Document:

Exhibit 4.7

 

 

 

WASTE CONNECTIONS, INC.

 

 

 

INDENTURE

 

Dated as of ___________, 20___

 

 

 

[_________]

 

Trustee

 

 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE	1
	Section 1.1.	Definitions.	1
	Section 1.2.	Other Definitions.	5
	Section 1.3.	Incorporation by Reference of Trust Indenture Act.	5
	Section 1.4.	Rules of Construction.	5
	 	 	 
	ARTICLE II. THE SECURITIES	6
	Section 2.1.	Issuable in Series.	6
	Section 2.2.	Establishment of Terms of Series of Securities.	6
	Section 2.3.	Execution and Authentication.	8
	Section 2.4.	Registrar, Notice Agent and Paying Agent.	9
	Section 2.5.	Paying Agent to Hold Money in Trust.	10
	Section 2.6.	Securityholder Lists.	10
	Section 2.7.	Transfer and Exchange.	11
	Section 2.8.	Mutilated, Destroyed, Lost and Stolen Securities.	11
	Section 2.9.	Outstanding Securities.	12
	Section 2.10.	Treasury Securities.	12
	Section 2.11.	Temporary Securities.	13
	Section 2.12.	Cancellation.	13
	Section 2.13.	Defaulted Interest.	13
	Section 2.14.	Global Securities.	13
	Section 2.15.	CUSIP Numbers.	14
	 	 	 
	ARTICLE III. REDEMPTION	15
	Section 3.1.	Notice to Trustee.	15
	Section 3.2.	Selection of Securities to be Redeemed.	15
	Section 3.3.	Notice of Redemption.	15
	Section 3.4.	Effect of Notice of Redemption.	16
	Section 3.5.	Deposit of Redemption Price.	16
	Section 3.6.	Securities Redeemed in Part.	16
	 	 	 
	ARTICLE IV. COVENANTS	17
	Section 4.1.	Payment of Principal and Interest.	17
	Section 4.2.	SEC Reports.	17
	Section 4.3.	Compliance Certificate.	17
	Section 4.4.	Stay, Extension and Usury Laws.	18
	Section 4.5.	Corporate Existence.	18
	 	 	 
	ARTICLE V. SUCCESSORS	18
	Section 5.1.	When Company May Merge, Etc.	18
	Section 5.2.	Successor Corporation Substituted.	19

 

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	ARTICLE VI. DEFAULTS AND REMEDIES	19
	Section 6.1.	Events of Default.	19
	Section 6.2.	Acceleration of Maturity; Rescission and Annulment.	20
	Section 6.3.	Collection of Indebtedness and Suits for Enforcement by Trustee.	21
	Section 6.4.	Trustee May File Proofs of Claim.	22
	Section 6.5.	Trustee May Enforce Claims Without Possession of Securities.	22
	Section 6.6.	Application of Money Collected.	23
	Section 6.7.	Limitation on Suits.	23
	Section 6.8.	Unconditional Right of Holders to Receive Principal and Interest.	24
	Section 6.9.	Restoration of Rights and Remedies.	24
	Section 6.10.	Rights and Remedies Cumulative.	24
	Section 6.11.	Delay or Omission Not Waiver.	24
	Section 6.12.	Control by Holders.	24
	Section 6.13.	Waiver of Past Defaults.	25
	Section 6.14.	Undertaking for Costs.	25
	 	 	 
	ARTICLE VII. TRUSTEE	26
	Section 7.1.	Duties of Trustee.	26
	Section 7.2.	Rights of Trustee.	27
	Section 7.3.	Individual Rights of Trustee.	28
	Section 7.4.	Trustee’s Disclaimer.	28
	Section 7.5.	Notice of Defaults.	28
	Section 7.6.	Reports by Trustee to Holders.	29
	Section 7.7.	Compensation and Indemnity.	29
	Section 7.8.	Replacement of Trustee.	30
	Section 7.9.	Successor Trustee by Merger, Etc.	31
	Section 7.10.	Eligibility; Disqualification.	31
	Section 7.11.	Preferential Collection of Claims Against Company.	31
	 	 	 
	ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE	31
	Section 8.1.	Satisfaction and Discharge of Indenture.	31
	Section 8.2.	Application of Trust Funds; Indemnification.	32
	Section 8.3.	Legal Defeasance of Securities of any Series.	33
	Section 8.4.	Covenant Defeasance.	34
	Section 8.5.	Repayment to Company.	35
	Section 8.6.	Reinstatement.	36
	 	 	 
	ARTICLE IX. AMENDMENTS AND WAIVERS	36
	Section 9.1.	Without Consent of Holders.	36
	Section 9.2.	With Consent of Holders.	36
	Section 9.3.	Limitations.	37
	Section 9.4.	Compliance with Trust Indenture Act.	37
	Section 9.5.	Revocation and Effect of Consents.	38
	Section 9.6.	Notation on or Exchange of Securities.	38
	Section 9.7.	Trustee Protected.	38

 

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	ARTICLE X. MISCELLANEOUS	38
	Section 10.1.	Trust Indenture Act Controls.	38
	Section 10.2.	Notices.	38
	Section 10.3.	Communication by Holders with Other Holders.	40
	Section 10.4.	Certificate and Opinion as to Conditions Precedent.	40
	Section 10.5.	Statements Required in Certificate or Opinion.	40
	Section 10.6.	Rules by Trustee and Agents.	40
	Section 10.7.	Legal Holidays.	41
	Section 10.8.	No Recourse Against Others.	41
	Section 10.9.	Counterparts.	41
	Section 10.10.	Governing Laws.	41
	Section 10.11.	No Adverse Interpretation of Other Agreements.	41
	Section 10.12.	Successors.	41
	Section 10.13.	Severability.	41
	Section 10.14.	Table of Contents, Headings, Etc.	42
	Section 10.15.	Securities in a Foreign Currency.	42
	Section 10.16.	Judgment Currency.	42
	Section 10.17.	Force Majeure.	43
	 	 	 
	ARTICLE XI. SINKING FUNDS	43
	Section 11.1.	Applicability of Article.	43
	Section 11.2.	Satisfaction of Sinking Fund Payments with Securities.	44
	Section 11.3.	Redemption of Securities for Sinking Fund.	44

 

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waste connections, inc.

 

Reconciliation and tie between Trust Indenture
Act of 1939 and

Indenture, dated as of ____________, 20__

 

	§ 310(a)(1)	 	7.10
	(a)(2)	 	7.10
	(a)(3)	 	Not Applicable
	(a)(4)	 	Not Applicable
	(a)(5)	 	7.10
	(b)	 	7.10
	§ 311(a)	 	7.11
	(b)	 	7.11
	(c)	 	Not Applicable
	§ 312(a)	 	2.6
	(b)	 	10.3
	(c)	 	10.3
	§ 313(a)	 	7.6
	(b)(1)	 	7.6
	(b)(2)	 	7.6
	(c)(1)	 	7.6
	(d)	 	7.6
	§ 314(a)	 	4.2, 10.5
	(b)	 	Not Applicable
	(c)(1)	 	10.4
	(c)(2)	 	10.4
	(c)(3)	 	Not Applicable
	(d)	 	Not Applicable
	(e)	 	10.5
	(f)	 	Not Applicable
	§ 315(a)	 	7.1
	(b)	 	7.5
	(c)	 	7.1
	(d)	 	7.1
	(e)	 	6.14
	§ 316(a)	 	2.10
	(a)(1)(A)	 	6.12
	(a)(1)(B)	 	6.13
	(b)	 	6.8
	§ 317(a)(1)	 	6.3
	(a)(2)	 	6.4
	(b)	 	2.5
	§ 318(a)	 	10.1

 

 

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

 

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Indenture dated as of
__________, 20__ between Waste Connections, Inc., a company incorporated under the laws of Delaware (“Company”),
and [______] (“Trustee”).

 

Each party agrees as
follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.

 

ARTICLE
I.

DEFINITIONS AND INCORPORATION BY REFERENCE

 

Section 1.1.          Definitions.

 

“Additional
Amounts” means any additional amounts which are required hereby or by any Security, under circumstances specified herein
or therein, to be paid by the Company in respect of certain taxes imposed on Holders specified herein or therein and which are
owing to such Holders.

 

“Affiliate”
of any specified person means any other person directly or indirectly controlling or controlled by or under common control with
such specified person. For the purposes of this definition, “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”), as used with respect to any person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through
the ownership of voting securities or by agreement or otherwise.

 

“Agent”
means any Registrar, Paying Agent or Notice Agent.

 

“Board of Directors”
means the board of directors of the Company or any duly authorized committee thereof.1

 

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

 

 

 

		1	If your issuer is not a corporation, consider:

 

“Board of Directors”
means:

 

		(1)	with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on
behalf of such board;

 

		(2)	with respect to a partnership, the board of directors of the general partner of the partnership;

 

		(3)	with respect to a limited liability company, the managing member or members or any controlling committee of managing members
thereof; and

 

		(4)	with respect to any other Person, the board or committee of such Person serving a similar function.

 

    	 

    	 

    

 

“Business Day”
means, unless otherwise provided by Board Resolution, Officer’s Certificate or supplemental indenture hereto for a particular
Series, any day except a Saturday, Sunday or a legal holiday in The City of New York (or in connection with any payment, the place
of payment) on which banking institutions are authorized or required by law, regulation or executive order to close.

 

“Capital Stock”
means any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock.

 

“Company”
means the party named as such above until a successor replaces it and thereafter means the successor.

 

“Company Order”
means a written order signed in the name of the Company by an Officer.

 

“Corporate Trust
Office” means the office of the Trustee at which at any particular time its corporate trust business related to this
Indenture shall be principally administered.

 

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

 

“Depositary”
means, with respect to the Securities of any Series issuable or issued in whole or in part in the form of one or more Global Securities,
the person designated as Depositary for such Series by the Company, which Depositary shall be a clearing agency registered under
the Exchange Act; and if at any time there is more than one such person, “Depositary” as used with respect to the Securities
of any Series shall mean the Depositary with respect to the Securities of such Series.

 

“Discount Security”
means any Security that provides for an amount less than the stated principal amount thereof to be due and payable upon declaration
of acceleration of the maturity thereof pursuant to Section 6.2.

 

“Dollars”
and “$” means the currency of The United States of America.

 

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

 

“Foreign Currency”
means any currency or currency unit issued by a government other than the government of The United States of America.

 

“Foreign Government
Obligations” means, with respect to Securities of any Series that are denominated in a Foreign Currency, direct obligations
of, or obligations guaranteed by, the government that issued or caused to be issued such currency for the payment of which obligations
its full faith and credit is pledged and which are not callable or redeemable at the option of the issuer thereof.

 

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“GAAP”
means accounting principles generally accepted in the United States of America set forth in the opinions and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect as of the date of determination.

 

“Global Security”
or “Global Securities” means a Security or Securities, as the case may be, in the form established pursuant
to Section 2.2 evidencing all or part of a Series of Securities, issued to the Depositary for such Series or its nominee, and registered
in the name of such Depositary or nominee.

 

“Holder”
or “Securityholder” means a person in whose name a Security is registered.

 

“Indenture”
means this Indenture as amended or supplemented from time to time and shall include the form and terms of particular Series of
Securities established as contemplated hereunder.

 

“interest”
solely with respect to any Discount Security which by its terms bears interest only after Maturity, means interest payable after
Maturity.

 

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

 

“Officer”
means the Chief Executive Officer, President, the Chief Financial Officer, the Treasurer or any Assistant Treasurer, the Secretary
or any Assistant Secretary, and any Vice President of the Company.2

 

“Officer’s
Certificate” means a certificate signed by any Officer.

 

“Opinion of
Counsel” means a written opinion of legal counsel who is acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company.

 

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

 

“principal”
of a Security means the principal of the Security plus, when appropriate, the premium, if any, on, and any Additional Amounts in
respect of, the Security.

 

“Responsible
Officer” means any officer of the Trustee in its Corporate Trust Office having responsibility for administration of this
Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom any corporate trust matter
is referred because of his or her knowledge of and familiarity with a particular subject.

 

“SEC”
means the Securities and Exchange Commission.

 

 

 

		2	Adapt as necessary for foreign entities which may not have these officers.

 

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“Securities”
means the debentures, notes or other debt instruments of the Company of any Series authenticated and delivered under this Indenture.

 

“Series”
or “Series of Securities” means each series of debentures, notes or other debt instruments of the Company created
pursuant to Sections 2.1 and 2.2 hereof.

 

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

 

“Subsidiary”
of any specified person means any corporation, association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person or one or more of the other
Subsidiaries of that person or a combination thereof.

 

“TIA”
means the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of this Indenture; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such date, “TIA” means, to the extent
required by any such amendment, the Trust Indenture Act as so amended.3

 

“Trustee”
means the person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include
each person who is then a Trustee hereunder, and if at any time there is more than one such person, “Trustee” as used
with respect to the Securities of any Series shall mean the Trustee with respect to Securities of that Series.

 

“U.S. Government
Obligations” means securities which are direct obligations of, or guaranteed by, The United States of America for the
payment of which its full faith and credit is pledged and which are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S. Government Obligation held by such custodian for
the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian
in respect of the U.S. Government Obligation evidenced by such depository receipt.

 

 

 

		3	Note that, although this indenture was designed for use in public offerings off of a shelf registration, with modification
it can be used for private deals. One such modification would be the deletion of the references to the TIA.

 

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Section 1.2.          Other
Definitions.

 

	 	 	DEFINED IN
	TERM	 	SECTION
	 	 	 
	“Bankruptcy Law”	 	6.1
	“Custodian”	 	6.1
	“Event of Default”	 	6.1
	“Judgment Currency”	 	10.16
	“Legal Holiday”	 	10.7
	“mandatory sinking fund payment”	 	11.1
	“Market Exchange Rate”	 	10.15
	“New York Banking Day”	 	10.16
	“Notice Agent”	 	2.4
	“optional sinking fund payment”	 	11.1
	“Paying Agent”	 	2.4
	“Registrar”	 	2.4
	“Required Currency”	 	10.16
	“successor person”	 	5.1

 

Section 1.3.          Incorporation
by Reference of Trust Indenture Act.

 

Whenever this Indenture
refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:

 

“Commission”
means the SEC.

 

“indenture securities”
means the Securities.

 

“indenture security
holder” means a Securityholder.

