Document:

exh10-73.htm

Exhibit 10.73

 

SHARE EXCHANGE AGREEMENT

THIS SHARE EXCHANGE AGREEMENT (the “Agreement”) is made and entered in this 7th day of March 2016 by and among CD International Enterprises, Inc., a Florida corporation (“CDII”), China Manor Assets Investment Management Company, Ltd. (“CMAIM”), a Cayman Islands corporation (“CMAIM”), and Xiangjun Wang (the “Shareholder”).

RECITALS:

A.           The Shareholder owns 100% of the issued and outstanding capital stock of CMAIM (the “CMAIM Shares”).

B.           CDII desires to acquire 100% of the CMAIM Shares from the Shareholder for 1,670,000 shares of CDII Series G Convertible Preferred Stock (the "CDII Preferred Shares") with a total market value of $5 million after the conversion to CDII common stock.  The CDII Preferred Shares can be converted to CDII common stock (the “CDII Shares”) upon a CDII listing on NYSE or NASDAQ at a ratio of each share of the CDI Preferred Shares to 1,000 shares of CDII common stock (the “Conversion”).  The CDI Preferred Shares have the same voting rights as a shareholder of CDII common stock.  Each share of the CDII Preferred Shares has the voting right of 1,000 shares of CDII common stock.

C.           The Shareholder desires to exchange his equity ownership in CMAIM for the CDII Shares upon the terms and conditions set forth herein.

D.           It is the intention of the parties hereto that:  (i) CDII shall acquire the CMAIM Shares solely for the consideration set forth below (the “Exchange”); (ii) the Exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended (the “Securities Act”), and under the applicable securities laws of the jurisdiction where the Shareholder resides.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained in this Agreement, the parties hereto agree as follows:

Section 1.  Exchange of Shares

1.1           Exchange of Shares.  On the Closing Date, the Shareholder shall tender the CMAIM Shares to CDII, and CDII shall issue the CDII Preferred Shares to the Shareholder in exchange therefor.  The percentage ownership of CMAIM by the Shareholder is set forth on Exhibit A.  The designations, rights and preferences of the CDII Preferred Shares are set forth on Exhibit B attached hereto and incorporated herein by such reference.

1.2           Delivery of CMAIM Shares and the CDII Shares.  On the Closing Date, the Shareholder will deliver to CDII the certificate(s) representing the CMAIM Shares, duly endorsed for transfer (or with executed stock power(s)) so as to convey good and marketable title to the CMAIM Shares to CDII, and, simultaneously therewith, CDII will deliver certificates evidencing the CDII Preferred Shares to the Shareholder, registered to the Shareholder.

Section 2.  Representations and Warranties of the Shareholder

The Shareholder represents and warrants to CDII as follows:

2.1           Authorization; Enforceability; No Breach.  The Shareholder has all necessary power and authority to execute this Agreement and perform its obligations hereunder.  This Agreement constitutes the valid and binding obligation of the Shareholder enforceable against it in accordance with its terms, except as may be limited by bankruptcy, moratorium, insolvency or other similar laws generally affecting the enforcement of creditors’ rights.  The execution, delivery and performance of this Agreement by the Shareholder and the consummation of the transactions contemplated hereby will not:

  

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(a)           violate, conflict with or result in the breach of any of the terms of, result in a material modification of, otherwise give any other contracting party the right to terminate, or constitute ( or with notice or lapse of time or both constitute) a default under, any contract or other agreement to which the Shareholder are parties or by or to which their or any of their assets or properties may be bound or subject;

(b)           violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, Shareholder, or upon the properties or business of the Shareholder; or

(c)           violate any statute, law or regulation of any jurisdiction applicable to the transactions contemplated herein which could have a material adverse effect on the business or operations of the Shareholder.

2.2           Litigation. There is no action, suit or proceeding pending or threatened, or any investigation, at law or in equity, before any arbitrator, court or other governmental authority, pending or threatened, nor any judgment, decree, injunction, award or order outstanding, against or in any manner involving the Shareholder or their properties or rights which (a) could reasonably be expected to have a material adverse effect on the Shareholder taken as a whole, or (b) could reasonably be expected to materially and adversely affect consummation of any of the transactions contemplated by this Agreement.

2.3           Information on Shareholder.  The Shareholder is an “accredited investor,” as such term is defined in Regulation D promulgated under the Securities Act, is experienced in investments and business matters, has made investments of a speculative nature and, with his representatives, has such knowledge and experience in financial, tax and other business matters as to enable him to utilize the information made available by CDII to evaluate the merits and risks of and to make an informed investment decision with respect to this Agreement, which represents a speculative investment.  Shareholder is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.

2.4           Investment Intent.  Shareholder understands that the CDII Shares have not been registered under the Securities Act, that the Exchange commences a new holding period for the CDII Shares, and the CDII Shares, or any shares of CDII’s common stock underlying the CDII Preferred Shares, may not be sold, assigned, pledged, transferred or otherwise disposed of unless the CDII Shares are registered under the Securities Act or an exemption from registration is available.  Shareholder represents and warrants that he is acquiring the CDII Preferred Shares for his own account, for investment, and not with a view to the sale or distribution of the CDII Preferred Shares except in compliance with the Securities Act.  Each certificate representing the CDII Preferred Shares will have the following or substantially similar legend thereon:

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”) or any state securities laws.  The shares have been acquired for investment and may not be sold or transferred in the absence of an effective Registration Statement for the shares under the Act unless, in the opinion of counsel satisfactory to the Company, registration is not required under the Act or any applicable state securities laws.”

2.5           Ownership of CMAIM Shares.  Shareholder is the sole record and beneficial owner of the CMAIM Shares, all of which shares are owned free and clear of all rights, claims, liens and encumbrances, and have not been sold, pledged, assigned or otherwise transferred except pursuant to this Agreement.  There are no outstanding subscriptions, rights, options, warrants or other agreements obligating Shareholder to sell or transfer to any third person any or all of the CMAIM Shares owned by Shareholder, or any interest therein.  Shareholder has the power to enter into this Agreement and to carry out his obligations hereunder.

2.6           Brokers or Finders.  No broker's or finder's fee will be payable by CDII and CMAIM in connection with the transaction contemplated by this Agreement.

  

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Section 3.  Representations and Warranties of CMAIM

CMAIM hereby represents and warrants to CDII as follows:

3.1           Organization and Good Standing.  CMAIM is a corporation duly organized, validly existing and in good standing under the laws of the Cayman Islands, and is entitled to own or lease its properties and to carry on its business as and in the places where such properties are now owned, leased or operated and such business is now conducted.  CMAIM is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification.  CMAIM has no subsidiaries.

3.2           Authorization; Enforceability; No Breach.  CMAIM has all necessary corporate power and authority to execute this Agreement and perform its obligations hereunder.  This Agreement constitutes the valid and binding obligation of CMAIM enforceable against it in accordance with its terms, except as may be limited by bankruptcy, moratorium, insolvency or other similar laws generally affecting the enforcement of creditors’ rights.  The execution, delivery and performance of this Agreement by CMAIM and the consummation of the transactions contemplated hereby will not:

(a)           violate any provision of the Articles of Incorporation or By-Laws of CMAIM;

(b)           violate, conflict with or result in the breach of any of the terms of, result in a material modification of, otherwise give any other contracting party the right to terminate, or constitute ( or with notice or lapse of time or both constitute) a default under, any contract or other agreement to which CMAIM is a party or by or to which it or any of its assets or properties may be bound or subject;

(c)           violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, CMAIM or upon the properties or business of CMAIM; or

(d)           violate any statute, law or regulation of any jurisdiction applicable to the transactions contemplated herein which could have a material adverse effect on the business or operations of  CMAIM.

3.3           Compliance with Laws.  CMAIM has complied with all federal, state, county and local laws, ordinances, regulations, inspections, orders, judgments, injunctions, awards or decrees applicable to it or its business which, if not complied with, would materially and adversely affect the business or financial condition of CMAIM taken as a whole.

