Document:

Exhibit
4.1

 

ASSURED GUARANTY
US HOLDINGS INC.,

Issuer

ASSURED GUARANTY
LTD.,

Guarantor

To

THE BANK OF NEW YORK,

Trustee

 

 

 

 

INDENTURE

 

 

 

 

 

Dated as of
December 1, 2006

Subordinated Debt Securities

   
 

 

Reconciliation and tie between

Trust Indenture Act of 1939 (the “Trust Indenture Act”) and Indenture

	
  Trust Indenture Act Section

  	
   

  	
  Indenture
  Section

  
	
  §§310(a)(1)

  	
   

  	
  6.8

  
	
  (a)(2)

  	
   

  	
  6.8

  
	
  (b)

  	
   

  	
  6.9

  
	
  §§312(a)

  	
   

  	
  7.1

  
	
  (b)

  	
   

  	
  7.2

  
	
  (c)

  	
   

  	
  7.2

  
	
  §§313(a)

  	
   

  	
  7.3

  
	
  (b)(2)

  	
   

  	
  7.3

  
	
  (c)

  	
   

  	
  7.3

  
	
  (d)

  	
   

  	
  7.3

  
	
  §§314(a)

  	
   

  	
  7.4

  
	
  (c)(1)

  	
   

  	
  1.2

  
	
  (c)(2)

  	
   

  	
  1.2

  
	
  (e)

  	
   

  	
  1.2

  
	
  (f)

  	
   

  	
  1.2

  
	
  §§316(a) (last
  sentence)

  	
   

  	
  1.1

  
	
  (a)(1)(A)

  	
   

  	
  5.2, 5.12

  
	
  (a)(1)(B)

  	
   

  	
  5.13

  
	
  (b)

  	
   

  	
  5.8

  
	
  §§317(a)(1)

  	
   

  	
  5.3

  
	
  (a)(2)

  	
   

  	
  5.4

  
	
  (b)

  	
   

  	
  10.3

  
	
  §§318(a)

  	
   

  	
  10.8

  

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

 

 

INDENTURE, dated as of December 1, 2006 (the “Indenture”),
among ASSURED GUARANTY US HOLDINGS INC., a corporation duly organized and
existing under the laws of the State of Delaware (hereinafter called the “Company”),
having its principal executive office located at 1325 Avenue of the Americas,
New York, New York  10019, ASSURED
GUARANTY LTD., a company duly organized and existing under the laws of Bermuda
(hereinafter called the “Guarantor”), having its principal executive office at
30 Woodbourne Avenue, Hamilton HM 08, Bermuda, and THE BANK OF NEW YORK, a
banking corporation duly organized and existing under the laws of the State of
New York, having its Corporate Trust Office located at 101 Barclay Street, 8W,
New York, New York  10286, as Trustee
(hereinafter called the “Trustee”).

RECITALS

The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its
subordinated unsecured debentures, notes or other evidences of indebtedness
(hereinafter called the “Securities”), including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from
the issuance from time to time by one or more Assured Guaranty Trusts (as
defined herein) of preferred beneficial interests in the assets of such Trusts
(the “Preferred Securities”) and common beneficial interests in the assets of
such Trusts (the “Common Securities” and, collectively with the Preferred
Securities, the “Trust Securities”), unlimited as to principal amount, to bear
such rates of interest, to mature at such time or times, to be issued in one or
more series and to have such other provisions as shall be fixed as hereinafter
provided.

For value received, the Company has duly authorized
the execution and delivery of this Indenture. All things necessary to make this
Indenture a valid agreement of the Company, in accordance with its terms, have
been done.

For value received, the Guarantor has duly authorized
the execution and delivery of this Indenture to provide for the issuance of the
Guarantee and the indemnity provided for herein. All things necessary to make
this Indenture a valid agreement of the Guarantor, in accordance with its
terms, have been done.

This Indenture is subject to the provisions of the
Trust Indenture Act of 1939, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder that are required to
be part of this Indenture and, to the extent applicable, shall be governed by
such provisions.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

 

ARTICLE 1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION

Section
1.1             Definitions.

Except as otherwise expressly provided in or pursuant
to this Indenture or unless the context otherwise requires, for all purposes of
this Indenture:

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

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

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

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

(5)  the word “or” is always used inclusively (for
example, the phrase “A or B” means “A or B or both,” not “either A or B but not
both”). Certain terms used principally in certain Articles hereof are defined
in those Articles; and

(6)  references herein to Sections or Articles are
references to sections or articles of this Indenture.

“Act,” when used with respect to any Holders, has the
meaning specified in Section 1.4.

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

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

“Additional Sums” has the meaning specified in Section
10.9.

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“Additional Taxes” means the sum of any additional
taxes, duties and other governmental charges to which an Assured Guaranty Trust
has become subject from time to time as a result of a Tax Event.

“Affiliate” of any specified Person means any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; provided, however, that an
Affiliate of the Company or the Guarantor, as the case may be, shall not be
deemed to include any Assured Guaranty Trust to which Securities and the
Guarantee in respect thereof have been issued. For the purposes of this
definition, “control,” when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms “controlling” and “controlled” have the meanings
correlative to the foregoing.

“Assured Guaranty Trusts” means, collectively, Assured
Guaranty Capital Trust I and Assured Guaranty Capital Trust II, each a
statutory business trust formed under the laws of the State of Delaware, or any
other similar trust created to issue Trust Securities and to use the proceeds
from the sale thereof to purchase Securities issued under this Indenture.

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

“Authorized Newspaper” means a newspaper, in an
official language of the place of publication or in the English language, customarily
published on each day that is a Business Day in the place of publication,
whether or not published on days that are Legal Holidays in the place of
publication, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Where
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different newspapers in
the same city meeting the foregoing requirements and in each case on any day
that is a Business Day in the place of publication.

“Authorized Officer” means, when used with respect to
the Company, the Chief Executive Officer, the Chief Financial Officer, the
Chief Accounting Officer, the Chairman of the Board of Directors, a Vice
Chairman, the President, any Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company.

“Bearer Security” means any Security in the form
established pursuant to Section 2.1 which is payable to bearer.

“Board of Directors” means the board of directors of
the Company or any committee of that board duly authorized to act generally or
in any particular respect for the Company hereunder.

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

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“Business Day,” with respect to any Place of Payment
or other location, means, unless otherwise specified with respect to any
Securities pursuant to Section 3.1, any day other than a Saturday, Sunday or
other day on which banking institutions in such Place of Payment or other location
are authorized or obligated by law, regulation or executive order to close.

“Capital Stock” of any Person means any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of such
Person, including Preferred Stock, but excluding any debt securities
convertible into such equity.

“Capitalized Lease Obligation” means an obligation
under a lease that is required to be capitalized for financial reporting
purposes in accordance with generally accepted accounting principles, and the
amount of Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with such principles.

“Commission” means the Securities and Exchange
Commission, as from time to time constituted, created under the Securities
Exchange Act of 1934, as amended, or, if at any time after the execution of
this Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

“Common Securities” has the meaning specified in the
first recital of this Indenture.

“Common Stock” in respect of any Corporation means
Capital Stock of any class or classes (however designated) which has no
preference as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
Corporation, and which is not subject to redemption by such Corporation.

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

“Company Request” and “Company Order” mean,
respectively, a written request or order, as the case may be, signed in the
name of the Company by an Authorized Officer, and delivered to the Trustee.

“Company Senior Indebtedness” means, with respect to
the Securities of any particular series, all Indebtedness of the Company
outstanding at any time, except (a) the Securities of such series, (b)
Indebtedness as to which, by the terms of the instrument creating or evidencing
the same, it is provided that such Indebtedness is subordinated to or pari
passu with the Securities of such series, (c) Indebtedness of the Company to an
Affiliate of the Company, (d) interest accruing after the filing of a petition
initiating any proceeding relating to the Company referred to in Section 5.1(7)
and 5.1(8) unless such interest is an allowed claim enforceable against the
Company in a proceeding under federal or state bankruptcy laws, (e) trade
accounts payable and (f) any Indebtedness, including all other debt securities
and guaranties in respect of those debt securities, initially issued to (x) any
Assured Guaranty Trust or (y) any trust, partnership or other entity affiliated
with the Guarantor which is a financing vehicle of the Guarantor or any
Affiliate 

 4
 

 

of the Guarantor in
connection with the issuance by such entity of Preferred Securities or other
securities which are similar to Preferred Securities that are guaranteed by the
Guarantor pursuant to an instrument that ranks pari passu with or junior in
right of payment to the Preferred Securities Guarantees.

“Conversion Event” means the cessation of use of (i) a
Foreign Currency both by the government of the country or the confederation
which issued such Foreign Currency and for the settlement of transactions by a
central bank or other public institutions of or within the international
banking community or (ii) any currency unit or composite currency for the
purposes for which it was established.

“Corporate Trust Office” means the principal corporate
trust office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of original execution
of this Indenture is located at 101 Barclay Street, 8W, New York, New York  10286.

“Corporation” includes corporations and limited
liability companies and, except for purposes of Article 8, associations,
companies and business trusts.

“Coupon” means any interest coupon appertaining to a
Bearer Security.

“Currency,” with respect to any payment, deposit or
other transfer in respect of the principal of or any premium or interest on or
any Additional Amounts with respect to any Security, means Dollars or the
Foreign Currency, as the case may be, in which such payment, deposit or other
transfer is required to be made by or pursuant to the terms hereof or such
Security and, with respect to any other payment, deposit or transfer pursuant
to or contemplated by the terms hereof or such Security, means Dollars.

“CUSIP number” means the alphanumeric designation
assigned to a Security by Standard & Poor’s Ratings Service, CUSIP Service
Bureau.

“Defaulted Interest” has the meaning specified in
Section 3.7.

“Direct Action” has the meaning specified in Section
5.8.

“Distributions,” with respect to any Assured Guaranty
Trust, has the meaning specified in the applicable Trust Agreement of such
Assured Guaranty Trust.

“Dollars” or “$” means a dollar or other equivalent
unit of legal tender for payment of public or private debts in the United
States of America.

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

“Extension Period” has the meaning specified in
Section 3.11.

“Foreign Currency” means any currency, currency unit
or composite currency, including, without limitation, the euro, issued by the government
of one or more countries other than the 

 5
 

 

United States of America
or by any recognized confederation or association of such governments.

“Government Obligations” means securities which are
(i) direct obligations of the United States of America or the other government
or governments which issued the Foreign Currency in which the principal of or
any premium or interest on such Security or any Additional Amounts in respect
thereof shall be payable, in each case where the payment or payments thereunder
are supported by the full faith and credit of such government or governments or
(ii) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America or such other
government or governments, in each case where the timely payment or payments
thereunder are unconditionally guaranteed as a full faith and credit obligation
by the United States of America or such other government or governments, and
which, in the case of (i) or (ii), are not callable or redeemable at the option
of the issuer or issuers thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of or other amount with
respect to the Government Obligation evidenced by such depository receipt.

“Guarantee” means the unconditional guarantee of the
payment of the principal of, any premium or interest on, and any Additional
Amounts with respect to the Securities by the Guarantor, as more fully set
forth in Article 17.

“Guarantee Agreement” means the Guarantee Agreement
with respect to the Preferred Securities of an Assured Guaranty Trust,
substantially in such form as may be specified as contemplated by Section 3.1
with respect to the Securities of any series, in each case as amended from time
to time.

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

“Guarantor’s Board of Directors” means the board of
directors of the Guarantor or any committee of that board duly authorized to
act generally or in any particular respect for the Guarantor hereunder.

“Guarantor’s Board Resolution” means a copy of one or
more resolutions, certified by the Secretary or an Assistant Secretary of the
Guarantor to have been duly adopted by the Guarantor’s Board of Directors and
to be in full force and effect on the date of such certification, delivered to
the Trustee.

“Guarantor’s Officer’s Certificate” means a
certificate signed by the Chairman of the Guarantor’s Board of Directors, a
Vice Chairman, the President, the Chief Financial Officer, the Chief Investment
Officer, the Chief Accounting Officer, the General Counsel or the Secretary of 

 6
 

 

the Guarantor, that
complies with the requirements of Section 314(e) of the Trustee Indenture Act
and is delivered to the Trustee.

“Guarantor Request” and “Guarantor Order” mean,
respectively, a written request or order, as the case may be, signed in the
name of the Guarantor by the Chairman of the Guarantor’s Board of Directors, a
Vice Chairman, the President, the Chief Financial Officer, the Chief Investment
Officer, the Chief Accounting Officer, the General Counsel or the Secretary of
the Guarantor, and delivered to the Trustee.

“Guarantor Senior Indebtedness” means, with respect to
the Securities of any particular series, all Indebtedness of the Guarantor
outstanding at any time, except (a) the Guarantor’s obligations under the
Guarantee in respect of the Securities of such series, (b) Indebtedness as to
which, by the terms of the instrument creating or evidencing the same, it is
provided that such Indebtedness is subordinated to or pari passu with the Guarantor’s
obligations under the Guarantee in respect of the Securities of such series,
(c) Indebtedness of the Guarantor to an Affiliate of the Guarantor, (d)
interest accruing after the filing of a petition initiating any proceeding
relating to the Guarantor referred to in Section 5.1(7) and 5.1(8) unless such
interest is an allowed claim enforceable against the Guarantor in a proceeding
under federal or state bankruptcy laws, (e) trade accounts payable, (f) the
Guarantor’s obligations under the Guarantee in respect of the securities of any
series initially issued to (x) any Assured Guaranty Trust or (y) any trust,
partnership or other entity affiliated with the Guarantor which is a financing
vehicle of the Guarantor or any Affiliate of the Guarantor in connection with
the issuance by such entity of Preferred Securities or other securities which
are similar to Preferred Securities that are guaranteed by the Guarantor
pursuant to an instrument that ranks pari passu with or junior in right of
payment to the Preferred Securities Guarantees. and (g) all Preferred
Securities Guarantees and all guarantees similar to the Preferred Securities
Guarantees issued by the Guarantor on behalf of holders of Preferred Securities
of an Assured Guaranty Trust or other securities similar to Preferred
Securities issued by any trust, partnership or other entity affiliated with the
Guarantor which is a financing vehicle of the Guarantor or any Affiliate of the
Guarantor.

“Holder,” in the case of any Registered Security,
means the Person in whose name such Security is registered in the Security
Register and, in the case of any Bearer Security, means the bearer thereof and,
in the case of any Coupon, means the bearer thereof.

