven business days before
each interest payment date, and at such other times as the Fiscal Agent may request in

8

 

writing, a list in such form and as of such date as the Fiscal Agent may reasonably require of the
names and addresses of the Holders of Securities.

Section 2.06. Transfer and Exchange.

          (a) Transfer and Exchange of Global Securities. A Global Security may not be transferred as
a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary
to the Depositary or to another nominee of the Depositary, or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary. Global Securities
may be exchanged or replaced, in whole or in part, as provided in this Section 2.06 and Section
2.07 hereof. Every Security authenticated and delivered in exchange for, or in lieu of, a Global
Security or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global Security. A Global
Security may not be exchanged for another Security other than as provided in this Section 2.06(a)
and Section 2.06(c) hereof; however, beneficial interests in a Global Security may be transferred
and exchanged as provided in Section 2.06(b) hereof.

          (b) Transfer and Exchange of Beneficial Interests in the Global Securities. The transfer and
exchange of beneficial interests in the Global Securities shall be effected through the
Depositary, in accordance with the provisions of this Agreement and the Applicable Procedures.
Beneficial interests in the Global Securities shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Securities also shall require compliance with either
subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following
subparagraphs, as applicable:

	 	(i)	 	Transfer of Beneficial Interests in the Same Global Security.
Beneficial interests in any Global Security may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same Global
Security in accordance with the transfer restrictions set forth in the Private
Placement Legend. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this Section
2.06(b).
	 
	 	(ii)	 	All Other Transfers and Exchanges of Beneficial Interests in
Global Securities. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 2.06(b)(i), the
transferer of such beneficial interest must deliver to the Registrar (A) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in another
Global Security in an amount equal to the beneficial interest to be
transferred or exchanged and (B) instructions given in accordance with the
Applicable Procedures containing information regarding the Participant
account to be credited with such increase. In addition, the Registrar must
receive the following:

	 	(A)	 	if the transferee will take delivery in the form of a beneficial
interest in the 144A Global Security, then the transferer must

9

 

	 	 	 	deliver a certificate in the forai of Exhibit B hereto,
including the certifications in item (1) thereof; and

	 	(B)	 	if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Global Security, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof;

	 	 	 	provided that, after any Distribution Compliance Period, the Registrar need
not receive such certificate in respect of a transfer of a beneficial
interest in the Regulation S Global Security. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in Global
Securities contained in this Agreement and the Securities or otherwise
applicable under the Securities Act, the Fiscal Agent shall adjust the
principal amount of the relevant Global Security(s) pursuant to Section
2.06(e) hereof.

	 	(c)	 	Exchange for Definitive Securities.
	 
	 	(i)	 	Except as provided below, owners of beneficial interests in
Global Securities will not be entitled to receive Definitive Securities.
Definitive Securities shall be transferred to all beneficial owners in exchange
for their beneficial interests in a Global Security if (A) DTC notifies the
Company that it is unwilling or unable to continue as depositary for such
Global Security or DTC ceases to be a clearing agency registered under the
Exchange Act, at a time when DTC is required to be so registered in order to
act as depositary, and in each case a successor depositary is not appointed by
the Company within 90 days of such notice, (B) the Company executes and
delivers to the Fiscal Agent and Registrar an Officers’ Certificate stating
that such Global Security shall be so exchangeable; provided that in no event
shall the Temporary Regulation S Global Security be exchanged by the Company
for Definitive Securities prior to the expiration of the Distribution
Compliance Period or (C) an Event of Default has occurred and is continuing and
the Registrar has received a request from DTC.
	 
	 
	 	(ii)	 	In connection with the transfer of an entire Global Security to
beneficial owners pursuant to this Section 2.06(c), such Global Security shall
be deemed to be surrendered to the Fiscal Agent for cancellation, and the
Company shall execute, and the Fiscal Agent shall authenticate and deliver, to
each beneficial owner identified by DTC in exchange for its beneficial interest
in such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations. Any Definitive Security delivered in
exchange for an interest in a Global Security pursuant to this Section 2.06(c)
shall bear the Private Placement Legend.

10

 

          (d) Legends. The following legends shall appear on the face of all Securities issued
under this Agreement unless specifically stated otherwise in the applicable provisions of this
Agreement.

	 	(i)	 	Private Placement Legend. Each Security (and all Securities
issued in exchange therefor or substitution thereof) shall bear the legend in
substantially the following form (the “Private Placement Legend”).

“THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSACTION
IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER
OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH
IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT
OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS
THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE
REQUIRED BY APPLICABLE LAW (THE “RESALE RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE ISSUER OR ONE OF ITS AFFILIATES, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON
U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (2) AGREES THAT IT WILL GIVE TO EACH PERSON TO
WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT
THE ISSUER, THE FISCAL AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE FISCAL AGENT. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS “UNITED

11

 

STATES” AND “U.S. PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.”

	 	(ii)	 	Global Security Legend. Each Global Security shall bear
legends in substantially the following form:

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT 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.”

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE FISCAL AGENCY AGREEMENT GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE FISCAL AGENT MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(b)(ii) AND SECTION 2.06(e) OF THE
FISCAL AGENCY AGREEMENT, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(a) OF THE FISCAL AGENCY AGREEMENT, (III) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE FISCAL AGENT FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE FISCAL AGENCY
AGREEMENT AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.”

          (e)
Cancellation and/or Adjustment of Global Securities. At such time as all beneficial
interests in a particular Global Security have been exchanged for Definitive Securities or a
particular Global Security has been redeemed, repurchased or canceled in whole and not in part,
each such Global Security shall be returned to or retained and canceled by the Fiscal Agent in
accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Security or exchanged for Definitive
Securities pursuant to Section 2.06(c) hereof, the principal amount of Securities represented by
such Global Security shall be reduced accordingly and an endorsement shall be made on such Global
Security by the Fiscal Agent or by the Depositary at the direction of the Fiscal Agent to reflect
such reduction; and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another Global Security,
such other Global Security shall be increased accordingly and an endorsement shall be made on such
other Global Security by the Fiscal Agent or by the Depositary at the direction of the Fiscal Agent
to reflect such increase.

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	 	(f)	 	General Provisions Relating to Transfers and Exchanges.
	 
	 	(i)	 	To permit registrations of transfers and exchanges, the Company
shall execute and the Fiscal Agent shall authenticate Global Securities and
Definitive Securities upon the Company’s order or at the Registrar’s request.
	 
	 	(ii)	 	No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange by or transfer to the same Holder
pursuant to Sections 2.06 or 9.04 hereof).
	 
	 	(iii)	 	The Registrar shall not be required to register the transfer
of or exchange any Security selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
	 
	 	(iv)	 	All Securities issued upon any registration of transfer or
exchange pursuant to the terms of this Agreement shall be the valid obligations
of the Company, evidencing the same debt, and entitled to the same benefits
under this Agreement, as the Securities surrendered upon such registration of
transfer or exchange.
	 
	 	(v)	 	The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Securities during a period beginning at the
opening of business 15 days before the day of any selection of Securities for
redemption under Section 3.02 hereof and ending at the close of business on the
day of selection or (B) to register the transfer of or to exchange any Security
so selected for redemption in whole or in part, except the unredeemed portion
of any Security being redeemed in part.
	 
	 	(vi)	 	Prior to due presentment for the registration of a transfer
of any Security, the Fiscal Agent, any Agent and the Company may deem and
treat the Person in whose name any Security is registered as the absolute
owner of such Security for the purpose of receiving payment of principal of,
premium, if any, and interest on such Securities and for ail other purposes,
and none of the Fiscal Agent, any Agent or the Company shall be affected by
notice to the contrary.
	 
	 	(vii)	 	The Fiscal Agent shall authenticate Securities in accordance
with the provisions of Section 2.02 hereof.
	 
	 	(viii)	 	All certifications, certifîcates and Opinions of Counsel required to be
submitted to the Registrar pursuant to this Section 2.06 to effect a
registration of transfer or exchange may be submitted by facsimile.

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	 	(ix)	 	The Fiscal Agent shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Agreement or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Participants or beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and
when expressly required by the terms of, this Agreement, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.

Section 2.07. Replacement Securities.

          If any mutilated Security is surrendered to the Fiscal Agent, or the Company and the Fiscal
Agent receive evidence to their satisfaction of the destruction, loss or theft of any Security,
the Company shall, upon the written request of the Holder thereof, issue and the Fiscal Agent,
upon the written order of the Company signed by two Officers of the Company, shall authenticate a
replacement Security if the Fiscal Agent’s requirements are met. If required by the Fiscal Agent
or the Company, an indemnity bond must be supplied by such Holder that is sufficient in the
judgment of the Fiscal Agent and the Company to protect the Company, the Fiscal Agent, any Agent
and any authenticating agent from any loss that any of them may suffer if a Security is replaced.
The Company may charge such Holder for its expenses in replacing a Security.

          Every replacement Security is an additional obligation of the Company and shall be entitled
to all of the benefits of this Agreement equally and proportionately with all other Securities duly
issued hereunder.

          The provisions of this Section 2.07 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 2.08. Outstanding Securities.

          The Securities outstanding at any time (the “Outstanding Securities”) are all the Securities
authenticated by the Fiscal Agent except for those cancelled by it (or its agent), those delivered
to it (or its agent) for cancellation, those reductions in the beneficial interest in a Global
Security effected by the Fiscal Agent in accordance with the provisions hereof, and those
described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a
Security does not cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.

          If a Security is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless
the Fiscal Agent receives proof satisfactory to it that the replaced Security is held by a
“protected purchaser” (as such term is defined in Section 8-303 of the Uniform Commercial Code as
in effect in the State of New York).

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          If the principal amount of any Security is considered paid under Section 4.02 hereof, it
ceases to be outstanding and interest on it ceases to accrue.