3.4           Litigation.  There is no action, suit or proceeding pending or threatened, or any investigation, at law or in equity, before any arbitrator, court or other governmental authority, pending or threatened, nor any judgment, decree, injunction, award or order outstanding, against or in any manner involving CMAIM or its properties or rights which (a) could reasonably be expected to have a material adverse effect on CMAIM taken as a whole, or (b) could reasonably be expected to materially and adversely affect consummation of any of the transactions contemplated by this Agreement.

3.5           Real Estate.  The Contracts are valid, binding and enforceable in accordance with their respective terms, and there does not exist under any such Contract any default by CMAIM or, to CMAIM’s knowledge, of any event that, with notice or lapse of time or both, would constitute a default by CMAIM or, to CMAIM’ s knowledge, by any other person. All charges currently due and payable under the Contracts have been paid.

3.6           Assets.  CMAIM owns all rights, title and interest in and to its assets, free and clear of all liens, pledges, mortgages, security interests, conditional sales contracts or any other encumbrances.

3.7           Contracts.   CMAIM is not a party to any contracts, agreements, engagement letters, or other understandings which bind CMAIM or its assets.

  

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3.8           Financial Statements.  CMAIM has previously delivered to CDII Balance sheets at December 31, 2015, Statements of operations for the year ended December 31, 2015 and for the period from the CMAIM inception to December 31, 2015, Statement of stockholders’ equity for the period from CMAIM inception through December 31, 2015 and Statements of cash flows for the year ended December 31, 2015 (the “CMAIM Financial Statements”).  The CMAIM Financial Statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved.

3.9           No Material Adverse Change.  Since the date of the CMAIM Financial Statements, there has been no material adverse change in the assets, operations, financial condition or prospects of CMAIM, taken as a whole.

3.10           Books and Records.  The financial records of CMAIM accurately reflect in all material respects the information relating to the business of CMAIM, the location and collection of its assets, the nature of all transactions giving rise to the obligations or accounts receivable of CMAIM.

3.11           Notes Payable; Liabilities.  CMAIM has not suffered or incurred any material direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, including without limitation, liabilities on account of taxes, other governmental charges or legal proceedings, nor does CMAIM have any liabilities or obligations of any nature, whether or not accrued, absolute, contingent or otherwise, that would be required by GAAP to be reflected on a balance sheet of CMAIM (or in the notes thereto) (the “CMAIM Liabilities”) other than (a) as set forth in the CMAIM Financial Statements, or (b) previously discharged CMAIM Liabilities.

3.12           Off Balance Sheet Arrangements.  CMAIM is not a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract (including any contract or arrangement relating to any transaction or relationship between or among CMAIM, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off-balance-sheet arrangement” (as defined in Item 303(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), where the result, purpose or intended effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, CMAIM or its affiliates.

3.13           Capitalization.  The authorized capital stock of CMAIM consists of 50,000 shares of common stock of which 50,000 shares are presently issued and outstanding.  Such shares of common stock are owned of record and beneficially by the Shareholder.  CMAIM has not granted, issued or agreed to grant, issue or make available any warrants, options, subscription rights or any other commitments of any character relating to the unissued shares of capital stock of CMAIM.  All of the CMAIM Shares are duly authorized and validly issued, fully paid and non-assessable.

3.14           Taxes.  All required tax returns or federal, state, county, municipal, local, foreign and other taxes and assessments have been properly prepared and filed by CMAIM for all years for which such returns are due unless an extension for filing any such return has been properly prepared and filed.  Any and all federal, state, county, municipal, local, foreign and other taxes, assessments, including any and all interest, penalties and additions imposed with respect to such amounts have been paid or provided for. CMAIM has no outstanding tax liabilities and has not received notice of any tax inquiry or audit against it.

3.15           Actions and Proceedings.  There is no outstanding order, judgment, injunction, award or decree of any court, governmental or regulatory body or arbitration tribunal against or involving CMAIM.  There is no action, suit or claim or legal, administrative or arbitral proceeding or (whether or not the defense thereof or liabilities in respect thereof are covered by insurance) pending or threatened against or involving CMAIM or any of its properties or assets.  There is no fact, event or circumstances that may give rise to any suit, action, claim, investigation or proceeding

  

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3.16           Full Disclosure.  No representation or warranty by CMAIM in this Agreement or in any document or schedule to be delivered by them pursuant hereto, and no written statement, certificate or instrument furnished or to be furnished to CDII pursuant hereto or in connection with the negotiation, execution or performance of this Agreement contains, or will contain, any untrue statement of a material fact or omits, or will omit, to state any fact necessary to make any statement herein or therein not materially misleading or necessary to a complete and correct presentation of all material aspects of the businesses of CMAIM.

3.17 Brokers or Finders.  No broker's or finder's fee will be payable by CMAIM in connection with the transaction contemplated by this Agreement, nor will any such fee be incurred as a result of any actions by CMAIM.

Section 4.  Representations and Warrants of CDII

CDII represent and warrants to Shareholder and CMAIM as follows:

4.1           Organization and Good Standing.  CDII is a corporation duly organized, validly existing and in good standing under the laws of Florida, and is entitled to own or lease its properties and to carry on its business as and in the places where such properties are now owned, leased or operated and such business is now conducted.  CDII is qualified to do business as a foreign corporation in each jurisdiction, if any, in which its property or business requires such qualification.  CDII’s subsidiaries, and its ownership interest in each, are set forth in its CDII SEC Documents (as hereinafter defined).

4.2           Authorization; Enforceability; No Breach.  CDII has all necessary corporate power and authority to execute this Agreement and perform its obligations hereunder.  This Agreement constitutes the valid and binding obligation of CDII enforceable against it in accordance with its terms, except as may be limited by bankruptcy, moratorium, insolvency or other similar laws generally affecting the enforcement of creditors’ rights.  The execution, delivery and performance of this Agreement by CDII and the consummation of the transactions contemplated hereby will not:

(a)           violate any provision of the Articles of Incorporation or By-Laws of CDII;

(b)           violate, conflict with or result in the breach of any of the terms of, result in a material modification of, otherwise give any other contracting party the right to terminate, or constitute ( or with notice or lapse of time or both constitute) a default under, any contract or other agreement to which CDII is a party or by or to which it or any of its assets or properties may be bound or subject;

(c)           violate any order, judgment, injunction, award or decree of any court, arbitrator or governmental or regulatory body against, or binding upon, CMAIM, or upon the properties or business of CDII;

(d)           violate any statute, law or regulation of any jurisdiction applicable to the transactions contemplated herein which could have a material adverse effect on the business or operations of CDII.

4.3           The CDII Securities.  The CDII Securities to be issued to the Shareholder has been, or on or prior to the Closing will have been, duly authorized by all necessary corporate and Shareholder actions and, when so issued in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and will not be issued in violation of the pre-emptive or similar rights of any person.

  

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4.4           CDII Financial Statements and SEC Documents.  CDII’s audited balance sheets at September 31, 2014 and 2015, and the related statements of operations and  Shareholder’ equity for each the two fiscal years then ended (collectively, the “CDII Financial Statements”) have been filed by CDII with the Securities and Exchange Commission (“SEC”) and are available on the SEC’s website at www.sec.gov.  The CDII Financial Statements have been prepared in accordance with GAAP.  CDII has filed or furnished all forms, documents and reports required to be filed or furnished by it with the SEC since June 27, 2008 (the “CDII SEC Documents”).  As of their respective dates or, if amended, as of the date of such amendment, the CDII SEC Documents complied in all material respects with the requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act of 2002, as the case may be, and the applicable rules and regulations promulgated thereunder, and none of the CDII SEC Documents contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received by CDII from the SEC or its staff.  Except (a) as reflected or reserved against in CDII’s most recent unaudited balance sheets (or stated in the notes thereto) at December 31, 2015 included in the CDII SEC Documents and (b) for liabilities and obligations incurred since June 27, 2008 in the ordinary course of business consistent with past practice (the “CDII Liabilities”), and CDII does not have any liabilities or obligations of any nature, whether or not accrued, absolute, contingent or otherwise, that would be required by GAAP to be reflected on a balance sheet of CDII (or in the notes thereto).