“Indebtedness” means, with respect to any Person, (i)
the principal of and any premium and interest on (a) indebtedness of such
Person for money borrowed and (b) indebtedness evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such Person is
responsible or liable; (ii) all Capitalized Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement (but excluding trade accounts payable arising in
the ordinary course of business); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker’s acceptance or
similar credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in (i) through
(iii) above) entered into in the ordinary course of business of such Person to
the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the third Business 

 7
 

 

Day following receipt by
such Person of a demand for reimbursement following payment on the letter of
credit); (v) all obligations of the type referred to in clauses (i) through
(iv) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable as obligor,
guarantor or otherwise; (vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons secured by any Lien on any property or asset
of such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of such
property or assets or the amount of the obligation so secured; and (vii) any
amendments, modifications, refundings, renewals or extensions of any
indebtedness or obligation described as Indebtedness in clauses (i) through
(vi) above.

“Indenture” means this instrument as it may from time
to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and, with
respect to any Security, by the terms and provisions of such Security and any
Coupon appertaining thereto established pursuant to Section 3.1 (as such terms
and provisions may be amended pursuant to the applicable provisions hereof).

“Independent Public Accountants” means accountants or
a firm of accountants that, with respect to the Company, the Guarantor and any
other obligor under the Securities or the Coupons, are independent public
accountants within the meaning of the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the Commission thereunder, who may be
the independent public accountants regularly retained by the Company or the
Guarantor or who may be other independent public accountants. Such accountants
or firm shall be entitled to rely upon any Opinion of Counsel as to the
interpretation of any legal matters relating to this Indenture or certificates
required to be provided hereunder.

“Indexed Security” means a Security the terms of which
provide that the principal amount thereof payable at Stated Maturity may be
more or less than the principal face amount thereof at original issuance.

“Interest”, with respect to any Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 10.4 or 17.2,
includes such Additional Amounts.

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

“Investment Company Event” means, in respect of an
Assured Guaranty Trust, the receipt by such Assured Guaranty Trust of an
Opinion of Counsel, rendered by an independent law firm experienced in such
matters, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a “Change
in 1940 Act Law”), such Assured Guaranty Trust is or will be considered an
investment company that is required to be registered under the 1940 Act, which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities of such Assured Guaranty Trust.

 8
 

 

“Judgment Currency” has the meaning specified in
Section 1.16.

“Lien” means any mortgage, pledge, lien, security interest
or other encumbrance.

“Maturity”, with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable as provided in or pursuant to this Indenture, whether
at the Stated Maturity or by declaration of acceleration, notice of redemption
or repurchase, notice of option to elect repayment or otherwise, and includes
the Redemption Date.

“New York Banking Day” has the meaning specified in
Section 1.16.

“1940 Act” means the Investment Company Act of 1940,
as amended.

“Office” or “Agency,” with respect to any Securities,
means an office or agency of the Company and the Guarantor maintained or
designated in a Place of Payment for such Securities pursuant to Section 10.2
or any other office or agency of the Company and the Guarantor maintained or
designated for such Securities pursuant to Section 10.2 or, to the extent
designated or required by Section 10.2 in lieu of such office or agency, the
Corporate Trust Office of the Trustee.

“Officer’s Certificate” means a certificate signed by
an Authorized Officer that complies with the requirements of Section 314(e) of
the Trust Indenture Act and is delivered to the Trustee.

“Opinion of Counsel” means a written opinion of
counsel, who may be an employee of or counsel for the Company or the Guarantor,
as the case may be, or other counsel who shall be reasonably acceptable to the
Trustee, that, if required by the Trust Indenture Act, complies with the
requirements of Section 314(e) of the Trust Indenture Act.

“Original Issue Discount Security” means a Security
issued pursuant to this Indenture which provides for declaration of an amount
less than the principal face amount thereof to be due and payable upon
acceleration pursuant to Section 5.2.

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

(1)  any such Security theretofore cancelled by
the Trustee or the Security Registrar or delivered to the Trustee or the
Security Registrar for cancellation;

(2)  any such Security for whose payment at the
Maturity thereof money in the necessary amount has been theretofore deposited
pursuant hereto (other than pursuant to Section 4.2) with the Trustee or any
Paying Agent (other than the Company or the Guarantor) in trust or set aside
and segregated in trust by the Company or the Guarantor (if the Company shall
act as its own, or authorize the Guarantor to act as, Paying Agent) for the
Holders of such Securities and any Coupons appertaining thereto, provided that,
if 

 9
 

 

such Securities
are to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been made;

(3)  any such Security with respect to which the
Company or the Guarantor has effected defeasance pursuant to the terms hereof,
except to the extent provided in Section 4.2;

(4)  any such Security which has been paid
pursuant to Section 3.6 or in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, unless there
shall have been presented to the Trustee proof satisfactory to it that such
Security is held by a bona fide purchaser in whose hands such Security is a
valid obligation of the Company; and

(5)  any such Security converted or exchanged as
contemplated by this Indenture into securities of the Company or the Guarantor
or another issuer, if the terms of such Security provide for such conversion or
exchange pursuant to Section 3.1; provided, however, that in determining
whether the Holders of the requisite principal amount of Outstanding Securities
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder or are present at a meeting of Holders of Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount
Security that may be counted in making such determination and that shall be
deemed to be Outstanding for such purposes shall be equal to the amount of the
principal thereof that pursuant to the terms of such Original Issue Discount
Security would be declared (or shall have been declared to be) due and payable
upon a declaration of acceleration thereof pursuant to Section 5.2 at the time
of such determination, and (ii) the principal amount of any Indexed Security
that may be counted in making such determination and that shall be deemed
Outstanding for such purposes shall be equal to the principal face amount of
such Indexed Security at original issuance, unless otherwise provided in or
pursuant to this Indenture, and (iii) the principal amount of a Security
denominated in a Foreign Currency shall be the Dollar equivalent, determined on
the date of original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent on the
date of original issuance of such Security of the amount determined as provided
in (i) above) of such Security, and (iv) Securities owned by the Company, the
Guarantor or any other obligor upon the Securities or any Affiliate of the
Company, the Guarantor or such other obligor, shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in making any such determination or relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which a Responsible Officer of the Trustee actually knows to be so owned shall
be so disregarded. Securities so owned which shall have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee (A) the pledgee’s right so to act with respect to
such Securities and (B) that the pledgee is not the Company, the Guarantor or
any other obligor upon the Securities or any Coupons appertaining thereto or an
Affiliate of the Company, the Guarantor or such other obligor.

 

 10

 

 

“Paying Agent” means any Person authorized by the
Company to pay the principal of, or any premium or interest on, or any
Additional Amounts with respect to, any Security or any Coupon on behalf of the
Company.

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

“Place of Payment,” with respect to any Security,
means the place or places where the principal of, or any premium or interest
on, or any Additional Amounts with respect to such Security are payable as
provided in or pursuant to this Indenture or such Security.

“Preferred Securities” has the meaning specified in
the first recital of this Indenture.

“Preferred Securities Guarantee” means the guarantee
by Assured Guaranty Ltd., in its capacity as guarantor with respect to the
Preferred Securities of an Assured Guaranty Trust, of distributions on such
Preferred Securities to the extent provided in the Guarantee Agreement.

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

“Preferred Stock” in respect of any Corporation means
Capital Stock of any class or classes (however designated) which is preferred
as to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Corporation, over
shares of Capital Stock of any other class of such Corporation.

“Property Trustee,” with respect to any Assured
Guaranty Trust, means the entity acting in the capacity of Property Trustee
pursuant to the related Trust Agreement.

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

“Redemption Price,” with respect to any Security or
portion thereof to be redeemed, means the price at which it is to be redeemed
as determined by or pursuant to this Indenture or such Security.

“Registered Security” means any Security established
pursuant to Section 2.1 which is registered in a Security Register.

“Regular Record Date” for the interest payable on any
Registered Security on any Interest Payment Date therefor means the date, if
any, specified in or pursuant to this Indenture or such Security as the “Regular
Record Date”.

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“Required Currency” has the meaning specified in
Section 1.16.

“Responsible Officer” means any officer assigned to
the corporate trust department of the Trustee and who shall have direct
responsibility for the administration of this Indenture and also means, for the
purposes of Section 6.1(8) and the first proviso of Section 6.2, any other
officer to whom a particular corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.

“Security” or “Securities” means any note or notes,
bond or bonds, debenture or debentures, or any other evidences of Indebtedness,
as the case may be, authenticated and delivered under this Indenture; provided,
however, that, if at any time there is more than one Person acting as Trustee
under this Indenture, “Securities,” with respect to any such Person, shall mean
Securities authenticated and delivered under this Indenture, exclusive,
however, of Securities of any series as to which such Person is not Trustee.

“Security Register” and “Security Registrar” have the
respective meanings specified in Section 3.5.

“Senior Indebtedness,” with respect to the Securities
of any particular series, means, collectively, Company Senior Indebtedness with
respect to the Securities of such series and Guarantor Senior Indebtedness with
respect to the Securities of such series.

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

“Special Record Date” for the payment of any Defaulted
Interest on any Registered Security means a date fixed by the Company pursuant
to Section 3.7.

“Stated Maturity,” with respect to any Security or any
installment of principal thereof or interest thereon or any Additional Amounts
with respect thereto, means the date established by or pursuant to this
Indenture or such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is, or such Additional
Amounts are, due and payable.

“Subsidiary” means, in respect of any Person, any
Corporation, limited or general partnership or other business entity of which
at the time of determination more than 50% of the voting power of the shares of
its Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is owned or controlled, directly or
indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries
of such Person or (iii) one or more Subsidiaries of such Person.

“Tax Event” means, in respect of an Assured Guaranty
Trust, the receipt by such Assured Guaranty Trust or the Company of an Opinion
of Counsel, rendered by an independent law firm experienced in such matters, to
the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or therein,
or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is

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announced on or after the
date of original issuance of the Preferred Securities of such Assured Guaranty
Trust, there is more than an insubstantial risk that (i) such Assured Guaranty
Trust is, or will be within 90 days of the date of such Opinion of Counsel,
subject to United States Federal income tax with respect to income received or
accrued on the corresponding series of Securities, (ii) interest payable by the
Company on the corresponding series of Securities is not, or within 90 days of
the date of such Opinion of Counsel will not be, deductible by the Company, in
whole or in part, for United States Federal income tax purposes or (iii) such
Assured Guaranty Trust is, or will be within 90 days of the date of such
Opinion of Counsel, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.

“Trust Agreement” means the Trust Agreement
substantially in the form attached hereto as Annex A, as amended by an Amended
and Restated Trust Agreement substantially in such form as may be specified as
contemplated by Section 3.1 with respect to the Securities of any series, in
each case as amended from time to time.

“Trust Indenture Act” means the Trust Indenture Act of
1939, as amended, and any reference herein to the Trust Indenture Act or a
particular provision thereof shall mean such Act or provision, as the case may
be, as amended or replaced from time to time or as supplemented from time to
time by rules or regulations adopted by the Commission under or in furtherance
of the purposes of such Act or provision, as the case may be.

“Trust Securities,” with respect to any Assured
Guaranty Trust, means, collectively, the Common Securities and Preferred
Securities issued by such Assured Guaranty Trust.

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

“United States,” except as otherwise provided in or
pursuant to this Indenture or any Security, means the United States of America
(including the states thereof and the District of Columbia), its territories
and possessions and other areas subject to its jurisdiction.

“United States Alien,” except as otherwise provided in
or pursuant to this Indenture or any Security, means any Person who, for United
States Federal income tax purposes, is a foreign corporation, a non-resident
alien individual, a non-resident alien fiduciary of a foreign estate or trust,
or a foreign partnership one or more of the members of which is, for United
States Federal income tax purposes, a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate or trust.

“U.S. Depository” or “Depository” means, with respect
to any Security issuable or issued in the form of one or more global
Securities, the Person designated as U.S. Depository or Depository by the
Company in or pursuant to this Indenture, which Person must be, to the extent
required by applicable law or regulation, a clearing agency registered under
the Securities Exchange Act of 1934, as amended, and, if so provided with
respect to any Security, any

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successor to such Person.
If at any time there is more than one such Person, “U.S. Depository” or “Depository”
shall mean, with respect to any Securities, the qualifying entity which has
been appointed with respect to such Securities.

“Vice President,” when used with respect to the
Company or the Trustee, means any vice president, whether or not designated by
a number or a word or words added before or after the title “Vice President”.

Section 1.2          Compliance Certificates and Opinions.

Except as otherwise expressly provided in this
Indenture, upon any application or request by the Company or the Guarantor to
the Trustee to take any action under any provision of this Indenture, the
Company or the Guarantor, as the case may be, shall furnish to the Trustee an
Officer’s Certificate or a Guarantor’s Officer’s Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents or any of them is specifically
required by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need be furnished.

Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:

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

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

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

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

Section 1.3          Form of Documents Delivered to
Trustee.

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

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Any certificate or opinion of an officer of the
Company or the Guarantor may be based, insofar as it relates to legal matters,
upon an Opinion of Counsel, provided that such officer, after reasonable
inquiry, has no reason to believe and does not believe that the Opinion of
Counsel with respect to the matters upon which his certificate or opinion is
based is erroneous. Any such Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or the Guarantor, as
the case may be, stating that the information with respect to such factual
matters is in the possession of the Company or the Guarantor, as the case may
be, provided that such counsel, after reasonable inquiry, has no reason to
believe and does not believe that the certificate or opinion or representations
with respect to such matters are erroneous.

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

Section 1.4          Acts of Holders.

(1)  Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by or pursuant to
this Indenture to be given or taken by Holders or by holders of Preferred
Securities may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders or holders of Preferred
Securities, as applicable, in person or by an agent duly appointed in writing.
If, but only if, Securities of a series are issuable as Bearer Securities, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided in or pursuant to this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article 15, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or
record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company or the Guarantor or both of them. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act” of the Holders or
holders of Preferred Securities signing such instrument or instruments or so
voting at any such meeting. Proof of execution of any such instrument or of a
writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee, the
Company and the Guarantor and any agent of the Trustee, the Company or the
Guarantor, if made in the manner provided in this Section.  The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 15.6.

Without limiting
the generality of this Section 1.4, unless otherwise provided in or pursuant to
this Indenture, a Holder, including a U.S. Depository that is a Holder of a
global Security, may make, give or take, by a proxy or proxies, duly appointed
in writing, any request, demand, authorization, direction, notice, consent,
waiver or other Act

 15
 

 

provided in or
pursuant to this Indenture to be made, given or taken by Holders, and a U.S.
Depository that is a Holder of a global Security may provide its proxy or
proxies to the beneficial owners of interests in any such global Security
through such U.S. Depository’s standing instructions and customary practices.