 

“indenture to
be qualified” means this Indenture.

 

“indenture trustee”
or “institutional trustee” means the Trustee.

 

“obligor”
on the indenture securities means the Company and any successor obligor upon the Securities.

 

All other terms used
in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.

 

Section 1.4.          Rules
of Construction.

 

Unless the context otherwise
requires:

 

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

 

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(b)          an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)          “or”
is not exclusive;

 

(d)          words
in the singular include the plural, and in the plural include the singular; and

 

(e)          provisions
apply to successive events and transactions.

 

ARTICLE
II.

THE
SECURITIES

 

Section 2.1.          Issuable
in Series.

 

The aggregate principal
amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in
one or more Series. All Securities of a Series shall be identical except as may be set forth or determined in the manner provided
in a Board Resolution, supplemental indenture or Officer’s Certificate detailing the adoption of the terms thereof pursuant
to authority granted under a Board Resolution. In the case of Securities of a Series to be issued from time to time, the Board
Resolution, Officer’s Certificate or supplemental indenture detailing the adoption of the terms thereof pursuant to authority
granted under a Board Resolution may provide for the method by which specified terms (such as interest rate, maturity date, record
date or date from which interest shall accrue) are to be determined. Securities may differ between Series in respect of any matters,
provided that all Series of Securities shall be equally and ratably entitled to the benefits of the Indenture.

 

Section 2.2.          Establishment
of Terms of Series of Securities.

 

At or prior to the issuance
of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Subsection 2.2.1
and either as to such Securities within the Series or as to the Series generally in the case of Subsections 2.2.2 through 2.2.24)
by or pursuant to a Board Resolution, and set forth or determined in the manner provided in a Board Resolution, supplemental indenture
hereto or Officer’s Certificate:

 

2.2.1.          the
title (which shall distinguish the Securities of that particular Series from the Securities of any other Series) and ranking (including
the terms of any subordination provisions) of the Series;

 

2.2.2.          the
price or prices (expressed as a percentage of the principal amount thereof) at which the Securities of the Series will be issued;

 

2.2.3.          any
limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities
of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);

 

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2.2.4.          the
date or dates on which the principal of the Securities of the Series is payable;

 

2.2.5.          the
rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including,
but not limited to, any commodity, commodity index, stock exchange index or financial index) at which the Securities of the Series
shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates on which such
interest, if any, shall commence and be payable and any regular record date for the interest payable on any interest payment date;

 

2.2.6.          the
place or places where the principal of and interest, if any, on the Securities of the Series shall be payable, where the Securities
of such Series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company
in respect of the Securities of such Series and this Indenture may be delivered, and the method of such payment, if by wire transfer,
mail or other means;

 

2.2.7.          if
applicable, the period or periods within which, the price or prices at which and the terms and conditions upon which the Securities
of the Series may be redeemed, in whole or in part, at the option of the Company;

 

2.2.8.          the
obligation, if any, of the Company to redeem or purchase the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within which, the price or prices at which and the terms
and conditions upon which Securities of the Series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

2.2.9.          the
dates, if any, on which and the price or prices at which the Securities of the Series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such repurchase obligations;

 

2.2.10.         if
other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall
be issuable;

 

2.2.11.         the
forms of the Securities of the Series and whether the Securities will be issuable as Global Securities;

 

2.2.12.         if
other than the principal amount thereof, the portion of the principal amount of the Securities of the Series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section 6.2;

 

2.2.13.         the
currency of denomination of the Securities of the Series, which may be Dollars or any Foreign Currency, and if such currency of
denomination is a composite currency, the agency or organization, if any, responsible for overseeing such composite currency;

 

2.2.14.         the
designation of the currency, currencies or currency units in which payment of the principal of and interest, if any, on the Securities
of the Series will be made;

 

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2.2.15.         if
payments of principal of or interest, if any, on the Securities of the Series are to be made in one or more currencies or currency
units other than that or those in which such Securities are denominated, the manner in which the exchange rate with respect to
such payments will be determined;

 

2.2.16.         the
manner in which the amounts of payment of principal of or interest, if any, on the Securities of the Series will be determined,
if such amounts may be determined by reference to an index based on a currency or currencies or by reference to a commodity, commodity
index, stock exchange index or financial index;

 

2.2.17.         the
provisions, if any, relating to any security provided for the Securities of the Series;

 

2.2.18.         any
addition to, deletion of or change in the Events of Default which applies to any Securities of the Series and any change in the
right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant
to Section 6.2;

 

2.2.19.         any
addition to, deletion of or change in the covenants set forth in Articles IV or V which applies to Securities of the Series;

 

2.2.20.         any
Depositaries, interest rate calculation agents, exchange rate calculation agents or other agents with respect to Securities of
such Series if other than those appointed herein;

 

2.2.21.         the
provisions, if any, relating to conversion or exchange of any Securities of such Series, including if applicable, the conversion
or exchange price, the conversion or exchange period, provisions as to whether conversion or exchange will be mandatory, at the
option of the Holders thereof or at the option of the Company, the events requiring an adjustment of the conversion price or exchange
price and provisions affecting conversion or exchange if such Series of Securities are redeemed; and

 

2.2.22.         any
other terms of the Series (which may supplement, modify or delete any provision of this Indenture insofar as it applies to such
Series), including any terms that may be required under applicable law or regulations or advisable in connection with the marketing
of Securities of that Series.

 

All Securities of any
one Series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture,
if so provided by or pursuant to the Board Resolution, supplemental indenture hereto or Officer’s Certificate referred to
above.

 

Section 2.3.          Execution
and Authentication.

 

An Officer shall sign
the Securities for the Company by manual signature.

 

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

 

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A Security shall not
be valid until authenticated by the manual signature of the Trustee or an authenticating agent. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.

 

The Trustee shall at
any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution,
supplemental indenture hereto or Officer’s Certificate, upon receipt by the Trustee of a Company Order. Each Security shall
be dated the date of its authentication.

 

The aggregate principal
amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture hereto or Officer’s Certificate delivered pursuant to Section
2.2, except as provided in Section 2.8.

 

Prior to the issuance
of Securities of any Series, the Trustee shall have received and (subject to Section 7.2) shall be fully protected in relying on:
(a) the Board Resolution, supplemental indenture hereto or Officer’s Certificate establishing the form of the Securities
of that Series or of Securities within that Series and the terms of the Securities of that Series or of Securities within that
Series, (b) an Officer’s Certificate complying with Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

 

The Trustee shall have
the right to decline to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines
that such action may not be taken lawfully; or (b) if the Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents or a committee of Responsible Officers shall determine that
such action would expose the Trustee to personal liability to Holders of any then outstanding Series of Securities.

 

The Trustee may appoint
an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee 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 2.4.          Registrar
and Paying Agent.

 

The Company shall maintain,
with respect to each Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.2,
an office or agency where Securities of such Series may be presented or surrendered for payment (“Paying Agent”),
where Securities of such Series may be surrendered for registration of transfer or exchange (“Registrar”) and
where notices and demands to or upon the Company in respect of the Securities of such Series and this Indenture may be delivered
(“Notice Agent”). The Registrar shall keep a register with respect to each Series of Securities and to their
transfer and exchange. The Company will give prompt written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Notice Agent. If at any time the Company shall fail to maintain any such required
Registrar, Paying Agent or Notice Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices and demands.

 

    	9

    	 

    

 

The Company may also
from time to time designate one or more co-registrars, additional paying agents or additional notice agents and may from time to
time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve
the Company of its obligations to maintain a Registrar, Paying Agent and Notice Agent in each place so specified pursuant to Section
2.2 for Securities of any Series for such purposes. The Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the name or address of any such co-registrar, additional paying agent or additional notice agent.
The term “Registrar” includes any co-registrar; the term “Paying Agent” includes any additional
paying agent; and the term “Notice Agent” includes any additional notice agent. The Company or any of its Affiliates
may serve as Registrar or Paying Agent.

 

The Company hereby appoints
the Trustee the initial Registrar, Paying Agent and Notice Agent for each Series unless another Registrar, Paying Agent or Notice
Agent, as the case may be, is appointed prior to the time Securities of that Series are first issued.

 

Section 2.5.          Paying
Agent to Hold Money in Trust.

 

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

 

Section 2.6.          Securityholder
Lists.

 

The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders
of each Series of Securities and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least ten days before each interest payment date and at such other times as the Trustee may request
in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Securityholders
of each Series of Securities.

 

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Section 2.7.          Transfer
and Exchange.

 

Where Securities of a
Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal
principal amount of Securities of the same Series, the Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met. To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities at
the Registrar’s request. No service charge shall be made for any registration of transfer or exchange (except as otherwise
expressly permitted herein), 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 tax or similar governmental charge payable upon exchanges
pursuant to Sections 2.11, 3.6 or 9.6).

 

Neither the Company nor
the Registrar shall be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning
at the opening of business fifteen days immediately preceding the mailing of a notice of redemption of Securities of that Series
selected for redemption and ending at the close of business on the day of such mailing, or (b) to register the transfer of or exchange
Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities
selected, called or being called for redemption in part.

 

Section 2.8.          Mutilated,
Destroyed, Lost and Stolen Securities.

 

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

 

If there shall be delivered
to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such
security or indemnity bond as may be required by each of them to hold itself and any of its agents harmless, then, in the absence
of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.

 

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

 

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

 

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

 

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

 

Section 2.9.          Outstanding
Securities.

 

The Securities outstanding
at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.

 

If a Security is replaced
pursuant to Section 2.8, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser.

 

If the Paying Agent (other
than the Company, a Subsidiary of the Company or an Affiliate of the Company) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that date such Securities of the Series cease to be outstanding
and interest on them ceases to accrue.

 

The Company may purchase
or otherwise acquire the Securities, whether by open market purchases, negotiated transactions or otherwise. A Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds the Security.

 

In determining whether
the Holders of the requisite principal amount of outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the principal amount of a Discount Security that shall be deemed to be outstanding for such
purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant to Section 6.2.

 

Section 2.10.         Treasury
Securities.

 

In determining whether
the Holders of the required principal amount of Securities of a Series have concurred in any request, demand, authorization, direction,
notice, consent or waiver, Securities of a Series owned by the Company or any Affiliate of the Company shall be disregarded, except
that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization,
direction, notice, consent or waiver only Securities of a Series that a Responsible Officer of the Trustee knows are so owned shall
be so disregarded.

 

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Section 2.11.         Temporary
Securities.

 

Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities upon a Company Order. Temporary
Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate
for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee upon receipt of a Company Order
shall authenticate definitive Securities of the same Series and date of maturity in exchange for temporary Securities. Until so
exchanged, temporary securities shall have the same rights under this Indenture as the definitive Securities.

 

Section 2.12.         Cancellation.

 

The Company at any time
may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Securities surrendered for
transfer, exchange, payment, replacement or cancellation and shall destroy such canceled Securities (subject to the record retention
requirement of the Exchange Act and the Trustee) and deliver a certificate of such cancellation to the Company upon written request
of the Company. The Company may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for
cancellation.

 

Section 2.13.         Defaulted
Interest.

 

If the Company defaults
in a payment of interest on a Series of Securities, it shall pay the defaulted interest, plus, to the extent permitted by law,
any interest payable on the defaulted interest, to the persons who are Securityholders of the Series on a subsequent special record
date. The Company shall fix the record date and payment date. At least 10 days before the special record date, the Company shall
mail to the Trustee and to each Securityholder of the Series a notice that states the special record date, the payment date and
the amount of interest to be paid. The Company may pay defaulted interest in any other lawful manner.

 

Section 2.14.         Global
Securities.

 

2.14.1.          Terms
of Securities. A Board Resolution, a supplemental indenture hereto or an Officer’s Certificate shall establish whether
the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depositary
for such Global Security or Securities.

 

2.14.2.          Transfer
and Exchange. Notwithstanding any provisions to the contrary contained in Section 2.7 of the Indenture and in addition thereto,
any Global Security shall be exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the names of Holders
other than the Depositary for such Security or its nominee only if (i) such Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a clearing agency registered
under the Exchange Act, and, in either case, the Company fails to appoint a successor Depositary registered as a clearing agency
under the Exchange Act within 90 days of such event or (ii) the Company executes and delivers to the Trustee an Officer’s
Certificate to the effect that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Securities registered in such names as the Depositary shall direct in writing
in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms.

 

    	13

    	 

    

 

Except as provided in
this Section 2.14.2, a Global Security may not be transferred except as a whole by the Depositary with respect to such Global Security
to a nominee of such Depositary, by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by
the Depositary or any such nominee to a successor Depositary or a nominee of such a successor Depositary.

 

2.14.3.          Legend.
Any Global Security issued hereunder shall bear a legend in substantially the following form:

 

“This Security
is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depositary
or a nominee of the Depositary. This Security is exchangeable for Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the Indenture, and may not be transferred except as a
whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or another nominee of
the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such a successor Depositary.”

 

2.14.4.          Acts
of Holders. The Depositary, as a Holder, may appoint agents and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under the
Indenture.

 

2.14.5.          Payments.
Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.2, payment of the
principal of and interest, if any, on any Global Security shall be made to the Holder thereof.

 

2.14.6.          Consents,
Declaration and Directions. The Company, the Trustee and any Agent shall treat a person as the Holder of such principal amount
of outstanding Securities of such Series represented by a Global Security as shall be specified in a written statement of the Depositary
or by the applicable procedures of such Depositary with respect to such Global Security, for purposes of obtaining any consents,
declarations, waivers or directions required to be given by the Holders pursuant to this Indenture.

 

Section 2.15.         CUSIP
Numbers.

 

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

 

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ARTICLE
III.

REDEMPTION

 

Section 3.1.          Notice
to Trustee.

 

The Company may, with
respect to any Series of Securities, reserve the right to redeem and pay the Series of Securities or may covenant to redeem and
pay the Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and on such terms as provided
for in such Securities. If a Series of Securities is redeemable and the Company wants or is obligated to redeem prior to the Stated
Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities, it shall notify the Trustee
in writing of the redemption date and the principal amount of Series of Securities to be redeemed. The Company shall give the notice
at least 15 days before the redemption date.

 

Section 3.2.          Selection
of Securities to be Redeemed.