4.5           No Material Adverse Changes.  Since the date of the CDII Financial Statements, there has been no material adverse change in the assets, operations, financial condition or prospects of CDII, taken as a whole.

4.6           Compliance with Laws.  CDII has complied with all federal, state, county and local laws, ordinances, regulations, inspections, orders, judgments, injunctions, awards or decrees applicable to it or its business which, if not complied with, would materially and adversely affect the business or financial condition of CDII.

4.7           Litigation.  Other than disclosed by CDII periodic SEC filings, there is no action, suit or proceeding pending or threatened, or any investigation, at law or in equity, before any arbitrator, court or other governmental authority, pending or threatened, nor any judgment, decree, injunction, award or order outstanding, against or in any manner involving CDII or any of CDII's properties or rights which (a) could reasonably be expected to have a material adverse effect on CDII taken as a whole, or (b) could reasonably be expected to materially and adversely affect consummation of any of the transactions contemplated by this Agreement.

4.8           Capitalization.  The authorized capital stock of CDII consists of shares of common stock and preferred shares, of which there are presently issued and outstanding the number of shares of common stock set forth on CDII periodic SEC filings. CDII has not granted, issued or agreed to grant, issue or make available any warrants, options, subscription rights or any other commitments of any character relating to the unissued shares of capital stock of CDII except as set forth in the CDII SEC Documents.  All of the issued and outstanding capital stock of CDII has been duly authorized and validly issued, fully paid and non-assessable, and was issued in compliance with applicable securities laws.

4.9           Taxes.  All required tax returns or federal, state, county, municipal, local, foreign and other taxes and assessments have been properly prepared and filed by CDII for all years for which such returns are due unless an extension for filing any such return has been properly prepared and filed.  Any and all federal, state, county, municipal, local, foreign and other taxes, assessments, including any and all interest, penalties and additions imposed with respect to such amounts have been paid or provided for.  Other than disclosed by CDII periodic SEC filings, CDII has no outstanding tax liabilities and has not received notice of any tax inquiry or audit against it.

4.10           Full Disclosure.  No representation or warranty by CDII in this Agreement or in any document or schedule to be delivered by them pursuant hereto, and no written statement, certificate or instrument furnished or to be furnished to CDII pursuant hereto or in connection with the negotiation, execution or performance of this Agreement contains, or will contain, any untrue statement of a material fact or omits, or will omit, to state any fact necessary to make any statement herein or therein not materially misleading or necessary to a complete and correct presentation of all material aspects of the businesses of CDII.

  

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4.11           Brokers or Finders.  Broker's or finder's fee will be payable by CDII in connection with the transaction contemplated by this Agreement.

Section 5.  Covenants

5.1           Examinations and Investigations.  Prior to the Closing Date, the parties acknowledge that they have been entitled, through their employees and representatives, to make such investigation and verification of the assets, properties, business and operations, books, records and financial condition of the other, including communications with suppliers, vendors and customers, as they each may reasonably require.  No investigation by a party hereto shall, however, diminish or waiver in any way any of the representations, warranties, covenants or agreements of the other party under this Agreement.  Consummation of this Agreement shall be subject to the fulfillment of due diligence procedures to the reasonable satisfaction of each of the parties hereto and their respective counsel.

5.2           Expenses.  Each party hereto agrees to pay its own costs and expenses incurred in negotiating this Agreement and consummating the transactions described herein.

5.3           Further Assurances.  The parties shall execute such documents and other papers and take such further action as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated hereby.  Each such party shall use its best efforts to fulfill or obtain in the fulfillment of the conditions to the Closing, including, without limitation, the execution and delivery of any documents or other papers, the execution and delivery of which are necessary or appropriate to the Closing.

5.4           Confidentiality.  In the event the transactions contemplated by this Agreement are not consummated, each of the parties hereto agree to keep confidential any information disclosed to each other in connection therewith; provided, however, such obligation shall not apply to information which:

(a)           at the time of disclosure was public knowledge;

(b)           after the time of disclosure becomes public knowledge (except due to the action of the receiving party); or

(c)           the receiving party had within its possession at the time of disclosure.

5.5           Stock Certificates and Consideration.  At the Closing, the Shareholder shall have delivered the certificates representing the CMAIM Shares duly endorsed (or with executed stock powers) so as to make CDII the sole owner thereof.  At such Closing, CDII shall issue to the Shareholder the CDII Shares as provided herein.

5.6           Change to Capitalization.  From the date hereof and continuing to the Conversion date, CDII may issue certain shares of capital stock or any securities convertible into capital stock. The only change in capitalization can be made prior to the Conversion of the CDII Preferred Shares to the CDII Shares by the Shareholder.

Section 6.  Survival of Representations and Warranties of CDII

Notwithstanding any right of the Shareholder fully to investigate the affairs of CDII, the Shareholder shall have the right to rely fully upon the representations, warranties, covenants and agreements of  contained in this Agreement or in any document delivered by CDII or any of its representatives, in connection with the transactions contemplated by this Agreement.  All such representations, warranties, covenants and agreements shall survive the execution and delivery hereof and the Closing Date hereunder for 12 months following the Closing.

  

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Section 7.  Survival of Representations and Warranties of The Shareholder

Notwithstanding any right of CDII fully to investigate the affairs of CMAIM, CDII has the right to rely fully upon the representations, warranties, covenants and agreements of CMAIM and the Shareholder contained in this Agreement or in any document delivered to CDII by either entity or any of its respective representatives, in connection with the transactions contemplated by this Agreement.  All such representations, warranties, covenants and agreements shall survive the execution and delivery hereof and the Closing Date hereunder for 12 months following the Closing.

Section 8.  Indemnification

8.1 Obligation of CDII to Indemnify.  Subject to the limitations on the survival of representations and warranties contained in Section 9, CDII hereby agrees to indemnify, defend and hold harmless the Shareholder from and against any losses, liabilities, damages, deficiencies, costs or expenses (including interest, penalties and reasonable attorneys’ fees and disbursements) (a “Loss”) based upon, arising out of, or otherwise due to any inaccuracy in or any breach of any representation, warranty, covenant or agreement of CDII contained in this Agreement or in any document or other writing delivered pursuant to this Agreement.

8.2 Obligation of the Shareholder to Indemnify.  Subject to the limitations on the survival of representations and warranties contained in Section 8, the Shareholder agree to indemnify, defend and hold harmless CDII to the extent provided for herein from and against any Loss based upon, arising out of, or otherwise due to any inaccuracy in or any breach of any representation, warranty, covenant or agreement made by any of them and contained in this Agreement or in any document or other writing delivered pursuant to this Agreement.

Section 9.  Miscellaneous

9.1 Waivers.  The waiver of a breach of this Agreement or the failure of any party hereto to exercise any right under this agreement shall in no event constitute waiver as to any future breach whether similar or dissimilar in nature or as to the exercise of any further right under this Agreement.

9.2 Amendment.  This Agreement may be amended or modified only by an instrument of equal formality signed by the parties or the duly authorized representatives of the respective parties.

9.3 Binding Agreement; Assignment.  This Agreement shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. This Agreement is not assignable except by operation of law.

9.4 Notices.  Until otherwise specified in writing, the mailing addresses of both parties of this Agreement shall be as follows:

 

 

           The Shareholder and CMAIM: 2008 Jiabin Road, Suite 2305

       Shenzhen, China 518001

 

 

CDII:                                           431 Fairway Drive, Suite 200

Deerfield Beach, FL 3344

Any notice or statement given under this Agreement shall be deemed to have been given if sent by certified mail, return receipt requested, overnight courier or personal delivery, to the other parties at the addresses indicated above or at such other address or number as may be furnished in writing in accordance with this paragraph.