          If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds, on a redemption date or maturity date, money or Cash Equivalents sufficient to pay all of
the principal of, premium (if any) and interest on Securities payable on that date, then on and
after that date such Securities shall be deemed to be no longer outstanding and shall cease to
accrue interest.

Section 2.09. Treasury Securities.

          In determining whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect common control
with the Company, shall be considered as though not outstanding and shall be disregarded, except
that for the purposes of determining whether the Fiscal Agent shall be protected in relying on
any such direction, waiver or consent, only Securities that a Responsible Officer of the Fiscal
Agent has actual knowledge are so owned shall be so disregarded.

Section 2.10. Temporary Securities.

          In lieu of formal printed Definitive Securities, or until such Definitive Securities are
ready for delivery, the Company may prepare and the Fiscal Agent shall authenticate temporary
Securities upon a written order of the Company signed by two Ofïicers of the Company. Temporary
Securities shall be substantially in the form of Definitive Securities but may have variations
that the Company considers appropriate for temporary Securities and as shall be reasonably
acceptable to the Fiscal Agent. At the Company’s election, the Company may prepare and the Fiscal
Agent shall authenticate Definitive Securities in exchange for temporary Securities.

          Unless and until any such exchange, Holders of temporary Securities shall be entitled to all
of the benefits of this Agreement.

Section 2.11. Cancellation.

          The Company at any time may deliver Securities to the Fiscal Agent or its agent for
cancellation. The Registrar and Paying Agent shall forward to the Fiscal Agent any Securities
surrendered to them for registration of transfer, exchange or payment. The Fiscal Agent (or its
agent) and no one else shall cancel all Securities surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall destroy cancelled Securities (subject to
the record retention requirement of the Exchange Act). Certification of the destruction of all
cancelled Securities shall be delivered to the Company, upon written request, from time to time.
The Company may not issue new Securities to replace Securities that it has paid or that have been
delivered to the Fiscal Agent (or its agent) for cancellation. If the Company acquires any of the
Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the Fiscal Agent (or
its agent) for cancellation pursuant to this Section 2.11.

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Section 2.12. Defaulted Interest.

          If the Company defaults in a payment of interest on the Securities, it shall pay the
defaulted interest in any lawfal manner plus, to the extent lawfiil, interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special record date, in each
case at the rate provided in the Securities. The Company shall notify the Fiscal Agent in writing
of the amount of defaulted interest proposed to be paid on each Security and the date of the
proposed payment. The Company shall fix or cause to be fixed each such special record date and
payment date; provided that no such special record date shall be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before the special record
date, the Company (or, upon the written request of the Company, the Fiscal Agent in the name and
at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such defaulted interest to be
paid.

Section 2.13. Persons Deemed Owners.

          Prior to due presentment for the registration of a transfer of any Security, the Fiscal
Agent, any Agent, the Company and any agent of the foregoing shall deem and treat the Person in
whose name any Security is registered as the absolute owner of such Security for all purposes
(including the purpose of receiving payment of principal of, premium, if any, and interest on
such Securities; provided that defaulted interest shall be paid as set forth in Section 2.12),
and none of the Fiscal Agent, any Agent, the Company or any agent of the foregoing shall be
affected by notice to the contrary.

Section 2.14. CUSIP Numbers.

          Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company will print CUSIP numbers on the Securities, and the Fiscal Agent may use
CUSIP numbers in notices of redemption and purchase as a convenience to Holders; provided,
however, that any such notices 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
purchase and that reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption or purchase shall not be affected by any defect or omission in
such numbers.

Section 2.15. Issuance of Additional Securities.

          The Company shall be entitled to issue Additional Securities under this Agreement at any
time. Additional Securities shall have identical terms as the Securities, other than with
respect to the date of issuance and issue price. The Securities and any Additional Securities
shall be treated as a single class for all purposes under this Agreement.

          With respect to any issuance of Additional Securities, the Company shall deliver to the
Fiscal Agent a Board Resolution and an Officers’ Certificate, and, if the Company elects, a
supplement or amendment to this Agreement, which shall together provide the following information:

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          (1) the aggregate principal amount of Additional Securities to be authenticated and delivered
pursuant to this Agreement;

          (2) the issue price and the issue date of such Additional Securities; and

          (3) whether such Additional Securities shall be transfer restricted Securities.

Section 2.16. Legal Holidays.

     A “Legal Holiday” is a Saturday, a Sunday or a day on which banking institutions in a
jurisdiction in which an action is required hereunder are not required to be open. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening
period. If a regular record date is a Legal Holiday, the record date shall not be affected.

ARTICLE THREE

Redemption

Section 3.01. Notice to Fiscal Agent of Election to Redeem.

     The election of the Company pursuant to Section 3.06 hereof to redeem any Securities shall
be evidenced by a Board Resolution. In case of any redemption at the election of the Company of
all or less than ail of the Securities, the Company, shall, at least 60 days prior to the
Redemption Date by the Company (unless a shorter notice shall be satisfactory to the Fiscal
Agent), notify the Fiscal Agent in writing of such Redemption Date and of the principal amount of
Securities of such series to be redeemed. Any such notice to the Fiscal Agent may be cancelled and
rescinded by the Company at any time prior to the mailing of such notice to any Holder pursuant to
Section 3.03. In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or elsewhere in this
Agreement, the Company shall furnish the Fiscal Agent with an Officers’ Certificate evidencing
compliance with such restriction.

Section 3.02. Selection of Securities to be Redeemed.

     In an optional redemption pursuant to Section 3.06, if less than all the Securities are to be
redeemed, the particular Securities to be redeemed shall be selected, not more than 60 days prior
to the applicable Redemption Date, by the Fiscal Agent, from the Outstanding Securities of such
series not previously called for redemption, on a pro rata basis, by lot or by such other method
as the Fiscal Agent, in its sole discretion, shall deem fair and appropriate and which may provide
for the selection for redemption of portions of the principal amount of Securities of a
denomination larger than the minimum authorized denomination for the Securities.

     The Fiscal Agent 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.

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     For all purposes of this Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Securities shall relate, in the case of any Securities redeemed or
to be redeemed only in part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.

     The Fiscal Agent may select for redemption portions of the principal amount of the
Securities that have denominations larger than $2,000. Securities and portions of them it selects
shall be in amounts of $2,000 or integral multiples of $1,000.

Section 3.03. Notice of Redemption.

     Notice of redemption to the Holders of Securities to be redeemed as a whole or in part at
the option of the Company pursuant to Section 3.06 shall be given by mailing notice of such
redemption by first-class mail, postage prepaid, at least 30 days and not more than 60 days prior
to the Redemption Date to such Holders of Securities at their last addresses as they shall appear
on the Register. Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the notice. Failure to give
notice by mail, or any defect in the notice, to the Holder of any Security of a series designated
for redemption as a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.

     The notice of redemption to each such Holder shall specify the CUSIP number (if any) and the
principal amount of each Security held by such Holder to be redeemed, the Redemption Date, the
redemption price, the name of the Paying Agent, Place or Places of Payment, that payment will be
made upon presentation and surrender of such Securities, that interest accrued to the Redemption
Date will be paid as specified in such notice and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. In case any Security is to be
redeemed in part only, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the Redemption Date, upon surrender of
such Security, a new Security or Securities of such series, in principal amount equal to the
unredeemed portion thereof, will be issued.

     The notice of redemption of Securities to be redeemed shall be given by the Company or, at
the Company’s timely request, by the Fiscal Agent in the name and at the expense of the Company.

     At least one business day prior to the Redemption Date specified in the notice of redemption
given as provided in this Section, the Company will deposit with the Fiscal Agent or with one or
more paying agents (or, if the Company is acting as Paying Agent, set aside, segregate and hold in
trust as provided in Section 2.04) an amount of money or Cash Equivalents, or combination thereof,
sufficient to redeem on the redemption date all the Securities so called for redemption at the
appropriate redemption price, together with accrued interest, if any, to the Redemption Date.
Promptly following the Redemption Date, the Paying Agent shall return to the Company any amounts of
money and Cash Equivalents so deposited which are not required to redeem the Securities called for
redemption.

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Section 3.04. Payment of Securities Called for Redemption.

     If notice of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and at the place
stated in such notice at the applicable redemption price, together with interest accrued to the
Redemption Date, and on and after said Redemption Date (unless the Company shall default in the
payment of such Securities at the redemption price, together with interest, if any, accrued to the
Redemption Date) any interest on the Securities or portions of Securities so called for redemption
shall cease to accrue and such Securities shall cease from and after the Redemption Date to be
entitled to any benefit or security under this Agreement, and the Holders thereof shall have no
right in respect of such Securities except the right to receive the redemption price thereof and
unpaid interest to the Redemption Date. On presentation and surrender of such Securities at a
Place of Payment specified in said notice, said Securities or the specified portions thereof shall
be paid and redeemed by the Company at the applicable redemption price, together with any interest
accrued thereon to the Redemption Date; provided that any semiannual payment of interest becoming
due on the Redemption Date shall be payable to the Holders of such Securities registered as such
in the Register on the relevant record date.

     If any Security called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, bear interest from the
Redemption Date at the rate of interest borne by the Security.

     Upon presentation of any Security redeemed in part only, the Company shall execute and the
Fiscal Agent shall authenticate and deliver to or on the order of the Holder thereof, at the
expense of the Company, a new Security or Securities of such series, of authorized denominations,
in principal amount equal to the unredeemed portion of the Security so presented.

Section 3.05. Exclusion of Certain Securities from Eligibility for Selection for Redemption.

     In the case of an optional redemption pursuant to Section 3.06 hereof, Securities shall be
excluded from eligibility for selection for redemption if they are identified by registration and
certificate number or other distinguishing symbol in a written statement signed by an authorized
officer of the Company and delivered to the Fiscal Agent at least 40 days prior to the last date
on which notice of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Company or (b) an entity specifically identified in such
written statement as directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company.