The Company shall
fix a record date for the purpose of determining the Persons who are beneficial
owners of interest in any permanent global Security held by a U.S. Depository
entitled under the procedures of such U.S. Depository to make, give or take, by
a proxy or proxies duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other Act provided in or
pursuant to this Indenture to be made, given or taken by Holders. If such a
record date is fixed, the Holders on such record date or their duly appointed
proxy or proxies, and only such Persons, shall be entitled to make, give or
take such request, demand, authorization, direction, notice, consent, waiver or
other Act, whether or not such Holders remain Holders after such record date.
No such request, demand, authorization, direction, notice, consent, waiver or
other Act shall be valid or effective if made, given or taken more than 90 days
after such record date.

(2)  The fact and date of the execution by any
Person of any such instrument or writing referred to in this Section 1.4 may be
proved in any reasonable manner; and the Trustee may in any instance require
further proof with respect to any of the matters referred to in this Section.

(3)  The ownership, principal amount and serial
numbers of Registered Securities held by any Person, and the date of the
commencement and the date of the termination of holding the same, shall be
proved by the Security Register.

(4)  The ownership, principal amount and serial
numbers of Bearer Securities held by any Person, and the date of the
commencement and the date of the termination of holding the same, may be proved
by the production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary reasonably
acceptable to the Company and the Guarantor, wherever situated, if such
certificate shall be deemed by the Company, the Guarantor and the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. 
The Trustee, the Company and the Guarantor may assume that such
ownership of any Bearer Security continues until (i) another certificate or
affidavit bearing a later date issued in respect of the same Bearer Security is
produced, or (ii) such Bearer Security is produced to the Trustee by some other
Person, or (iii) such Bearer Security is surrendered in exchange for a
Registered Security, or (iv) such Bearer Security is no longer Outstanding. The
ownership, principal amount and serial numbers of Bearer Securities held by the
Person so executing such instrument or writing and the date of the commencement
and the date of the termination of holding the same may also be proved in any
other manner which the Company, the Guarantor and the Trustee deem sufficient.

 16
 

 

(5)  If the Company or the Guarantor shall solicit
from the Holders of any Registered Securities any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company or
the Guarantor, as the case may be, may at its option (but is not obligated to),
by Board Resolution or Guarantor’s Board Resolution, as the case may be, fix in
advance a record date for the determination of Holders of Registered Securities
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of Registered
Securities of record at the close of business on such record date shall be
deemed to be Holders for the purpose of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders of Registered Securities shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.

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

Section 1.5          Notices, etc. to Trustee, Company and
Guarantor.

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

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

(2)  Company or the Guarantor, as the case may be,
by the Trustee or any Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company or the Guarantor, as the case may
be, addressed to the attention of its Treasurer, with a copy to the attention
of its General Counsel, at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously furnished
in writing to the Trustee by the Company or the Guarantor, as the case may be.

Section 1.6          Notice to Holders of Securities;
Waiver.

Except as otherwise expressly provided in or pursuant
to this Indenture, where this Indenture provides for notice to Holders of
Securities of any event,

 17
 

 

(1)  such notice shall be sufficiently given to
Holders of Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice; and

(2)  such notice shall be sufficiently given to
Holders of Bearer Securities, if any, if published in an Authorized Newspaper
in The City of New York and, if such Securities are then listed on any stock
exchange outside the United States, in an Authorized Newspaper in such city as
the Company shall advise the Trustee that such stock exchange so requires, on a
Business Day at least twice, the first such publication to be not earlier than
the earliest date and the second such publication not later than the latest
date prescribed for the giving of such notice.

In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder of a Registered
Security shall affect the sufficiency of such notice with respect to other
Holders of Registered Securities or the sufficiency of any notice to Holders of
Bearer Securities given as provided herein. Any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given
or provided. In the case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

In case by reason of the suspension of publication of
any Authorized Newspaper or Authorized Newspapers or by reason of any other
cause it shall be impracticable to publish any notice to Holders of Bearers
Securities as provided above, then such notification to Holders of Bearer
Securities as shall be given with the approval of the Trustee shall constitute
sufficient notice to such Holders for every purpose hereunder. Neither failure
to give notice by publication to Holders of Bearer Securities as provided
above, nor any defect in any notice so published, shall affect the sufficiency
of any notice mailed to Holders of Registered Securities as provided above.

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

Section 1.7          Language of Notices.

Any request, demand, authorization, direction, notice,
consent, election or waiver required or permitted under this Indenture shall be
in the English language, except that, if the Company or the Guarantor, as the
case may be, so elects, any published notice may be in an official language of
the country of publication.

Section 1.8          Conflict with Trust Indenture Act.

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If any provision hereof limits, qualifies or conflicts
with any duties under any required provision of the Trust Indenture Act imposed
hereon by Section 318(c) thereof, such required provision shall control.

Section 1.9          Effect of Headings and Table of
Contents.

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

Section 1.10        Successors and Assigns.

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

Section 1.11        Separability Clause.

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

Section 1.12        Holders of Preferred Securities as Third
Party Beneficiaries.

The Company and the Guarantor hereby acknowledge that,
to the extent specifically set forth herein, the holders of the Preferred
Securities of an Assured Guaranty Trust shall expressly be third party
beneficiaries of this Indenture. The Company and the Guarantor further
acknowledge that, if an Event of Default has occurred and is continuing and is
attributable to the failure of the Company and the Guarantor to pay the
principal of or premium, if any, or interest on or Additional Amounts with
respect to the Securities of the series held by such Assured Guaranty Trust,
any holder of the Preferred Securities of such Assured Guaranty Trust may
institute a Direct Action against the Company or the Guarantor.

Section 1.13        Benefits of Indenture.

Except as otherwise expressly provided herein with
respect to holders of Preferred Securities, nothing in this Indenture, any
Security or any Coupon, express or implied, shall give to any Person, other
than the parties hereto and the holders of Senior Indebtedness, any Security
Registrar, any Paying Agent, any Authenticating Agent and their successors
hereunder and the Holders of Securities or Coupons, any benefit or any legal or
equitable right, remedy or claim under this Indenture.

Section 1.14        Governing Law.

This Indenture, the Securities and any Coupons shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made or instruments entered into and, in each
case, performed in said state.

Section 1.15        Legal Holidays.

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Unless otherwise specified in or pursuant to this
Indenture or any Securities, in any case where any Interest Payment Date,
Stated Maturity or Maturity of any Security, or the last date on which a Holder
has the right to convert or exchange Securities of a series that are
convertible or exchangeable, shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture, any
Security or any Coupon other than a provision in any Security or Coupon that
specifically states that such provision shall apply in lieu hereof) payment
need not be made at such Place of Payment on such date, and such Securities
need not be converted or exchanged on such date, but such payment may be made,
and such Securities may be converted or exchanged, on the next succeeding day
that is a Business Day at such Place of Payment, and no interest shall accrue
on the amount payable on such date or at such time for the period from and
after such Interest Payment Date, Stated Maturity, Maturity or last day for
conversion or exchange, as the case may be, to such next succeeding Business
Day, except that if such next succeeding Business Day is in the next succeeding
calendar year, such payment may be made, and such Securities may be converted
or exchanged, on the immediately preceding Business Day (in the case of each of
the foregoing, with the same force and effect as if made on such Interest
Payment Date or at such Stated Maturity or Maturity or on such last day for
conversion or exchange, as the case may be).

Section 1.16        Counterparts.

This Indenture may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one
and the same instrument.

Section 1.17        Judgment Currency.

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

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Section 1.18        No Security Interest Created.

Nothing in this Indenture or in any Securities,
express or implied, shall be construed to constitute a security interest under
the Uniform Commercial Code or similar legislation, as now or hereafter enacted
and in effect in any jurisdiction where property of the Company, the Guarantor
or their respective Subsidiaries is or may be located.

Section 1.19        Limitation on Individual Liability.

No recourse under or upon any obligation, covenant or
agreement contained in this Indenture or in any Security, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder (except in a shareholder’s corporate capacity as
Guarantor), officer or director, as such, past, present or future, of the
Company or the Guarantor, as the case may be, either directly or through the
Company or the Guarantor, as the case may be, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Indenture and
the obligations issued hereunder are solely corporate obligations, and that no
such personal liability whatever shall attach to, or is or shall be incurred
by, the incorporators, shareholders, officers or directors, as such, of the
Company or the Guarantor, as the case may be, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom; and that any and all such personal liability of
every name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, shareholder, officer or director, as such, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Security.

Section 1.20        Submission to Jurisdiction; Jury Trial
Waiver.

The Company and the Guarantor each agrees that any
judicial proceedings instituted in relation to any matter arising under this
Indenture, the Securities or any Coupons appertaining thereto may be brought in
any United States Federal or New York State court sitting in the Borough of
Manhattan, The City of New York, New York to the extent that such court has
subject matter jurisdiction over the controversy, and, by execution and
delivery of this Indenture, the Company and the Guarantor each hereby
irrevocably accepts, generally and unconditionally, the jurisdiction of the
aforesaid courts, acknowledges their competence and irrevocably agrees to be
bound by any judgment rendered in such proceeding. The Company and the
Guarantor each also irrevocably and unconditionally waives for the benefit of
the Trustee and the Holders of the Securities and Coupons any immunity from
jurisdiction and any immunity from legal process (whether through service or
notice, attachment prior to judgment, attachment in the aid of execution,
execution or otherwise) in respect of this Indenture. The Company and the
Guarantor each hereby irrevocably designates and appoints for the benefit of
the Trustee and the Holders of the Securities and Coupons for the term of this
Indenture Assured Guaranty Corp., 1325 Avenue of the Americas, New York, New York
10019, as its agent to receive on its behalf service of all process (with a
copy of all such service of process to be delivered to James M. Michener,

 21
 

 

General Counsel and
Secretary, 30 Woodbourne Avenue, Hamilton, HM 08, Bermuda) brought against it
with respect to any such proceeding in any such court in The City of New York,
such service being hereby acknowledged by each of the Company and the Guarantor
to be effective and binding service on it in every respect whether or not the
Company or the Guarantor, as the case may be, shall then be doing or shall have
at any time done business in New York. Such appointment shall be irrevocable so
long as any of the Securities or Coupons or the respective obligations of the
Company and the Guarantor hereunder remain outstanding, or until the
appointment of a successor by the Company or the Guarantor, as the case may be,
and such successor’s acceptance of such appointment. Upon such acceptance, the
Company or the Guarantor, as the case may be, shall notify the Trustee of the
name and address of such successor. The Company and the Guarantor each further
agrees for the benefit of the Trustee and the Holders of the Securities and the
Coupons to take any and all action, including the execution and filing of any
and all such documents and instruments, as may be necessary to continue such
designation and appointment of said Assured Guaranty Corp., Inc. in full force
and effect so long as any of the Securities or Coupons or the respective
obligations of the Company and the Guarantor hereunder shall be outstanding.
The Trustee shall not be obligated and shall have no responsibility with
respect to any failure by the Company or the Guarantor to take any such action.
Nothing herein shall affect the right to serve process in any other manner
permitted by any law or limit the right of the Trustee or any Holder to
institute proceedings against the Company or the Guarantor in the courts of any
other jurisdiction or jurisdictions.

EACH PARTY HERETO, AND
EACH HOLDER OF A SECURITY BY ACCEPTANCE THEREOF, HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION RELATING TO THE TRUSTEE DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE.

ARTICLE 2

SECURITIES FORMS

Section 2.1          Forms Generally.

Each Registered Security, Bearer Security, Coupon and
temporary or permanent global Security issued pursuant to this Indenture shall
be in the form established by or pursuant to a Board Resolution or in one or
more indentures supplemental hereto, shall have such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
or pursuant to this Indenture or any indenture supplemental hereto and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon.

Unless otherwise provided in or pursuant to this
Indenture or any Securities, the Securities shall be issuable in registered
form without Coupons and shall not be issuable upon the exercise of warrants.

 

 22

 

 

Definitive Securities and definitive Coupons shall be
printed, lithographed or engraved or produced by any combination of these
methods on a steel engraved border or steel engraved borders or may be produced
in any other manner, all as determined by the officers of the Company executing
such Securities or Coupons, as evidenced by their execution of such Securities
or Coupons.

Section 2.2          Form of Trustee’s Certificate of
Authentication.

Subject to Section 6.11, the Trustee’s certificate of
authentication shall be in substantially the following form:

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

	
  

  	
  THE BANK OF NEW YORK,

  	
   

  
	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
				

 

Section 2.3          Securities
in Global Form.

Unless otherwise provided in or pursuant to this
Indenture or any Securities, the Securities shall not be issuable in temporary
or permanent global form. If Securities of a series shall be issuable in global
form, any such Security may provide that it or any number of such Securities
shall represent the aggregate amount of all Outstanding Securities of such
series (or such lesser amount as is permitted by the terms thereof) from time
to time endorsed thereon and may also provide that the aggregate amount of
Outstanding Securities represented thereby may from time to time be increased
or reduced to reflect exchanges. Any endorsement of any Security in global form
to reflect the amount, or any increase or decrease in the amount, or changes in
the rights of Holders, of Outstanding Securities represented thereby shall be
made in such manner and by such Person or Persons as shall be specified therein
or in the Company Order to be delivered pursuant to Section 3.3 or 3.4 with respect
thereto. Subject to the provisions of Section 3.3 and, if applicable, Section
3.4, the Trustee shall deliver and redeliver, in each case at the Company’s
expense, any Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officer’s Certificate and need not be
accompanied by an Opinion of Counsel.

Notwithstanding the provisions of Section 3.7, unless
otherwise specified in or pursuant to this Indenture or any Securities, payment
of principal of, any premium and interest on, and any Additional Amounts in
respect of, any Security in temporary or permanent global form shall be made to
the Person or Persons specified therein.

Notwithstanding the provisions of Section 3.8 and except
as provided in the preceding paragraph, the Company, the Guarantor, the Trustee
and any agent of the Company, the 

 23
 

 

Guarantor or the Trustee
shall treat as the Holder of such principal amount of Outstanding Securities
represented by a global Security (i) in the case of a global Security in
registered form, the Holder of such global Security in registered form, or (ii)
in the case of a global Security in bearer form, the Person or Persons
specified pursuant to Section 3.1.

ARTICLE 3

THE SECURITIES

Section 3.1          Amount Unlimited; Issuable in Series.

The aggregate principal amount of Securities which may
be authenticated and delivered under this Indenture is unlimited. The
Securities may be issued in one or more series. The Securities of each series
shall be subordinated in right of payment to all Company Senior Indebtedness
with respect to such series as provided in Article 16. The Securities of each
series shall be guaranteed by the Guarantor, which Guarantee shall be
subordinated in right of payment to all Guarantor Senior Indebtedness with
respect to such series as provided in Article 18.