  

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9.5 Governing Law; Venue.  This Agreement shall be governed and construed in accordance with the laws of the State of Florida, without regard to the conflicts of law provisions thereof.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the County of Broward, State of Florida, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  If any provision of this agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this agreement in that jurisdiction or the validity or enforceability of any provision of this agreement in any other jurisdiction.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.

9.6 Publicity.  No publicity release or announcement concerning this Agreement or the transactions contemplated hereby shall be issued by either party hereto at any time from the signing hereof without advance approval in writing of the form and substance thereof by the other party.

9.7 Entire Agreement.  This Agreement (including the Exhibits and Schedules hereto) contains the entire agreement among the parties with respect to the purchase and issuance of the CMAIM Shares and the CDII Shares and related transactions, and supersede all prior agreements, written or oral, with respect thereto.

9.8 Headings.  The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

9.9 Severability of Provisions.  The invalidity or unenforceability of any term, phrase, clause, paragraph, restriction, covenant, agreement or other provision of this Agreement shall in no way affect the validity or enforcement of any other provision or any part thereof.

9.10 Counterparts; Facsimile.  This Agreement may be executed in any number of counterparts, each of which, when so executed, shall constitute an original copy hereof, but all of which together shall consider but one and the same document. This Agreement may be executed and delivered by facsimile transmission and when so executed and delivered shall have the same effect as if the receiving party had received an original counterpart of this Agreement.

9.11 Termination. CDII, CMAIM and the Shareholder have an option to termination the merger within 12 months of the date hereof if certain milestones are not completed as agreed on.  Upon the termination, the Shareholder will return the CDII shares for cancellation and CDII will return the CMAIM shares to the Shareholder.

  

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

CD INTERNATIONAL ENTERPRISES, INC.

By:          /s/ Yuejian (James) Wang 

Dr. Yuejian James Wang

Chairman and Chief Executive Officer

China Manor Assets Investment Management Company, Ltd.

By:          /s/ Xiangjun Wang

Xiangjun Wang, Chairman

Shareholder:

By:          /s/ Xiangjun Wang                                                      

Xiangjun Wang, sole shareholder                                                      

  

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Exhibit A

Shareholders of CMAIM

	
Shareholder's Name

	
Ownership%

	
Xiangjun Wang

	
100%

 

  

  

  

Exhibit B

ARTICLES OF AMENDMENT

TO THE ARTICLES OF INCORPORATION

OF

CD INTERNATIONAL ENTERPRISES, INC.

Pursuant to Sections 607.1002 and 607.0602 of the Florida Business Corporation Act of the State of Florida (the “FBCA”), the undersigned Chief Executive Officer of CD International Enterprises, Inc. (the "Corporation"), a corporation organization and existing under and by virtue of the laws of the State of Florida and bearing Document Number P07000072666, does hereby certify:

FIRST:                                By virtue of the authority contained in the Articles of Incorporation of the Corporation the Corporation has authority to issue ten million (10,000,000) shares of Preferred Stock, $0.0001 par value per share, the designation and amount thereof and series, together with the powers, preferences, rights, qualifications, limitations or restrictions thereof, to be determined by the Board of Directors pursuant to the applicable laws of the State of Florida.

SECOND:                      The Board of Directors approved the following amendments to the Corporation’s Articles of Incorporation pursuant to unanimous written consent on February 10, 2016 pursuant to Section 607.0821 of the FBCA and has hereby established a Series G Convertible Preferred Stock authorized to be issued by the Corporation as above stated, with the designations and amounts thereof, together with the voting powers, preferences and relative, participating, optional and other special rights of the shares of each such series, and the qualifications, limitations or restrictions thereof, to be as follows:

THIRD:                      Article IV of the Corporation's Articles of Incorporation shall be amended to include the following designation:

Series G Voting Convertible Preferred Stock

The Corporation shall designate a series of preferred stock, consisting of three million (3,000,000) shares, as Series G voting Convertible Preferred Stock (the “Series G Preferred”) which shall have the following designations, rights and preferences:

1.           Stated Value.  The stated value of the Series G Preferred shall be $0.01 per share (the “Stated Value”).

2.           Dividends.  The holders of Series G Preferred shall have no rights to receive dividend distributions or to participate in any dividends declared by the Corporation to or for the benefit of the holders of its Common Stock.

3.           Conversion.  Commencing June 30, 2016, the shares of Series G Preferred are convertible at any time at the option of the holder into fully-paid and non-assessable shares of the Corporation’s Common Stock at the rate of one thousand (1,000) shares of Common Stock for every one (1) share of Series G Preferred so converted (the “Conversion Ratio”).  No fractional shares of Common Stock are to be issued upon the conversion of any Series G Preferred, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole share.  If the Corporation at any time after the issuance date of a share of Series G Preferred subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Ratio in effect immediately prior to such subdivision will be proportionately reduced.  If the Corporation at any time after the issuance date of a share of Series G Preferred combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Ratio in effect immediately prior to such combination will be proportionately increased.

  

  

  

 

4.           Redemption.  The shares of Series G Preferred are not redeemable without the prior express written consent of the holders of the majority of the then outstanding shares of such Series G Preferred.  In the event any shares of Series G Preferred shall be redeemed pursuant to this section, the shares so redeemed shall automatically be cancelled and returned to the status of authorized but unissued shares of Preferred Stock.

5.           Voting Rights. The Series G Preferred shall have voting rights same as Shareholder of common stock at a ratio of 1:1,000 (each share of the Series G Preferred has 1,000 shares of voting right as each share of common stock).

6.           Liquidation, Dissolution, Winding-Up.  In the event of the liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, the holders of shares of the Series G Preferred then outstanding shall be entitled to receive, out of the remaining assets of the Corporation available for distribution to its Shareholder, an amount per share equal to the Stated Value.

7.           Protective Provisions.  So long as any shares of Series G Preferred are outstanding, the Corporation shall not without first obtaining the written approval of the holders of at least a majority of the then outstanding shares of such Series G Preferred (i) alter or change the rights, preferences or privileges of the Series G Preferred, or (ii) increase or decrease the total number of authorized shares of Series G Preferred Stock.

8.           No Preemptive Rights.  No holder of the Series G Preferred shall be entitled to rights to subscribe for, purchase or receive any part of any new or additional shares of any class of the Corporation, whether now or hereinafter authorized, or of bonds or debentures, or other evidences of indebtedness convertible into or exchangeable for shares of any class.

IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment to its Articles of Incorporation to be duly executed by its Chief Executive Officer as of this 10th day of February 2016.

	
  

	
CD INTERNATIONAL ENTERPRISES, INC.

By:  /s/ Yuejian (James) Wang                                                                         

Yuejian (James) Wang, Ph.D.

Chief Executive OfficerEX-4.2

 Exhibit 4.2 
  

 
 LEGG MASON, INC., 

as Issuer 
 and 

THE BANK OF NEW YORK MELLON, 

as Trustee 
  

 
 FIRST
SUPPLEMENTAL INDENTURE 
 DATED AS OF MARCH 14, 2016 

TO 
 INDENTURE 

DATED AS OF MARCH 14, 2016 
  

 
 $250,000,000

 6.375% JUNIOR SUBORDINATED NOTES DUE 2056 
  

 

 TABLE OF CONTENTS 

PAGE 

ARTICLE 1 
 THE
JUNIOR SUBORDINATED NOTES 
  

					
	 Section 1.01. Establishment
	  	 	1	  
	 Section 1.02. Definitions
	  	 	2	  
	 Section 1.03. Payment of Principal and Interest
	  	 	4	  
	 Section 1.04. Deferral of Interest Payments
	  	 	5	  
	 Section 1.05. Denominations
	  	 	7	  
	 Section 1.06. Redemption at the Company’s Option
	  	 	7	  
	 Section 1.07. Events of Default
	  	 	7	  
	 Section 1.08. Transfer And Exchange of Notes
	  	 	9	  
		