Section 3.06. Optional Redemption.

     The Securities shall be subject to redemption at the option of the Company, in whole or in
part, at any time or from time to time, prior to maturity at the Company’s option, at a redemption
price equal to the greater of: (i) 100% of the principal amount of the Securities to be redeemed,
or (ii) as determined by the Quotation Agent (as defined below), the sum of the present values of
the remaining scheduled payments of principal and interest on the Securities to be redeemed (not
including any portion of such payments of interest accrued as of the

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Redemption Date) discounted to such Redemption Date on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate (as defined below), plus 25 basis
points (the “Make Whole Amount”), plus, in each case, accrued and unpaid interest on the
Securities to be redeemed to the Redemption Date. The Company shall pay any interest due on an
interest payment date which occurs on or prior to a Redemption Date (as defined below) to the
registered Holders of the Securities as of the close of business on the regular record date
immediately preceding that interest payment date.

     For purposes of determining the Make Whole Amount, the following definitions apply:

     The term “Comparable Treasury Issue” means the U.S. Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Securities to be
redeemed that would be utilized at the time of selection, and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of the Securities to be redeemed.

     The term “Comparable Treasury Price” means (1) the average of three Reference Treasury Dealer Quotations (as defined below) for the Redemption Date, after excluding the
highest and lowest of five Reference Treasury Dealer Quotations, or (2) if the Fiscal Agent
obtains fewer than five Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations.

     The term “Quotation Agent means one of the Reference Treasury Dealers appointed by the Fiscal
Agent after consultation with the Company.

     “Redemption Date” means the date fixed for redemption of the Securities.

     The term “Reference Treasury Dealer” means Lehman Brothers Inc., Banc of America Securities
LLC, J.P. Morgan Securities Inc. and two other primary U.S. Government securities dealers.

     The term “Reference Treasury Dealer Quotations” means the average, as determined by the
Fiscal Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed, in each
case, as a percentage of its principal amount) quoted in writing to the Fiscal Agent by such
Reference Treasury Dealer at 3:30 p.m., New York City time, on the third business day preceding
the Redemption Date.

     The term “Treasury Rate” means the rate per annum equal to the semiannual equivalent or
interpolated (on a day-count basis) yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for that Redemption Date.

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ARTICLE FOUR

Covenants

Section 4.01. Certain Definitions.

     The following capitalized terms used in this Agreement shall have the meanings ascribed to
them below.

     “Indebtedness” means the principal, premium and interest due on indebtedness of a Person
whether outstanding on the date of this Agreement or thereafter created, incurred or assumed,
which is indebtedness for borrowed money, and any amendments, renewals, extensions, modifications
and refîmdings of any such indebtedness. For purposes of this definition, “indebtedness for
borrowed money” means: (1) any obligation of, or any obligation guaranteed by, such person for the
repayment of borrowed money, whether or not evidenced by bonds, debentures, notes or other written
instruments; (2) any obligation of, or any such obligation guaranteed by, such person evidenced by
bonds, debentures, notes or similar written instruments, including obligations assumed or incurred
in connection with the acquisition of property, assets or businesses, provided, however, that the
deferred purchase price of any property, assets or businesses will not be considered indebtedness
if the purchase price thereof is payable in full within 90 days from the date on which such
indebtedness was created; (3) any obligation of such person as lessee under any lease required to
be capitalized on the balance sheet of the lessee under generally accepted accounting principles
or under any lease of property or assets made as part of any sale and lease-back transaction to
which such person is a party; and (4) any obligation of, or any obligation guaranteed by, any
person for the payment of amounts due under a swap agreement or similar instrument or agreement,
or under a foreign currency hedge exchange or similar instrument or agreement

     “Insurance Subsidiaries” shall mean Symetra National Life Insurance Company, a Washington
corporation and First Symetra National Life Insurance Company of New York, a New York corporation.

     “Lien” means any mortgage, deed of trust, pledge, lien, security interest or other
encumbrance (including, without limitation, any conditional sale or other title retention
agreement or lease in the nature thereof, and any filing or agreement to give a lien or file a
financing statement as a debtor under the Uniform Commercial Code or any similar statute, other
than to reflect ownership by a third party of property leased to the Company under a lease which
is not in the nature of a conditional sale or title retention agreement).

     “Subsidiary” means a direct or indirect subsidiary of the Company.

     “Symetra Life” shall mean Symetra Life Insurance Company, a Washington corporation.

     “United States” means the United States of America including its territories and possessions.

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Section 4.02. Payment of Securities.

          (a) The Company shall pay the principal of, premium, if any, and interest on the
Securities on the date and in the manner provided in the Securities and this Agreement. An
installment of principal or interest shall be considered paid on the date it is due if the
Fiscal
Agent or Paying Agent holds on that date money irrevocably designated for and sufficient to
pay
the installment. At the Company’s option, it may pay any interest on any Securities by
mailing
checks by first class mail to the Holders of such Securities at their address as shown on
the
Registrar’s books; provided that all payments with respect to Global Securities and
Definitive
Securities the Holders of which hâve given wire transfer instructions to the Company will be
required to be made by wire transfer of same day fonds to the accounts in the United States
specified by the Holders thereof. The Company shall pay interest on overdue principal and
premium, if any, at the rate or rates borne by the Securities; it shall, to the extent
lawful, pay
interest on overdue installments of interest at the same rate or rates.

The
Company hereby further agrees that all payments made by the Company or any successor entity of
the Company (each a “Payor”) on the Securities will be made without withholding or deduction for,
or on account of, any present or future taxes, duties, assessments or governmental charges of
whatever nature (“Taxes”) unless the withholding or deduction of such Taxes is then required by
law.

          (b) The Payor will pay any present or future stamp, court or documentary taxes,
or any other excise or property taxes, charges or similar levies that arise in any
jurisdiction from
the execution, delivery or registration of any Securities or any other document or instrument
referred to therein.

Section 4.03. Limitation on Liens of Capital Stock.

     As long as any Securities are outstanding, the Company shall not, and it shall not permit
Symetra Life or any Insurance Subsidiary to, directly or indirectly, create, assume, incur or
permit to exist any Lien on the capital stock of Symetra Life or any Insurance Subsidiary to
secure any Indebtedness unless the Securities are secured equally and ratably with such
Indebtedness for at least the time period such Indebtedness is so secured.

Section 4.04. Limitation on Disposition of Stock.

     As long as any Securities are outstanding, the Company shall not, and it shall not permit
Symetra Life or any Insurance Subsidiary to issue, sell, transfer or otherwise dispose of any shares of Capital Stock of Symetra Life or any Insurance Subsidiary, or any securities convertible
into or exercisable or exchangeable for shares of Capital Stock of Symetra Life or any Insurance
Subsidiary, or warrants, rights or options to subscribe for or purchase shares of Capital Stock of
Symetra Life or any Insurance Subsidiary, unless such issuance, sale, transfer or other
disposition is for at least fair value (as determined by the Board of Directors acting in good
faith) (“Fair Value”) and the Company will own, directly or indirectly, at least 80% of the
Capital Stock of Symetra Life or any Insurance Subsidiary after giving effect to that transaction.
The foregoing covenant shall not prohibit any issuance or disposition of securities by any of our
Subsidiaries (other than Symetra Life or any Insurance Subsidiary) either (i) to the Company in

22

 

accordance with applicable law or (ii) if required by any regulation or order or any governmental
regulatory authority.

     The Company shall not permit Symetra Life or any Insurance Subsidiary to (a) merge or
consolidate with or into any corporation or other person, unless such merger or consolidation is
for at least Fair Value and (i) the surviving corporation or person is the Company, or (ii) at
least 80% of the surviving corporation’s issued and outstanding voting stock is owned, directly or
indirectly, by the Company; or (b) lease, sell, assign or
transfer all or substantially all of its
properties and assets to any corporation or other person (other than the Company), unless such
lease, sale, assignment or transfer is for at least Fair Value and at least 80% of the issued and
outstanding voting stock of that corporation or other person is owned, directly or indirectly, by
the Company.

     Notwithstanding anything to the contrary in this Section 4.04, the Company may (i) merge or
consolidate any of its Subsidiaries (including any Insurance Subsidiary) into or with another of
the Company’s wholly-owned Subsidiaries and (ii) sell, transfer or otherwise dispose of the
Company’s business in accordance with Article 5.

Section 4.05. Compliance Certificate.

     The Company shall deliver to the Fiscal Agent within 120 days after the end of each fiscal
year of the Company an Officers’ Certificate stating whether or not the signers know of any
Default by the Company in performing its covenants and obligations hereunder that occurred during
the fiscal year and is continuing. If they do know of such a Default, the Certificate shall
describe the nature and status of the Default. The Certificate need not comply with Section 11.03.

Section 4.06.
Certain Financial Information of the Company.

     The Company will furnish to the Fiscal Agent and the Holders of the Securities, (i) annually,
within 90 days of the year end date, audited Consolidated financial statements of the Company and
(ii) quarterly, within 45 days of the quarter end date, unaudited Consolidated balance sheet,
income statement and statement of cash flows of the Company. In addition, for so long as any of the
Securities remain outstanding, the Company has agreed to make available to any Holder of the
Securities or prospective purchaser of the Securities, at their request, the information required
by Rule 144A(d)(4) under the Securities Act if, at the time of such request the Company is not
subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act.

ARTICLE FIVE

Successor Company

Section 5.01. When the Company May Merge, etc.