 

Unless otherwise indicated
for a particular Series by a Board Resolution, a supplemental indenture hereto or an Officer’s Certificate, if less than
all the Securities of a Series are to be redeemed, the Trustee shall select the Securities of the Series to be redeemed in any
manner that the Trustee deems fair and appropriate, including by lot or other method, unless otherwise required by law or applicable
stock exchange requirements, subject, in the case of Global Securities, to the applicable rules and procedures of the Depositary.
The Trustee shall make the selection from Securities of the Series outstanding not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities of the Series that have denominations larger than $1,000. Securities
of the Series and portions of them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or, with respect to Securities
of any Series issuable in other denominations pursuant to Section 2.2.10, the minimum principal denomination for each Series and
the authorized integral multiples thereof. Provisions of this Indenture that apply to Securities of a Series called for redemption
also apply to portions of Securities of that Series called for redemption.

 

Section 3.3.          Notice
of Redemption.

 

Unless otherwise indicated
for a particular Series by Board Resolution, a supplemental indenture hereto or an Officer’s Certificate, at least 15 days
but not more than 60 days before a redemption date, the Company shall mail a notice of redemption by first-class mail to each Holder
whose Securities are to be redeemed.

 

The notice shall identify
the Securities of the Series to be redeemed and shall state:

 

(a)          the
redemption date;

 

(b)          the
redemption price;

 

(c)          the
name and address of the Paying Agent;

 

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(d)          if
any Securities are being redeemed in part, the portion of the principal amount of such Securities to be redeemed and that, after
the redemption date and upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed
portion of the original Security shall be issued in the name of the Holder thereof upon cancellation of the original Security;

 

(e)          that
Securities of the Series called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(f)          that
interest on Securities of the Series called for redemption ceases to accrue on and after the redemption date unless the Company
defaults in the deposit of the redemption price;

 

(g)          the
CUSIP number, if any; and

 

(h)          any
other information as may be required by the terms of the particular Series or the Securities of a Series being redeemed.

 

At the Company’s
request, the Trustee shall give the notice of redemption in the Company’s name and at its expense, provided, however, that
the Company has delivered to the Trustee, at least 10 days (unless a shorter time shall be acceptable to the Trustee) prior to
the notice date, an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information
to be stated in such notice.

 

Section 3.4.          Effect
of Notice of Redemption.

 

Once notice of redemption
is mailed as provided in Section 3.3, Securities of a Series called for redemption become due and payable on the redemption date
and at the redemption price. Except as otherwise provided in the supplemental indenture, Board Resolution or Officer’s Certificate
for a Series, a notice of redemption may not be conditional. Upon surrender to the Paying Agent, such Securities shall be paid
at the redemption price plus accrued interest to the redemption date.

 

Section 3.5.          Deposit
of Redemption Price.

 

On or before 11:00 a.m.,
New York City time, on the redemption date, the Company shall deposit with the Paying Agent money sufficient to pay the redemption
price of and accrued interest, if any, on all Securities to be redeemed on that date.

 

Section 3.6.          Securities
Redeemed in Part.

 

Upon surrender of a Security
that is redeemed in part, the Trustee shall authenticate for the Holder a new Security of the same Series and the same maturity
equal in principal amount to the unredeemed portion of the Security surrendered.

 

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ARTICLE
IV.

COVENANTS

 

Section 4.1.          Payment
of Principal and Interest.

 

The Company covenants
and agrees for the benefit of the Holders of each Series of Securities that it will duly and punctually pay the principal of and
interest, if any, on the Securities of that Series in accordance with the terms of such Securities and this Indenture. On or before
11:00 a.m., New York City time, on the applicable payment date, the Company shall deposit with the Paying Agent money sufficient
to pay the principal of and interest, if any, on the Securities of each Series in accordance with the terms of such Securities
and this Indenture.

 

Section 4.2.          SEC
Reports.

 

To the extent any Securities
of a Series are outstanding, the Company shall deliver to the Trustee within 15 days after it files them with the SEC copies of
the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe) which the Company is required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. The Company also shall comply with the other provisions of TIA § 314(a). Reports, information and documents
filed with the SEC via the EDGAR system will be deemed to be delivered to the Trustee as of the time of such filing via EDGAR for
purposes of this Section 4.2.

 

Delivery of reports,
information and documents to the Trustee under this Section 4.2 are for informational purposes only and the Trustee’s receipt
of the foregoing shall not constitute constructive or actual notice of any information contained therein or determinable from information
contained therein, including the Company’s compliance with any of their covenants hereunder (as to which the Trustee is entitled
to rely exclusively on Officer’s Certificates).

 

Section 4.3.          Compliance
Certificate.

 

To the extent any Securities
of a Series are outstanding, the Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company, commencing ____________, ______, an Officer’s Certificate stating that a review of the activities of the Company
and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating,
as to each such Officer signing such certificate, that to the best of his/her knowledge the Company has kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which the Officer may have knowledge).

 

The Company will, so
long as any of the Securities are outstanding, deliver to the Trustee, promptly upon becoming aware of any Default or Event of
Default, an Officer’s Certificate specifying such Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto.

 

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Section 4.4.          Stay,
Extension and Usury Laws.

 

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

 

Section 4.5.          Corporate
Existence.

 

Subject to Article V,
the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence
and rights (charter and statutory); provided, however, that the Company shall not be required to preserve any such right if the
Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company
and its Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect to the Holders.

 

ARTICLE
V.

SUCCESSORS

 

Section 5.1.          When
Company May Merge, Etc.

 

The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or substantially all of its properties and assets to,
any person (a “successor person”) unless:

 

(a)          the
Company is the surviving corporation or the successor person (if other than the Company) is a corporation organized and validly
existing under the laws of any U.S. domestic jurisdiction4 and expressly assumes the Company’s obligations on
the Securities and under this Indenture; and

 

(b)          immediately
after giving effect to the transaction, no Default or Event of Default, shall have occurred and be continuing.

 

The Company shall deliver
to the Trustee prior to the consummation of the proposed transaction an Officer’s Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and any supplemental indenture comply with this Indenture.

 

Notwithstanding the above,
any Subsidiary of the Company may consolidate with, merge into or transfer all or part of its properties to the Company. Neither
an Officer’s Certificate nor an Opinion of Counsel shall be required to be delivered in connection therewith.

 

 

 

		4	Make appropriate changes if issuer is a foreign issuer or if there are likely foreign merger destinations (keep it first world).

 

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Section 5.2.          Successor
Corporation Substituted.

 

Upon any consolidation
or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance
with Section 5.1, the successor corporation formed by such consolidation or into or with which the Company is merged or to which
such sale, lease, conveyance or other disposition is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such successor person has been named as the Company herein;
provided, however, that the predecessor Company in the case of a sale, conveyance or other disposition (other than
a lease) shall be released from all obligations and covenants under this Indenture and the Securities.

 

ARTICLE
VI.

DEFAULTS AND REMEDIES

 

Section 6.1.          Events
of Default.

 

“Event of Default,”
wherever used herein with respect to Securities of any Series, means any one of the following events, unless in the establishing
Board Resolution, supplemental indenture or Officer’s Certificate, it is provided that such Series shall not have the benefit
of said Event of Default:

 

(a)          default
in the payment of any interest on any Security of that Series when it becomes due and payable, and continuance of such default
for a period of 30 days (unless the entire amount of such payment is deposited by the Company with the Trustee or with a Paying
Agent prior to 11:00 a.m., New York City time, on the 30th day of such period); or

 

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

 

(c)          default
in the performance or breach of any covenant or warranty of the Company in this Indenture (other than defaults pursuant to paragraphs
(a) or (b) above or pursuant to a covenant or warranty that has been included in this Indenture solely for the benefit of Series
of Securities other than that Series), which default continues uncured for a period of 60 days after there has been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the outstanding Securities of that Series a written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a “Notice of Default” hereunder; or

 

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

 

(i)          commences
a voluntary case,

 

(ii)         consents
to the entry of an order for relief against it in an involuntary case,

 

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

 

(iv)        makes
a general assignment for the benefit of its creditors, or

 

(v)         generally
is unable to pay its debts as the same become due; or

 

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

 

(i)          is
for relief against the Company in an involuntary case,

 

(ii)         appoints
a Custodian of the Company or for all or substantially all of its property, or

 

(iii)        orders
the liquidation of the Company,

 

and the order or decree remains
unstayed and in effect for 60 days; or

 

(f)          any
other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental
indenture hereto or an Officer’s Certificate, in accordance with Section 2.2.18.

 

The term “Bankruptcy
Law” means title 11, U.S. Code or any similar Federal or State law for the relief of debtors.5 The term “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.

 

Section 6.2.          Acceleration
of Maturity; Rescission and Annulment.

 

If an Event of Default
with respect to Securities of any Series at the time outstanding occurs and is continuing (other than an Event of Default referred
to in Section 6.1(d) or (e)) then in every such case the Trustee or the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series may declare the principal amount (or, if any Securities of that Series are Discount Securities,
such portion of the principal amount as may be specified in the terms of such Securities) of and accrued and unpaid interest, if
any, on all of the Securities of that Series to be due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) and accrued and unpaid
interest, if any, shall become immediately due and payable. If an Event of Default specified in Section 6.1(d) or (e) shall occur,
the principal amount (or specified amount) of and accrued and unpaid interest, if any, on all outstanding Securities shall ipso
facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

 

 

		5	Make appropriate changes if the issuer is a foreign issuer.

 

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At any time after such
a declaration of acceleration with respect to any Series has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of
the outstanding Securities of that Series, by written notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if all Events of Default with respect to Securities of that Series, other than the non-payment of the principal
and interest, if any, of Securities of that Series which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.13.

 

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

 

Section 6.3.          Collection
of Indebtedness and Suits for Enforcement by Trustee.

 

The Company covenants
that if

 

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

 

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

 

(c)          default
is made in the deposit of any sinking fund payment, if any, when and as due by the terms of a Security,

 

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

 

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

 

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

 

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Section 6.4.          Trustee
May File Proofs of Claim.

 

In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for
the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise,

 

(a)          to
file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and

 

(b)          to
collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same,

 

and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7.

 

Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.

 

Section 6.5.          Trustee
May Enforce Claims Without Possession of Securities.

 

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

 

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Section 6.6.          Application
of Money Collected.

 

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

 

First:             To
the payment of all amounts due the Trustee under Section 7.7; and

 

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

 

Third:           To
the Company.

 

Section 6.7.          Limitation
on Suits.

 

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

 

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

 

(b)          the
Holders of not less than 25% in principal amount of the outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

 

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

 

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

 

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

 

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

 

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Section 6.8.          Unconditional
Right of Holders to Receive Principal and Interest.

 

Notwithstanding any other
provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment
of the principal of and interest, if any, on such Security on the Maturity of such Security, including the Stated Maturity expressed
in such Security (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such Holder.

 

Section 6.9.          Restoration
of Rights and Remedies.

 

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

 

Section 6.10.         Rights
and Remedies Cumulative.

 

Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder,
or otherwise, shall not, to the extent permitted by law, prevent the concurrent assertion or employment of any other appropriate
right or remedy.

 

Section 6.11.         Delay
or Omission Not Waiver.

 

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

 

Section 6.12.         Control
by Holders.

 

The Holders of a majority
in principal amount of the outstanding Securities of any Series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such Series, provided that

 

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

 

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(b)          the
Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction,

 

(c)          subject
to the provisions of Section 6.1, the Trustee shall have the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer of the Trustee, determine that the proceeding so directed would involve the Trustee in personal
liability, and

 

(d)          prior
to taking any action as directed under this Section 6.12, the Trustee shall be entitled to indemnity satisfactory to it against
the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

 

Section 6.13.         Waiver
of Past Defaults.

 

The Holders of not less
than a majority in principal amount of the outstanding Securities of any Series may on behalf of the Holders of all the Securities
of such Series waive any past Default hereunder with respect to such Series and its consequences, except a Default in the payment
of the principal of or interest on any Security of such Series (provided, however, that the Holders of a majority in principal
amount of the outstanding Securities of any Series may rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.

 

Section 6.14.         Undertaking
for Costs.

 

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

 

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ARTICLE
VII.

TRUSTEE

 

Section 7.1.          Duties
of Trustee.

 

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

 

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

 

(i)          The
Trustee need perform only those duties that are specifically set forth in this Indenture and no others.

 

(ii)         In
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon Officer’s Certificates or Opinions of Counsel furnished to the Trustee and conforming
to the requirements of this Indenture; however, in the case of any such Officer’s Certificates or Opinions of Counsel
which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such Officer’s
Certificates and Opinions of Counsel to determine whether or not they conform to the form requirements of this Indenture.

 

(c)          The
Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct,
except that:

 

(i)          This
paragraph does not limit the effect of paragraph (b) of this Section.

 

(ii)         The
Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.

 

(iii)        The
Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it with respect to Securities
of any Series in good faith in accordance with the direction of the Holders of a majority in principal amount of the outstanding
Securities of such Series relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such Series
in accordance with Section 6.12.

 

(d)          Every
provision of this Indenture that in any way relates to the Trustee is subject to paragraph (a), (b) and (c) of this Section.

 

    	26

    	 

    

 

(e)          The
Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in performing such duty or exercising such right or power.

 

(f)          The
Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

(g)          No
provision of this Indenture shall require the Trustee to risk its own funds or otherwise incur any financial liability in the performance
of any of its duties, or in the exercise of any of its rights or powers, if adequate indemnity against such risk is not assured
to the Trustee in its satisfaction.

 

(h)          The
Paying Agent, the Notice Agent, the Registrar and any authenticating agent shall be entitled to the protections and immunities
as are set forth in paragraphs (e), (f) and (g) of this Section and in Section 7.2, each with respect to the Trustee.

 

Section 7.2.          Rights
of Trustee.

 

(a)          The
Trustee may rely on and shall be protected in acting or refraining from acting upon any document (whether in its original or facsimile
form) believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate
any fact or matter stated in the document.

 

(b)          Before
the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion
of Counsel.

 

(c)          The
Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.
No Depositary shall be deemed an agent of the Trustee and the Trustee shall not be responsible for any act or omission by any Depositary.

 

(d)          The
Trustee 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, provided that the Trustee’s conduct does not constitute willful misconduct or negligence.

 

(e)          The
Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it hereunder without willful misconduct or negligence, and
in reliance thereon.

 

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

 

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(g)          The
Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.

 

(h)          The
Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Securities generally or the Securities of a particular Series and this
Indenture.

 

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

 

(j)          The
permissive right of the Trustee to take the actions permitted by this Indenture shall not be construed as an obligation or duty
to do so.