	ARTICLE 2	  			
	MISCELLANEOUS PROVISIONS	  			
		
	 Section 2.01. Amendments to this Supplemental Indenture and the Notes
	  	 	13	  
	 Section 2.02. Certain Trustee Matters
	  	 	13	  
	 Section 2.03. Continued Effect
	  	 	13	  
	 Section 2.04. Provisions Binding on Company’s Successors
	  	 	14	  
	 Section 2.05. Governing Law
	  	 	14	  
	 Section 2.06. Counterparts
	  	 	14	  
		
	 EXHIBIT A Form of Note
	  	 	A-1	  

  
 i 

 FIRST SUPPLEMENTAL INDENTURE, dated as of March 14, 2016 (this “Supplemental
Indenture”), between LEGG MASON, INC., a Maryland corporation (the “Company”), and THE BANK OF NEW YORK MELLON, a New York banking corporation, as trustee under the Indenture referred to below (in such capacity, the
“Trustee”). 
 RECITALS OF THE COMPANY 

WHEREAS, the Company and the Trustee are parties to an Indenture dated as of March 14, 2016 (the “Indenture”),
providing for the issuance from time to time of one or more series of the Company’s Junior Subordinated Notes, the terms of which are to be determined as set forth in Section 301 of the Indenture; and 

WHEREAS, pursuant to Section 901 of the Indenture, without the consent of any Holders, the Company, when authorized by or pursuant to a
Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Indenture to establish the form or terms of a series of Junior Subordinated Notes as permitted by Sections 201 and 301 of
the Indenture; and 
 WHEREAS, pursuant to this Supplemental Indenture, the Company desires to create a new series of Junior Subordinated
Notes under the Indenture and to establish the forms and the terms, conditions, rights and preferences thereof; 
 WHEREAS, all action on
the part of the Company necessary to authorize the issuance of such series of Junior Subordinated Notes under the Indenture and this Supplemental Indenture has been duly taken; and 

WHEREAS, all acts and requirements necessary to make such series of Junior Subordinated Notes, when executed by the Company and authenticated
and delivered by the Trustee as provided in the Indenture and this Supplemental Indenture, the valid and binding obligations of the Company and to make this Supplemental Indenture a valid and binding agreement in accordance with the Indenture have
been done and performed; 
 NOW, THEREFORE, in consideration of the premises, agreements and obligations set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree, for the equal and proportionate benefit of all Holders of such series of Junior Subordinated Notes, as follows: 

ARTICLE 1 
 THE
JUNIOR SUBORDINATED NOTES 
 Section 1.01. Establishment. There is hereby
established a new series of Junior Subordinated Notes to be issued under the Indenture, to be designated as the Company’s 6.375% Junior Subordinated Notes due 2056 (the “Notes”). 

  

 There are to be authenticated and delivered $250,000,000 principal amount of Notes, and such
principal amount of the Notes may be increased from time to time pursuant to Section 301 of the Indenture. All Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for
issuances of additional Notes. Any such additional Notes will have the same interest rate, maturity and other terms as those initially issued (except for the public offering price and issue date and the initial interest accrual date and initial
Interest Payment Date (as defined below), if applicable); provided that if such additional Notes are not fungible with the outstanding Notes for United States federal income tax purposes, then they will be issued under a separate CUSIP
number. No Notes shall be authenticated and delivered in excess of the principal amount as so increased except as provided by Sections 203, 303, 304, 907 or 1107 of the Indenture. The Notes shall be issued in fully registered form. 

The Notes shall be issued in the form of one or more Global Securities, and the form of the Trustee’s Certificate of Authentication for
the Notes shall be, in substantially the form set out in Exhibit A hereto. The Global Securities will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company (“DTC”), and registered in the
name of DTC or its nominee, in each case for credit to an account of a Participant or Indirect Participant. The terms and provisions contained in the form of Note set out in Exhibit A hereto shall constitute, and are hereby expressly made, a
part of this Supplemental Indenture and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. 

Each Note shall be dated the date of authentication thereof and shall bear interest from the Original Issue Date or from the most recent
Interest Payment Date to which interest has been paid or duly provided for. 
 Section 1.02. Definitions. The following defined
terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture. 

“Additional Interest” has the meaning set forth in Section 1.04 of this Supplemental Indenture. 

“Administrative Action” means any judicial decision or any official administrative pronouncement, ruling, regulatory
procedure, notice or announcement including any notice or announcement of intent to issue or adopt any administrative pronouncement, ruling, regulatory procedure or regulation. 

“Applicable Rating Agency” means any Rating Agency that (i)(a) published a rating for the Company on the Original
Issue Date and (b) publishes a rating for the Company at such time as a Rating Agency Event occurs, or (ii) any successor to a Rating Agency described in the preceding clause (i). 

“Clearstream” means Clearstream Banking, société anonyme, or its successor. 

  
 2 

 “Definitive Note” means a definitive Note in certificated form and registered in
the name of the Holder thereof and issued in accordance with the terms of the Indenture, substantially in the form of Exhibit A, except that such Note shall not bear the Global Security Legend and shall not have the Schedule of Exchanges of
Note attached thereto. 
 “Euroclear” means Euroclear Bank S.A./N.V. as operator of Euroclear System, and any successor
thereto. 
 “Global Security Legend” means the legend set forth in Section 1.08(f) of this Supplemental Indenture,
which is required to be placed on all Global Securities issued under this Indenture. 
 “Indirect Participant” means a
Person who holds a beneficial interest in a Global Security through a Participant. 
 “Interest Payment Dates” means
March 15, June 15, September 15 and December 15 of each year, commencing June 15, 2016. 

“Optional Deferral Period” has the meaning set forth in Section 1.04 of this Supplemental Indenture. 

“Original Issue Date” means March 14, 2016. 

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the
Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream). 
 “Rating
Agency” means any nationally recognized statistical rating organization (within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended). 

“Rating Agency Event” means a change to the methodology or criteria that were employed by an Applicable Rating Agency for
purposes of assigning equity credit to securities such as the Notes on the Original Issue Date, which change reduces the amount of equity credit assigned to the Notes by the Applicable Rating Agency as compared with the amount of equity credit that
such Rating Agency had assigned to the Notes as of the Original Issue Date. 
 “Regular Record Date” means, with respect to
each Interest Payment Date, the close of business (i) on the Business Day immediately preceding such Interest Payment Date if any Notes are issuable in the form of one or more Global Securities or (ii) on the 15th calendar day preceding
such Interest Payment Date if no Notes are issuable in the form of one or more Global Securities (whether or not a Business Day). 

“Securities Rate” has the meaning set forth in Section 1.03 of this Supplemental Indenture. 

“Stated Maturity” means March 15, 2056. 

  
 3 

 “Tax Event” means that the Company shall have received an Opinion of Counsel
experienced in tax matters to the effect that, as a result of: 
 (a) any amendment to, clarification of, or change, including any announced
prospective change, in the laws or treaties of the United States or any political subdivisions or taxing authorities, or any regulations under those laws or treaties; 

(b) an Administrative Action; 

(c) any amendment to, clarification of, or change in the official position or the interpretation of any Administrative Action or any
interpretation or pronouncement that provides for a position with respect to an Administrative Action that differs from the previously generally accepted position, in each case by any legislative body, court, governmental authority or regulatory
body, regardless of the time or manner in which that amendment, clarification or change is introduced or made known; or 
 (d) a threatened
challenge asserted in writing in connection with an audit of the Company or an audit of any of the subsidiaries of the Company, or a publicly-known threatened challenge asserted in writing against any other taxpayer that has raised capital through
the issuance of securities that are substantially similar to the Notes, 
 which amendment, clarification or change is effective or the Administrative
Action is taken or issued, or interpretation or pronouncement is issued or threatened challenge is asserted or becomes publicly-known after the Original Issue Date, there is more than an insubstantial risk that interest payable by the Company on the
Notes is not deductible, or within 90 days of the date of such opinion would not be deductible, in whole or in part, by the Company for United States federal income tax purposes. 