     The Company may not consolidate with or merge into, or sell, convey, assign, transfer, lease
or otherwise dispose of all or substantially all of its properties or assets to another person or
entity, unless (a) (i) the Company is the continuing corporation, or (ii) the entity (if other
than the

23

 

Company) (the “Successor Company”) formed by the consolidation or into which the Company is
merged or the entity that acquires all or substantially all of the properties and assets of the
Company is a corporation, partnership or trust organized and validly existing under the laws of
United States, any State or the District of Columbia, and expressly assumes payment of the
principal of and any premium and interest on all the Securities and the performance of all of the
Company’s covenants applicable to the Indebtedness; (b) immediately thereafter, no Event of
Default (and no event that, after notice or lapse of time, or both, would become an Event of
Default) has occurred and is continuing; and (c) the Company has delivered to the Fiscal Agent
required certificates and opinions relating to the transaction.

     The predecessor Company shall be released from its obligations under this Agreement and the
Successor Company shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Agreement, but, in the case of a lease of all or substantially
all its assets, the predecessor Company shall not be released from the obligation to pay the
principal of and any premium and interest on the Securities.

ARTICLE SIX

Defaults and Remedies

Section 6.01. Events of Default.

An
“Event of Default’ occurs with respect to the Securities if:

     (1) the Company defaults in the payment of any installment of interest on any
Security when the same becomes due and payable and such Default continues for a period of
30 days;

     (2) the Company defaults in the payment of the principal of, or premium, if any, on,
any Security when the same becomes due and payable at maturity, upon redemption or
otherwise;

     (3) the Company defaults in the performance of, or fails to comply with any other
term, covenant or agreement in the Securities or this Agreement (other than those referred
to in (1) or (2) above) and the default continues for the period and after the notice
specified below in the last paragraph of this Section 6.01;

     (4) the Company defaults under any other series of debt securities or any agreements,
indentures or instruments under which the Company then has outstanding indebtedness in
excess of $25 million in the aggregate which indebtedness, if not already matured in
accordance with its terms, has been accelerated and the acceleration has not been rescinded
or annulled or the indebtedness has not been discharged within ten days after notice is
given to the Company by the trustee thereunder or to the Company and the trustee by the
holders of at least 25% in aggregate principal amount of outstanding debt securities of the
series, unless (a) prior to the entry of judgment in favor of the trustee thereunder, the
default under that indenture or instrument is remedied or cured by the Company or waived by
the holders of the indebtedness, or (b) the default results from an

24

 

action of the United States government or a foreign government which prevents the Company
from performing its obligations under the agreement, indenture or instrument;

(5) the Company pursuant to or within the meaning of any Bankruptcy Law:

          (a) commences a voluntary case;

          (b) consents to the entry of any order for relief from claims against it in an
involuntary case;

          (c)
consents to the appointment of a Custodian of it or for all or
substantially all of its property; or

          (d)
makes a general assignment for the benefit of its creditors;

(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:

          (a) is for relief against the Company in an involuntary case;

          (b) appoints a Custodian of the Company for all or substantially all of its
property; or

          (c) orders the liquidation of the Company;

and the order or decree remains unstayed and in effect for 90 days.

     The term “Bankruptcy Law” means Title 11, U.S. Code or any similar Federal or State law for
the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.

     A Default with respect to the Securities under clause (3) is not an Event of Default until
the Fiscal Agent notifies the Company or the Holders of at least 25% in principal amount of the
outstanding Securities notify the Fiscal Agent and the Company of the Default and the Company does
not cure the Default within 60 days after-receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a
“Notice of Default”.

Section 6.02.
Acceleration.

     If an Event of Default occurs and is continuing with respect to Securities, the Fiscal Agent
by notice to the Company, or the Holders of at least 25% in principal amount of outstanding
Securities by notice to the Company and the Fiscal Agent, may declare
that the principal of,
premium, if any, and accrued interest on the Securities shall be due and payable immediately,
except that such amount shall become due and payable automatically in the case of an Event of
Default described in clauses (5) and (6) of Section 6.01. Upon such declaration, such principal (or
specified amount), premium, if any, and accrued interest shall be due and payable immediately. The
Holders of a majority in principal amount of the outstanding Securities by notice to the Company
and the Fiscal Agent may rescind an acceleration and its consequences if

25

 

the rescission would not conflict with any judgment or decree and if all existing Events of
Default have been cured or waived except nonpayment of principal, interest or premium, if any,
that has become due solely because of the acceleration.

Section 6.03. Other Remedies.

     If an Event of Default with respect to Securities occurs and is continuing, the Fiscal Agent
may pursue any available remedy by proceeding at law or in equity to collect the payment of
principal of, interest or premium, if any, on, the Securities or to enforce the performance of
any provision of the Securities or this Agreement. If an Event of Default occurs and is
continuing, the Fiscal Agent must exercise such of its rights and powers under this Agreement,
and use the same degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.

     The Fiscal Agent may maintain a proceeding even if it does not possess any of the Securities
or does not produce any of them in the proceeding. A delay or omission by the Fiscal Agent or any
Securityholder in exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are cumulative.

Section 6.04.
Waiver of Past Defaults.

     Subject to Section 9.02, the Holders of a majority in principal amount of the outstanding
Securities on behalf of the Holders of the outstanding Securities by notice to the Fiscal Agent
may waive an existing past Default or Event of Default and its consequences but such waiver shall
not extend to any future Event of Default. When a Default or Event of Default is waived by the
Holders of Securities, it is cured and stops continuing.

Section 6.05. Control by Majority.

     The Holders of a majority in principal amount of the outstanding Securities may direct the
time, method and place of (1) conducting any proceeding for any remedy available to the Fiscal
Agent with respect to the Securities; or (2) exercising any trust or power conferred on the Fiscal
Agent with respect to the Securities. However, the Fiscal Agent may refuse to follow any direction
that conflicts with law or this Agreement, or, subject to Section 7.01, that the Fiscal Agent
determines would be unduly prejudicial to the rights of other Securityholders or that would
involve the Fiscal Agent in personal liability. The Fiscal Agent may require indemnity
satisfactory to it from the Holders requesting the Fiscal Agent to enforce this Agreement or the
Securities before doing so.

Section 6.06. Limitation on Suits.

     A Securityholder may pursue a remedy with respect to this Agreement or the Securities only
if:

     (1) the Holder gives to the Fiscal Agent written notice of a continuing Event of
Default;

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     (2) the Holders of at least 25% in principal amount of the outstanding Securities
make a written request to the Fiscal Agent to pursue the remedy;

     (3) such Holder or Holders offer to the Fiscal Agent indemnity satisfactory to the
Fiscal Agent against any loss, liability or expense;

     (4) the Fiscal Agent does not comply with the request within 60 days after receipt of
the request and the offer of indemnity; and

     (5) during such 60-day period the Holders of a majority in principal amount of the
outstanding Securities do not give the Fiscal Agent a direction inconsistent with the
request.

     A Holder of Securities may not use any provision of this Agreement to prejudice the rights
of another Holder of any Securities or to obtain a preference or priority over another Holder of
any Securities.

Section 6.07. Rights of Holders to Receive Payment.

     Notwithstanding any other provision of this Agreement, the right of any Holder of a Security
to receive payment of principal of, interest and premium, if any, on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected without the consent
of the Holder.

Section 6.08. Collection Suit by Fiscal Agent.

     If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Fiscal Agent may recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal, interest and any premium remaining unpaid on the
Securities.

Section 6.09.
Fiscal Agent May File Proofs of Claim.

     The Fiscal Agent may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to hâve the claims of the Fiscal Agent and the Holders of
Securities allowed in any judicial proceedings relative to the Company, its creditors or its
property.

Section 6.10. Priorities.

     If the Fiscal Agent collects any money or Cash Equivalents pursuant to this Article, it shall
pay out the money or Cash Equivalents in the following order:

     FIRST: to the Fiscal Agent and any predecessor fiscal agent of it for amounts due
under Section 7.05;

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     SECOND: to Holders of Securities for amounts due and unpaid on the Securities for
principal, interest and premium, if any, ratably without preference or priority of any
kind, according to the amounts due and payable on the Securities for principal, interest
and premium, if any, respectively; and

     THIRD: to the Company.

     The Fiscal Agent may fix a record date and payment date for any payment to Securityholders
pursuant to this Section 6.10.

Section 6.11.
Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Agreement or in any suit
against the Fiscal Agent for any action taken or omitted by it as Fiscal Agent, a court in its
discretion may require the filing by any party litigant in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This Section does not
apply to a suit by the Fiscal Agent, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 25% in principal amount of the Securities.

Section 6.12. Notice to Holders by Fiscal Agent.

     The Fiscal Agent shall, within 90 days after the occurrence of a Default known to it, give
Holders of the Securities notice of Default; however, the Fiscal Agent may withhold from Holders
of the Securities notice of any continuing Default (except a Default in the payment of principal,
interest or premium, if any) if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Holders of the Securities.

ARTICLE SEVEN

Fiscal Agent

Section 7.01. Duties of Fiscal Agent.

     The Fiscal Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees
and to all of which the rights
of Holders of Securities are subject:

     (1) In acting under this Agreement and in connection with the Securities, the Fiscal
Agent is acting solely as an agent of the Company and does not assume any responsibility
for the correctness of the recitals in the Securities (except for the correctness of the
statement of the Fiscal Agent in its certificate of authentication thereon) or any
obligation or relationship of agency, for or with any of the owners or Holders of the
Securities.

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     (2) The Fiscal Agent shall (except as ordered by a court of competent jurisdiction or
as required by any applicable law), notwithstanding any notice to the contrary, be entitled
to treat the Holder of any Security as the owner thereof as set forth in Section 2.13,
shall not be liable for so doing and shall be indemnified and held harmless by the Company
against any loss, liability, claim, demand or expense arising from or based upon it so
doing.

     (3) Except as may otherwise be agreed, the Fiscal Agent shall not be under any
liability for interest on monies at any time received by it pursuant to any of the
provisions of this Agreement or of the Securities.

     (4) The Fiscal Agent may consult with counsel of its selection, and the advice or
opinion of counsel with respect to legal matters relating to this Agreement and the
Securities shall be full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.