 

Section 7.3.          Individual
Rights of Trustee.

 

The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate of
the Company with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. The Trustee
is also subject to Sections 7.10 and 7.11.

 

Section 7.4.          Trustee’s
Disclaimer.

 

The Trustee makes no
representation as to the validity or adequacy of this Indenture 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 authentication.

 

Section 7.5.          Notice
of Defaults.

 

If a Default or Event
of Default occurs and is continuing with respect to the Securities of any Series and if it is known to a Responsible Officer of
the Trustee, the Trustee shall mail to each Securityholder of the Securities of that Series notice of a Default or Event of Default
within 90 days after it occurs or, if later, after a Responsible Officer of the Trustee has knowledge of such Default or Event
of Default. Except in the case of a Default or Event of Default in payment of principal of or interest on any Security of any Series,
the Trustee may withhold the notice if and so long as its corporate trust committee or a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of Securityholders of that Series.

 

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Section 7.6.          Reports
by Trustee to Holders.

 

Within 60 days after
May 15 in each year, the Trustee shall transmit by mail to all Securityholders, as their names and addresses appear on the register
kept by the Registrar, a brief report dated as of such May 15, in accordance with, and to the extent required under, TIA §
313.

 

A copy of each report
at the time of its mailing to Securityholders of any Series shall be filed with the SEC and each national securities exchange on
which the Securities of that Series are listed. The Company shall promptly notify the Trustee in writing when Securities of any
Series are listed on any national securities exchange.

 

Section 7.7.          Compensation
and Indemnity.

 

The Company shall pay
to the Trustee from time to time compensation for its services as the Company and the Trustee shall from time to time agree upon
in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust.
The Company shall reimburse the Trustee upon request for all reasonable out of pocket expenses incurred by it. Such expenses shall
include the reasonable compensation and expenses of the Trustee’s agents and counsel.

 

The Company shall indemnify
each of the Trustee and any predecessor Trustee (including the cost of defending itself) against any cost, expense or liability,
including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred by it except as
set forth in the next paragraph in the performance of its duties under this Indenture as Trustee or Agent. The Trustee shall notify
the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve
the Company of its obligations hereunder, unless and to the extent that the Company is materially prejudiced thereby. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have one separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent,
which consent will not be unreasonably withheld. This indemnification shall apply to officers, directors, employees, shareholders
and agents of the Trustee.

 

The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through willful misconduct or negligence.

 

To secure the Company’s
payment obligations in this Section, the Trustee shall have a lien prior to the Securities of any Series on all money or property
held or collected by the Trustee, except that held in trust to pay principal of and interest on particular Securities of that Series.

 

When the Trustee incurs
expenses or renders services after an Event of Default specified in Section 6.1(d) or (e) occurs, the expenses and the compensation
for the services are intended to constitute expenses of administration under any Bankruptcy Law.

 

The provisions of this
Section shall survive the termination of this Indenture.

 

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Section 7.8.          Replacement
of Trustee.

 

A resignation or removal
of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s acceptance
of appointment as provided in this Section.

 

The Trustee may resign
with respect to the Securities of one or more Series by so notifying the Company at least 30 days prior to the date of the proposed
resignation. The Holders of a majority in principal amount of the Securities of any Series may remove the Trustee with respect
to that Series by so notifying the Trustee and the Company. The Company may remove the Trustee with respect to Securities of one
or more Series if:

 

(a)          the
Trustee fails to comply with Section 7.10;

 

(b)          the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy
Law;

 

(c)          a
Custodian or public officer takes charge of the Trustee or its property; or

 

(d)          the
Trustee becomes incapable of acting.

 

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

 

If a successor Trustee
with respect to the Securities of any one or more Series does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders of at least a majority in principal amount of the Securities of
the applicable Series may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

A successor Trustee shall
deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor Trustee subject to the lien provided for in Section
7.7, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture.
A successor Trustee shall mail a notice of its succession to each Securityholder of each such Series. Notwithstanding replacement
of the Trustee pursuant to this Section 7.8, the Company’s obligations under Section 7.7 hereof shall continue for the benefit
of the retiring Trustee with respect to expenses and liabilities incurred by it for actions taken or omitted to be taken in accordance
with its rights, powers and duties under this Indenture prior to such replacement.

 

    	30

    	 

    

 

Section 7.9.          Successor
Trustee by Merger, Etc.

 

If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee, subject to Section 7.10.

 

Section 7.10.         Eligibility;
Disqualification.

 

This Indenture shall
always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee shall always have a combined
capital and surplus of at least $25,000,000 as set forth in its most recent published annual report of condition. The Trustee shall
comply with TIA § 310(b).

 

Section 7.11.         Preferential
Collection of Claims Against Company.

 

The Trustee is subject
to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee who has resigned or been removed
shall be subject to TIA § 311(a) to the extent indicated.

 

ARTICLE
VIII.

SATISFACTION AND DISCHARGE; DEFEASANCE

 

Section 8.1.          Satisfaction
and Discharge of Indenture.

 

This Indenture shall
upon Company Order cease to be of further effect (except as hereinafter provided in this Section 8.1), and the Trustee, at the
expense of the Company, shall execute instruments acknowledging satisfaction and discharge of this Indenture, when

 

(a)          either

 

(i)          all
Securities theretofore authenticated and delivered (other than Securities that have been destroyed, lost or stolen and that have
been replaced or paid) have been delivered to the Trustee for cancellation; or

 

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

 

(1)         have
become due and payable, or

 

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

 

(3)         have
been called for redemption or are to be called for redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, or

 

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(4)         are
deemed paid and discharged pursuant to Section 8.3, as applicable;

 

and the Company, in the case of (1), (2)
or (3) above, has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of such deposit (in the case of Securities which have become due and payable
on or prior to the date of such deposit) or to the Stated Maturity or redemption date, as the case may be;

 

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

 

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

 

Notwithstanding the satisfaction
and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.7, and, if money shall have been
deposited with the Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 8.2 and 8.5 shall
survive.

 

Section 8.2.          Application
of Trust Funds; Indemnification.

 

(a)          Subject
to the provisions of Section 8.5, all money deposited with the Trustee pursuant to Section 8.1, all money and U.S. Government Obligations
or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4 and all money received by the Trustee
in respect of U.S. Government Obligations or Foreign Government Obligations deposited with the Trustee pursuant to Section 8.3
or 8.4, shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) to the persons entitled
thereto, of the principal and interest for whose payment such money has been deposited with or received by the Trustee or to make
mandatory sinking fund payments or analogous payments as contemplated by Sections 8.3 or 8.4.

 

(b)          The
Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against U.S. Government
Obligations or Foreign Government Obligations deposited pursuant to Sections 8.3 or 8.4 or the interest and principal received
in respect of such obligations other than any payable by or on behalf of Holders.

 

(c)          The
Trustee shall deliver or pay to the Company from time to time upon Company Order any U.S. Government Obligations or Foreign Government
Obligations or money held by it as provided in Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm of independent
certified public accountants or investment bank expressed in a written certification thereof delivered to the Trustee, are then
in excess of the amount thereof which then would have been required to be deposited for the purpose for which such U.S. Government
Obligations or Foreign Government Obligations or money were deposited or received. This provision shall not authorize the sale
by the Trustee of any U.S. Government Obligations or Foreign Government Obligations held under this Indenture.

 

    	32

    	 

    

 

Section 8.3.          Legal
Defeasance of Securities of any Series.

 

Unless this Section 8.3
is otherwise specified, pursuant to Section 2.2.20, to be inapplicable to Securities of any Series, the Company shall be deemed
to have paid and discharged the entire indebtedness on all the outstanding Securities of any Series on the 91st day after the date
of the deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates to such outstanding
Securities of such Series, shall no longer be in effect (and the Trustee, at the expense of the Company, shall, upon receipt of
a Company Order, execute instruments acknowledging the same), except as to:

 

(a)          the
rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph (d) hereof, (i) payment
of the principal of and each installment of principal of and interest on the outstanding Securities of such Series on the Maturity
of such principal or installment of principal or interest and (ii) the benefit of any mandatory sinking fund payments applicable
to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this Indenture
and the Securities of such Series;

 

(b)          the
provisions of Sections 2.4, 2.7, 2.8, 7.7, 8.2, 8.3 and 8.5; and

 

(c)          the
rights, powers, trust and immunities of the Trustee hereunder and the Company’s obligations in connection therewith;

 

provided that, the following conditions
shall have been satisfied:

 

(d)          the
Company shall have deposited or caused to be irrevocably deposited (except as provided in Section 8.2(c)) with the Trustee as trust
funds in trust for the purpose of making the following payments, specifically pledged as security for and dedicated solely to the
benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated in Dollars, cash in Dollars
and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in a Foreign Currency (other than
a composite currency), money and/or Foreign Government Obligations, which through the payment of interest and principal in respect
thereof in accordance with their terms, will provide (and without reinvestment and assuming no tax liability will be imposed on
such Trustee), not later than one day before the due date of any payment of money, an amount in cash, sufficient, in the opinion
of a nationally recognized firm of independent public accountants or investment bank expressed in a written certification thereof
delivered to the Trustee, to pay and discharge each installment of principal of and interest, if any, on and any mandatory sinking
fund payments in respect of all the Securities of such Series on the dates such installments of interest or principal and such
sinking fund payments are due;

 

    	33

    	 

    

 

(e)          such
deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;

 

(f)          no
Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of
such deposit or during the period ending on the 91st day after such date;

 

(g)          the
Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel to the effect that (i) the
Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the Securities of such Series will not recognize income, gain
or loss for Federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to Federal income
tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and
discharge had not occurred;

 

(h)          the
Company shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company
with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and

 

(i)          the
Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this Section have been complied with.

 

Section 8.4.          Covenant
Defeasance.

 

Unless this Section 8.4
is otherwise specified pursuant to Section 2.2.20 to be inapplicable to Securities of any Series, the Company may omit to comply
with respect to the Securities of any Series with any term, provision or condition set forth under Sections 4.2, 4.3, 4.4, 4.5,
and 5.1 as well as any additional covenants specified in a supplemental indenture for such Series of Securities or a Board Resolution
or an Officer’s Certificate delivered pursuant to Section 2.2.20 (and the failure to comply with any such covenants shall
not constitute a Default or Event of Default with respect to such Series under Section 6.1) and the occurrence of any event specified
in a supplemental indenture for such Series of Securities or a Board Resolution or an Officer’s Certificate delivered pursuant
to Section 2.2.18 and designated as an Event of Default shall not constitute a Default or Event of Default hereunder, with respect
to the Securities of such Series, provided that the following conditions shall have been satisfied:

 

    	34

    	 

    

 

(a)          With
reference to this Section 8.4, the Company has deposited or caused to be irrevocably deposited (except as provided in Section 8.2(c))
with the Trustee as trust funds in trust for the purpose of making the following payments specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities (i) in the case of Securities of such Series denominated
in Dollars, cash in Dollars and/or U.S. Government Obligations, or (ii) in the case of Securities of such Series denominated in
a Foreign Currency (other than a composite currency), money and/or Foreign Government Obligations, which through the payment of
interest and principal in respect thereof in accordance with their terms, will provide (and without reinvestment and assuming no
tax liability will be imposed on such Trustee), not later than one day before the due date of any payment of money, an amount in
cash, sufficient, in the opinion of a nationally recognized firm of independent certified public accountants or investment bank
expressed in a written certification thereof delivered to the Trustee, to pay and discharge each installment of principal of and
interest, if any, on and any mandatory sinking fund payments in respect of the Securities of such Series on the dates such installments
of interest or principal and such sinking fund payments are due;

 

(b)          Such
deposit will not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument
to which the Company is a party or by which it is bound;

 

(c)          No
Default or Event of Default with respect to the Securities of such Series shall have occurred and be continuing on the date of
such deposit;

 

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

 

(e)          The
Company shall have delivered to the Trustee an Officer’s Certificate stating the deposit was not made by the Company with
the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and

 

(f)          The
Company shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the covenant defeasance contemplated by this Section have been complied with.

 

Section 8.5.          Repayment
to Company.

 

Subject to applicable
abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment
of principal and interest that remains unclaimed for two years. After that, Securityholders entitled to the money must look to
the Company for payment as general creditors unless an applicable abandoned property law designates another person.

 

    	35

    	 

    

 

Section 8.6.          Reinstatement.

 

If the Trustee or the
Paying Agent is unable to apply any money deposited with respect to Securities of any Series in accordance with Section 8.1 by
reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the obligations of the Company under this Indenture with respect to the Securities of
such Series and under the Securities of such Series shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.1 until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section
8.1; provided, however, that if the Company has made any payment of principal of or interest on or any Additional
Amounts with respect to any Securities because of 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 held by the Trustee or Paying Agent.

 

ARTICLE
IX.

AMENDMENTS
AND WAIVERS

 

Section 9.1.          Without
Consent of Holders.

 

The Company and the Trustee
may amend or supplement this Indenture or the Securities of one or more Series without the consent of any Securityholder:

 

(a)          to
cure any ambiguity, defect or inconsistency;

 

(b)          to
comply with Article V;

 

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

 

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

 

(e)          to
provide for the issuance of and establish the form and terms and conditions of Securities of any Series as permitted by this Indenture;

 

(f)          to
evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or
more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee; or

 

(g)          to
comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA.

 

Section 9.2.          With
Consent of Holders.

 

The Company and the Trustee
may enter into a supplemental indenture with the written consent of the Holders of at least a majority in principal amount of the
outstanding Securities of each Series affected by such supplemental indenture (including consents obtained in connection with a
tender offer or exchange offer for the Securities of such Series), for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Securityholders of each such Series. Except as provided in Section 6.13, the Holders of at least a majority in principal
amount of the outstanding Securities of any Series by notice to the Trustee (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series) may waive compliance by the Company with any provision of this Indenture
or the Securities with respect to such Series.

 

    	36

    	 

    

 

It shall not be necessary
for the consent of the Holders of Securities under this Section 9.2 to approve the particular form of any proposed supplemental
indenture or waiver, but it shall be sufficient if such consent approves the substance thereof. After a supplemental indenture
or waiver under this section becomes effective, the Company shall mail to the Holders of Securities affected thereby, a notice
briefly describing the supplemental indenture or waiver. Any failure by the Company to mail or publish such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver.