Section 1.03. Payment of Principal and Interest. The principal of the Notes shall be due at the Stated Maturity (unless
earlier redeemed). The unpaid principal amount of the Notes shall bear interest at the rate of 6.375% per annum (the “Securities Rate”) until paid or duly provided for. Interest shall be paid quarterly in arrears
on each Interest Payment Date to the Person in whose name the Notes are registered at the close of business on the Regular Record Date for such Interest Payment Date; provided that interest payable at the Stated Maturity or on a Redemption
Date as provided herein will be paid to the Person to whom principal is payable. So long as an Optional Deferral Period is not occurring, any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the
Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to Holders of the Notes not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the
Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture. 

  
 4 

 Payments of interest on the Notes will include interest accrued to but excluding the respective
Interest Payment Dates. Interest payments for the Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of
the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was
originally payable. 
 Payment of the principal and interest (including Additional Interest) due at the Stated Maturity or earlier
redemption of the Notes shall be made upon surrender of the Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Notes (including Additional Interest) shall be paid in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts. Payments of interest (including interest on any Interest Payment Date)(including Additional Interest) will be made, subject to such surrender where
applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to
such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. 

Section 1.04. Deferral of Interest Payments. The Company may, at its option, on one or more occasions, defer payment of all
or part of the current and accrued interest otherwise due on the Notes by extending the interest payment period for up to 20 consecutive quarterly periods (each period, commencing on the date that the first such interest payment would otherwise have
been made, an “Optional Deferral Period”). A deferral of interest payments may not extend beyond the Stated Maturity or end on a day other than an Interest Payment Date. Any deferred interest on the Notes will accrue
additional interest at the Securities Rate from the applicable Interest Payment Date to the date of payment, compounded quarterly (such deferred interest and additional interest accrued thereon, “Additional Interest”),
to the extent permitted under applicable law. No interest shall be due and payable on the Notes until the end of an Optional Deferral Period, except upon a redemption of the Notes during such Optional Deferral Period. 

Prior to the termination of any Optional Deferral Period, the Company may further defer the payment of interest by extending such Optional
Deferral Period; provided that such Optional Deferral Period together with all such previous and further deferrals of interest payments shall not exceed 20 consecutive quarterly periods at any one time or extend beyond the Stated Maturity.
Upon the termination of any Optional Deferral Period or on any Redemption Date, the Company shall pay all interest accrued and unpaid on the Notes, including any Additional Interest, (i) to the Person in whose name the Notes are registered on
the Regular Record Date for such Interest Payment Date, provided that interest accrued and unpaid on the Notes, including any Additional Interest, payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom
principal is payable, or (ii) to the Person entitled to receive the Redemption Price in accordance with Article 11 of the Indenture. Once the Company pays all interest accrued and unpaid on the Notes, including any Additional Interest, it shall
be entitled again to defer interest payments on the Notes as described above. 

  
 5 

 During an Optional Deferral Period, subject to the next succeeding sentence, the Company
shall not (a) declare or pay any dividend or make any distributions, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, or (b) make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank equally (“pari passu securities”) or junior (“junior securities”), in each case, in right of payment to
the Notes. The immediately preceding sentence, however, shall not restrict (i) any of the actions described in the immediately preceding sentence resulting from any reclassification of the Company’s capital stock or the exchange or
conversion of one class or series of the Company’s capital stock for another class or series of the Company’s capital stock, (ii) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being converted or exchanged, (iii) dividends, payments or distributions payable in shares of capital stock or warrants, options or rights to acquire the Company’s
capital stock, (iv) redemptions, purchases or other acquisitions of shares of capital stock in connection with any employment contract, incentive plan, benefit plan or other similar arrangement of the Company or any of its subsidiaries or in
connection with a dividend reinvestment or stock purchase plan, (v) any declaration of a dividend in connection with implementation of any stockholders’ rights plan, or the issuance of rights, stock or other property under any such plan,
or the redemption, repurchase or other acquisition of any such rights pursuant thereto, (vi) redemptions, purchases or other acquisitions of shares of capital stock in connection with the satisfaction of the Company’s obligations pursuant
to any contract entered into prior to the beginning of the applicable Optional Deferral Period, (vii) (x) any payment of current or deferred interest on any pari passu securities that is made pro rata to the amounts due on such pari passu
securities and the Notes and (y) any payment of principal or current or deferred interest on pari passu securities that, if not made, would cause the Company to breach the terms of the instrument governing such pari passu securities or
(viii) (x) the payment of any dividend or distribution on the Company’s capital stock within 30 days after the date of declaration of such dividend or distribution, if the dividend or distribution would have been permitted under the
Indenture and this Supplemental Indenture on the date of declaration and (y) the redemption of pari passu securities or junior securities within 30 days after the date on which notice of redemption was given, if at the time the notice was
given, such redemption would have been permitted under the Indenture and this Supplemental Indenture. 
 The Company shall provide to
the Trustee written notice, as provided in Section 105 of the Indenture, of its selection or extension of an Optional Deferral Period at least 10 Business Days and not more than 60 Business Days prior to the earlier of (a) the next
applicable Interest Payment Date or (b) the date, if any, upon which the Company is required to give notice of such Interest Payment Date or the Regular Record Date thereof to the New York Stock Exchange or any applicable self-regulatory
organization. The Trustee shall forward such written notice promptly to the Holders of the Notes as provided in Section 106 of the Indenture. In addition, the Company shall deliver to the Trustee an Officer’s Certificate stating whether or
not a default or Event of Default shall have occurred and be continuing. 

  
 6 

 Section 1.05. Denominations. The Notes may be issued in the denominations of $25.00,
or any integral multiple thereof. 
 Section 1.06. Redemption at the Company’s Option. At any time and from time to
time on or after March 15, 2021, the Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of
the Notes being redeemed plus accrued and unpaid interest (including any Additional Interest) on the Notes being redeemed to the Redemption Date.  

In addition, before March 15, 2021, the Company may redeem, upon not less than 30 nor more than 60 days’ notice, in whole but not in
part, the Notes following the occurrence of a Tax Event, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date. 

In addition, before March 15, 2021, the Company may, upon not less than 30 nor more than 60 days’ notice, within the 90 days after
the conclusion of any review or appeal process instituted by the Company following the occurrence of a Rating Agency Event, redeem, in whole but not in part, the Notes at a Redemption Price equal to 102% of the principal amount to be redeemed plus
any accrued but unpaid interest (including any Additional Interest) to the Redemption Date. 
 In the event of redemption of the Notes in
part only, a new Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof. 

The Notes will not have a sinking fund. 

Notice of redemption shall be given as provided in Section 1104 of the Indenture. 

Any redemption of less than all of the Notes shall, with respect to the principal thereof, be divisible by $25.00. 

Section 1.07. Events of Default. 

The Events of Default set forth in clauses (1)-(7) of Section 501 of the Indenture shall not apply to the Notes.
“Event of Default”, whenever used herein or in the Indenture with respect to the Notes, means any of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body or occasioned by the operation of Article 13 of the Indenture): 

  
 7 

 (1) default in the payment of any interest upon any Note when it becomes due and payable
on an Interest Payment Date other than at Maturity, including Additional Interest in respect thereof, and continuance of such default for a period of 30 days; provided, however, that a valid extension of the interest payment period by
the Company pursuant to Section 1.04 of this Supplemental Indenture shall not constitute a default in the payment of interest for this purpose; or 

(2) default in the payment of the principal of (or premium, if any), or interest (including Additional Interest) on, any Note at its Maturity;
or 
 (3) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition
by one or more Persons other than the Company seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official for the Company or for any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive days; or 
 (4) the commencement by the Company of a case or proceeding
under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in a case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by
it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company in furtherance of any such action. 
 With respect to the
Notes, and for purposes of this Section 1.07, the term “Default” means the following event: default in the performance or breach of any covenant or warranty of the Company in the Indenture or this Supplemental Indenture (other than
a covenant or warranty (i) a default in whose performance or whose breach is addressed in the second sentence of the immediately preceding paragraph or (ii) which has expressly been included in the Indenture solely for the benefit of one
or more series of Junior Subordinated Notes other than the Notes), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the Outstanding Notes, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Covenant Default”
hereunder. 