     (5) The Fiscal Agent shall not be charged with knowledge of any Default or Event of
Default with respect to the Securities, unless either (a) a Responsible Officer shall have
actual knowledge of such Default or Event of Default or (b) written notice of such Default
or Event of Default shall have been given to the Fiscal Agent by the Company or by any
Holder of the Securities and such notice references this Agreement and the Securities.

     (6) The permissive rights of the Fiscal Agent enumerated herein shall not be construed
as duties.

     (7) The duties and obligations of the Fiscal Agent shall be determined solely by the
express provisions of this Agreement and the Securities and the Fiscal Agent shall not be
liable except for the performance of such duties and obligations as are specifically set
forth in this Agreement and the Securities, and no implied covenants or obligations shall
be read into this Agreement or the Securities against the Fiscal Agent.

Section 7.02. Rights of Fiscal Agent.

     (1) The Fiscal Agent shall be protected and shall incur no liability for or in respect
of any action taken or thing suffered by it in reliance upon any Security, notice,
direction, consent, certificate, affedavit, statement, or other document to the extent that
such communication conforms to the provisions set forth herein, believed by it, in good
faith and without negligence, to be genuine and to have been passed or signed by the proper
parties.

     (2) Before the Fiscal Agent acts or refrains from acting, it may require an Officers’
Certificate or any Opinion of Counsel. The Fiscal Agent shall not be liable for any action
it takes or omits to take in good faith in reliance on the Certificate or Opinion.

     (3) The Fiscal Agent may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.

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     (4) The Fiscal Agent shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or powers.

Section 7.03. Individual Rights of Fiscal Agent.

     The Fiscal Agent 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 Fiscal Agent. Any Agent may do the same with like rights.

Section 7.04. Fiscal Agent’s Disclaimer.

     The Fiscal Agent makes no representation as to the validity or adequacy of this Agreement or
the Securities, it shall not be accountable for the Company’s use of the proceeds from the
Securities, and it shall not be responsible for any statement in the Securities other than its
certificate of authentication.

Section 7.05.
Compensation and Indemnity.

     The Company shall pay to the Fiscal Agent, from time to time, reasonable compensation for
its services under this Agreement. The Company shall reimburse the Fiscal Agent upon request for
all reasonable out-of-pocket expenses incurred by it in the performance of its duties under this
Agreement. Such expenses shall include the reasonable compensation and expenses of the Fiscal
Agent’s agents and counsel.

     Except as provided below in this paragraph, the Company shall indemnify the Fiscal Agent, any
predecessor fiscal agent of it and each director, officer, employee and agent of the Fiscal Agent
or predecessor fiscal agent against any loss, liability, cost, claim, action, demand or expense
(including reasonable fees and expenses of legal counsel) incurred by it in connection with its
appointment, or the performance of its duties hereunder, including all reasonable costs and
expenses in defending itself against any claim or liability in connection with the exercise or
performance of any of its powers and duties under this Agreement, or performance of any other
duties pursuant to the terms and conditions hereof, except such as
may result from the gross
negligence, bad faith or willful misconduct of any such Person. The Fiscal Agent shall notify the
Company promptly of any claim for which it may seek indemnity but failure to do so shall not
relieve the Company of its obligations under this Section 7.05. The Company need not pay for any
settlement made by the Fiscal Agent without the Company’s consent, which consent shall not be
unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss
or liability incurred by either the Fiscal Agent or any predecessor fiscal agent of it through its
own gross negligence, bad faith or willful misconduct. In respect of the Company’s payment
obligations in this Section 7.05, the Fiscal Agent shall have a senior claim to which the
Securities are hereby made subordinate on all money or property held or collected by the Fiscal
Agent as such and not in its individual capacity, except for money or property held in trust for
the benefit of the Holders to pay the principal of and interest and premium, if any, on particular
Securities. Notwithstanding anything contained in this Agreement to the contrary, the indemnity
agreement set forth in this paragraph shall survive the termination of this Agreement and the
resignation or removal of the Fiscal Agent.

30

 

Section 7.06. Replacement of Fiscal Agent.

     The Fiscal Agent may resign upon 30 days’ written notice to the Company. The Holders of a
majority in principal amount of the outstanding Securities may remove the Fiscal Agent by
notifying the removed Fiscal Agent and the Company. Those Holders may appoint a successor Fiscal
Agent with the Company’s consent. The Company may remove the Fiscal Agent without prior notice
if:

	 	(1)	 	the Fiscal Agent is adjudged a bankrupt or an insolvent;
	 
	 	(2)	 	a receiver or public officer takes charge of the Fiscal Agent or its property;
or
	 
	 	(3)	 	the Fiscal Agent becomes incapable of acting.

     If the Fiscal Agent resigns or is removed or if a vacancy exists in the office of Fiscal
Agent for any reason, the Company shall promptly appoint a successor Fiscal Agent. Within one
year after the successor Fiscal Agent takes office, the Holders of a majority in principal amount
of the Securities may appoint a successor Fiscal Agent to replace the successor Fiscal Agent
appointed by the Company.

     If a successor Fiscal Agent does not take office within 60 days after the retiring Fiscal
Agent resigns or is removed, the retiring Fiscal Agent, the Company or the Holders of a majority
in principal amount of the Securities may petition any court of competent jurisdiction for the
appointment of a successor Fiscal Agent.

     A successor Fiscal Agent shall deliver a written acceptance of its appointment to the
retiring Fiscal Agent and to the Company. Immediately after that, the retiring Fiscal Agent shall
transfer all property held by it as Fiscal Agent to the successor Fiscal Agent, the resignation or
removal of the retiring Fiscal Agent shall become effective, and the successor Fiscal Agent shall
hâve all the rights, powers and duties of the Fiscal Agent under this Agreement. A successor
Fiscal Agent shall mail notice of its succession to each Holder of Securities for which it acts as
Fiscal Agent.

     If at the time a successor to the Fiscal Agent succeeds to the trusts created by this
Agreement any of the Securities shall have been authenticated but not delivered, the successor to
the Fiscal Agent may adopt the certificate of authentication of any predecessor fiscal agent and
deliver the Securities so authenticated. If at that time any of the Securities shall not have been
authenticated, any successor to the Fiscal Agent may authenticate the Securities either in the name
of any predecessor fiscal agent hereunder or in the name of the successor fiscal agent. In all such
cases the certificate of authentication shall have the same force and effect which the provisions
of the Securities or this Agreement provided that certificates of authentication of the Fiscal
Agent shall have, except that the right to adopt the certificate of authentication of any
predecessor Fiscal Agent or to authenticate the Securities in the name of any predecessor Fiscal
Agent shall apply only to its successor or successors by merger, conversion or consolidation.

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Section 7.07. Successor Fiscal Agent by Merger, etc.

     If the Fiscal Agent consolidates, merges or converts into, or transfers all or substantially
all of its corporate trust assets to, another corporation, the successor corporation shall be the
successor Fiscal Agent, without any further act.

ARTICLE EIGHT

Defeasance and Discharge

Section 8.01. Option to Effect Covenant Defeasance.

                    The Company may, at the option of its Board of Directors evidenced by a Board Resolution set
forth in an Officers’ Certificate, at any time, elect to have Section 8.02 hereof be applied to
all outstanding Securities upon compliance with the conditions set forth below in this Article 8.

Section 8.02. Covenant Defeasance.

                    Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this
Section 8.02, and subject to the satisfaction of the conditions set forth in Section 8.03 hereof,
the Company shall be released from its obligations under the covenants contained in Sections 4.03,
4.04 and 4.05 and Article 5 on and after the date the conditions set forth below are satisfied
(hereinafter, “Covenant Defeasance”), and the Securities shall thereafter be deemed not
“outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but shall continue to be
deemed “outstanding” for all other purposes hereunder (it being understood that such Securities
shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Securities, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other provision herein or in
any other document and such omission to comply shall not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified above, the remainder of this Agreement
and such Securities shall be unaffected thereby.

Section 8.03. Conditions to Covenant Defeasance.

                    In order to exercise Covenant Defeasance, the Company must irrevocably deposit, or caused to
be deposited, with the Fiscal Agent (or another fiscal agent satisfying the requirements of this
Agreement), in trust for such purpose, (1) money in an amount, (2) U.S. Government Obligations that
through the payment of principal and interest in accordance with their terms will provide money in
an amount (“Cash Equivalents”), or (3) a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Fiscal Agent, to pay the principal of, premium, if any, and interest on,
the outstanding Securities at maturity or upon redemption, together with all other amounts payable
by the Company under this Agreement. Such Covenant Defeasance will become effective 91 days after
such deposit if and only if:

32

 

               (i) no Default or Event of Default with respect to the Securities has
occurred and is continuing immediately prior to the time of such deposit;

               (ii) no Default or Event of Default shall have occurred at any time in the
period ending on the 91st day after the date of such deposit and shall be
continuing on such 91st day;

               (iii)
such defeasance does not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the Company
is a party or by which it is bound (and, in furtherance of such condition, no
Default or Event of Default shall result under this Agreement due to the
incurrence of indebtedness to fund such deposit and the entering into of customary
documentation in connection therewith, even though such documentation may contain
provisions that would otherwise give rise to a Default or Event of Default); and

               (iv) the Company has delivered to the Fiscal Agent (A) an Opinion of Counsel
to the effect that the Holders of the Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amount, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had not
occurred; and (B) an Officers’ Certificate and an Opinion of Counsel, each stating
that all conditions precedent relating to such Covenant Defeasance have been
complied with.

Section 8.04. Discharge.