 

Section 9.3.          Limitations.

 

Without the consent of
each Securityholder affected, an amendment or waiver may not:

 

(a)          reduce
the principal amount of Securities whose Holders must consent to an amendment, supplement or waiver;

 

(b)          reduce
the rate of or extend the time for payment of interest (including default interest) on any Security;

 

(c)          reduce
the principal or change the Stated Maturity of any Security or reduce the amount of, or postpone the date fixed for, the payment
of any sinking fund or analogous obligation;

 

(d)          reduce
the principal amount of Discount Securities payable upon acceleration of the maturity thereof;

 

(e)          waive
a Default or Event of Default in the payment of the principal of or interest, if any, on any Security (except a rescission of acceleration
of the Securities of any Series by the Holders of at least a majority in principal amount of the outstanding Securities of such
Series and a waiver of the payment default that resulted from such acceleration);

 

(f)          make
the principal of or interest, if any, on any Security payable in any currency other than that stated in the Security;

 

(g)          make
any change in Sections 6.8, 6.13 or 9.3 (this sentence); or

 

(h)          waive
a redemption payment with respect to any Security, provided that such redemption is made at the Company’s option.

 

Section 9.4.          Compliance
with Trust Indenture Act.

 

Every amendment to this
Indenture or the Securities of one or more Series shall be set forth in a supplemental indenture hereto that complies with the
TIA as then in effect.

 

    	37

    	 

    

 

Section 9.5.          Revocation
and Effect of Consents.

 

Until an amendment is
set forth in a supplemental indenture or a waiver becomes effective, a consent to it by a Holder of a Security is a continuing
consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting
Holder’s Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder
may revoke the consent as to his Security or portion of a Security if the Trustee receives the notice of revocation before the
date of the supplemental indenture or the date the waiver becomes effective.

 

Any amendment or waiver
once effective shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described
in any of clauses (a) through (h) of Section 9.3. In that case, the amendment or waiver shall bind each Holder of a Security who
has consented to it and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting
Holder’s Security.

 

Section 9.6.          Notation
on or Exchange of Securities.

 

The Trustee may place
an appropriate notation about an amendment or waiver on any Security of any Series thereafter authenticated. The Company in exchange
for Securities of that Series may issue and the Trustee shall authenticate upon request new Securities of that Series that reflect
the amendment or waiver.

 

Section 9.7.          Trustee
Protected.

 

In executing, or accepting
the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officer’s Certificate or an Opinion of Counsel or both complying with Section 10.4. The Trustee shall sign all supplemental
indentures upon delivery of such an Officer’s Certificate or Opinion of Counsel or both, except that the Trustee need not
sign any supplemental indenture that adversely affects its rights.

 

ARTICLE
X.

MISCELLANEOUS

 

Section 10.1.        Trust
Indenture Act Controls.

 

If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is required or deemed to be included in this Indenture by
the TIA, such required or deemed provision shall control.

 

Section 10.2.        Notices.

 

Any notice or communication
by the Company or the Trustee to the other, or by a Holder to the Company or the Trustee, is duly given if in writing and delivered
in person or mailed by first-class mail:

 

    	38

    	 

    

 

if to the Company:

 

Waste Connections, Inc.

[_____]

[_____]

Attention: General Counsel

Telephone: [_____]

 

with a copy to:

 

Latham & Watkins
LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Attention: Keith Benson

Telephone: (713) 546-7459

 

if to the Trustee:

 

U.S. Bank National Association

Corporate Trust Services

633 West Fifth Street, 24th Floor

Los Angeles, CA 90071

Attention: Paula Oswald (Waste Connection 2___ Indenture)

Telephone: (213) 615-6043

Facsimile: (213) 615-6197

 

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

 

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

 

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

 

If the Company mails
a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time.

 

Notwithstanding any other
provision of this Indenture or any Security, where this Indenture or any Security provides for notice of any event (including any
notice of redemption) to a Holder of a Global Security (whether by mail or otherwise), such notice shall be sufficiently given
to the Depositary for such Security (or its designee) pursuant to the customary procedures of such Depositary.

 

    	39

    	 

    

 

Section 10.3.        Communication
by Holders with Other Holders.

 

Securityholders of any
Series may communicate pursuant to TIA § 312(b) with other Securityholders of that Series or any other Series with respect
to their rights under this Indenture or the Securities of that Series or all Series. The Company, the Trustee, the Registrar and
anyone else shall have the protection of TIA § 312(c).

 

Section 10.4.        Certificate
and Opinion as to Conditions Precedent.

 

Upon any request or application
by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

 

(a)          an
Officer’s Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and

 

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

 

Section 10.5.        Statements
Required in Certificate or Opinion.

 

Each certificate or opinion
with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant
to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:

 

(a)          a
statement that the person making such certificate or opinion has read such covenant or condition;

 

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

 

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

 

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

 

Section 10.6.        Rules
by Trustee and Agents.

 

The Trustee may make
reasonable rules for action by or a meeting of Securityholders of one or more Series. Any Agent may make reasonable rules and set
reasonable requirements for its functions.

 

    	40

    	 

    

 

Section 10.7.        Legal
Holidays.

 

Unless otherwise provided
by Board Resolution, Officer’s Certificate or supplemental indenture hereto for a particular Series, a “Legal Holiday”
is any day that is not a Business Day. 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.

 

Section 10.8.        No
Recourse Against Others.

 

A director, officer,
employee or stockholder (past or present), as such, of the Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation.
Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration
for the issue of the Securities.

 

Section 10.9.        Counterparts.

 

This Indenture may be
executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

Section 10.10.      Governing
Laws.

 

THIS INDENTURE AND
THE SECURITIES, INCLUDING ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THE INDENTURE OR THE SECURITIES, SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY LAW
OTHER THAN THE LAW OF THE STATE OF NEW YORK.

 

Section 10.11.      No
Adverse Interpretation of Other Agreements.

 

This Indenture may not
be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary of the Company. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.

 

Section 10.12.      Successors.

 

All agreements of the
Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.

 

Section 10.13.      Severability.

 

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

 

    	41

    	 

    

 

Section 10.14.      Table
of Contents, Headings, Etc.

 

The Table of Contents,
Cross Reference Table, and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

 

Section 10.15.      Securities
in a Foreign Currency.

 

Unless otherwise specified
in a Board Resolution, a supplemental indenture hereto or an Officer’s Certificate delivered pursuant to Section 2.2 of this
Indenture with respect to a particular Series of Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of Securities of all Series or all Series affected by a particular
action at the time outstanding and, at such time, there are outstanding Securities of any Series which are denominated more than
one currency, then the principal amount of Securities of such Series which shall be deemed to be outstanding for the purpose of
taking such action shall be determined by converting any such other currency into a currency that is designated upon issuance of
any particular Series of Securities. Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an Officer’s
Certificate delivered pursuant to Section 2.2 of this Indenture with respect to a particular Series of Securities, such conversion
shall be at the spot rate for the purchase of the designated currency as published in the The Financial Times in the “Currency
Rates” section (of, if The Financial Times is no longer published, or if such information is no longer available in The Financial
Times, such source as may be selected in good faith by the Company) on any date of determination. The provisions of this paragraph
shall apply in determining the equivalent principal amount in respect of Securities of a Series denominated in currency other than
Dollars in connection with any action taken by Holders of Securities pursuant to the terms of this Indenture.

 

All decisions and determinations
provided for in the preceding paragraph shall, in the absence of manifest error, to the extent permitted by law, be conclusive
for all purposes and irrevocably binding upon the Trustee and all Holders.

 

Section 10.16.      Judgment
Currency.

 

The Company agrees, to
the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of or interest or other amount on the Securities of any
Series (the “Required Currency”) into a currency in which a judgment will be rendered (the “Judgment
Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment Currency on the day on which final unappealable
judgment is entered, unless such day is not a New York Banking Day, then the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding the day on which final unappealable judgment is entered and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, any recovery
pursuant to any judgment (whether or not entered in accordance with subsection (a)), in any currency other than the Required Currency,
except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of
action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short
of the full amount of the Required Currency so expressed to be payable, and (iii) shall not be affected by judgment being obtained
for any other sum due under this Indenture. For purposes of the foregoing, “New York Banking Day” means any
day except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions are authorized or required
by law, regulation or executive order to close.

 

    	42

    	 

    

 

Section 10.17.      Force
Majeure.

 

In no event shall the
Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused
by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware) services, it being understood that the Trustee shall
use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as soon
as practicable under the circumstances.

 

ARTICLE
XI.

SINKING
FUNDS

 

Section 11.1.        Applicability
of Article.

 

The provisions of this
Article shall be applicable to any sinking fund for the retirement of the Securities of a Series if so provided by the terms of
such Securities PURSUANT TO Section 2.2 and except as otherwise permitted or required by any form of Security of such Series issued
pursuant to this Indenture.

 

The minimum amount of
any sinking fund payment provided for by the terms of the Securities of any Series is herein referred to as a “mandatory
sinking fund payment” and any other amount provided for by the terms of Securities of such Series is herein referred
to as an “optional sinking fund payment.” If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in Section 11.2. Each sinking fund payment shall be
applied to the redemption of Securities of any Series as provided for by the terms of the Securities of such Series.

 

    	43

    	 

    

 

Section 11.2.        Satisfaction
of Sinking Fund Payments with Securities.

 

The Company may, in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of
such Securities (1) deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than
any of such Securities previously called for mandatory sinking fund redemption) and (2) apply as credit Securities of such Series
to which such sinking fund payment is applicable and which have been repurchased by the Company or redeemed either at the election
of the Company pursuant to the terms of such Series of Securities (except pursuant to any mandatory sinking fund) or through the
application of permitted optional sinking fund payments or other optional redemptions pursuant to the terms of such Securities,
provided that such Securities have not been previously so credited. Such Securities shall be received by the Trustee, together
with an Officer’s Certificate with respect thereto, not later than 15 days prior to the date on which the Trustee begins
the process of selecting Securities for redemption, and shall be credited for such purpose by the Trustee at the price specified
in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Securities in lieu of cash payments pursuant to this Section 11.2, the
principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash payment shall be less than
$100,000, the Trustee need not call Securities of such Series for redemption, except upon receipt of a Company Order that such
action be taken, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking
fund payment, provided, however, that the Trustee or such Paying Agent shall from time to time upon receipt of a
Company Order pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery
by the Company to the Trustee of Securities of that Series purchased by the Company having an unpaid principal amount equal to
the cash payment required to be released to the Company.

 

Section 11.3.        Redemption
of Securities for Sinking Fund.

 

Not less than 45 days
(unless otherwise indicated in the Board Resolution, supplemental indenture hereto or Officer’s Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for any Series of Securities, the Company will deliver
to the Trustee an Officer’s Certificate specifying the amount of the next ensuing mandatory sinking fund payment for that
Series pursuant to the terms of that Series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of Securities of that Series pursuant to Section 11.2, and
the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the Company shall thereupon
be obligated to pay the amount therein specified. Not less than 30 days (unless otherwise indicated in the Board Resolution, Officer’s
Certificate or supplemental indenture in respect of a particular Series of Securities) before each such sinking fund payment date
the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.2
and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided
in Section 3.3. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.

 

    	44

    	 

    

 

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

 

	 	WASTE CONNECTIONS, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Its:
	 	 	 
	 	[_____], as Trustee
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Its:EX-99.1 release 12.31.14

Exhibit 99.1
	
			
	
	 
	Waterloo House, Ground Floor

	 
	100 Pitts Bay Road

	 
	Pembroke HM 08 Bermuda

	 
	 

	 
	441-278-9250

	 
	441-278-9255 fax

	 
	 

	   PRESS RELEASE
	 
	CONTACT:

	   NASDAQ Symbol ACGL
	 
	Mark D. Lyons

	   For Immediate Release
	 
	Executive Vice President and

	 
	 
	Chief Financial Officer

ARCH CAPITAL GROUP LTD. REPORTS 2014 FOURTH QUARTER RESULTS 

HAMILTON, BERMUDA, February 10, 2015 -- Arch Capital Group Ltd. (NASDAQ: ACGL) reports that net income available to Arch common shareholders for the 2014 fourth quarter was $209.7 million, or $1.60 per share, compared to $156.0 million, or $1.14 per share, for the 2013 fourth quarter, while after-tax operating income available to Arch common shareholders was $150.2 million, or $1.15 per share, for the 2014 fourth quarter, compared to $152.7 million, or $1.12 per share, for the 2013 fourth quarter. For the year ended December 31, 2014, net income available to Arch common shareholders was $812.4 million, or $6.02 per share, compared to $687.8 million, or $5.07 per share, for 2013, while after-tax operating income available to Arch common shareholders for 2014 was $617.3 million, or $4.58 per share, compared to $595.7 million, or $4.39 per share, for 2013. All earnings per share amounts discussed in this release are on a diluted basis.

The Company’s book value per common share was $45.58 at December 31, 2014, a 3.5% increase from $44.04 per share at September 30, 2014 and a 14.5% increase from $39.82 per share at December 31, 2013. The Company’s after-tax operating income available to Arch common shareholders represented an annualized return on average common equity of 10.4% for the 2014 fourth quarter, compared to 11.7% for the 2013 fourth quarter, and 11.1% for the year ended December 31, 2014, compared to 11.7% for 2013. The Company’s net income available to Arch common shareholders represented an annualized return on average common equity of 14.5% for the 2014 fourth quarter, compared to 12.0% for the 2013 fourth quarter, and 14.6% for the year ended December 31, 2014, compared to 13.5% for 2013. 

The following table summarizes the Company’s underwriting results, excluding amounts related to the ‘other’ segment (i.e., results of Watford). Although the Company owns approximately 11% of Watford’s common equity, it consolidates the results of Watford in its financial statements, pursuant to generally accepted accounting principles. All discussions of line items in this release exclude amounts related to the ‘other’ segment. For segment results reflecting the contribution of the ‘other’ segment, see pages 11 to 14 of the Company’s Financial Supplement dated December 31, 2014.
	