With respect to any Securities to be authenticated and
delivered hereunder, there shall be established in or pursuant to a Board
Resolution and set forth in an Officer’s Certificate, or established in one or
more indentures supplemental hereto,

(1)  the title of such Securities and the series
in which such Securities shall be included;

(2)  any limit upon the aggregate principal amount
of the Securities of such title or the Securities of such series which may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of such series pursuant to Section 3.4,
3.5, 3.6, 9.5 or 11.7, upon repayment in part of any Registered Security of
such series pursuant to Article 13, upon surrender in part of any Registered
Security for conversion into other securities of the Company or exchange for
securities of the Guarantor or another issuer pursuant to its terms, or
pursuant to or as contemplated by the terms of such Securities);

(3)  if such Securities are to be issuable as
Registered Securities, as Bearer Securities or alternatively as Bearer
Securities and Registered Securities, and whether the Bearer Securities are to
be issuable with Coupons, without Coupons or both, and any restrictions
applicable to the offer, sale or delivery of the Bearer Securities and the
terms, if any, upon which Bearer Securities may be exchanged for Registered
Securities and vice versa;

(4)  if any of such Securities are to be issuable
in global form, when any of such Securities are to be issuable in global form
and (i) whether such Securities are to be issued in temporary or permanent
global form or both, (ii) whether beneficial owners of interests in any such
global Security may exchange such interests for Securities of the same series
and of like tenor and of any authorized form and denomination, and the
circumstances under which any such exchanges may occur, if other than in the
manner 

 24
 

 

specified in Section 3.5,
and (iii) the name of the Depository or the U.S. Depository, as the case may
be, with respect to any such global Security;

(5)  if any of such Securities are to be issuable
as Bearer Securities or in global form, the date as of which any such Bearer
Security or global Security shall be dated (if other than the date of original
issuance of the first of such Securities to be issued);

(6)  if any of such Securities are to be issuable
as Bearer Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form payable in respect of an Interest Payment Date
therefor prior to the exchange, if any, of such temporary Bearer Security for
definitive Securities shall be paid to any clearing organization with respect
to the portion of such temporary Bearer Security held for its account and, in
such event, the terms and conditions (including any certification requirements)
upon which any such interest payment received by a clearing organization will
be credited to the Persons entitled to interest payable on such Interest
Payment Date;

(7)  the date or dates, or the method or methods,
if any, by which such date or dates shall be determined, on which the principal
of such Securities is payable;

(8)  the rate or rates at which such Securities
shall bear interest, if any, or the method or methods, if any, by which such
rate or rates are to be determined, the rate or rates and the extent to which
Additional Interest, if any, shall be payable in respect of such Securities,
the date or dates, if any, from which such interest shall accrue or the method
or methods, if any, by which such date or dates are to be determined, the
Interest Payment Dates, if any, on which such interest shall be payable and the
Regular Record Date, if any, for the interest payable on Registered Securities
on any Interest Payment Date, the right, pursuant to Section 3.11 hereof or as
otherwise set forth therein, of the Company to defer or extend an interest
payment period and the duration of any such Extension Period, including the
maximum consecutive period during which interest payment periods may be
extended, whether and under what circumstances Additional Amounts on such
Securities or any of them shall be payable, the notice, if any, to Holders
regarding the determination of interest on a floating rate Security and the
manner of giving such notice, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;

(9)  if in addition to or other than the Borough
of Manhattan, The City of New York, the place or places where the principal of,
any premium and interest on or any Additional Amounts with respect to such
Securities shall be payable, any of such Securities that are Registered
Securities may be surrendered for registration of transfer or exchange, any of
such Securities may be surrendered for conversion or exchange and notices or
demands to or upon the Company or the Guarantor in respect of such Securities
and this Indenture may be served, the extent to which, or the manner in which,
any interest payment or Additional Amounts on a global Security on an Interest
Payment Date, will be paid and the manner in which any principal of or premium,
if any, on any global Security will be paid;

 25
 

 

 

(10)  whether any of such Securities are to be
redeemable at the option of the Company and, if so, the date or dates on which,
the period or periods within which, the price or prices at which and the other
terms and conditions upon which such Securities may be redeemed, in whole or in
part, at the option of the Company;

(11)  whether the Company is obligated to redeem or
purchase any of such Securities pursuant to any sinking fund or analogous
provision or at the option of any Holder thereof and, if so, the date or dates
on which, the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation, and any provisions
for the remarketing of such Securities so redeemed or purchased;

(12)  the denominations in which any of such
Securities that are Registered Securities shall be issuable if other than
denominations of $1,000 and any integral multiple thereof, and the
denominations in which any of such Securities that are Bearer Securities shall
be issuable if other than the denomination of $5,000;

(13)  whether the Securities of the series will be
convertible into other securities of the Company and/or exchangeable for
securities of the Guarantor or another issuer, and if so, the terms and
conditions upon which such Securities will be so convertible or exchangeable,
and any deletions from or modifications or additions to this Indenture to
permit or to facilitate the issuance of such convertible or exchangeable
Securities or the administration thereof;

(14)  if other than the principal amount thereof,
the portion of the principal amount of any of such Securities that shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to Section
5.2 or the method by which such portion is to be determined;

(15)  if other than Dollars, the Foreign Currency
in which payment of the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities shall be payable;

(16)  if the principal of, any premium or interest
on or any Additional Amounts with respect to any of such Securities are to be
payable, at the election of the Company or a Holder thereof or otherwise, in
Dollars or in a Foreign Currency other than that in which such Securities are
stated to be payable, the date or dates on which, the period or periods within
which, and the other terms and conditions upon which, such election may be
made, and the time and manner of determining the exchange rate between the
Currency in which such Securities are stated to be payable and the Currency in
which such Securities or any of them are to be paid pursuant to such election,
and any deletions from or modifications of or additions to the terms of this
Indenture to provide for or to facilitate the issuance of Securities
denominated or payable, at the election of the Company or a Holder thereof or
otherwise, in a Foreign Currency;

 26
 

 

 

(17)  whether the amount of payments of principal
of, any premium or interest on or any Additional Amounts with respect to such
Securities may be determined with reference to an index, formula or other
method or methods (which index, formula or method or methods may be based,
without limitation, on one or more Currencies, commodities, equity securities,
equity indices or other indices), and, if so, the terms and conditions upon
which and the manner in which such amounts shall be determined and paid or
payable;

(18)  the relative degree, if any, to which
Securities of such series and the Guarantee in respect thereof shall be senior
to or be subordinated to other series of Securities and the Guarantee in
respect thereof or other Indebtedness of the Company or the Guarantor, as the
case may be, in right of payment, whether such other series of Securities or
other Indebtedness is outstanding or not;

(19)  any deletions from, modifications of or
additions to the Events of Default or covenants of the Company or the Guarantor
with respect to any of such Securities, whether or not such Events of Default
or covenants are consistent with the Events of Default or covenants set forth
herein;

(20)  whether either or both of Section 4.2(2)
relating to defeasance or Section 4.2(3) relating to covenant defeasance shall
not be applicable to the Securities of such series, or any covenants in
addition to those specified in Section 4.2(3) relating to the Securities of
such series which shall be subject to covenant defeasance, and any deletions
from, or modifications or additions to, the provisions of Article 4 in respect
of the Securities of such series;

(21)  the form or forms of the Trust Agreement (if
different from the form attached hereto as Annex A), Amended and Restated Trust
Agreement and Guarantee Agreement;

(22)  whether any of such Securities are to be
issuable upon the exercise of warrants, and the time, manner and place for such
Securities to be authenticated and delivered;

(23)  if any of such Securities are to be issuable
in global form and are to be issuable in definitive form (whether upon original
issue or upon exchange of a temporary Security) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then the
form and terms of such certificates, documents or conditions;

(24)  if there is more than one Trustee, the
identity of the Trustee and, if not the Trustee, the identity of each Security
Registrar, Paying Agent or Authenticating Agent with respect to such
Securities; and

(25)  any other terms of such Securities and any
other deletions from or modifications or additions to this Indenture in respect
of such Securities.

All Securities of any one series and all Coupons, if
any, appertaining to Bearer Securities of such series shall be substantially
identical except as to Currency of payments due thereunder, 

 27
 

 

denomination and the rate
of interest thereon, or method of determining the rate of interest, if any,
Maturity, and the date from which interest, if any, shall accrue and except as
may otherwise be provided by the Company in or pursuant to the Board Resolution
and set forth in the Officer’s Certificate or in any indenture or indentures
supplemental hereto pertaining to such series of Securities. The terms of the
Securities of any series may provide, without limitation, that the Securities
shall be authenticated and delivered by the Trustee on original issue from time
to time upon written order of persons designated in the Officer’s Certificate
or supplemental indenture and that such persons are authorized to determine,
consistent with such Officer’s Certificate or any applicable supplemental
indenture, such terms and conditions of the Securities of such series as are
specified in such Officer’s Certificate or supplemental indenture. All
Securities of any one series need not be issued at the same time and, unless
otherwise so provided, a series may be reopened for issuances of additional
Securities of such series or to establish additional terms of such series of
Securities.

If any of the terms of the Securities of any series
shall be established by action taken by or pursuant to a Board Resolution, the
Board Resolution shall be delivered to the Trustee at or prior to the delivery
of the Officer’s Certificate setting forth the terms of such series.

Section 3.2          Currency;
Denominations.

Unless otherwise provided in or pursuant to this
Indenture, the principal of, any premium and interest on and any Additional
Amounts with respect to the Securities shall be payable in Dollars. Unless
otherwise provided in or pursuant to this Indenture, Registered Securities
denominated in Dollars shall be issuable in registered form without Coupons in
denominations of $1,000 and any integral multiple thereof, and the Bearer
Securities denominated in Dollars shall be issuable in the denomination of
$5,000. Securities not denominated in Dollars shall be issuable in such
denominations as are established with respect to such Securities in or pursuant
to this Indenture.

Section 3.3          Execution, Authentication, Delivery
and Dating.

Securities shall be executed on behalf of the Company
by its Chairman of the Board, a Vice Chairman, its President, its Treasurer or
a Vice President and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the
Treasurer or any Assistant Treasurer of the Company. The signature of any of
these officers on the Securities or any Coupons appertaining thereto may be
manual or facsimile.

Securities and any Coupons appertaining thereto bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company and the Guarantor,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities and Coupons
or did not hold such offices at the date of original issuance of such
Securities or Coupons.

At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Securities, together
with any Coupons appertaining thereto, executed by the Company, to the Trustee
for authentication and, provided that the Board Resolution and Officer’s
Certificate or supplemental indenture or indentures with respect to such Securities

 28
 

 

referred to in Section
3.1 and a Company Order for the authentication and delivery of such Securities
have been delivered to the Trustee, the Trustee in accordance with the Company
Order and subject to the provisions hereof and of such Securities shall
authenticate and deliver such Securities. In authenticating such Securities,
and accepting the additional responsibilities under this Indenture in relation
to such Securities and any Coupons appertaining thereto, the Trustee shall be
entitled to receive, and (subject to Sections 315(a) through 315(d) of the
Trust Indenture Act) shall be fully protected in relying upon,

(1)  an Opinion of Counsel to the effect that:

(a)           the form or forms and terms of such
Securities and Coupons, if any, have been established in conformity with the
provisions of this Indenture;

(b)           all conditions precedent to the
authentication and delivery of such Securities and Coupons, if any,
appertaining thereto, have been complied with and that such Securities and
Coupons, when completed by appropriate insertions and attested by duly
authorized officers of the Company, delivered by duly authorized officers of
the Company to the Trustee for authentication pursuant to this Indenture, and
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel, will
constitute legally valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as enforcement
thereof may be subject to or limited by bankruptcy, insolvency, reorganization,
moratorium, arrangement, fraudulent conveyance, fraudulent transfer or other
similar laws relating to or affecting creditors’ rights generally, and subject
to general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law) and will entitle the Holders thereof to the
benefits of this Indenture, including the Guarantee; such Opinion of Counsel
need express no opinion as to the availability of equitable remedies;

(c)           all laws and requirements in respect
of the execution and delivery by the Company of such Securities and Coupons, if
any, have been complied with; and

(d)           this Indenture has been qualified
under the Trust Indenture Act;

and

(2)  an Officer’s Certificate and a Guarantor’s
Officer’s Certificate, in each case stating that, to the best knowledge of the
Persons executing such certificate, all conditions precedent to the execution,
authentication and delivery of such Securities and Coupons, if any,
appertaining thereto, have been complied with, and no event which is, or after
notice or lapse of time would become, an Event of Default with respect to any
of the Securities shall have occurred and be continuing.

If all the Securities of any series are not to be
issued at one time, it shall not be necessary to deliver an Opinion of Counsel
and an Officer’s Certificate and Guarantor’s Officer’s Certificate at the time
of issuance of each Security, but such opinion and certificates, with
appropriate modifications, shall be delivered at or before the time of issuance
of the first Security 

 29
 

 

of such series. After any
such first delivery, any separate written request by an Authorized Officer of
the Company or any person designated in writing by an Authorized Officer that
the Trustee authenticate and deliver Securities of such series for original
issue will be deemed to be a certification by the Company and the Guarantor
that all conditions precedent provided for in this Indenture relating to
authentication and delivery of such Securities continue to have been complied
with and that no Event of Default with respect to any of the Securities has
occurred or is continuing.

The Trustee shall not be required to authenticate or
to cause an Authenticating Agent to authenticate any Securities if the issue of
such Securities pursuant to this Indenture will affect the Trustee’s own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee or if
the Trustee, being advised by counsel, determines that such action may not
lawfully be taken.

Each Registered Security shall be dated the date of
its authentication. Each Bearer Security and any Bearer Security in global form
shall be dated as of the date specified in or pursuant to this Indenture.

No Security or Coupon appertaining thereto shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose, unless there appears on such Security a certificate of authentication
substantially in the form provided for in Section 2.2 or 6.11 executed by or on
behalf of the Trustee or by the Authenticating Agent by the manual signature of
one of its authorized signatories.  Such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Except as permitted by Section 3.6 or 3.7, the Trustee shall not
authenticate and deliver any Bearer Security unless all Coupons appertaining
thereto then matured have been detached and cancelled.

Section 3.4          Temporary Securities.

Pending the preparation of definitive Securities, the
Company may execute and deliver to the Trustee and, upon Company Order, the
Trustee shall authenticate and deliver, in the manner provided in Section 3.3,
temporary Securities in lieu thereof which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued, in registered form or, if authorized in or pursuant
to this Indenture, in bearer form with one or more Coupons or without Coupons
and with such appropriate insertions, omissions, substitutions and other
variations as the officers of the Company executing such Securities may
determine, as conclusively evidenced by their execution of such Securities.
Such temporary Securities may be in global form.