                    If (i) the Company shall deliver to the Fiscal Agent for cancellation all Securities
theretofore authenticated and delivered (other than any Securities which shall have been destroyed,
lost or stolen and in lieu of or in substitution for which other
Securities shall have been
authenticated and delivered) and not theretofore cancelled, or (ii) all Securities not theretofore
surrendered or delivered to the Fiscal Agent for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Fiscal Agent, and the Company shall
irrevocably deposit with the Fiscal Agent, as trust fonds solely for the benefit of the Holders for
that purpose, an amount sufficient to pay at maturity or upon redemption all of the Securities
(other than any Securities which shall have been destroyed, lost or stolen and in lieu of or in
substitution for which other Securities shall have been authenticated and delivered) not
theretofore surrendered or delivered to the Fiscal Agent for cancellation, including principal,
premium, if any, and interest due or to become due to such date of maturity or redemption date, as
the case may be, then this Agreement shall cease to be of further force or effect (except as to
rights of registration of transfer or exchange of the Securities provided in this Agreement) and,
at the written request of the Company, accompanied by an
Officers’ Certificate and Opinion of
Counsel, each stating that all conditions precedent provided for herein relating to the
satisfaction and discharge of this Agreement have been complied with, and upon payment of the
costs, charges and expenses incurred or to be incurred by the Fiscal Agent in relation thereto or
in carrying out the provisions of this Agreement, the Fiscal Agent shall satisfy and discharge this

33

 

Agreement (“Discharge”); provided that the Company’s obligations with respect to the payment of
principal, premium, if any, and interest will not terminate until the same shall apply the moneys
so deposited to the payment to the Holders of Securities of all sums due and to become due
thereon.

Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions.

                    Subject to Section 8.06 hereof, all money and Cash Equivalents (including the proceeds
thereof) deposited with the Fiscal Agent (or other qualifying fiscal agent, collectively for
purposes of this Section 8.05, the “Fiscal Agent”) pursuant to Section 8.02 hereof in respect of
the outstanding Securities shall be held in trust and applied by the Fiscal Agent, in accordance
with the provisions of such Securities and this Agreement, to the payment, either directly or
through the Paying Agent as the Fiscal Agent may determine, to the Holders of such Securities of
all sums due and to become due thereon in respect of principal, premium, if any, and interest but
such money and Cash Equivalents need not be segregated from other funds except to the extent
required by law.

                    The Company shall pay and indemnify the Fiscal Agent against any tax, fee or other charge
imposed on or assessed against the money or Cash Equivalents deposited pursuant to this Section
8.05 or the principal and interest received in respect thereof other than any such tax, fee or
other charge which by law is for the account of the Holders of the outstanding Securities.

                    Anything in this Article 8 to the contrary notwithstanding, the Fiscal Agent shall deliver or
pay to the Company from time to time upon the request of the Company any money or Cash Equivalents
held by it as provided in this Section 8.05 which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof delivered to the
Fiscal Agent (which may be the opinion delivered under Section 8.03 hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an equivalent Covenant
Defeasance or Discharge.

Section 8.06. Repayment to Company.

                    Any money and Cash Equivalents deposited with the Fiscal Agent or any Paying Agent, or then
held by the Company or any of its Subsidiaries, in trust for the payment of the principal of, or
premium, if any, or interest on, any Security and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid to the Company on
its request or (if then held by the Company or any of its Subsidiaries) shall 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 Fiscal Agent or such Paying
Agent with respect to such trust money and Cash Equivalents, and all liability of the Company or
any of its Subsidiaries or Affiliates as fiscal agent thereof, shall thereupon cease; provided,
however, that the Fiscal Agent 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 the New York Times, The
Wall Street Journal (national edition) and such foreign publication as may be required by
applicable law, notice that such money and Cash Equivalents

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remains
unclaimed and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such money and Cash
Equivalents then remaining will be repaid to the Company.

Section 8.07. Reinstatement

                    If the Fiscal Agent or Paying Agent is unable to apply any United States dollars or Cash
Equivalents in accordance with Section 8.02 or 8.04 hereof, as the case may be, 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 Agreement and the
Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.04 hereof until such time as the Fiscal Agent or Paying Agent is permitted to apply all
such assets in accordance with Section 8.02 or 8.04 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, or 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 such Securities to receive such payment from the money and Cash
Equivalents held by the Fiscal Agent or Paying Agent.

ARTICLE NINE

Amendments, Supplements and Waivers

Section 9.01. Without Consent of Holders.

     The Company and the Fiscal Agent may amend or supplement this Agreement or the Securities
without notice to or consent of any Securityholder:

     (1)
to cure any ambiguity, omission, defect or inconsistency or to make other formal
changes;

     (2) to comply with Article Four or Five;

     (3) to provide for uncertificated Securities in addition to or in place of
certificated Securities;

     (4) to add to the covenants of the Company or to add any additional Events of Default
for the benefit of all the Securities;

     (5) to add to or change any of the provisions of this Agreement to such extent as
shall be necessary to permit or facilitate the issuance of Securities in (i) bearer form,
registrable or not registrable as to principal, and/or (ii) coupon form, registrable or
not registrable as to principal, and to provide for exchangeability of such Securities
with Securities issued hereunder in fully registered form;

35

 

               (6) to add to or change any provisions of this Agreement as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more than one
Fiscal Agent;

               (7) to issue Additional Securities pursuant to Section 2.15; or

               (8) to make any change that does not adversely affect the rights of any
Securityholder;

but none of such changes shall adversely affect the rights of any Securityholder.

Section 9.02.
With Consent of Holders.

     The Company and the Fiscal Agent may amend this Agreement or the Securities with the written
consent of the Holders of at least a majority in principal amount of the outstanding Securities
affected by such supplement or amendment. The Holders of a majority in principal amount of the
outstanding Securities may waive compliance by the Company in a particular instance with any
provision of this Agreement or the Securities without notice to any Holder of Securities. Without
the consent of each Securityholder affected, however, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:

               (1) change the stated maturity of the principal of, or any installment of principal
of or interest on, the Securities;

               (2) reduce the principal amount of (or premium, if any) or any interest on the
Securities;

               (3) change the place of payment on any Security;

               (4) impair the right to institute suit for the enforcement of any payment on or with
respect to the Securities on or after its stated maturity (or, in the case of redemption,
on or after the Redemption Date); or

               (5) reduce the percentage in principal amount of outstanding Securities of any
series, the consent of the Holders of which is required for modification or amendment of
this Agreement or for waiver of compliance with certain provisions of this Agreement or
for waiver of certain defaults.

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

Section 9.03.
Revocation and Effect of Consents.

     A consent to an amendment, supplement or waiver by a Holder of a Security is a continuing
consent, irrevocable for a period of nine months from the date given or, if earlier, until the
amendment, supplement or waiver becomes effective, both as to the Holder giving such consent and
as to every subsequent Holder of a Security or a portion of a Security that evidences

36

 

the same debt as the consenting Holder’s Security, even if notation of the consent is not made on
each Security. An amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Securityholder.

Section 9.04. Notation on or Exchange of Securities.

     If an amendment, supplement or waiver changes the term of a Security, the Fiscal Agent may
require the Holder of the Security to deliver it to the Fiscal Agent. The Fiscal Agent may place
an appropriate notation on the Security about an amendment,
supplement or waiver and return it to
the Holder. Alternatively, the Company in exchange for Securities may issue and the Fiscal Agent
shall authenticate new Securities that reflect an amendment, supplement or waiver.

Section 9.05. Fiscal Agent to Sign Amendments, etc.

     The Fiscal Agent need not sign any supplement or amendment to this Agreement that adversely
affects its rights. In signing any amendment, supplement or waiver, the Fiscal Agent shall be
entitled to receive, and (subject to Section 7.02) shall be fully protected in relying upon an
Officers’ Certificate and Opinion of Counsel stating that such amendment, supplement or waiver is
not prohibited by the Agreement.

ARTICLE TEN

Miscellaneous

Section 10.01. Notices.

     Any
notice or communication shall be in writing and delivered in person or mailed by
first-class mail to the other’s address as follows:

	 	 	 
	If to the Company:

	 	Symetra Financial Corporation
	 

	 	Symetra Financial Center
	 

	 	P.O. Box 34690
	 

	 	Seattle, Washington 98124-1690
	 

	 	Attn: General Counsel
	 
	 	 
	With a copy to:

	 	Orrick Herrington & Sutcliffe LLP
	 

	 	719 Second Avenue, Suite 900
	 

	 	Seattle, Washington 98104
	 

	 	Attn: Stephen M. Graham
	 
	 	 
	If to the Fiscal Agent:

	 	U.S. Bank National Association
	 

	 	Corporate Trust Services
	 

	 	CN-OH-W6CT
 425 Walnut Street
	 

	 	Cincinnati, Ohio 45202
	 

	 	Attn: William E. Sicking

37

 

     The Company or the Fiscal Agent by notice to the other may designate additional or different
addresses for subsequent notices or communications.

     Any
notice or communication mailed to a Holder of a Security shall be mailed by first class
mail to his or her address shown on the register kept by the
Registrar. Failure to mail a notice
or communication to a Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders.

     If
a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.

     In
case, by reason of the suspension of regular mail service, or by reason of any other
cause, it shall be impossible to mail any notice as required by this Agreement, then such method
of notification as shall be made with the approval of the Fiscal Agent shall constitute a
sufficient mailing of such notice.

Section 10.02. Certificate and Opinion as to Conditions Precedent.

     Upon any request or application by the Company to the Fiscal Agent to take any action under
this Agreement, the Company shall furnish to the Fiscal Agent:

     (1) an Officers’ Certificate stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Agreement relating to the proposed
action hâve been complied with; and

     (2) an Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent hâve been complied with.

Section 10.03. Statements Required in Certificate or Opinion.

     Each Certificate or Opinion with respect to compliance with a condition or covenant provided
for in this Agreement shall include:

     (1) a statement that the person making such Certificate or Opinion has read such
covenant or condition;

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

     (3) a statement that, in the opinion of such person, 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 covenant or condition has been complied with; and

     (4) a statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.