																						
	 
	Three Months Ended December 31,
	 
	Year Ended December 31,

	(U.S. dollars in thousands)
	2014
	 
	2013
	 
	% Change
	 
	2014
	 
	2013
	 
	% Change

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Gross premiums written
	$
	1,069,932
	

	 
	$
	955,199
	

	 
	12.0
	

	 
	$
	4,760,394
	

	 
	$
	4,196,623
	

	 
	13.4
	

	Net premiums written
	804,836
	

	 
	748,921
	

	 
	7.5
	

	 
	3,617,482
	

	 
	3,351,367
	

	 
	7.9
	

	Net premiums earned
	869,604
	

	 
	839,366
	

	 
	3.6
	

	 
	3,490,271
	

	 
	3,145,952
	

	 
	10.9
	

	Underwriting income
	114,300
	

	 
	128,318
	

	 
	(10.9
	)
	 
	474,178
	

	 
	451,737
	

	 
	5.0
	

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Underwriting Ratios
	 
	 
	 
	 
	% Point Change
	 
	 
	 
	 
	 
	% Point Change

	Loss ratio
	52.8
	%
	 
	51.7
	%
	 
	1.1
	

	 
	53.0
	%
	 
	53.4
	%
	 
	(0.4
	)

	Acquisition expense ratio
	18.4
	%
	 
	18.8
	%
	 
	(0.4
	)
	 
	18.0
	%
	 
	17.9
	%
	 
	0.1
	

	Other operating expense ratio
	16.3
	%
	 
	14.9
	%
	 
	1.4
	

	 
	15.8
	%
	 
	14.6
	%
	 
	1.2
	

	Combined ratio
	87.5
	%
	 
	85.4
	%
	 
	2.1
	

	 
	86.8
	%
	 
	85.9
	%
	 
	0.9
	

1

The following table summarizes, on an after-tax basis, the Company’s consolidated financial data, including a reconciliation of after-tax operating income available to Arch common shareholders, a non-GAAP measure, to net income available to Arch common shareholders and related diluted per share results. See ‘Comments on Regulation G’ for a further discussion of after-tax operating income or loss available to Arch common shareholders.
	
																
	 
	Three Months Ended
	 
	Year Ended

	 
	December 31,
	 
	December 31,

	(U.S. dollars in thousands, except share data)
	2014
	 
	2013
	 
	2014
	 
	2013

	 
	 
	 
	 
	 
	 
	 
	 

	After-tax operating income available to Arch common shareholders
	$
	150,184
	

	 
	$
	152,741
	

	 
	$
	617,312
	

	 
	$
	595,715
	

	Net realized gains, net of tax
	26,847
	

	 
	8,584
	

	 
	122,863
	

	 
	73,844
	

	Net impairment losses recognized in earnings, net of tax
	(3,837
	)
	 
	(88
	)
	 
	(30,150
	)
	 
	(3,786
	)

	Equity in net income of investment funds accounted for using the equity method, net of tax
	2,252
	

	 
	5,309
	

	 
	19,235
	

	 
	35,738
	

	Net foreign exchange gains (losses), net of tax
	34,233
	

	 
	(10,541
	)
	 
	83,157
	

	 
	(13,718
	)

	Net income available to Arch common shareholders
	$
	209,679
	

	 
	$
	156,005
	

	 
	$
	812,417
	

	 
	$
	687,793
	

	 
	 
	 
	 
	 
	 
	 
	 

	Diluted per common share results:
	 
	 
	 
	 
	 
	 
	 

	After-tax operating income available to Arch common shareholders
	$
	1.15
	

	 
	$
	1.12
	

	 
	$
	4.58
	

	 
	$
	4.39
	

	Net realized gains, net of tax
	0.21
	

	 
	0.06
	

	 
	0.91
	

	 
	0.54
	

	Net impairment losses recognized in earnings, net of tax
	(0.03
	)
	 
	—
	

	 
	(0.22
	)
	 
	(0.03
	)

	Equity in net income of investment funds accounted for using the equity method, net of tax
	0.01
	

	 
	0.04
	

	 
	0.14
	

	 
	0.27
	

	Net foreign exchange gains (losses), net of tax
	0.26
	

	 
	(0.08
	)
	 
	0.61
	

	 
	(0.10
	)

	Net income available to Arch common shareholders
	$
	1.60
	

	 
	$
	1.14
	

	 
	$
	6.02
	

	 
	$
	5.07
	

	 
	 
	 
	 
	 
	 
	 
	 

	Weighted average common shares and common share equivalents outstanding - diluted
	130,855,218
	

	 
	136,467,998
	

	 
	134,922,322
	

	 
	135,777,183
	

The Company’s investment portfolio continues to be comprised primarily of high quality fixed income securities with an average credit quality of “AA/Aa2.” The average effective duration of the Company’s investment portfolio was 3.34 years at December 31, 2014, compared to 3.28 years at September 30, 2014. Including the effects of foreign exchange, total return on the Company’s investment portfolio was 0.85% for the 2014 fourth quarter, compared to 0.97% for the 2013 fourth quarter. Total return in the 2014 fourth quarter was primarily driven by investment grade fixed income returns and strong returns on equities during the period, partially offset by strengthening of the U.S. Dollar against the Euro, British Pound Sterling and other major currencies on non-U.S. Dollar denominated investments. Excluding the effects of foreign exchange, total return was 1.34% for the 2014 fourth quarter, compared to 0.85% for the 2013 fourth quarter. 

Net investment income for the 2014 fourth quarter was $72.6 million, or $0.56 per share, compared to $72.2 million, or $0.53 per share, for the 2014 third quarter, and $67.1 million, or $0.49 per share, for the 2013 fourth quarter. The annualized pre-tax investment income yield was 2.16% for the 2014 fourth quarter, compared to 2.05% for the 2014 third quarter and 2.08% for the 2013 fourth quarter. Such yields reflect the effects of low prevailing interest rates available in the market and the Company’s investment strategy, which puts an emphasis on total return. Consolidated cash flow provided by operating activities was $226.9 million for the 2014 fourth quarter, compared to $223.8 million for the 2013 fourth quarter.

In 2008, the Company provided $100.0 million of funding to Gulf Reinsurance Limited (“Gulf Re”), a specialty reinsurer based in the Dubai International Financial Centre which was founded jointly by Arch and Gulf Investment Corporation (“GIC”). The Company accounts for its investment in Gulf Re, shown as ‘investment in joint venture,’ using the equity method and records its equity in the operating results of Gulf Re in ‘other income (loss).’ The Company recorded a loss of $5.0 million in the 2014 fourth quarter and $14.1 million for the year ended December 31, 2014 related to its investment in Gulf Re, primarily resulting from a small number of large losses. The Company entered into a number of strategic initiatives in the 2014 fourth quarter, including an agreement to acquire complete ownership of Gulf Re, which is currently pending approval by the Dubai Financial Services Authority. To further support Gulf Re’s business in advance of the January 1 renewal season, the Company entered into a 90% whole 

2

account quota share retrocession arrangement of Gulf Re’s net liabilities and a portfolio transfer of all of Gulf Re’s existing business (both unearned premium and loss reserves), effective as of October 1, 2014.

On a pre-tax basis, net foreign exchange gains for the 2014 fourth quarter were $34.5 million, compared to net foreign exchange losses for the 2013 fourth quarter of $9.8 million. For both periods, such amounts were primarily unrealized and resulted from the effects of revaluing the Company’s net insurance liabilities required to be settled in foreign currencies at each balance sheet date. Changes in the value of available-for-sale investments held in foreign currencies due to foreign currency rate movements are reflected as a direct increase or decrease to shareholders’ equity and are not included in the consolidated statements of income. 

The Company’s effective tax rate on income before income taxes was 2.5% for the 2014 fourth quarter and 2.7% for the year ended December 31, 2014, compared to 8.7% for the 2013 fourth quarter and 4.4% for 2013. The Company’s effective tax rate on pre-tax operating income available to Arch common shareholders was 1.7% for the 2014 fourth quarter and 2.4% for the year ended December 31, 2014, compared to 8.3% for the 2013 fourth quarter and 4.8% for 2013. The 2013 effective tax rates reflected the recognition of a valuation allowance on a deferred tax asset in the 2013 fourth quarter. The Company’s effective tax rates may fluctuate from period to period based on the relative mix of income or loss reported by jurisdiction and the varying tax rates in each jurisdiction. 

During the 2014 fourth quarter, the Company repurchased 3.6 million common shares for an aggregate purchase price of $202.2 million under its share repurchase program. Since the inception of the share repurchase program through December 31, 2014, ACGL has repurchased 118.1 million common shares for an aggregate purchase price of $3.24 billion. At December 31, 2014, $887.1 million of repurchases were available under the share repurchase program.

At December 31, 2014, total capital available to Arch of $7.03 billion consisted of $800.0 million of senior notes, representing 11.4% of the total, $100.0 million of revolving credit agreement borrowings due in June 2019, representing 1.4% of the total, $325.0 million of preferred shares, representing 4.6% of the total, and common shareholders’ equity of $5.81 billion, representing 82.6% of the total. At December 31, 2013, total capital available to Arch of $6.55 billion consisted of $800.0 million of senior notes, representing 12.2% of the total, $100.0 million of revolving credit agreement borrowings, representing 1.5% of the total, $325.0 million of preferred shares, representing 5.0% of the total, and common shareholders’ equity of $5.32 billion, representing 81.3% of the total.

The Company will hold a conference call for investors and analysts at 11:00 a.m. Eastern Time on February 11, 2015. A live webcast of this call will be available via the Investors section of the Company’s website at 
http://www.archcapgroup.com. A telephone replay of the conference call also will be available beginning on February 11, 2015 at 3:00 p.m. Eastern Time until February 18, 2015 at midnight Eastern Time. To access the replay, domestic callers should dial 888-286-8010 (passcode 22410429), and international callers should dial 617-801-6888 (passcode 22410429). 

Please refer to the Company’s Financial Supplement dated December 31, 2014, which is available via the Investors section of the Company’s website at http://www.archcapgroup.com. The Financial Supplement provides additional detail regarding the financial performance of the Company. From time to time, the Company posts additional financial information and presentations to its website, including information with respect to its subsidiaries. Investors and other recipients of this information are encouraged to check the Company’s website regularly for additional information regarding the Company.

Arch Capital Group Ltd., a Bermuda-based company with approximately $7.03 billion in capital at December 31, 2014, provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries.

3

Supplemental Information

Book Value Per Common Share
	
								
	(U.S. dollars in thousands, except share data)
	December 31, 
2014
	 
	December 31, 
2013

	Calculation of book value per common share:
	 
	 
	 

	Total shareholders’ equity available to Arch
	$
	6,130,053
	

	 
	$
	5,647,496
	

	Less preferred shareholders’ equity
	325,000
	

	 
	325,000
	

	Common shareholders’ equity available to Arch
	5,805,053
	

	 
	5,322,496
	

	Common shares outstanding, net of treasury shares (1)
	127,367,934
	

	 
	133,674,884
	

	Book value per common share
	$
	45.58
	

	 
	$
	39.82
	

		
	(1)
	Excludes the effects of 7,804,033 and 8,338,480 stock options and 447,073 and 443,710 restricted stock units outstanding at December 31, 2014 and December 31, 2013, respectively.

Investment Information
	
																
	(U.S. dollars in thousands, except share data)
	Three Months Ended
	 
	Year Ended

	 
	December 31,
	 
	December 31,

	 
	2014
	 
	2013
	 
	2014
	 
	2013

	Components of net investment income (1):
	 
	 
	 
	 
	 
	 
	 

	Fixed maturities
	$
	65,978
	

	 
	$
	63,376
	

	 
	$
	257,387
	

	 
	$
	249,833
	

	Term loan investments (2)
	4,902
	

	 
	5,069
	

	 
	21,521
	

	 
	20,608
	

	Equity securities (dividends)
	4,034
	

	 
	2,091
	

	 
	13,005
	

	 
	8,919
	

	Short-term investments
	244
	

	 
	86
	

	 
	904
	

	 
	1,259
	

	Other (3)
	7,122
	

	 
	4,924
	

	 
	28,803
	

	 
	19,710
	

	Gross investment income
	82,280
	

	 
	75,546
	

	 
	321,620
	

	 
	300,329
	

	Investment expenses
	(9,634
	)
	 
	(8,451
	)
	 
	(37,284
	)
	 
	(33,110
	)

	Net investment income
	$
	72,646
	

	 
	$
	67,095
	

	 
	$
	284,336
	

	 
	$
	267,219
	

	Per share
	$
	0.56
	

	 
	$
	0.49
	

	 
	$
	2.11
	

	 
	$
	1.97
	

	 
	 
	 
	 
	 
	 
	 
	 

	Investment income yield, at amortized cost (1) (4):
	 
	 
	 
	 
	 
	 
	 

	Pre-tax
	2.16
	%
	 
	2.08
	%
	 
	2.08
	%
	 
	2.12
	%

	After-tax
	2.03
	%
	 
	1.96
	%
	 
	1.94
	%
	 
	1.98
	%

	Total return (1) (5):
	 
	 
	 
	 
	 
	 
	 

	Including effects of foreign exchange
	0.85
	%
	 
	0.97
	%
	 
	3.21
	%
	 
	1.28
	%

	Excluding effects of foreign exchange
	1.34
	%
	 
	0.85
	%
	 
	4.26
	%
	 
	1.13
	%

	 
	 
	 
	 
	 
	 
	 
	 

	Cash flow from operations (1)
	$
	226,948
	

	 
	$
	223,820
	

	 
	$
	997,815
	

	 
	$
	850,868
	

		
	(1)
	Excludes amounts related to the ‘other’ segment.

		
	(2)
	Included in “investments accounted for using the fair value option” on the Company’s balance sheet.

		
	(3)
	Includes income on other investments, funds held balances, cash balances and other.

		
	(4)
	Presented on an annualized basis and excluding the impact of investments for which returns are not included within investment income, such as investments accounted for using the equity method and certain equities.

		
	(5)
	Includes net investment income, equity in net income or loss of investment funds accounted for using the equity method, net realized gains and losses and the change in unrealized gains or losses generated by the Company’s investment portfolio. Total return is calculated on a pre-tax basis and before investment expenses.