Except in the case of temporary Securities in global
form, which shall be exchanged in accordance with the provisions thereof, if
temporary Securities are issued, the Company shall cause definitive Securities
to be prepared without unreasonable delay. After the preparation of definitive
Securities of the same series and containing terms and provisions that are
identical to those of any temporary Securities, such temporary Securities shall
be exchangeable for such definitive Securities upon surrender of such temporary
Securities at an Office or Agency for such Securities, without charge to any
Holder thereof. Upon surrender for cancellation of any one or 

 30
 

 

more temporary Securities
(accompanied by any unmatured Coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of authorized denominations of
the same series and containing identical terms and provisions; provided,
however, that no definitive Bearer Security, except as provided in or pursuant
to this Indenture, shall be delivered in exchange for a temporary Registered
Security; and provided, further, that a definitive Bearer Security shall be
delivered in exchange for a temporary Bearer Security only in compliance with
the conditions set forth in or pursuant to this Indenture. Unless otherwise
provided in or pursuant to this Indenture with respect to a temporary global
Security, until so exchanged the temporary Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.

Section 3.5          Registration, Transfer and Exchange.

With respect to the Registered Securities of each
series, if any, the Company shall cause to be kept a register (each such
register being herein sometimes referred to as the “Security Register”) at an
Office or Agency for such series in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of the Registered Securities of such series and of transfers of the Registered
Securities of such series. Such Office or Agency shall be the “Security
Registrar” for that series of Securities. Unless otherwise specified in or
pursuant to this Indenture or the Securities, the Trustee shall be the initial
Security Registrar for each series of Securities. The Company shall have the
right to remove and replace from time to time the Security Registrar for any
series of Securities; provided that no such removal or replacement shall be
effective until a successor Security Registrar with respect to such series of
Securities shall have been appointed by the Company and shall have accepted
such appointment by the Company. In the event that the Trustee shall not be or
shall cease to be Security Registrar with respect to a series of Securities, it
shall have the right to examine the Security Register for such series at all
reasonable times. There shall be only one Security Register for each series of
Securities.

Upon surrender for registration of transfer of any
Registered Security of any series at any Office or Agency for such series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series denominated as authorized in or pursuant to this
Indenture, of a like aggregate principal amount bearing a number not
contemporaneously outstanding and containing identical terms and provisions.

At the option of the Holder, Registered Securities of
any series may be exchanged for other Registered Securities of the same series
containing identical terms and provisions, in any authorized denominations, and
of a like aggregate principal amount, upon surrender of the Securities to be
exchanged at any Office or Agency for such series. Whenever any Registered
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive.

If provided in or pursuant to this Indenture, with
respect to Securities of any series, at the option of the Holder, Bearer
Securities of such series may be exchanged for Registered 

 31
 

 

Securities of such series
containing identical terms, denominated as authorized in or pursuant to this
Indenture and in the same aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any Office or Agency for such series, with
all unmatured Coupons and all matured Coupons in default thereto appertaining.
If the Holder of a Bearer Security is unable to produce any such unmatured
Coupon or Coupons or matured Coupon or Coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Company, the Guarantor and the Trustee in an amount equal to
the face amount of such missing Coupon or Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company, the Guarantor and the
Trustee if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Bearer Security shall surrender to any Paying Agent any such
missing Coupon in respect of which such a payment shall have been made, such
Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 10.2, interest
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an Office or Agency for such series located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such Office or Agency for such series in exchange for a
Registered Security of such series and like tenor after the close of business
at such Office or Agency on (i) any Regular Record Date and before the opening
of business at such Office or Agency on the next succeeding Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such Office or Agency on the related date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be (or, if
such Coupon is so surrendered with such Bearer Security, such Coupon shall be
returned to the Person so surrendering the Bearer Security), and interest or
Defaulted Interest, as the case may be, shall not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
the Registered Security issued in exchange for such Bearer Security, but shall
be payable only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture.

If provided in or pursuant to this Indenture with
respect to Securities of any series, at the option of the Holder, Registered
Securities of such series may be exchanged for Bearer Securities upon such
terms and conditions as may be provided in or pursuant to this Indenture with
respect to such series.

Whenever any Securities are surrendered for exchange
as contemplated by the immediately preceding two paragraphs, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.

Notwithstanding the foregoing, except as otherwise
provided in or pursuant to this Indenture, any global Security shall be
exchangeable for definitive Securities only if (i) the Depository is at any
time unwilling, unable or ineligible to continue as depository and a successor
depository is not appointed by the Company within 90 days of the date the
Company is so informed in writing, (ii) the Company executes and delivers to
the Trustee a Company Order to the effect that such global Security shall be so
exchangeable, or (iii) an Event of Default has occurred and is continuing with
respect to the Securities. If the beneficial owners of interests in a global
Security are entitled to exchange such interests for definitive Securities as
the result of an 

 32
 

 

event described in clause
(i), (ii) or (iii) of the preceding sentence, then without unnecessary delay
but in any event not later than the earliest date on which such interests may
be so exchanged, the Company shall deliver to the Trustee definitive Securities
in such form and denominations as are required by or pursuant to this
Indenture, and of the same series, containing identical terms and in aggregate
principal amount equal to the principal amount of such global Security,
executed by the Company. On or after the earliest date on which such interests
may be so exchanged, such global Security shall be surrendered from time to
time by the U.S. Depository or such other Depository as shall be specified in
the Company Order with respect thereto, and in accordance with instructions
given to the Trustee and the U.S. Depository or such other Depository, as the
case may be (which instructions shall be in writing but need not be contained
in or accompanied by an Officer’s Certificate or be accompanied by an Opinion
of Counsel), as shall be specified in the Company Order with respect thereto to
the Trustee, as the Company’s agent for such purpose, to be exchanged, in whole
or in part, for definitive Securities as described above without charge. The
Trustee shall authenticate and make available for delivery, in exchange for
each portion of such surrendered global Security, a like aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such global Security to be exchanged, which
(unless such Securities are not issuable both as Bearer Securities and as
Registered Securities, in which case the definitive Securities exchanged for
the global Security shall be issuable only in the form in which the Securities
are issuable, as provided in or pursuant to this Indenture) shall be in the
form of Bearer Securities or Registered Securities, or any combination thereof,
as shall be specified by the beneficial owner thereof, but subject to the
satisfaction of any certification or other requirements to the issuance of
Bearer Securities; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities of the same series to be redeemed and ending on the relevant
Redemption Date; and provided, further, that (unless otherwise provided in or
pursuant to this Indenture) no Bearer Security delivered in exchange for a
portion of a global Security shall be mailed or otherwise delivered to any location
in the United States. Promptly following any such exchange in part, such global
Security shall be returned by the Trustee to such Depository or the U.S.
Depository, as the case may be, or such other Depository or U.S. Depository
referred to above in accordance with the instructions of the Company referred
to above. If a Registered Security is issued in exchange for any portion of a
global Security after the close of business at the Office or Agency for such
Security where such exchange occurs on or after (i) any Regular Record Date for
such Security and before the opening of business at such Office or Agency on
the next succeeding Interest Payment Date, or (ii) any Special Record Date for
such Security and before the opening of business at such Office or Agency on
the related proposed date for payment of interest or Defaulted Interest, as the
case may be, interest shall not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Registered
Security, but shall be payable on such Interest Payment Date or proposed date
for payment, as the case may be, only to the Person to whom interest in respect
of such portion of such global Security shall be payable in accordance with the
provisions of this Indenture.

All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid obligations of the
Company and the Guarantor, respectively, evidencing the same debt and entitling
the Holders thereof to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.

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

No service charge shall be made for any registration
of transfer or exchange, or redemption of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge and any other expenses (including fees and expenses of the Trustee) that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4, 9.5 or 11.7 not
involving any transfer.

Except as otherwise provided in or pursuant to this
Indenture, the Company shall not be required (i) to issue, register the
transfer of or exchange any Securities during a period beginning at the opening
of business 15 days before the day of mailing of a notice of redemption of
Securities of like tenor and the same series under Section 11.3 and ending at
the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Registered Security selected for redemption in
whole or in part, except in the case of any Security to be redeemed in part,
the portion thereof not to be redeemed, or (iii) to exchange any Bearer
Security selected for redemption except, to the extent provided with respect to
such Bearer Security, that such Bearer Security may be exchanged for a
Registered Security of like tenor and the same series, provided that such
Registered Security shall be immediately surrendered for redemption with
written instruction for payment consistent with the provisions of this
Indenture or (iv) to issue, register the transfer of or exchange any Security
which, in accordance with its terms, has been surrendered for repayment at the
option of the Holder, except the portion, if any, of such Security not to be so
repaid.

Section 3.6          Mutilated, Destroyed, Lost and Stolen
Securities.

If any mutilated Security or a Security with a
mutilated Coupon appertaining to it is surrendered to the Trustee, subject to
the provisions of this Section 3.6, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of the same
series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding, with Coupons appertaining thereto
corresponding to the Coupons, if any, appertaining to the surrendered Security.

If there be delivered to the Company, the Guarantor
and the Trustee (i) evidence to their satisfaction of the destruction, loss or
theft of any Security or Coupon, and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company, the Guarantor or the Trustee
that such Security or Coupon has been acquired by a bona fide purchaser, the
Company shall execute and, upon the Company’s request the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen Coupon appertains with all appurtenant Coupons not
destroyed, lost or stolen, a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto 

 34
 

 

corresponding to the
Coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen Coupon appertains.

Notwithstanding the foregoing provisions of this
Section 3.6, in case any mutilated, destroyed, lost or stolen Security or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security or Coupon;
provided, however, that payment of principal of, any premium or interest on or
any Additional Amounts with respect to any Bearer Securities shall, except as
otherwise provided in Section 10.2, be payable only at an Office or Agency for
such Securities located outside the United States and, unless otherwise
provided in or pursuant to this Indenture, any interest on Bearer Securities
and any Additional Amounts with respect to such interest shall be payable only
upon presentation and surrender of the Coupons appertaining thereto.

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

Every new Security, with any Coupons appertaining
thereto issued pursuant to this Section 3.6 in lieu of any destroyed, lost or
stolen Security, or in exchange for a Security to which a destroyed, lost or
stolen Coupon appertains shall constitute a separate obligation of the Company
and the Guarantor, whether or not the destroyed, lost or stolen Security and
Coupons appertaining thereto or the destroyed, lost or stolen Coupon shall be
at any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Securities of
such series and any Coupons, if any, duly issued hereunder.

The provisions of this Section 3.6, as amended or
supplemented pursuant to this Indenture with respect to particular Securities
or generally, shall be exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or Coupons.

Section 3.7          Payment of Interest and Certain
Additional Amounts; Rights to Interest and Certain Additional Amounts
Preserved.

Unless otherwise provided in or pursuant to this
Indenture, any interest on and any Additional Amounts with respect to any
Registered Security which shall be payable, and are punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Security (or one or more Predecessor Securities) is registered as of
the close of business on the Regular Record Date for such interest.

Unless otherwise provided in or pursuant to this Indenture,
any interest on and any Additional Amounts with respect to any Registered
Security which shall be payable, but shall not be punctually paid or duly
provided for, on any Interest Payment Date for such Registered Security (herein
called “Defaulted Interest”) shall forthwith cease to be payable to the Holder
thereof on the relevant Regular Record Date by virtue of having been such
Holder; and such Defaulted Interest may be paid by the Company or the
Guarantor, at its election in each case, as provided in Clause (1) or (2)
below:

 35

 

 

(1)  The Company or the Guarantor, as the case may
be, may elect to make payment of any Defaulted Interest to the Person in whose
name such Registered Security (or a Predecessor Security thereof) shall be
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed by the Company in the following
manner. The Company or the Guarantor, as the case may be, shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
such Registered Security, the Special Record Date therefor and the date of the
proposed payment, and at the same time the Company or the Guarantor, as the
case may be, shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on or
prior to the date of the proposed payment, such money when so deposited to be
held in trust for the benefit of the Person entitled to such Defaulted Interest
as in this Clause provided. The Special Record Date for the payment of such
Defaulted Interest shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after
notification to the Trustee of the proposed payment. The Trustee shall, in the
name and at the expense of the Company or the Guarantor, cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to the Holder of such
Registered Security (or a Predecessor Security thereof) at his address as it
appears in the Security Register not less than 10 days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the expense
of the Company or the Guarantor, cause a similar notice to be published at
least once in an Authorized Newspaper of general circulation in the Borough of
Manhattan, The City of New York, but such publication shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Person in whose name such Registered Security (or a Predecessor Security
thereof) shall be registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).

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

Unless otherwise provided in or pursuant to this
Indenture or the Securities of any particular series pursuant to the provisions
of this Indenture, at the option of the Company or the Guarantor, interest on
Registered Securities that bear interest may be paid by mailing a check to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by transfer to an account maintained by the payee with a
bank located in the United States.

Subject to the foregoing provisions of this Section
and Section 3.5, each Security delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any

 36
 

 

other Security shall
carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.

In the case of any Registered Security of any series
that is convertible into other securities of the Company or exchangeable for
securities of the Guarantor or another issuer, which Registered Security is
converted or exchanged after any Regular Record Date and on or prior to the
next succeeding Interest Payment Date (other than any Registered Security with
respect to which the Stated Maturity is prior to such Interest Payment Date),
interest with respect to which the Stated Maturity is on such Interest Payment
Date shall be payable on such Interest Payment Date notwithstanding such
conversion or exchange, and such interest (whether or not punctually paid or
duly provided for) shall be paid to the Person in whose name that Registered
Security (or one or more predecessor Registered Securities) is registered at the
close of business on such Regular Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Registered
Security which is converted or exchanged, interest with respect to which the
Stated Maturity is after the date of conversion or exchange of such Registered
Security shall not be payable.

Section 3.8          Persons
Deemed Owners.

Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Guarantor, the Trustee and any agent
of the Company or the Guarantor or the Trustee may treat the Person in whose
name such Registered Security is registered in the Security Register as the
owner of such Registered Security for the purpose of receiving payment of
principal of, any premium and (subject to Sections 3.5 and 3.7) interest on and
any Additional Amounts with respect to such Registered Security and for all
other purposes whatsoever, whether or not any payment with respect to such
Registered Security shall be overdue, and none of the Company, the Guarantor,
the Trustee or any agent of the Company, the Guarantor or the Trustee shall be
affected by notice to the contrary.