  
 8 

 Upon the occurrence and continuance of a Default, the Trustee and the Holders of the Notes
shall have the same rights and remedies, and shall be subject to the same limitations, restrictions, protections and exculpations, and the Company shall be subject to the same obligations and restrictions, in each case, as would apply if such
Default was an Event of Default or an event which after notice or lapse of time or both would become an Event of Default; provided that the principal of and accrued interest on the Notes may not be declared immediately due and payable by
reason of the occurrence and continuation of a Default, and any notice of declaration or acceleration based on such Default shall be null and void with respect to the Notes; provided, further, that in case a Default has occurred and is
continuing, the Trustee shall not be subject to Section 601(b) of the Indenture unless an Event of Default has occurred and is continuing.  

In addition, with respect to the Notes and for purposes of this Supplemental Indenture and the Indenture: 

(a) the reference to “Section 501(1), (2), (3) or (4)” in the first sentence of Section 503 of the Indenture shall be
deemed to refer to clause (1) or (2) of the third immediately preceding paragraph; 
 (b) the reference to “Section
501(5)” in the penultimate sentence of Section 602 of the Indenture shall be deemed to refer to the second paragraph of this Section 1.07. 

(c) the references to “Section 501(6) or (7)” in the last sentence of Section 607 of the Indenture and to “paragraphs
(6) and (7) of Section 501” in Section 1404(2) of the Indenture shall be deemed to refer to clause (3) or (4) of the third immediately preceding paragraph; and 

(d) the references to “Section 501” in Sections 1006 and 1403 of the Indenture shall be deemed to refer to this Section 1.07.

 Section 1.08. Transfer And Exchange of Notes.  

(a) Global Securities. A Global Security may not be transferred as a whole except by the Depositary (who shall initially be DTC) to a
nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Notes unless (i) the
Depositary (A) notifies the Company that it is unwilling or unable to continue as Depositary for the Global Securities or (B) has ceased to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and in each
case the Company fails to appoint a successor Depositary within 90 days after receiving such notice or becoming aware of such condition; (ii) the Company, at its option but subject to Depositary procedures, notifies the Trustee in writing that
it elects to cause the issuance of Definitive Notes in exchange for Global Securities (in whole but not in part); or (iii) there shall have occurred and be continuing a Default or Event of Default with respect to the Notes and the Depositary
requests such exchange. Upon the 

  
 9 

 
occurrence of any of the preceding events in subclauses (i), (ii) or (iii) of this Section 1.08(a) above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Securities also may be exchanged or replaced, in whole or in part, as provided in Section 304 of the Indenture. A Global Security may not be exchanged for another Note other than as provided in this
Section 1.08; however, beneficial interests in a Global Security may be transferred and exchanged as provided in Section 1.08(b) or (c) hereby. 

(b) Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities
shall be effected through the Depositary, in accordance with the provisions of this Supplemental Indenture and the applicable procedures of the Depositary, Euroclear and Clearstream. Transfers of beneficial interests in the Global Securities also
shall require compliance with either subparagraph (i) or (ii) below, as applicable: 
 (i)
Beneficial Interests in the Same Global Security. Beneficial interests in any Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Global Security. No written orders or
instructions shall be required to be delivered to the Trustee to effect the transfers described in this Section 1.08(b)(i). 

(ii) All Other Beneficial Interests in Global Securities. If not subject to Section 1.08(b)(i) above, the
transferor of such beneficial interest must deliver to the Trustee either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary directing the Depositary to credit or cause to be credited a beneficial
interest in another Global Security in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions containing information regarding the Participant account to be credited with such increase or
(B) (1) a written order from a Participant or an Indirect Participant given to the Depositary directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and
(2) instructions given by the Depositary to the Trustee containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. Upon satisfaction of
all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in this Supplemental Indenture and the Notes or otherwise applicable under the Securities Act of 1933, as amended, the Trustee shall adjust the
principal amount at maturity of the relevant Global Securities pursuant to Section 1.08(g). 
 (c) Beneficial Interests for
Definitive Notes. If any holder of a beneficial interest in a Global Security proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, upon satisfaction of the conditions set forth in Section 1.08(b)(ii), the Trustee shall cause the aggregate principal amount of the applicable Global Security to be reduced accordingly pursuant to Section 1.08(g),
and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in 

  
 10 

 
the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 1.08(c) shall be registered
in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Trustee through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so registered. 
 (d) Definitive Notes for Beneficial
Interests in Global Securities. A Holder of a Definitive Note may exchange such Note for a beneficial interest in a Global Security or transfer such Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a
Global Security at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Definitive Note and increase or cause to be increased the aggregate principal amount of a Global Security pursuant to
Section 1.08(g).  
 (e) Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes, the
Trustee shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Trustee the Definitive Notes duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Trustee duly executed by such Holder or by its attorney, duly authorized in writing.  

(f) Global Security Legend. Each Global Security shall bear a legend in substantially the following form: 

THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 1.08 OF THE SUPPLEMENTAL INDENTURE TO THE INDENTURE,
(2) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 1.08 OF THE SUPPLEMENTAL INDENTURE TO THE INDENTURE, (3) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO THE INDENTURE
AND (4) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. 
 (g)
Cancellation and/or Adjustment of Global Securities. At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Notes or a particular Global Security has been redeemed, repurchased or canceled
in whole and not in part, each such Global Security shall be returned to or retained and canceled by the Trustee in accordance with the Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged
for or transferred to a Person who shall take delivery thereof in the form of a beneficial interest in another 

  
 11 

 
Global Security or for Definitive Notes, the principal amount of Notes represented by such Global Security shall be reduced accordingly and an endorsement shall be made on the Schedule of
Exchanges of Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who shall take delivery thereof in the form of a
beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such
increase. 
 (h) General Provisions. 

(i) To permit registrations of transfers and exchanges permitted hereunder, the Company shall execute and the Trustee shall
authenticate Global Securities and Definitive Notes upon the Company’s order or at the Trustee’s request in accordance with the Indenture. 

(ii) No service charge shall be made to a holder of a beneficial interest in a Global Security or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith. 

(iii) The Trustee shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part. 
 (iv) All Global Securities and Definitive Notes
issued upon any registration of transfer or exchange of Global Securities or Definitive Notes shall be the valid and legally binding obligations of the Company, evidencing the same debt, and entitled to the same benefits under the Indenture, as the
Global Securities or Definitive Notes surrendered upon such registration of transfer or exchange. 
 (v) The Company shall
not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a
Note between a Regular Record Date and the next succeeding Interest Payment Date. 
 (vi) Prior to due presentment for the
registration of a transfer of any Note, the Trustee, the Paying Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and
(subject to Section 305 of the Indenture and Section 1.03 of this Supplemental Indenture) interest on such Notes and for all other purposes, and none of the Trustee, the Paying Agent or the Company shall be affected by notice to the
contrary. 

  
 12 

 (vii) Neither the Trustee nor the Security Registrar shall have any duty to
monitor the Company’s compliance with or have any responsibility with respect to the Company’s compliance with any federal or state securities laws in connection with registrations of transfers and exchanges of the Notes. Neither the
Trustee nor the Security Registrar shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Supplemental Indenture, the Indenture or under applicable law with respect to
any transfer of any interest in any Notes (including any transfers between or among the Depositary’s Participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other
documentation, as is expressly required by, and to do so if and when expressly required by, the terms of this Supplemental Indenture and Indenture and to examine the same to determine substantial compliance as to form with the express requirements
hereof or thereof. 
 ARTICLE 2 

MISCELLANEOUS PROVISIONS 

Section 2.01. Amendments to this Supplemental Indenture and the Notes. Subject to the rights of the Company and the Trustee
set forth in Section 901 of the Indenture and in addition to the rights of the Holders of the Notes set forth in Section 902 of the Indenture, the Company and the Trustee may enter into a supplemental indenture to the Indenture or this
Supplemental Indenture for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or this Supplemental Indenture which affect the Notes or of modifying in any manner the rights of the
Holders of the Notes under the Indenture or this Supplemental Indenture only, in each case, with the consent of Holders of a majority in principal amount of all Outstanding Notes. 