4

Investment Information (continued)
	
														
	(U.S. dollars in thousands)
	December 31, 2014
	 
	December 31, 2013

	 
	Amount
	 
	% of Total
	 
	Amount
	 
	% of Total

	 
	 
	 
	 
	 
	 
	 
	 

	Investable assets (1) (2):
	 
	 
	 
	 
	 
	 
	 

	Fixed maturities available for sale, at fair value
	$
	10,750,770
	

	 
	73.6
	

	 
	$
	9,571,776
	

	 
	68.1
	

	Fixed maturities, at fair value (3)
	377,053
	

	 
	2.6
	

	 
	448,254
	

	 
	3.2
	

	Fixed maturities pledged under securities lending agreements, at fair value
	50,802
	

	 
	0.3
	

	 
	105,081
	

	 
	0.8
	

	Total fixed maturities
	11,178,625
	

	 
	76.5
	

	 
	10,125,111
	

	 
	72.1
	

	Short-term investments available for sale, at fair value
	797,226
	

	 
	5.5
	

	 
	1,478,367
	

	 
	10.5
	

	Cash
	474,247
	

	 
	3.2
	

	 
	434,057
	

	 
	3.1
	

	Equity securities available for sale, at fair value
	658,182
	

	 
	4.5
	

	 
	496,824
	

	 
	3.5
	

	Other investments available for sale, at fair value
	296,224
	

	 
	2.0
	

	 
	498,310
	

	 
	3.6
	

	Other investments, at fair value (3)
	889,253
	

	 
	6.1
	

	 
	773,280
	

	 
	5.5
	

	Investments accounted for using the equity method (4)
	349,014
	

	 
	2.4
	

	 
	244,339
	

	 
	1.7
	

	Securities transactions entered into but not settled at the balance sheet date
	(32,802
	)
	 
	(0.2
	)
	 
	(763
	)
	 
	—
	

	Total investable assets managed by the Company
	$
	14,609,969
	

	 
	100.0
	

	 
	$
	14,049,525
	

	 
	100.0
	

	 
	 
	 
	 
	 
	 
	 
	 

	Investment portfolio statistics (1):
	 
	 
	 
	 
	 
	 
	 

	Average effective duration (in years)
	3.34
	

	 
	 
	 
	2.62
	

	 
	 

	Average credit quality (Standard & Poor’s/Moody’s Investors Service)
	AA/Aa2
	

	 
	 
	 
	AA-/Aa2
	

	 
	 

	Embedded book yield (before investment expenses)
	2.18
	%
	 
	 
	 
	2.38
	%
	 
	 

		
	(1)
	Excludes amounts related to the ‘other’ segment.

		
	(2)
	This table excludes the collateral received and reinvested and includes the fixed maturities and short-term investments pledged under securities lending agreements, at fair value. 

		
	(3)
	Represents investments which are carried at fair value under the fair value option and reflected as “investments accounted for using the fair value option” on the Company’s balance sheet. Changes in the carrying value of such investments are recorded in net realized gains or losses.

		
	(4)
	Changes in the carrying value of investment funds accounted for using the equity method are recorded as “equity in net income (loss) of investment funds accounted for using the equity method” rather than as an unrealized gain or loss component of accumulated other comprehensive income.

5

Selected Information on Losses and Loss Adjustment Expenses (1)
	
																
	(U.S. dollars in thousands)
	Three Months Ended
	 
	Year Ended

	 
	December 31,
	 
	December 31,

	 
	2014
	 
	2013
	 
	2014
	 
	2013

	Components of losses and loss adjustment expenses incurred
	 
	 
	 
	 
	 
	 
	 

	Paid losses and loss adjustment expenses
	$
	428,874
	

	 
	$
	439,411
	

	 
	$
	1,757,260
	

	 
	$
	1,708,817
	

	Change in unpaid losses and loss adjustment expenses
	29,905
	

	 
	(5,088
	)
	 
	91,817
	

	 
	(29,393
	)

	Total losses and loss adjustment expenses
	$
	458,779
	

	 
	$
	434,323
	

	 
	$
	1,849,077
	

	 
	$
	1,679,424
	

	 
	 
	 
	 
	 
	 
	 
	 

	Estimated net (favorable) adverse development in prior year loss reserves, net of related adjustments
	 
	 
	 
	 
	 
	 
	 

	Net impact on underwriting results:
	 
	 
	 
	 
	 
	 
	 

	Insurance
	$
	(9,437
	)
	 
	$
	(2,884
	)
	 
	$
	(44,087
	)
	 
	$
	(35,702
	)

	Reinsurance
	(63,192
	)
	 
	(63,200
	)
	 
	(261,519
	)
	 
	(218,034
	)

	Mortgage
	858
	

	 
	(438
	)
	 
	(1,005
	)
	 
	(438
	)

	Total
	$
	(71,771
	)
	 
	$
	(66,522
	)
	 
	$
	(306,611
	)
	 
	$
	(254,174
	)

	Impact on losses and loss adjustment expenses:
	 
	 
	 
	 
	 
	 
	 

	Insurance
	$
	(12,322
	)
	 
	$
	(6,649
	)
	 
	$
	(58,677
	)
	 
	$
	(45,148
	)

	Reinsurance
	(66,785
	)
	 
	(63,607
	)
	 
	(267,314
	)
	 
	(217,911
	)

	Mortgage
	858
	

	 
	(983
	)
	 
	(911
	)
	 
	(983
	)

	Total
	$
	(78,249
	)
	 
	$
	(71,239
	)
	 
	$
	(326,902
	)
	 
	(264,042
	)

	Impact on acquisition expenses:
	 
	 
	 
	 
	 
	 
	 

	Insurance
	$
	2,885
	

	 
	$
	3,765
	

	 
	$
	14,590
	

	 
	$
	9,446
	

	Reinsurance
	3,593
	

	 
	407
	

	 
	5,795
	

	 
	(123
	)

	Mortgage
	—
	

	 
	545
	

	 
	(94
	)
	 
	545
	

	Total
	$
	6,478
	

	 
	$
	4,717
	

	 
	$
	20,291
	

	 
	$
	9,868
	

	Impact on combined ratio:
	 
	 
	 
	 
	 
	 
	 

	Insurance
	(1.8
	)%
	 
	(0.6
	)%
	 
	(2.2
	)%
	 
	(1.9
	)%

	Reinsurance
	(20.7
	)%
	 
	(19.0
	)%
	 
	(20.4
	)%
	 
	(17.9
	)%

	Mortgage
	1.7
	 %
	 
	(3.1
	)%
	 
	(0.5
	)%
	 
	(0.9
	)%

	Total
	(8.3
	)%
	 
	(7.9
	)%
	 
	(8.8
	)%
	 
	(8.1
	)%

	Impact on loss ratio:
	 
	 
	 
	 
	 
	 
	 

	Insurance
	(2.4
	)%
	 
	(1.3
	)%
	 
	(2.9
	)%
	 
	(2.4
	)%

	Reinsurance
	(21.8
	)%
	 
	(19.2
	)%
	 
	(20.9
	)%
	 
	(17.9
	)%

	Mortgage
	1.7
	 %
	 
	(6.9
	)%
	 
	(0.5
	)%
	 
	(1.9
	)%

	Total
	(9.0
	)%
	 
	(8.5
	)%
	 
	(9.4
	)%
	 
	(8.4
	)%

	Impact on acquisition expense ratio:
	 
	 
	 
	 
	 
	 
	 

	Insurance
	0.6
	 %
	 
	0.7
	 %
	 
	0.7
	 %
	 
	0.5
	 %

	Reinsurance
	1.1
	 %
	 
	0.2
	 %
	 
	0.5
	 %
	 
	—
	 %

	Mortgage
	—
	 %
	 
	3.8
	 %
	 
	—
	 %
	 
	1.0
	 %

	Total
	0.7
	 %
	 
	0.6
	 %
	 
	0.6
	 %
	 
	0.3
	 %

	 
	 
	 
	 
	 
	 
	 
	 

	Estimated net losses incurred from current accident year catastrophic events (2)
	 
	 
	 
	 
	 
	 
	 

	Insurance
	$
	5,671
	

	 
	$
	2,203
	

	 
	$
	13,982
	

	 
	$
	21,563
	

	Reinsurance
	14,237
	

	 
	14,583
	

	 
	42,145
	

	 
	62,188
	

	Total
	$
	19,908
	

	 
	$
	16,786
	

	 
	$
	56,127
	

	 
	$
	83,751
	

	Impact on combined ratio:
	 
	 
	 
	 
	 
	 
	 

	Insurance
	1.1
	 %
	 
	0.4
	 %
	 
	0.7
	 %
	 
	1.1
	 %

	Reinsurance
	4.7
	 %
	 
	4.4
	 %
	 
	3.3
	 %
	 
	5.1
	 %

	Total
	2.3
	 %
	 
	2.0
	 %
	 
	1.6
	 %
	 
	2.7
	 %

		
	(1)
	Excludes amounts related to the ‘other’ segment.

		
	(2)
	Equals estimated losses from catastrophic events occurring in the current accident year, net of reinsurance and reinstatement premiums. Amounts shown for the insurance segment are for named catastrophic events only. Amounts shown for the reinsurance segment include (i) named events with over $5 million of losses incurred by its Bermuda and Europe operations and (ii) all catastrophe losses incurred by its U.S. operations. Amounts not applicable for the mortgage segment. 

6

Segment Information

The following section provides analysis on the Company’s 2014 fourth quarter performance by operating segment. For additional details regarding the Company’s operating segments, please refer to the Company’s Financial Supplement dated December 31, 2014.

Insurance Segment
	
											
	 
	Three Months Ended December 31,

	(U.S. dollars in thousands)
	2014
	 
	2013
	 
	% Change

	 
	 
	 
	 
	 
	 

	Gross premiums written
	$
	699,109
	

	 
	$
	636,949
	

	 
	9.8
	

	Net premiums written
	483,176
	

	 
	440,707
	

	 
	9.6
	

	Net premiums earned
	512,770
	

	 
	493,264
	

	 
	4.0
	

	Underwriting income
	22,856
	

	 
	18,653
	

	 
	22.5
	

	 
	 
	 
	 
	 
	 

	Underwriting Ratios
	 
	 
	 
	 
	% Point Change

	Loss ratio
	63.3
	 %
	 
	62.4
	 %
	 
	0.9
	

	Acquisition expense ratio
	15.8
	 %
	 
	17.0
	 %
	 
	(1.2
	)

	Other operating expense ratio
	16.6
	 %
	 
	16.9
	 %
	 
	(0.3
	)

	Combined ratio
	95.7
	 %
	 
	96.3
	 %
	 
	(0.6
	)

	 
	 
	 
	 
	 
	 

	Catastrophic activity and prior year development:
	 
	 
	 
	 
	 

	Current accident year catastrophic events, net of
	 
	 
	 
	 
	 

	reinsurance and reinstatement premiums
	1.1
	 %
	 
	0.4
	 %
	 
	0.7
	

	Net (favorable) adverse development in prior year loss
	 
	 
	 
	 
	 

	reserves, net of related adjustments
	(1.8
	)%
	 
	(0.6
	)%
	 
	(1.2
	)

	Combined ratio excluding such items
	96.4
	 %
	 
	96.5
	 %
	 
	(0.1
	)

Gross premiums written by the insurance segment in the 2014 fourth quarter were 9.8% higher than in the 2013 fourth quarter and net premiums written were 9.6% higher than in the 2013 fourth quarter. The growth in net premiums written primarily resulted from increases in professional lines, excess and surplus casualty and alternative markets, partially offset by a decrease in construction and national accounts. The growth in professional lines primarily reflected increases in small and medium sized international accounts. The increase in excess and surplus casualty business primarily resulted from contract binding business and reflected additional product lines and a high retention ratio while growth in alternative markets reflected new accounts resulting from a renewal rights agreement entered into in the 2014 second quarter, growth in existing accounts and new business. Net premiums written for construction and national accounts was impacted by a 2014 regulatory change in the accounting for New York workers’ compensation surcharges.

Net premiums earned by the insurance segment in the 2014 fourth quarter were 4.0% higher than in the 2013 fourth quarter, and reflect changes in net premiums written over the previous five quarters.

The 2014 fourth quarter loss ratio reflected 1.1 points of current year catastrophic activity, compared to 0.4 points in the 2013 fourth quarter. Estimated net favorable development in prior year loss reserves, before related adjustments, reduced the loss ratio by 2.4 points in the 2014 fourth quarter, compared to 1.3 points in the 2013 fourth quarter. The estimated net favorable development in the 2014 fourth quarter primarily resulted from better than expected claims emergence in short-tail business from more recent accident years. 

The underwriting expense ratio was 32.4% in the 2014 fourth quarter, compared to 33.9% in the 2013 fourth quarter. The acquisition expense ratio was 15.8% in the 2014 fourth quarter, compared to 17.0% in the 2013 fourth quarter. The higher ratio in the 2013 fourth quarter primarily resulted from the accounting for New York workers’ compensation surcharges noted above. The comparison of the 2014 fourth quarter and 2013 fourth quarter acquisition expense ratios is also influenced by, among other things, the mix and type of business written and earned and the level of ceding commissions. In addition, the 2014 fourth quarter ratio was impacted by changes in development of prior year loss reserves which increased the 2014 fourth quarter commission expense ratio by 0.6 points, compared to 0.7 points recorded in the 2013 fourth quarter. The operating expense ratio was 16.6% in the 2014 fourth quarter, compared to 16.9% in the 2013 fourth quarter, primarily reflecting growth in net premiums earned.