The Company, the Guarantor, the Trustee and any agent
of the Company, the Guarantor or the Trustee may treat the bearer of any Bearer
Security or the bearer of any Coupon as the absolute owner of such Security or
Coupon for the purpose of receiving payment thereof or on account thereof and
for all other purposes whatsoever, whether or not any payment with respect to
such Security or Coupon shall be overdue, and none of the Company, the
Guarantor, the Trustee or any agent of the Company, the Guarantor or the
Trustee shall be affected by notice to the contrary.

No Holder of any beneficial interest in any global
Security held on its behalf by a Depository shall have any rights under this
Indenture with respect to such global Security, and such Depository may be
treated by the Company, the Guarantor, the Trustee, and any agent of the
Company, the Guarantor or the Trustee as the owner of such global Security for
all purposes whatsoever. None of the Company, the Guarantor, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

 37
 

 

Section 3.9          Cancellation.

All Securities and Coupons surrendered for payment,
redemption, registration of transfer, exchange or conversion or for credit
against any sinking fund payment shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee, and any such Securities and Coupons,
as well as Securities and Coupons surrendered directly to the Trustee for any
such purpose, shall be cancelled promptly by the Trustee. The Company or the
Guarantor may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
or the Guarantor may have acquired in any manner whatsoever, and all Securities
so delivered shall be cancelled promptly by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by or pursuant to this
Indenture. All cancelled Securities and Coupons held by the Trustee shall be
disposed of by the Trustee in accordance with its then customary procedures,
unless by a Company Order or Guarantor Order the Company or the Guarantor, as
the case may be, directs their return to it.

Section 3.10        Computation
of Interest.

Except as otherwise provided in or pursuant to this
Indenture or in any Security, interest on the Securities shall be computed on
the basis of a 360-day year of twelve 30-day months.

Section 3.11        Extension of Interest Payment Period.

If specified as contemplated by Section 3.1 with
respect to the Securities of a particular series and subject to the terms,
conditions and covenants, if any, so specified, the Company shall have the
right, at any time and from time to time during the term of such series, to
defer the payment of interest on such Securities for such period or periods as
may be specified as contemplated by Section 3.1 (each, an “Extension Period”),
during which Extension Periods the Company shall have the right to make partial
payments of interest on any Interest Payment Date. No Extension Period shall
end on a day other than an Interest Payment Date. At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on
the Securities (together with Additional Interest thereon, if any, at the rate
specified for the Securities of such series to the extent permitted by
applicable law). Prior to the termination of any such Extension Period, the
Company may further extend the interest payment period, provided that no
Extension Period shall exceed the period or periods specified in such
Securities or extend beyond the Stated Maturity of the principal of such
Securities. Upon termination of any Extension Period and upon the payment of
all accrued and unpaid interest and any Additional Interest then due on any
Interest Payment Date, the Company may elect to begin a new Extension Period,
subject to the above requirements. No interest shall be due and payable during
an Extension Period, except at the end thereof.

The Company shall give the Holders of the Securities
of such series and the Trustee notice of its election to begin any such
Extension Period at least one Business Day prior to the Interest Payment Date
or, with respect to the Securities of a series issued to an Assured Guaranty
Trust, prior to the earlier of (i) the date the Distributions on the Preferred
Securities of such Assured Guaranty Trust are payable or (ii) the date the
trustees of such Assured Guaranty Trust are required to give notice to any
securities exchange or other applicable self-regulatory organization or to
holders of such Preferred Securities of the record date or the date such

 38
 

 

Distributions are
payable, but in any event not less than one Business Day prior to such record
date.

The Company shall promptly give notice of the Company’s
election to begin any such Extension Period to the Holders of the outstanding
Securities of such series.

Section 3.12        Right of Set-Off.

With respect to the Securities of a series issued to
an Assured Guaranty Trust, notwithstanding anything to the contrary in this
Indenture, the Company or the Guarantor, as applicable, shall each have the
right to set-off any payment it is otherwise required to make thereunder in
respect of any such Security to the extent the Company or the Guarantor, as
applicable, has theretofore made, or is concurrently on the date of such
payment making, a payment under the Preferred Securities Guarantee relating to
such Security or under Section 5.8 hereof, as applicable.

Section 3.13        Agreed
Tax Treatment.

Each Security issued hereunder shall provide that the
Company, the Guarantor and, by its acceptance of a Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, such Security agree that for United States Federal, state and
local tax purposes it is intended that such Security constitute indebtedness.

Section 3.14        Extension of Stated Maturity; Adjustment
of Stated Maturity Upon an Exchange.

If specified as contemplated by Section 3.1 with
respect to the Securities of a particular series, the Company shall have the
right to (a) change the Stated Maturity of the principal of the Securities of
such series upon the liquidation of the applicable Assured Guaranty Trust and
the exchange of such Securities for the Preferred Securities of such Assured
Guaranty Trust, or (b) extend the Stated Maturity of the principal of the
Securities of such series; provided that, at the time any election to extend
such Stated Maturity is made and at the time of such extension, (i) neither the
Company nor the Guarantor is in bankruptcy, otherwise insolvent or in
liquidation, (ii) neither the Company nor the Guarantor is in default in the
payment of any interest or principal or Additional Amounts on the Securities of
such series or under the Guarantee in respect thereof, as the case may be, and
no deferred interest payments thereon have accrued, (iii) the applicable
Assured Guaranty Trust is not in arrears on payments of Distributions on its
Preferred Securities and no deferred Distributions thereon have accumulated,
(iv) the Securities of such series are rated not less than BBB- by Standard
& Poor’s Ratings Services or Baa3 by Moody’s Investors Service, Inc. or the
equivalent by any other nationally recognized statistical rating organization
and (v) the extended Stated Maturity is no later than the 49th anniversary of
the initial issuance of the Preferred Securities of the applicable Assured
Guaranty Trust; provided, further, that, if the Company exercises its right to
liquidate the applicable Assured Guaranty Trust and exchange the Securities of
such series for the Preferred Securities of such Assured Guaranty Trust as
specified in clause (a) above, any changed Stated Maturity of the principal of
the Securities of such series shall be no earlier than the date that is five
years after the initial issue date of the Preferred Securities and no later
than the date 30 years (plus an

 39
 

 

extended term of up to an
additional 19 years if the above-referenced conditions are satisfied) after the
initial issue date of the Preferred Securities of the applicable Assured
Guaranty Trust.

ARTICLE 4

SATISFACTION AND DISCHARGE OF INDENTURE

Section 4.1          Satisfaction and Discharge.

Upon the direction of the Company by a Company Order
or of the Guarantor by a Guarantor Order, this Indenture shall cease to be of
further effect with respect to any series of Securities specified in such
Company Order or Guarantor Order and any Coupons appertaining thereto, and the
Trustee, on receipt of a Company Order or a Guarantor Order, at the expense of
the Company and the Guarantor, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture as to such series, when

(1) either

(1)  all Securities of such series theretofore
authenticated and delivered and all Coupons appertaining thereto (other than
(i) Coupons appertaining to Bearer Securities of such series surrendered in
exchange for Registered Securities of such series and maturing after such
exchange whose surrender is not required or has been waived as provided in
Section 3.5, (ii) Securities and Coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 3.6, (iii) Coupons appertaining to Securities of such series called for
redemption and maturing after the relevant Redemption Date whose surrender has
been waived as provided in Section 11.7, and (iv) Securities and Coupons of
such series for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company or the Guarantor and thereafter
repaid to the Company or the Guarantor, as the case may be, or discharged from
such trust, as provided in Section 10.3) have been delivered to the Trustee for
cancellation;

or

(2)  all Securities of such series and, in the
case of (i) or (ii) below, any Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation (i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) if redeemable at the option of the Company, are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company and the Guarantor, and the Company or the Guarantor, in
the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with
the Trustee as trust funds in trust for such purpose, money in the Currency in
which such Securities are payable in an amount sufficient to pay and discharge
the entire indebtedness on such Securities and any Coupons appertaining thereto
not theretofore delivered to the Trustee for cancellation, including the
principal of, any premium and interest (including any Additional Interest) on,
and any Additional Amounts with respect to such Securities and any Coupons

 40
 

 

appertaining thereto, to
the date of such deposit (in the case of Securities which have become due and
payable) or to the Maturity thereof, as the case may be;

(3)  the Company or the Guarantor has paid or
caused to be paid all other sums payable hereunder by the Company and the
Guarantor with respect to the Outstanding Securities of such series and any
Coupons appertaining thereto; and

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

In the event there are Securities of two or more
series hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested to
do so with respect to Securities of such series as to which it is Trustee and
if the other conditions thereto are met.

Notwithstanding the satisfaction and discharge of this
Indenture with respect to any series of Securities, the obligations of the
Company and the Guarantor to the Trustee under Section 6.6 and, if money shall
have been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the obligations of the Company, the Guarantor and the Trustee
with respect to the Securities of such series under Sections 3.5, 3.6, 4.3,
10.2 and 10.3, with respect to the payment of Additional Amounts, if any, with respect
to such Securities as contemplated by Sections 10.4 and 17.2 (but only to the
extent that the Additional Amounts payable with respect to such Securities
exceed the amount deposited in respect of such Additional Amounts pursuant to
Section 4.1(1)(b)), and with respect to any rights to convert or exchange such
Securities into securities of the Company or the Guarantor or another issuer
shall survive.

Section 4.2          Defeasance and Covenant Defeasance.

(1)  Unless pursuant to Section 3.1, either or
both of (i) defeasance of the Securities of or within a series under clause (2)
of this Section 4.2 shall not be applicable with respect to the Securities of
such series or (ii) covenant defeasance of the Securities of or within a series
under clause (3) of this Section 4.2 shall not be applicable with respect to
the Securities of such series, then such provisions, together with the other
provisions of this Section 4.2 (with such modifications thereto as may be
specified pursuant to Section 3.1 with respect to any Securities), shall be
applicable to such Securities and any Coupons appertaining thereto, and the
Company may at its option by Board Resolution, at any time, with respect to
such Securities and any Coupons appertaining thereto, elect to have Section 4.2(2)
or Section 4.2(3) be applied to such Outstanding Securities and any Coupons
appertaining thereto upon compliance with the conditions set forth below in
this Section 4.2.

(2)  Upon the Company’s exercise of the above
option applicable to this Section 4.2(2) with respect to any Securities of or
within a series, the Company and the Guarantor shall be deemed to have been
discharged from its obligations with respect to such

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Outstanding Securities
and any Coupons appertaining thereto and under the Guarantee in respect
thereof, respectively, on the date the conditions set forth in clause (4) of
this Section 4.2 are satisfied (hereinafter, “defeasance”). For this purpose,
such defeasance means that the Company or the Guarantor shall be deemed to have
paid and discharged the entire Indebtedness represented by such Outstanding
Securities and any Coupons appertaining thereto, and under the Guarantee in
respect thereof, which shall thereafter be deemed to be “Outstanding” only for
the purposes of clause (5) of this Section 4.2 and the other Sections of this
Indenture referred to in clauses (i) and (ii) below, and to have satisfied all
of its other obligations under such Securities and any Coupons appertaining
thereto, and under the Guarantee in respect thereof, and this Indenture insofar
as such Securities and any Coupons appertaining thereto, and the Guarantee in
respect thereof, are concerned (and the Trustee, at the expense of the Company
and the Guarantor, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of such Outstanding Securities and any
Coupons appertaining thereto to receive, solely from the trust fund described
in clause (4) of this Section 4.2 and as more fully set forth in such clause,
payments in respect of the principal of (and premium, if any) and interest
(including any Additional Interest), if any, on, and Additional Amounts, if
any, with respect to, such Securities and any Coupons appertaining thereto when
such payments are due, and any rights of such Holder to convert such Securities
into other securities of the Company or exchange such Securities for securities
of the Guarantor or another issuer, (ii) the obligations of the Company, the
Guarantor and the Trustee with respect to such Securities under Sections 3.5,
3.6, 10.2 and 10.3 and with respect to the payment of Additional Amounts, if
any, on such Securities as contemplated by Sections 10.4 and 17.2 (but only to
the extent that the Additional Amounts payable with respect to such Securities
exceed the amount deposited in respect of such Additional Amounts pursuant to
Section 4.2(4)(a) below), and with respect to any rights to convert such
Securities into other securities of the Company or exchange such Securities for
securities of the Guarantor or another issuer, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (iv) this Section
4.2. The Company may exercise its option under this Section 4.2(2)
notwithstanding the prior exercise of its option under clause (3) of this
Section 4.2 with respect to such Securities and any Coupons appertaining
thereto.

(3)  Upon the Company’s exercise of the option to
have this Section 4.2(3) apply with respect to any Securities of or within a
series, the Company and the Guarantor shall be released from their obligations
under any covenant applicable to such Securities specified pursuant to Section
3.1(20), with respect to such Outstanding Securities and any Coupons
appertaining thereto, and the Guarantee in respect thereof, on and after the
date the conditions set forth in clause (4) of this Section 4.2 are satisfied
(hereinafter, “covenant defeasance”), and such Securities and any Coupons
appertaining thereto shall thereafter be deemed to be not “Outstanding” for the
purposes of any direction, waiver, consent or declaration or Act of Holders
(and the consequences of any thereof) in connection with any such covenant, but
shall continue to be deemed “Outstanding” for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to such
Outstanding Securities and any Coupons appertaining thereto, the Company and
the Guarantor may omit to comply with, and shall have no liability in respect
of, any term, condition or limitation set forth in any such Section or such
other

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covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or such other covenant or by reason of reference in any such Section or
such other covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a default or an Event of Default
under Section 5.1(4) or 5.1(9) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and
Coupons appertaining thereto and the Guarantee in respect thereof shall be
unaffected thereby.

(4)  The following shall be the conditions to
application of clause (2) or (3) of this Section 4.2 to any Outstanding
Securities of or within a series and any Coupons appertaining thereto and the
Guarantee in respect thereof:

(5)  The Company or the Guarantor shall
irrevocably have deposited or caused to be deposited with the Trustee (or
another trustee satisfying the requirements of Section 6.7 who shall agree to
comply with the provisions of this Section 4.2 applicable to it) as trust funds
in trust for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of such
Securities and any Coupons appertaining thereto, (1) an amount in Dollars or in
such Foreign Currency in which such Securities and any Coupons appertaining
thereto are then specified as payable at Stated Maturity, or (2) Government
Obligations applicable to such Securities and Coupons appertaining thereto
(determined on the basis of the Currency in which such Securities and Coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment of principal of (and premium, if any) and interest
(including any Additional Interest), if any, on such Securities and any Coupons
appertaining thereto, money in an amount, or (3) a combination thereof, in any
case, in an amount, sufficient, without consideration of any reinvestment of
such principal and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (y) the
principal of (and premium, if any) and interest (including any Additional
Interest), if any, on such Outstanding Securities and any Coupons appertaining
thereto at the Stated Maturity of such principal or installment of principal or
premium or interest and (z) any mandatory sinking fund payments or analogous
payments applicable to such Outstanding Securities and any Coupons appertaining
thereto on the days on which such payments are due and payable in accordance
with the terms of this Indenture and of such Securities and any Coupons
appertaining thereto.