38

 

Section 10.04. Rules by Fiscal Agent, Paying Agent, Registrar.

     The Fiscal Agent may make reasonable rules for action by or a meeting of Securityholders. The
Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its
functions.

Section 10.05. Governing Law.

     THIS
AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

Section 10.06. No Recourse Against Others.

     All liability described in the Securities of any director, officer, employee or stockholder,
as such, of the Company is waived and released.

Section 10.07. Successors.

     All agreements of the Company in this Agreement and the Securities shall bind its successor.
All agreements of the Fiscal Agent in this Agreement shall bind its successor.

Section 10.08. Execution in Counterparts.

     The parties may sign this Agreement in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the same agreement.

39

 

SIGNATURES

	 	 	 	 	 
	 	 	SYMETRA FINANCIAL CORPORATION
	 
	 	 	 	 
	 

	 	By
	 	/s/ Margaret A. Meister
	 

	 	 	 	 
	 

	 	 	 	Name: Margaret A. Meister

Title: Executive Vice President and

           Chief Financial Officer
	 
	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION
	 
	 	 	 	 
	 

	 	By
	 	/s/ William E. Sicking
	 

	 	 	 	 
	 

	 	 	 	Name: William E. Sicking

Title: Vice President and Trust Officer

FISCAL AGENCY AGREEMENT

 

EXHIBIT A

[FORM OF FACE OF NOTE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT 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.

THIS GLOBAL NOTE IS HELD BY THE DEPOSlTARY (AS DEFINED IN THE FISCAL AGENCY AGREEMENT GOVERNING
THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE FISCAL AGENT MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06(b)(ii) AND SECTION 2.06(e) OF THE
FISCAL AGENCY AGREEMENT, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT
TO SECTION 2.06(a) OF THE FISCAL AGENCY AGREEMENT, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
FISCAL AGENT FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE FISCAL AGENCY AGREEMENT AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR OTHER SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES
ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) AGREES THAT IT WILL NOT PRIOR TO
(X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RLTLE 144(k) UNDER
THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE “RESALE
RESTRICTION TERMINATION DATE”), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
ISSUER OR ONE OF ITS AFFILIATES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR

A-1

 

RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL
BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (2) AGREES THAT IT WILL GIVE TO EACH PERSON TO
WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT
THE ISSUER, THE FISCAL AGENT AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE FISCAL AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE
RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS “UNITED STATES” AND “U.S. PERSON” HAVE THE
MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.1

 

			
	1.	 	(Only to be printed on Global Securities)

A-2

 

CUSIP: [ 144A: 87151 Q AA 4]

[REG. S: U79664 AA 3]

ISIN: [144A: US87151QAA40

[REG S: USU79664AA36]

			
	 	 	 
	No.
	 	$300,000,000

6.125% Senior Notes due 2016

SYMETRA FINANCIAL CORPORATION, a Delaware corporation promises to pay to 
Cede & Co.,
or registered assigns, the principal sum of $300,000,000 on April 1, 2016.

Interest Payment Dates: April 1 and October 1

Record Dates: March 15 and September 15

A-3

 

     Additional provisions of this Security are set forth on the other side of this Security.

Dated: March 30, 2006

	 	 	 	 	 
	 	SYMETRA FINANCIAL CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

FISCAL AGENT’S CERTIFICATE OF
AUTHENTICATION

Dated: March 30, 2006

	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION

as Fiscal Agent, certifies that this is one

of the Securities referred to in the Fiscal

Agency Agreement.

 	 	 
	by  	 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 
	 

A-4

 

[FORM OF REVERSE SIDE OF NOTE]

6.125% Senior Notes due 2016

     Capitalized terms used herein but not defined shall have the meanings assigned to them
in the Fiscal Agency Agreement referred to below unless otherwise indicated.

     1. Interest. The Company promises to pay interest on the principal amount of this
Security from March 30, 2006 until maturity. The Company will pay interest semi-annually on
April 1 and October 1 of each year (each an “Interest Payment Date”), commencing October 2,
2006, or if any such day is not a Business Day, on the next succeeding Business Day, which
payment shall be deemed made on such Interest Payment Date. Interest on the Securities will
accrue at the rate of 6.125% per annum from the most recent date to which interest has been
paid or, if no interest has been paid, from March 30, 2006, or as otherwise specified
therein. The Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law to the extent that such interest is an allowed claim enforceable
against the debtor under such Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at the rate equal to the rate then in effect; it shall pay
interest (including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace periods) from time
to time on demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

     2. Method of Payment. The Company shall pay the principal of, and premium and
interest on, the Securities on the dates and in the manner provided herein and in the
Fiscal Agency Agreement. Principal of, and premium and interest on, Global Securities will
be payable by the Company through the Fiscal Agent to the Depositary in immediately
available funds. At the Company’s option, payment of interest may be made by check in
immediately available funds mailed to such Holder on the applicable Interest Payment Date
at the address set forth upon the Register maintained by the Registrar; provided that all
payments with respect to Global Securities and Definitive Securities the holders of whom
have given wire transfer instructions to the Company will be required to be made by wire
transfer of same day funds to the accounts in the United States specified by the holders
thereof.

     3. Paying Agent and Registrar. Initially, U.S. Bank National Association, the Fiscal
Agent under the Fiscal Agency Agreement, will act as Paying Agent and Registrar. The
Company may change any Paying Agent
or Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity, except that none of the Company, its Subsidiaries or their
Affiliates shall act as Paying Agent or Registrar if a Default or Event of Default has
occurred and is continuing.

     4. Fiscal Agency Agreement.

     The Company issued the Securities under a Fiscal Agency Agreement, dated as of March
30, 2006, (as may be further amended, supplemented or restated from time to time, the
“Fiscal Agency Agreement”), among the Company and the Fiscal Agent. The terms of the
Securities include those stated in the Fiscal Agency Agreement. The Securities are
subject to all such

A-5

 

terms, and Holders are referred to the Fiscal Agency Agreement for a statement of such terms. The
Securities are general unsecured obligations of the Company.

     5. Optional Redemption. The Securities shall be subject to redemption at the option of
the Company, in whole or in part, at any time or from time to time, prior to maturity at
the Company’s option, at a redemption price equal to the greater of: (i) 100% of the
principal amount of the Securities to be redeemed, or (ii) as determined by the Quotation
Agent (as defined in the Fiscal Agency Agreement), the sum of the present values of the
remaining scheduled payments of principal and interest on the Securities to be redeemed
(not including any payments of interest accrued as of the date fixed for redemption (the
“Redemption Date”) discounted to such Redemption Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the
Fiscal Agency Agreement), plus 25 basis points, plus, in each case, accrued and unpaid
interest on the Securities to be redeemed to the Redemption Date.

     6. Denominations, Transfer, Exchange. The Securities are in registered form without
coupons in minimum denominations of $2,000 and integral multiples of $1,000. The transfer
of Securities may be registered and Securities may be exchanged as provided in the Fiscal
Agency Agreement. The Registrar and the Fiscal Agent may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the Fiscal
Agency Agreement. The Company need not exchange or register the transfer of any Security
or portion of a Security selected for redemption, except for the unredeemed portion of any
Security being redeemed in part. Also, it need not exchange or register the transfer of
any Securities for a period of 15 days before a selection of Securities to be redeemed or
during the period between a record date and the corresponding Interest Payment Date.

     7. Persons Deemed Owners. The registered Holder of a Security may be treated as its
owner for all purposes.

     8. Unclaimed Money. If money for the payment of principal, premium or interest
remains unclaimed for two years after such principal, premium or interest has become due
and payable, the Fiscal Agent and the Paying Agent will pay the money back to the Company
at its request. After that, all liability of the Fiscal Agent and such Paying Agent with
respect to such money shall cease.

     9. Defeasance Prior to Redemption or Maturity. Subject to certain conditions contained in the
Fiscal Agency Agreement, the Company at any time may terminate some or all of its obligations
under the Securities and the Fiscal Agency Agreement if the Company deposits with the Fiscal Agent
money or Cash Equivalents sufficient to pay the principal of, and premium and interest on, the
Securities to redemption or maturity, as the case may be.

     10. Amendment, Supplement and Waiver. Subject to certain exceptions, the Fiscal Agency
Agreement and the Securities may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Securities then outstanding, and any existing
Default or Event of Default or compliance with any provision of the Fiscal Agency Agreement or
the Securities may be waived with the consent of the Holders of a majority in

A-6

 

principal amount of the then outstanding Securities. Without notice to or the consent of any Holder
of a Security, the Fiscal Agency Agreement or the Securities may be amended or supplemented to cure
any ambiguity, omission, defect or inconsistency, to comply with the covenants contained in the
Fiscal Agency Agreement, to provide for uncertificated Securities in addition to or in place of
certificated Securities, to add to the covenants of the Company or to add any additional Events of
Default for the benefit of all the Securities, to add to or change any of the provisions of the
Fiscal Agency Agreement to such extent as shall be necessary to permit or facilitate the issuance
of Securities in bearer form, registrable or not registrable as to principal, and/or coupon form,
registrable or not registrable as to principal, and to provide for exchangeability of such
Securities with Securities issued hereunder in fully registered form, to add to or change any
provisions of the Fiscal Agency Agreement as shall be necessary to provide for or facilitate the
administration of the trusts thereunder by more than one Fiscal Agent, to issue Additional
Securities pursuant to the Fiscal Agency Agreement, or to make any change that does not adversely
affect the rights of any Holder of the Securities; provided that none of such changes shall
adversely affect the rights of any Holder of the Securities.