7

Reinsurance Segment
	
											
	 
	Three Months Ended December 31,

	(U.S. dollars in thousands)
	2014
	 
	2013
	 
	% Change

	 
	 
	 
	 
	 
	 

	Gross premiums written
	$
	314,604
	

	 
	$
	299,818
	

	 
	4.9
	

	Net premiums written
	268,973
	

	 
	287,779
	

	 
	(6.5
	)

	Net premiums earned
	305,805
	

	 
	331,929
	

	 
	(7.9
	)

	Underwriting income
	89,902
	

	 
	103,599
	

	 
	(13.2
	)

	 
	 
	 
	 
	 
	 

	Underwriting Ratios
	 
	 
	 
	 
	% Point Change

	Loss ratio
	38.8
	 %
	 
	38.6
	 %
	 
	0.2
	

	Acquisition expense ratio
	20.2
	 %
	 
	20.1
	 %
	 
	0.1
	

	Other operating expense ratio
	12.3
	 %
	 
	11.6
	 %
	 
	0.7
	

	Combined ratio
	71.3
	 %
	 
	70.3
	 %
	 
	1.0
	

	 
	 
	 
	 
	 
	 

	Catastrophic activity and prior year development:
	 
	 
	 
	 
	 

	Current accident year catastrophic events, net of
	 
	 
	 
	 
	 

	reinsurance and reinstatement premiums
	4.7
	 %
	 
	4.4
	 %
	 
	0.3
	

	Net (favorable) adverse development in prior year loss
	 
	 
	 
	 
	 

	reserves, net of related adjustments
	(20.7
	)%
	 
	(19.0
	)%
	 
	(1.7
	)

	Combined ratio excluding such items
	87.3
	 %
	 
	84.9
	 %
	 
	2.4
	

Gross premiums written by the reinsurance segment in the 2014 fourth quarter were 4.9% higher than in the 2013 fourth quarter, while net premiums written were 6.5% lower than in the 2013 fourth quarter. The differential in gross versus net premiums written primarily reflects retrocessions of premiums to Watford Re (included in the ‘other’ segment) in the 2014 fourth quarter. The lower level of net premiums written reflected decreases in casualty and other specialty lines, partially offset by growth in property excluding property catastrophe business discussed below. The decrease in casualty business primarily resulted from a 2013 fourth quarter portfolio in from a large U.S. professional liability quota share contract of $44.4 million, along with cessions to Watford Re in the 2014 fourth quarter. The decrease in other specialty business reflected a lower level of premiums related to a multi-line quota share reinsurance agreement entered into in the 2013 third quarter which was not expected to, and did not, recur in 2014. In addition, other specialty premiums reflected a reduction in motor business. As discussed earlier in this release, the Company entered into a 90% whole account quota share retrocession arrangement of Gulf Re’s net liabilities and a portfolio transfer of all of Gulf Re’s existing business (both unearned premium and loss reserves), effective as of October 1, 2014. The growth in property excluding property catastrophe business in the 2014 fourth quarter primarily resulted from the unearned premium portfolio transfer from Gulf Re of $50.2 million. 

Net premiums earned in the 2014 fourth quarter were 7.9% lower than in the 2013 fourth quarter, and primarily reflect changes in net premiums written over the previous five quarters, including the mix and type of business written. 

The 2014 fourth quarter loss ratio reflected 4.7 points of current year catastrophic activity, compared to 4.7 points of catastrophic activity in the 2013 fourth quarter. Estimated net favorable development in prior year loss reserves, before related adjustments, reduced the loss ratio by 21.8 points in the 2014 fourth quarter, compared to 19.2 points in the 2013 fourth quarter. The estimated net favorable development in the 2014 fourth quarter primarily resulted from better than expected claims emergence in short-tail business from more recent underwriting years and in longer-tail business, primarily from older underwriting years. The balance of the increase in the 2014 fourth quarter loss ratio primarily resulted from changes in the mix of net premiums earned, including a lower contribution from property catastrophe business than in the 2013 fourth quarter.

The underwriting expense ratio was 32.5% in the 2014 fourth quarter, compared to 31.7% in the 2013 fourth quarter. The acquisition expense ratio for the 2014 fourth quarter was 20.2%, compared to 20.1% for the 2013 fourth quarter. The 2014 fourth quarter acquisition expense ratio was impacted by changes in development of prior year loss reserves which increased the ratio by 1.1 points, compared to 0.2 points for the 2013 fourth quarter. The comparison of the acquisition expense ratios in each period is influenced by, among other things, the mix and type of business written and earned and the level of ceding commissions. The operating expense ratio for the 2014 fourth quarter was 12.3%, compared to 11.6% in the 2013 fourth quarter, primarily reflecting the lower level of net premiums earned. 

8

Mortgage Segment
	
											
	 
	Three Months Ended December 31,

	(U.S. dollars in thousands)
	2014
	 
	2013
	 
	% Change

	 
	 
	 
	 
	 
	 

	Gross premiums written
	$
	57,584
	

	 
	$
	20,435
	

	 
	181.8
	

	Net premiums written
	52,687
	

	 
	20,435
	

	 
	157.8
	

	Net premiums earned
	51,029
	

	 
	14,173
	

	 
	260.0
	

	Underwriting income
	1,542
	

	 
	6,066
	

	 
	(74.6
	)

	 
	 
	 
	 
	 
	 

	Underwriting Ratios
	 
	 
	 
	 
	% Point Change

	Loss ratio
	30.8
	%
	 
	(10.8
	)%
	 
	41.6
	

	Acquisition expense ratio
	32.9
	%
	 
	46.2
	 %
	 
	(13.3
	)

	Other operating expense ratio
	36.9
	%
	 
	23.6
	 %
	 
	13.3
	

	Combined ratio
	100.6
	%
	 
	59.0
	 %
	 
	41.6
	

	 
	 
	 
	 
	 
	 

	Net (favorable) adverse development in prior year loss
	 
	 
	 
	 
	 

	reserves, net of related adjustments
	1.7
	%
	 
	(3.1
	)%
	 
	4.8
	

	Combined ratio excluding prior year development
	98.9
	%
	 
	62.1
	 %
	 
	36.8
	

The mortgage segment includes the results of Arch MI U.S., a leading provider of mortgage insurance products and services to the U.S. marketplace, which was acquired in January 2014, along with the Company’s other global mortgage insurance, reinsurance and risk-sharing products. 

Net premiums written in the 2014 fourth quarter included $25.3 million of business underwritten by Arch MI U.S., compared to $32.2 million in the 2014 third quarter. The lower sequential level of net premiums written primarily resulted from a lower level of lender paid mortgage insurance (“LPMI”) single business than in the 2014 third quarter. In addition, net premiums written for the 2014 fourth quarter included $7.7 million from the 100% quota share indemnity reinsurance agreement with PMI for performing certificates of insurance that were issued by PMI from 2009 to 2011, while premiums on reinsurance treaties covering U.S. and international mortgages were substantially unchanged. 

Net premiums earned for the 2014 fourth quarter were substantially higher than in the 2013 fourth quarter, reflecting the contribution of Arch MI U.S. business along with an increase from the mortgage segment’s quota share reinsurance business. 

The loss ratio for the 2014 fourth quarter continues to reflect relatively low levels of reported delinquencies and a higher contribution from Arch MI U.S. while the 2013 fourth quarter loss ratio reflected favorable development in current year and prior year loss reserves on certain U.S. mortgage reinsurance business. This also resulted in an increase to the acquisition expense ratio for the 2013 fourth quarter. The acquisition expense ratio for the 2014 fourth quarter increased sequentially from 22.6% in the 2014 third quarter, reflecting a higher level of costs related to certain U.S. mortgage reinsurance business. The operating expense ratio and overall underwriting expense ratio are expected to stay at elevated levels until Arch MI U.S. reaches scale.

At December 31, 2014, the mortgage segment’s risk-in-force of $10.1 billion consisted of $5.6 billion from Arch MI U.S. and an additional $4.5 billion through the mortgage segment’s reinsurance and risk-sharing operations. Arch MI U.S. generated $1.36 billion of new insurance written (“NIW”) during the 2014 fourth quarter, primarily for credit union clients. For additional information on the mortgage segment, please refer to the Company’s Financial Supplement.
 

9

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (“PSLRA”) provides a “safe harbor” for forward-looking statements. This release or any other written or oral statements made by or on behalf of the Company may include forward-looking statements, which reflect the Company’s current views with respect to future events and financial performance. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements. Forward-looking statements, for purposes of the PSLRA or otherwise, can generally be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” and similar statements of a future or forward-looking nature or their negative or variations or similar terminology. 

Forward-looking statements involve the Company’s current assessment of risks and uncertainties. Actual events and results may differ materially from those expressed or implied in these statements. Important factors that could cause actual events or results to differ materially from those indicated in such statements are discussed below and elsewhere in this release and in the Company’s periodic reports filed with the Securities and Exchange Commission (the “SEC”), and include:

		
	•
	the Company’s ability to successfully implement its business strategy during “soft” as well as “hard” markets; 

		
	•
	acceptance of the Company’s business strategy, security and financial condition by rating agencies and regulators, as well as by brokers and its insureds and reinsureds; 

		
	•
	the Company’s ability to maintain or improve its ratings, which may be affected by its ability to raise additional equity or debt financings, by ratings agencies’ existing or new policies and practices, as well as other factors described herein; 

		
	•
	general economic and market conditions (including inflation, interest rates, foreign currency exchange rates, prevailing credit terms and the depth and duration of a recession) and conditions specific to the reinsurance and insurance markets (including the length and magnitude of the current “soft” market) in which the Company operates; 

		
	•
	competition, including increased competition, on the basis of pricing, capacity, coverage terms or other factors; 

		
	•
	developments in the world’s financial and capital markets and the Company’s access to such markets;

		
	•
	the Company’s ability to successfully enhance, integrate and maintain operating procedures (including information technology) to effectively support its current and new business; 

		
	•
	the loss of key personnel; 

		
	•
	the integration of businesses the Company has acquired or may acquire into its existing operations; 

		
	•
	accuracy of those estimates and judgments utilized in the preparation of the Company’s financial statements, including those related to revenue recognition, insurance and other reserves, reinsurance recoverables, investment valuations, intangible assets, bad debts, income taxes, contingencies and litigation, and any determination to use the deposit method of accounting, which for a relatively new insurance and reinsurance company, like the Company, are even more difficult to make than those made in a mature company since relatively limited historical information has been reported to the Company through December 31, 2014;  

		
	•
	greater than expected loss ratios on business written by the Company and adverse development on claim and/or claim expense liabilities related to business written by its insurance and reinsurance subsidiaries; 

		
	•
	severity and/or frequency of losses;

		
	•
	claims for natural or man-made catastrophic events in the Company’s insurance or reinsurance business could cause large losses and substantial volatility in its results of operations; 

		
	•
	acts of terrorism, political unrest and other hostilities or other unforecasted and unpredictable events; 

		
	•
	availability to the Company of reinsurance to manage its gross and net exposures and the cost of such reinsurance; 

		
	•
	the failure of reinsurers, managing general agents, third party administrators or others to meet their obligations to the Company; 

10

		
	•
	the timing of loss payments being faster or the receipt of reinsurance recoverables being slower than anticipated by the Company;

		
	•
	the Company’s investment performance, including legislative or regulatory developments that may adversely affect the fair value of the Company’s investments;

		
	•
	the impact of the continued weakness of the U.S., European countries and other key economies, projected budget deficits for the U.S., European countries and other governments and the consequences associated with possible additional downgrades of securities of the U.S., European countries and other governments by credit rating agencies, and the resulting effect on the value of securities in the Company’s investment portfolio as well as the uncertainty in the market generally;

		
	•
	the volatility of the Company’s shareholders’ equity from foreign currency fluctuations, which could increase due to the Company not matching portions of its projected liabilities in foreign currencies with investments in the same currencies in current and future periods.

		
	•
	losses relating to aviation business and business produced by a certain managing underwriting agency for which the Company may be liable to the purchaser of its prior reinsurance business or to others in connection with the May 5, 2000 asset sale described in the Company’s periodic reports filed with the SEC; 

		
	•
	changes in accounting principles or policies or in the Company’s application of such accounting principles or policies;

		
	•
	changes in the political environment of certain countries in which the Company operates, underwrites business or invests; 

		
	•
	statutory or regulatory developments, including as to tax policy matters and insurance and other regulatory matters such as the adoption of proposed legislation that would affect Bermuda-headquartered companies and/or Bermuda-based insurers or reinsurers and/or changes in regulations or tax laws applicable to the Company, its subsidiaries, brokers or customers; and

		
	•
	the other matters set forth under Item 1A “Risk Factors”, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of the Company’s Annual Report on Form 10-K, as well as the other factors set forth in the Company’s other documents on file with the SEC, and management’s response to any of the aforementioned factors.   

All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein or elsewhere. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Comment on Regulation G

Throughout this release, the Company presents its operations in the way it believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use the Company’s financial information in evaluating the performance of the Company. This presentation includes the use of after-tax operating income or loss available to Arch common shareholders, which is defined as net income available to Arch common shareholders, excluding net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses, net of income taxes. The presentation of after-tax operating income or loss available to Arch common shareholders is a “non-GAAP financial measure” as defined in Regulation G. The reconciliation of such measure to net income available to Arch common shareholders (the most directly comparable GAAP financial measure) in accordance with Regulation G is included on page 2 of this release.

The Company believes that net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses in any particular period are not indicative of the performance of, or trends in, the Company’s business performance. Although net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of 

11

investment funds accounted for using the equity method and net foreign exchange gains or losses are an integral part of the Company’s operations, the decision to realize investment gains or losses, the recognition of the change in the carrying value of investments accounted for using the fair value option in net realized gains or losses, the recognition of net impairment losses, the recognition of equity in net income or loss of investment funds accounted for using the equity method and the recognition of foreign exchange gains or losses are independent of the insurance underwriting process and result, in large part, from general economic and financial market conditions. Furthermore, certain users of the Company’s financial information believe that, for many companies, the timing of the realization of investment gains or losses is largely opportunistic. In addition, net impairment losses recognized in earnings on the Company’s investments represent other-than-temporary declines in expected recovery values on securities without actual realization. The use of the equity method on certain of the Company’s investments in certain funds that invest in fixed maturity securities is driven by the ownership structure of such funds (either limited partnerships or limited liability companies). In applying the equity method, these investments are initially recorded at cost and are subsequently adjusted based on the Company’s proportionate share of the net income or loss of the funds (which include changes in the fair value of the underlying securities in the funds). This method of accounting is different from the way the Company accounts for its other fixed maturity securities and the timing of the recognition of equity in net income or loss of investment funds accounted for using the equity method may differ from gains or losses in the future upon sale or maturity of such investments. Due to these reasons, the Company excludes net realized gains or losses, net impairment losses recognized in earnings, equity in net income or loss of investment funds accounted for using the equity method and net foreign exchange gains or losses from the calculation of after-tax operating income or loss available to Arch common shareholders. 

The Company believes that showing net income available to Arch common shareholders exclusive of the items referred to above reflects the underlying fundamentals of the Company’s business since the Company evaluates the performance of and manages its business to produce an underwriting profit. In addition to presenting net income available to Arch common shareholders, the Company believes that this presentation enables investors and other users of the Company’s financial information to analyze the Company’s performance in a manner similar to how the Company’s management analyzes performance. The Company also believes that this measure follows industry practice and, therefore, allows the users of the Company’s financial information to compare the Company’s performance with its industry peer group. The Company believes that the equity analysts and certain rating agencies which follow the Company and the insurance industry as a whole generally exclude these items from their analyses for the same reasons.

12

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