Section 2.02. Certain Trustee Matters. The recitals contained herein shall be taken as the statements of the Company, and
the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture or the Notes or the proper authorization or the due execution hereof or thereof by the
Company. 
 Section 2.03. Continued Effect. Except as expressly supplemented and amended by this Supplemental
Indenture, the Indenture shall continue in full force and effect in accordance with the provisions thereof, and the Indenture (as further supplemented and amended by this Supplemental Indenture) is in all respects hereby ratified and confirmed. This
Supplemental Indenture and all its provisions shall be deemed a part of the Indenture in the manner and to the extent herein and therein provided. 

  
 13 

 Section 2.04. Provisions Binding on Company’s Successors. All the
covenants, stipulations, promises and agreements in this Supplemental Indenture contained by the Company shall bind its successors and assigns whether so expressed or not. 

Section 2.05. Governing Law. This Supplemental Indenture and the Notes shall be governed by and construed in accordance with the
laws of the State of New York. 
 Section 2.06. Counterparts. This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 

[Remainder of Page Intentionally Blank] 

  
 14 

 IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and
behalf by its duly authorized officer, all as of the day and year first above written. 
  

			
	LEGG MASON, INC.
		
	By:	 	 /s/ Jeffrey A. Nattans

		 	Name: Jeffrey A. Nattans
		 	Title: Executive Vice President

 
			
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	 /s/ Laurence J. O’Brien

		 	Name: Laurence J. O’Brien
		 	Title: Vice President

  
 2 

 EXHIBIT A 

FORM OF NOTE 
  

			
	NO.        	 	CUSIP NO. [            ]

 LEGG MASON, INC. 

6.375% JUNIOR SUBORDINATED NOTE DUE 2056 
  

			
	[Initial]1 Principal Amount:	  	$                    
		
	Regular Record Date:	  	With respect to each Interest Payment Date, the close of business (i) on the Business Day immediately preceding such Interest Payment Date if any Notes are issuable in the form of one or more Global Securities or (ii) on the 15th
calendar day preceding such Interest Payment Date if no Notes are issuable in the form of one or more Global Securities (whether or not a Business Day)
		
	Original Issue Date:	  	March 14, 2016
		
	Stated Maturity:	  	March 15, 2056
		
	Interest Payment Dates:	  	March 15, June 15, September 15 and December 15
		
	Interest Rate:	  	6.375% per annum
		
	Authorized Denomination:	  	$25.00

 Legg Mason, Inc., a Maryland corporation (the “Company,” which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to
                                        , or
registered assigns, the principal sum of                     DOLLARS ($        ) [or such other amount as
indicated on the Schedule of Exchanges of Note attached hereto]2 on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown
above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on
            , 20    and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for
payment and at such rate on any overdue 
  
  

	1 	Include in Global Note. 

	2 	 Include in Global Note. 

  
 A-1 

 
principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that
is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the “Note”) is registered at the close of business on the Regular Record Date as
specified above next preceding such Interest Payment Date, provided that any interest payable at the Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the
Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business
on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the
Indenture. 
 Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates.
Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Note is not a Business Day, then payment of the interest payable on
such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable. A
“Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office
of the Trustee is closed for business. 
 The Company may, at its option, on one or more occasions, defer payment of all or part of the
current and accrued interest otherwise due on the Notes during an Optional Deferral Period in accordance with Section 1.04 of the Supplemental Indenture referred to on the reverse hereof. 

Payment of the principal of and interest (including Additional Interest) due at the Stated Maturity or earlier redemption of the Notes shall
be made upon surrender of the Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Notes (including Additional Interest) shall be paid in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. Payment of interest (including interest on an Interest Payment Date)(including Additional Interest) will be made, subject to such surrender where applicable, at the option of the
Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto. 

  
 A-2 

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

REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. 
 Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

  
 A-3 

 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its
corporate seal. 
 Dated: 
  

			
	LEGG MASON, INC.
		
	By:	 	  

		 	Name:
		 	Title:

  
 A-1 

 CERTIFICATE OF AUTHENTICATION 

This is one of the Junior Subordinated Notes referred to in the within-mentioned Indenture. 

 

			
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	  

		 	Name:
		 	Title: Authorized Signatory

  
 A-2 

 [REVERSE SIDE OF NOTE] 

This Note is one of a duly authorized issue of Junior Subordinated Notes of the Company (the “Notes”), issued and
issuable in one or more series under a Junior Subordinated Note Indenture, dated as of March 14, 2016, between the Company and The Bank of New York Mellon, as trustee (the “Trustee,” which term includes any successor trustee
under the Indenture), as supplemented from time to time, including pursuant to the First Supplemental Indenture thereto, dated as of March 14, 2016 (the “Supplemental Indenture” and, such Junior Subordinated Note Indenture as
so supplemented, the “Indenture”), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this
Note and the terms of the Indenture, the terms of the Indenture will control. 
 This Note is one of the series designated on
the face hereof as 6.375% Junior Subordinated Notes due 2056 (the “Notes”) which series is unlimited in principal amount. The Indenture limits the original aggregate principal amount of the Notes to $250,000,000, but additional
Notes may be issued pursuant to the Indenture, and the originally issued Notes and all such additional Notes will form a single series of Junior Subordinated Notes. Capitalized terms used herein for which no definition is provided herein shall have
the meanings set forth in the Indenture. 
 The Notes will not have a sinking fund. 

The Notes will be subject to redemption at the option of the Company during the time periods and at the Redemption Prices specified in
Section 1.06 of the Supplemental Indenture. 
 If an Event of Default with respect to the Notes of this series shall occur and be
continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at
the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes
of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. 

  
 A-3 

 No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and, subject to the Company’s option to defer interest payments in accordance with Section 1.04 of the Supplemental Indenture,
interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed. 
 As provided in the Indenture and
subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series,
of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
 Prior to due
presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
 The Notes of this series
are issuable only in registered form without coupons in denominations of $25.00 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like
aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company. 

The Company and, by acceptance of this Note or a beneficial interest in this Note, each Holder hereof and any person acquiring a beneficial
interest herein, agree that for United States federal, state and local tax purposes it is intended that this Note constitute indebtedness and that each Holder hereof and any person acquiring a beneficial interest herein will treat the Notes as
indebtedness for United States federal, state and local tax purposes. 
 This Note shall be governed by, and construed in accordance with,
the internal laws of the State of New York. 
 Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act). 

  
 A-4 

 [SCHEDULE OF EXCHANGES OF NOTE]3 

The following exchanges of a part of this Global Security for individual Notes or a part of another Global Security have been made: 

 

									
	 Date of Exchange
	 	 Amount of decrease

in principal amount
 of this
Global
 Security
	 	 Amount of increase

in principal amount

of this Global

Security
	  	Principal amount of
this Global Security
following such
decrease (or
increase)	  	Signature of
authorized officer
of Trustee

  

 

	3 	For Global Notes 

  
 B-1 

 TRANSFER NOTICE 

FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto 

Insert Taxpayer Identification No. 
  

 
 Please print or typewrite name and
address including zip code of assignee 
  
  

the within Note and all rights thereunder, hereby irrevocably constituting and appointing 

 
  

attorney to transfer said Note on the books of the Company with full power of substitution in the premises. 

 

					
	Dated:
                                         
                               	  	  
	  	
			
		  	  
 Signature(s)
	  	

  
  

Signature Guarantee 
  

			
	Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities
and Exchange Commission Rule 17Ad-15 if Notes are to be delivered other than to and in the name of the registered holder.	  	

  
 A-2 

			
	 Fill in for registration of Notes if to be delivered other than to and in the name of the registered holder:

 
	  	

					
	  
 (Name)
	  		  	
			
	  
 (Street Address)
	  		  	
			
	  
 (City, State and Zip Code)

Please print name and address
	  		  	

  

	
	NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.
	
	  
 Social Security or Other
Taxpayer

	Identification Number

  
 A-3

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