     11. Defaults and Remedies. An Event of Default occurs if: (i) the Company defaults in
the payment of any installment of interest on any
Security when the same becomes due and payable and the Default continues for a period
of 30 days, (ii) the Company defaults in the payment of the principal of, or premium, if
any, on, any Security when the same becomes due and payable at maturity, upon redemption
or otherwise, (iii) the Company defaults in the performance of, or fails to comply with
any of its other agreements in the Securities or the Fiscal Agency Agreement (other than
those referred to in (i) or (ii) above) and the default continues for 60 days after notice
by the Fiscal Agent or Holders of at least 25% in principal amount of Securities
outstanding, (iv) the Company defaults under any other series of debt securities or any
agreements, indentures or instruments under which the Company then has outstanding
indebtedness in excess of $25 million in the aggregate which indebtedness, if not already
matured in accordance with its terms, has been accelerated and the acceleration has not
been rescinded or annulled or the indebtedness has not been discharged within ten days
after notice is given to the Company by the Fiscal Agent or to the Company and the Fiscal
Agent by the holders of at least 25% in aggregate principal amount of outstanding debt
securities of the series, unless (a) prior to the entry of judgment in favor of the Fiscal
Agent, the default under that indenture or instrument is remedied or cured by the Company
or waived by the holders of the indebtedness, or (b) the default results from an action of
the United States government or a foreign government which prevents the Company from
performing its obligations under the agreement, indenture or instrument, (v) the Company
pursuant to or within the meaning of any Bankruptcy Law: commences a voluntary case,
consents to the entry of any order for relief from claims against it in an involuntary
case, consents to the appointment of a Custodian of it or for all or substantially all of
its property, or makes a general assignment for the benefit of its creditors or (vi) a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:
is for relief against the Company in an involuntary case, appoints a Custodian of the
Company or for all or substantially all of its property, or orders the liquidation of the
Company and the order or decree remains unstayed and in effect for 90 days.

     12. Fiscal Agent’s Dealings with Company. The Fiscal Agent, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services for the
Company

A-7

 

or Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Fiscal Agent.

     13. No Recourse Against Others. No past, present or future director, officer,
employee, agent, manager, incorporator, stockholder or other Affiliate of the Company shall
have any liability for any obligations of the Company under any of the Securities or the
Fiscal Agency Agreement or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the issuance of
the Securities.

     14. Authentication. This Security shall not be valid until authenticated by the
manual signature of the Fiscal Agent or an authenticating agent.

     15. Abbreviations. Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

     16. CUSIP Numbers. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and-the Fiscal Agent may use CUSIP numbers in notices of
redemption and purchase as a convenience to Holders. 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 purchase and reliance may be placed only on the other
identification numbers placed thereon. Any such redemption or purchase shall not be
affected by any defect or omission in such numbers.

     17. Governing Law. THE FISCAL AGENCY AGREEMENT AND THIS
SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

     18. Successor Corporation. In the event a successor corporation assumes all the
obligations of the Company under the Securities and the Fiscal Agency Agreement, pursuant
to the terms thereof, the Company will be released from all such obligations.

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

	 	Attention of: 	 	 Symetra Financial Corporation

PO Box 34690

Seattle, WA 98124-1690 

Attn: General Counsel

A-8

 

Assignment Form

     To assign this Security, fill in the form below:

(I) or (we) assign and transfer this Security to:

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

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

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

Date:                     

	 	 	 	 	 	 
	 

	 	Your Signature:
	 	 
	 

	 	 	 	 	 
	 	 	(Sign exactly as your name appears on the face of this Security)

Signature Guarantee* :                     

 

			
	*	 	Participant in a recognized Signature Guarantee Medallion Program (or other signature
guarantor acceptable to the Fiscal Agent).

A-9

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY*

     The following exchanges of a part of this Global Security for an interest
in another Global Security, or exchanges of a part of another Global Security for an
interest in this Global Security, have been made:

	 	 	 	 	 	 	 	 	 
	Date of 

Exchange
	 	Amount of

decrease in

Principal Amount

of this Global

Security
	 	Amount of

increase in

Principal Amount

of this Global

Security
	 	Principal Amount

of this Global

Security

following such

decrease

(or increase)
	 	Signature of

authorized

signatory of

Fiscal Agent or

Security

Custodian
	 
	 	 
	 	 
	 	 
	 	 

A-10

 

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

Symetra Financial Corporation

P.O. Box 34690

Seattle, WA 98124-1690

Attn: General Counsel

U.S. Bank National Association

Corporate Trust Services

CN-OH-W6CT

425 Walnut Street

Cincinnati, Ohio 45202 

Attn: William E. Sicking

	Re: 	 	6.125% Senior Notes due 2016

          Reference is hereby made to the Fiscal Agency Agreement, dated as of March
30, 2006 (the “Fiscal Agency Agreement”), between Symetra Financial Corporation,
a Delaware corporation (the “Company”) and U.S. Bank National Association, as
fiscal agent (the “Fiscal Agent). Capitalized terms used but not defined herein
shall have the meanings given to them in the Fiscal Agency Agreement.

                                                  , (the “Transferor”) owns and proposes to transfer
the Security[ies] or interest in such
Security[ies] specified in Annex A hereto, in the
principal amount of $                      in such Security[ies] or
interests (the “Transfer”), to                                          (the “Transferee”), as
further specified in Annex A hereto. In connection with
the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

     1. o Check if Transferee will take delivery of a beneficial interest in the 144A
Global Security. The Transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the “Securities Act”),
and, accordingly, the Transferor hereby further certifies that the beneficial interest
is being transferred to a Person that the Transferor reasonably believed and believes is
purchasing the beneficial interest for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and such Person and
each such account is a “qualified institutional buyer” within the meaning of Rule 144A
in a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the United
States. Upon consummation of the proposed Transfer in accordance with the terms of the
Fiscal Agency Agreement, the transferred beneficial interest will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on the 144A
Global Security and in the Fiscal Agency Agreement and the Securities Act.

     2. o Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Security. The Transfer is being effected pursuant to and in
accordance

B-1

 

with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United States and (x) at the
time the buy order was originated, the Transferee was outside the United States or such Transferor
and any Person acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person acting on its
behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act and (iv) if the proposed
transfer is being made prior to the expiration of the Distribution Compliance Period, the transfer
is not being made to a U.S. Person or for the account or benefit of a U.S. Person. Upon
consummation of the proposed transfer in accordance with the terms of the Fiscal Agency Agreement,
the transferred beneficial interest will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Security and in the Fiscal Agency
Agreement and the Securities Act.

     3. o Check and complete if Transferee will take delivery of a beneficial
interest pursuant to any provision of the Securities Act other than Rule 144A or
Regulation S. The Transfer is being effected in compliance with the transfer
restrictions applicable to beneficial interests in Global Securities and pursuant to and
in accordance with the Securities Act and any applicable blue sky securities laws of any
state of the United States, and accordingly the Transferor hereby further certifies that
(check one):

          (a) o such Transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;

or

          (b) o such Transfer is being effected to the Company or a subsidiary
thereof;

or

          (c) o such Transfer is being effected pursuant to an effective registration
statement under the Securities Act and in compliance with the prospectus delivery
requirements of the Securities Act.

     This certificate and the statements contained herein are made for your benefit and
the benefit of the Company.

	 	 	 	 	 
	 	[Insert Name of Transferor]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-2

 

	 	 	 	 	 

ANNEX A TO CERTIFICATE OF TRANSFER

	1.	 	The Transferor owns and proposes to transfer the following:

[CHECK ONE]

	 	o 	 	a beneficial interest in the:

	 	o	 	144A Global Security (CUSIP _______________), or
	 
	 	o	 	Regulation S Global Security (CUSIP  _______________), or
	 
	 	o	 	Temporary Regulation S Global Security (CUSIP _______________).

	2.	 	After the Transfer the Transferee will hold:

[CHECK ONE]

	 	o 	 	a beneficial interest in the:

	 	o	 	144A Global Security (CUSIP _______________), or
	 
	 	o	 	Regulation S Global Security (CUSIP _______________), or
	 
	 	o	 	Temporary Regulation S Global Security (CUSIP _______________).

	 	o	 	a Definitive Security

in accordance with the terms of the Fiscal Agency Agreement

B-3

 

EXHIBIT C

[FORM OF CERTIFICATE TO BE DELIVERED UPON

TERMINATION OF RESTRICTED PERIOD]

[Date]

Symetra Financial Corporation

P.O. Box 34690 
Seattle, WA
98124-1690

Attn: General Counsel

U.S. Bank National Association

Corporate Trust Services

CN-OH-W6CT

425 Walnut Street

Cincinnati, Ohio 45202 
Attn:
William E. Sicking

Re: 6.125% Senior Notes due 2016

Ladies and Gentlemen:

          Reference is hereby made to the Fiscal Agency Agreement, dated as of March
30, 2006 (the “Fiscal Agency Agreement”), between Symetra Financial Corporation,
a Delaware corporation (the “Company”) and U.S. Bank National Association, as
fiscal agent (the “Fiscal Agent). Capitalized terms used but not defined herein
shall have the meanings given to them in the Fiscal Agency Agreement.

          This letter relates to Securities represented by a temporary global security
(the “Temporary Regulation S Global Security”). Pursuant to Section 2.1 of the Fiscal
Agency Agreement, we hereby certify that the persons who are the beneficial
owners of $ [                    ] principal amount of Securities represented by the Temporary
Regulation S Global Security are persons outside the United States to whom
beneficial interests in such Securities could be transferred in accordance with
Rule 904 of Regulation S promulgated under the Securities Act of 1933, as amended.
Accordingly, you are hereby requested to issue a Regulation S Global Security
representing the undersigned’s interest in the principal amount of Securities
represented by the Temporary Regulation S Global Security, all in the manner
provided by the Fiscal Agency Agreement.

C-1

 

          You and the Company are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered hereby. Terms used in this
letter have the meanings set forth in Regulation S.

	 	 	 	 	 
	 	[Insert Name of Transferor]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

C-2

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