(6)  Such defeasance or covenant defeasance shall
not result in a breach or violation of, or constitute a default under, this
Indenture or any other material agreement or instrument to which the Company or
the Guarantor is a party or by which either of them is bound.

(7)  No Event of Default or event which with
notice or lapse of time or both would become an Event of Default with respect
to such Securities and any Coupons appertaining thereto shall have occurred and
be continuing on the date of such deposit

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and, with respect to
defeasance only, at any time during the period ending on the 123rd day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).

(8)  In the case of an election under clause (2)
of this Section 4.2, the Company or the Guarantor shall have delivered to the
Trustee an Opinion of Counsel stating that (i) the Company or the Guarantor has
received from the Internal Revenue Service a letter ruling, or there has been
published by the Internal Revenue Service a Revenue Ruling, or (ii) since the
date of execution of this Indenture, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon
such opinion shall confirm that, the Holders of such Outstanding Securities and
any Coupons appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.

(9)  In the case of an election under clause (3)
of this Section 4.2, the Company or the Guarantor shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such
Outstanding Securities and any Coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such covenant defeasance had not occurred.

(10)  The Company or the Guarantor shall have
delivered to the Trustee an Opinion of Counsel to the effect that, after the
123rd day after the date of deposit, all money and
Government Obligations (or other property as may be provided pursuant to
Section 3.1) (including the proceeds thereof) deposited or caused to be
deposited with the Trustee (or other qualifying trustee) pursuant to this
clause (4) to be held in trust will not be subject to any case or proceeding
(whether voluntary or involuntary) in respect of the Company or the Guarantor
under any Federal or State bankruptcy, insolvency, reorganization or other
similar law, or any decree or order for relief in respect of the Company or the
Guarantor issued in connection therewith.

(11)  The Company and the Guarantor shall have
delivered to the Trustee an Officer’s Certificate and a Guarantor’s Officer’s
Certificate and the Company or the Guarantor shall have delivered to the
Trustee an Opinion of Counsel, each stating that all conditions precedent to
the defeasance or covenant defeasance under clause (2) or (3) of this Section
4.2 (as the case may be) have been complied with.

(12)  Notwithstanding any other provisions of this
Section 4.2(4), such defeasance or covenant defeasance shall be effected in
compliance with any additional or substitute terms, conditions or limitations
which may be imposed on the Company or the Guarantor in connection therewith
pursuant to Section 3.1.

(13)  Unless otherwise specified in or pursuant to
this Indenture or any Security, if, after a deposit referred to in Section
4.2(4)(a) has been made, (a) the Holder of a

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Security in
respect of which such deposit was made is entitled to, and does, elect pursuant
to Section 3.1 or the terms of such Security to receive payment in a Currency
other than that in which the deposit pursuant to Section 4.2(4)(a) has been
made in respect of such Security, or (b) a Conversion Event occurs in respect
of the Foreign Currency in which the deposit pursuant to Section 4.2(4)(a) has
been made, the indebtedness represented by such Security and any Coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any), and
interest (including any Additional Interest), if any, on, and Additional
Amounts, if any, with respect to, such Security as the same becomes due out of
the proceeds yielded by converting (from time to time as specified below in the
case of any such election) the amount or other property deposited in respect of
such Security into the Currency in which such Security becomes payable as a
result of such election or Conversion Event based on (x) in the case of
payments made pursuant to clause (a) above, the applicable market exchange rate
for such Currency in effect on the second Business Day prior to each payment
date, or (y) with respect to a Conversion Event, the applicable market exchange
rate for such Foreign Currency in effect (as nearly as feasible) at the time of
the Conversion Event.

The Company and the Guarantor (without duplication)
shall pay and indemnify the Trustee (or other qualifying trustee, collectively
for purposes of this Section 4.2(5) and Section 4.3, the “Trustee”) against any
tax, fee or other charge, imposed on or assessed against the Government
Obligations deposited pursuant to this Section 4.2 or the principal or interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of such Outstanding Securities and any
Coupons appertaining thereto.

Anything in this Section 4.2 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request, or the Guarantor upon Guarantor Request, as the case
may be, any money or Government Obligations (or other property and any proceeds
therefrom) held by it as provided in clause (4) of this Section 4.2 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Section 4.2.

Section 4.3          Application of Trust Money.

Subject to the provisions of the last paragraph of
Section 10.3, all money and Government Obligations (or other property as may be
provided pursuant to Section 3.1) (including the proceeds thereof) deposited
with the Trustee pursuant to Section 4.1 or 4.2 in respect of any Outstanding
Securities of any series and any Coupons appertaining thereto shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and any Coupons appertaining thereto and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent or the Guarantor acting as Paying Agent) as the
Trustee may determine, to the Holders of such Securities and any Coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest (including any Additional
Interest) and

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Additional Amounts, if
any; but such money and Government Obligations need not be segregated from
other funds except to the extent required by law.

ARTICLE 5

REMEDIES

Section 5.1          Events of Default.

“Event of Default,” wherever used herein with respect
to Securities of any series, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless such event is specifically deleted
or modified in or pursuant to the supplemental indenture, Board Resolution or
Officer’s Certificate establishing the terms of such Series pursuant to this
Indenture:

(1)  default in the payment of any interest on any
Security of such series, including any Additional Interest in respect thereof,
or any Additional Amounts payable with respect thereto, when such interest
becomes or such Additional Amounts become due and payable, and continuance of
such default for a period of 30 days (subject to any deferral of any due date
in the case of an Extension Period); or

(2)  default in the payment of the principal of or
any premium on any Security of such series, or any Additional Amounts payable
with respect thereto, when such principal or premium becomes or such Additional
Amounts become due and payable at their Maturity; or

(3)  default in the deposit of any sinking fund
payment when and as due by the terms of a Security of such series; or

(4)  default in the performance, or breach, of any
covenant or warranty of the Company or the Guarantor in this Indenture or the
Securities (other than a covenant or warranty a default in the performance or
the breach of which is elsewhere in this Section specifically dealt with or
which has been expressly included in this Indenture solely for the benefit of a
series of Securities other than such series), and continuance of such default
or breach for a period of 60 days after there has been given, by registered or
certified mail, to the Company and the Guarantor by the Trustee or to the
Company, the Guarantor and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of such series or, if that
series of Securities is held by an Assured Guaranty Trust, the holders of at
least 25% in liquidation amount of the Preferred Securities of that Assured
Guaranty Trust then outstanding, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a “Notice
of Default” hereunder; or

(5)  if any event of default as defined in any
mortgage, indenture or instrument under which there may be issued, or by which
there may be secured or evidenced, any Indebtedness of the Company or the
Guarantor (including, in each case, an Event of

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Default under any other
series of Securities), whether such Indebtedness now exists or shall hereafter
be created or incurred, shall happen and shall consist of default in the
payment of more than $50,000,000 in principal amount of such Indebtedness at
the maturity thereof (after giving effect to any applicable grace period) or
shall result in such Indebtedness in principal amount in excess of $50,000,000
becoming or being declared due and payable prior to the date on which it would
otherwise become due and payable, and such default shall not be cured or such
acceleration shall not be rescinded or annulled within a period of 30 days
after there shall have been given, by registered or certified mail, to the
Company and the Guarantor by the Trustee or to the Company, the Guarantor and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of such series or, if that series of Securities is held
by an Assured Guaranty Trust, the holders of at least 25% in liquidation amount
of the Preferred Securities of that Assured Guaranty Trust then outstanding, a
written notice specifying such event of default and requiring the Company or
the Guarantor to cause such acceleration to be rescinded or annulled or to
cause such Indebtedness to be discharged and stating that such notice is a “Notice
of Default” hereunder; or

(6)  the Company or the Guarantor shall fail
within 60 days to pay, bond or otherwise discharge any uninsured judgment or
court order for the payment of money in excess of $50,000,000, which is not
stayed on appeal or is not otherwise being appropriately contested in good
faith; or

(7)  the entry by a court having competent
jurisdiction of:

(8)  a decree or order for relief in respect of
the Company or the Guarantor in an involuntary proceeding under any applicable
bankruptcy, insolvency, reorganization (other than a reorganization under a
foreign law that does not relate to insolvency) or other similar law and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or

(9)  a decree or order adjudging the Company or
the Guarantor to be insolvent, or approving a petition seeking reorganization
(other than a reorganization under a foreign law that does not relate to
insolvency), arrangement, adjustment or composition of the Company or the
Guarantor and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or

(10)  a final and non-appealable order appointing a
custodian, receiver, liquidator, assignee, trustee or other similar official of
the Company or the Guarantor of any substantial part of the property of the
Company or the Guarantor or ordering the winding up or liquidation of the
affairs of the Company or the Guarantor; or

(11)  the commencement by the Company or the
Guarantor of a voluntary proceeding under any applicable bankruptcy, insolvency,
reorganization (other than a reorganization under a foreign law that does not
relate to insolvency) or other similar law or of a voluntary proceeding seeking
to be adjudicated insolvent or the consent by the Company or the Guarantor to
the entry of a decree or order for relief in an involuntary proceeding under
any applicable bankruptcy, insolvency, reorganization or other similar

 47
 

 

law or to the
commencement of any insolvency proceedings against it, or the filing by the
Company or the Guarantor of a petition or answer or consent seeking
reorganization, arrangement, adjustment or composition of the Company or relief
under any applicable law, or the consent by the Company or the Guarantor to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or similar official of the
Company or the Guarantor or any substantial part of the property of the Company
or the Guarantor or the making by the Company or the Guarantor of an assignment
for the benefit of creditors, or the taking of corporate action by the Company
or the Guarantor in furtherance of any such action; or

(12)  any other Event of Default provided in or
pursuant to this Indenture with respect to Securities of such series.

Section 5.2          Acceleration
of Maturity; Rescission and Annulment.

If an Event of Default with respect to Securities of
any series at the time Outstanding (other than an Event of Default specified in
clause (7) or (8) of Section 5.1) occurs and is continuing, then the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of such series may declare the principal of all the Securities of
such series, or such lesser amount as may be provided for in the Securities of
such series, to be due and payable immediately, by a notice in writing to the
Company and the Guarantor (and to the Trustee if given by the Holders), and
upon any such declaration such principal or such lesser amount shall become
immediately due and payable; provided that, in the case of Securities of a
series issued to an Assured Guaranty Trust, if, upon an Event of Default, the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series fail to declare the principal of all the
Securities of such series, or such lesser amount as may be provided for in the
Securities of such series, to be immediately due and payable, the holders of at
least 25% in liquidation amount of the Preferred Securities of such Assured
Guaranty Trust then outstanding shall have such right by a notice in writing to
the Company, the Guarantor, the Trustee and the Property Trustee; and upon any
such declaration such principal or such lesser amount and all accrued and
unpaid interest (including any Additional Interest) thereon shall become
immediately due and payable, provided that the payment of principal and
interest and all other amounts due with respect to such Securities shall remain
subordinated to the extent provided in Article 16.

If an Event of Default specified in clause (7) or (8)
of Section 5.1 occurs, all unpaid principal of and accrued interest (including
any Additional Interest) on the Outstanding Securities of that series (or such
lesser amount as may be provided for in the Securities of such series) shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder of any Security of that
series.

At any time after a declaration of acceleration with
respect to the Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of not less than a majority
in principal amount of the Outstanding Securities of such series (subject to,
in the case of any series of Securities held as assets of an Assured Guaranty
Trust, such consent of the holders of the Preferred Securities and the Common
Securities of such Assured Guaranty Trust as may be

 48
 

 

required under the Trust
Agreement of such Assured Guaranty Trust), by written notice to the Company,
the Guarantor and the Trustee, may rescind and annul such declaration and its
consequences if

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

(2)  all overdue installments of any interest
(including any Additional Interest) on and Additional Amounts with respect to
all Securities of such series and any Coupon appertaining thereto,

(3)  the principal of and any premium on any
Securities of such series which have become due otherwise than by such
declaration of acceleration and interest thereon and any Additional Amounts
with respect thereto at the rate or rates borne by or provided for in such
Securities,

(4)  to the extent that payment of such interest
or Additional Amounts is lawful, interest upon overdue installments of any
interest and Additional Amounts at the rate or rates borne by or provided for
in such Securities, and

(5)  all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and all other amounts due the Trustee
under Section 6.6; and

(6)  all Events of Default with respect to
Securities of such series, other than the non-payment of the principal of, any
premium and interest on, and any Additional Amounts with respect to Securities
of such series which shall have become due solely by such declaration of
acceleration, shall have been cured or waived as provided in Section 5.13.

In the case of Securities of a series issued to an
Assured Guaranty Trust, should the Holders of such Securities fail to rescind
and annul such declaration and its consequences, the holders of a majority in
liquidation amount of the Preferred Securities of such Assured Guaranty Trust
then outstanding shall have such right by written notice to the Company, the
Guarantor, the Trustee and the Property Trustee, subject to satisfaction of the
conditions set forth in clauses (1) and (2) above of this Section 5.2.

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

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

The Company and the Guarantor each covenants, in each
case, that if

(1)  default is made in the payment of any
installment of interest (including any Additional Interest) on or any
Additional Amounts with respect to any Security or any Coupon appertaining
thereto when such interest or Additional Amounts shall have become due and
payable and such default continues for a period of 30 days, or

 49
 

 

(2)  default is made in the payment of the
principal of or any premium on any Security or any Additional Amounts with
respect thereto at their Maturity, the Company or the Guarantor, as the case
may be, shall, upon demand of the Trustee, pay to the Trustee, for the benefit
of the Holders of such Securities and any Coupons appertaining thereto, the
whole amount of money then due and payable with respect to such Securities and
any Coupons appertaining thereto, with interest (including any Additional
Interest) upon the overdue principal, any premium and (to the extent that
payment of such interest shall be legally enforceable and, if the Securities
are held by an Assured Guaranty Trust, without duplication of any other amounts
paid to such Assured Guaranty Trust in respect thereof) upon any overdue
installments of interest and Additional Amounts at the rate or rates borne by
or provided for in such Securities, and, in addition thereto, such further
amount of money as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and all other amounts due to
the Trustee under Section 6.6.

If the Company or the Guarantor fails to pay the money
it is required to pay the Trustee pursuant to the preceding paragraph forthwith
upon the demand of the Trustee, the Trustee, in its own name and as trustee of
an express trust, may institute a judicial proceeding for the collection of the
money so due and unpaid, and may prosecute such proceeding to judgment or final
decree, and may enforce the same against the Company or the Guarantor or any
other obligor upon such Securities and any Coupons appertaining thereto and
collect the monies adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or the Guarantor or any other obligor
upon such Securities and any Coupons appertaining thereto, wherever situated.

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

Section 5.4          Trustee May File Proofs of Claim.

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

 

 50

 

 

(1)  to file and prove a claim for the whole
amount, or such lesser amount as may be provided for in the Securities of any
applicable series, of the principal and any premium, interest (including any
Additional Interest) and Additional Amounts owing and unpaid in respect of the
Securities and any Coupons appertaining thereto and to file such other papers
or documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents or counsel) and of the Holders of
Securities or any Coupons appertaining thereto allowed in such judicial
proceeding, and (2) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder of Securities or any Coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 6.6.

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

Section 5.5          Trustee May Enforce Claims without
Possession of Securities or Coupons.

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

Section 5.6          Application of Money Collected.

Any money collected by the Trustee pursuant to this
Article and any money or other property distributable in respect of the Company’s
or the Guarantor’s obligations under this Indenture after an Event of Default shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal, or any premium, interest (including any Additional
Interest) or Additional Amounts, upon presentation of the Securities or
Coupons, or both, as the case may be, and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:

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

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

THIRD: The
balance, if any, to the Person or Persons entitled thereto.

Section 5.7          Limitations on Suits.

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

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

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

(3)  such Holder or Holders have offered to the
Trustee such indemnity as is reasonably satisfactory to it against the costs,
expenses and liabilities to be incurred in compliance with such request;

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

(5)  no direction inconsistent with such written
request has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all such Holders.

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

Notwithstanding any other provision in this Indenture,
the Holder of any Security or Coupon shall have the right, which is absolute
and unconditional, to receive payment of the principal of, any premium and
(subject to Sections 3.5, 3.7 and 3.11) interest (including any Additional
Interest) on, and any Additional Amounts with respect to such Security or
payment of such Coupon, as the case may be, on the respective Stated Maturity
or Maturities therefor specified in such Security or Coupon (or, in the case of
redemption, on the Redemption Date or, 

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in the case of repayment
at the option of such Holder if provided in or pursuant to this Indenture, on
the date such repayment is due) and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder. In the case of Securities of a series issued to an Assured
Guaranty Trust, any holder of Preferred Securities issued by such Assured
Guaranty Trust shall have the right, upon the occurrence of an Event of Default
described in Section 5.1(1) or 5.1(2) hereof, to institute directly a
proceeding against the Company or the Guarantor, as the case may be, for
enforcement of payment to such holder of principal of, and any premium and
(subject to Sections 3.5, 3.7 and 3.11) interest (including any Additional
Interest) on, and Additional Amounts with respect to, such Securities having a
principal amount equal to the liquidation amount of such Preferred Securities
held by such holder (a “Direct Action”). Notwithstanding any payments made to a
holder of Preferred Securities by the Company or the Guarantor in connection
with a Direct Action, the Company and the Guarantor shall remain obligated to
pay the principal of and premium, if any, or interest on and Additional
Amounts, if any, with respect to the related Securities, and the Company or the
Guarantor shall be subrogated to the rights of the holder of such Preferred
Securities with respect to payments on the Preferred Securities to the extent
of any payments made by the Company or the Guarantor, as the case may be, to
such holder in any Direct Action.

Section 5.9          Restoration of Rights and Remedies.

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

Section 5.10        Rights and Remedies Cumulative.

Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
Coupons in the last paragraph of Section 3.6, no right or remedy herein
conferred upon or reserved to the Trustee, to each and every Holder of a
Security or a Coupon or to the holders of Preferred Securities is intended to
be exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.

Section 5.11        Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder
of any Security or Coupon or of the holders of Preferred Securities to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default 

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or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to any Holder of a Security or a Coupon or to the holders of Preferred
Securities may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee, by such Holder or by such holders of Preferred
Securities, as the case may be.

Section 5.12        Control by Holders of Securities.

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

(1)  such direction shall not be in conflict with
any rule of law or with this Indenture or with the Securities of such series,

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

(3)  such direction is not unduly prejudicial to
the rights of the other Holders of Securities of such series not joining in
such action.

(4)  such direction shall not involve the Trustee
in personal liability.

Section 5.13        Waiver of Past Defaults.

The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series on behalf of the Holders of
all the Securities of such series and any Coupons appertaining thereto and, in
the case of any Securities issued to an Assured Guaranty Trust, the holders of
not less than a majority in liquidation amount of the Preferred Securities
issued by such Assured Guaranty Trust then outstanding, may waive any past
default hereunder with respect to such series and its consequences, except a
default

(1)  in the payment of the principal of, any
premium or interest (including any Additional Interest) on, or any Additional
Amounts with respect to, any Security of such series or any Coupons
appertaining thereto, or

(2)  in respect of a covenant or provision hereof
which under Article 9 cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.

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

Section 5.14        Waiver of Usury, Stay or Extension Laws.

The Company and the Guarantor each covenants that (to
the extent that it may lawfully do so) it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the 

 54
 

 

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

Section 5.15        Undertaking for Costs

All parties to this Indenture agree, and each Holder
of any Security by his acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of any undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in such suit having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of Outstanding Securities of
any series or, if a series of Securities is held by an Assured Guaranty Trust,
the holders of more than 10% in liquidation amount of the Preferred Securities
of that Assured Guaranty Trust then outstanding, or to any suit instituted by
any Holder or any holder of Preferred Securities for the enforcement of the
payment of the principal of (or premium, if any) or interest (including any
Additional Interest), if any, on or Additional Amounts, if any, with respect to
any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date, and,
in the case of repayment, on or after the date for repayment) or for the
enforcement of the right, if any, to convert or exchange any Security into
other securities in accordance with its terms.

ARTICLE 6

THE TRUSTEE

Section 6.1          Certain Duties and Responsibilities.

(1)  Except during the continuance of an Event of
Default,

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

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

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they conform to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein or any
conclusions stated therein).

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

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

(a)           this Subsection shall not be
construed to limit the effect of Subsections (a) or (d) of this Section 6.1;

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

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

(4)  no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.

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

Section 6.2          Certain Rights of Trustee.

Subject to Sections 315(a) through 315(d) of the Trust
Indenture Act:

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

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(2)  any request or direction of the Company or of
the Guarantor mentioned herein shall be sufficiently evidenced by a Company
Request or a Company Order or by a Guarantor Request or Guarantor Order, as the
case may be (in each case, other than delivery of any Security, together with
any Coupons appertaining thereto, to the Trustee for authentication and
delivery pursuant to Section 3.3 which shall be sufficiently evidenced as
provided therein) and any resolution of the Board of Directors or of the
Guarantor’s Board of Directors may be sufficiently evidenced by a Board
Resolution or by a Guarantor’s Board Resolution, as the case may be;

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

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

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

(6)  the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, coupon or other paper or document, but the Trustee, in
its discretion, may, but shall not be obligated to make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine, during business hours and upon reasonable notice, the
books, records and premises of the Company and the Guarantor, personally or by
agent or attorney at the sole cost of the Company and shall incur no liability
or additional liability of any kind by reason of such inquiry or investigation.

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

(8)  the Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith and believed by it to
be authorized or within the discretion or rights or powers conferred upon it by
this Indenture;

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(9)  the Trustee shall not be deemed to have
notice or be charged with knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee has received written notice of such default
or Event of Default at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture;

(10)  the rights, privileges, protections,
immunities and benefits given to the Trustee pursuant hereto, including,
without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each
agent, custodian and other person employed by the Trustee to act hereunder;

(11)  the permissive right of the Trustee to take
or refrain from taking any actions enumerated in this Indenture shall not be construed
as a duty;

(12)  the Trustee may request that the Company or
the Guarantor, as the case may be, deliver an Officer’s Certificate or
Guarantor’s Officer’s Certificate, as the case may be, setting forth the names
of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture;

(13)  anything in this Indenture notwithstanding,
in no event shall the Trustee be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to loss of profit), even if the Company or Guarantor has been advised as to the
likelihood of such loss or damage and regardless of the form of action;

(14)  the Trustee shall not be responsible or
liable for any failure or delay in the performance of its obligations under
this Indenture arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without limitation,
acts of God; earthquakes; fire; flood; terrorism; wars and other military
disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions
of utilities, computer (hardware or software) or communication services;
accidents; labor disputes; acts of civil or military authority and governmental
action;

Section 6.3          Notice of Defaults.

Within 90 days after the occurrence of any default
hereunder with respect to the Securities of any series, the Trustee shall
transmit by mail to all Holders of Securities of such series entitled to
receive reports pursuant to Section 7.3(3), notice of such default hereunder
actually known to a Responsible Officer of the Trustee, unless such default
shall have been cured or waived; provided, however, that, except in the case of
a default in the payment of the principal of (or premium, if any), or interest
(including any Additional Interest), if any, on, or Additional Amounts or any
sinking fund or purchase fund installment with respect to, any Security of such
series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the best interest of the Holders of
Securities and Coupons of such series; and provided, further, that in the case
of any default of the character specified in Section 5.1(5) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For 

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the purpose of this
Section, the term “default” means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.

Section 6.4          Not Responsible for Recitals or
Issuance of Securities.

The recitals contained herein and in the Securities,
except the Trustee’s certificate of authentication, and in any Coupons shall be
taken as the statements of the Company or the Guarantor, as the case may be,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities or the Coupons, except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Securities and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility on
Form T-1 supplied to the Company are true and accurate, subject to the
qualifications set forth therein. Neither the Trustee nor any Authenticating
Agent shall be accountable for the use or application by the Company of the
Securities or the proceeds thereof.

Section 6.5          May Hold Securities.

The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other Person that may be an agent of the
Trustee or the Guarantor or the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities or Coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with
the Company or the Guarantor with the same rights it would have if it were not
the Trustee, Authenticating Agent, Paying Agent, Security Registrar or such
other Person.

Section 6.6          Money Held in Trust.

Except as provided in Section 4.3 and Section 10.3,
money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law and shall be held uninvested. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed to in writing with the Company or the
Guarantor.

Section 6.7          Compensation and Reimbursement.

The Company and the Guarantor (without duplication)
each agree:

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

(2)  except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture or arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to the Trustee’s gross negligence or willful misconduct; and

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(3)  to indemnify the Trustee and its agents,
officers, directors and employees for, and to hold them harmless against, any
loss, damage, claims, liability or expense (including taxes (other than taxes
based upon, measured by or determined by the income of the trustee)) incurred
without gross negligence or willful misconduct on their part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending themselves against any
claim (whether asserted by the Company, the Guarantor, any Holder or any other
Person) or liability (including the compensation and expenses of counsel) in
connection with the exercise or performance of any of their powers or duties
hereunder.

As security for the performance of the obligations of
the Company and the Guarantor under this Section, the Trustee shall have a lien
prior to the Securities of any series upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of
principal of, and premium or interest (including any Additional Interest) on or
any Additional Amounts with respect to particular Securities or any Coupons
appertaining thereto.

To the extent permitted by law, any compensation due
or expense incurred by the Trustee after a default specified in or pursuant to
Section 5.1 is intended to constitute an expense of administration under any
then applicable bankruptcy or insolvency law. “Trustee” for purposes of this
Section 6.6 shall include any predecessor Trustee but the negligence or bad
faith of any Trustee shall not affect the rights of any other Trustee under
this Section 6.6.

The provisions of this Section 6.6 shall survive the
satisfaction and discharge of this Indenture, the termination of this Indenture
for any reason, or the earlier resignation or removal of the Trustee and shall
apply with equal force and effect to the Trustee in its capacity as
Authenticating Agent, Paying Agent or Security Registrar.

Section 6.8          Corporate Trustee Required;
Eligibility.

There shall at all times be a Trustee hereunder that
is a Corporation organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia, that is eligible
under Section 310(a)(1) of the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act and that has a combined
capital and surplus (computed in accordance with Section 310(a)(2) of the Trust
Indenture Act) of at least $50,000,000, and that is subject to supervision or
examination by Federal or state authority. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter
specified in this Article.

Section 6.9          Resignation and Removal; Appointment
of Successor.

(1)  Resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee pursuant
to Section 6.9.

(2)  The Trustee may resign at any time with
respect to the Securities of one or more series by giving written notice
thereof to the Company and the Guarantor. If the instrument of acceptance by a
successor Trustee required by Section 6.9 shall not have been delivered to the
resigning Trustee or the Trustee being removed as hereafter 

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provided within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to such series.

(3)  The Trustee may be removed at any time with
respect to the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, delivered to the
Trustee, the Company and the Guarantor.

(4)  If at any time:

(a)           the Trustee shall fail to comply with
the obligations imposed upon it under Section 310(b) of the Trust Indenture Act
with respect to Securities of any series after written request therefor by the
Company, the Guarantor or any Holder of a Security of such series who has been
a bona fide Holder of a Security of such series for at least six months, or

(b)            
the Trustee shall cease to be eligible under Section 6.7 and shall fail
to resign after written request therefor by the Company, the Guarantor or any
such Holder, or

(c)            
the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,

then, in any such case,
(i) the Company, by or pursuant to a Board Resolution, or the Guarantor, by or
pursuant to a Guarantor’s Board Resolution, may remove the Trustee with respect
to all Securities or the Securities of such series, or (ii) subject to Section
315(e) of the Trust Indenture Act, any Holder of a Security who has been a bona
fide Holder of a Security of such series for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities of
such series and the appointment of a successor Trustee or Trustees.

(5)  If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Securities of one or more series,
the Company, by or pursuant to a Board Resolution, and the Guarantor, by or
pursuant to a Guarantor’s Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of such series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there
shall be only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section 6.9. If,
within one year after such resignation, removal or incapacity, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company, the Guarantor and the retiring Trustee, the successor Trustee so
appointed shall, forthwith 

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upon its acceptance of
such appointment in accordance with the applicable requirements of Section 6.9,
become the successor Trustee with respect to the Securities of such series and
to that extent supersede the successor Trustee appointed by the Company and the
Guarantor. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company and the Guarantor or the Holders of
Securities and accepted appointment in the manner required by Section 6.9, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.

(6)  The Company shall give notice of each
resignation and each removal of the Trustee with respect to the Securities of
any series and each appointment of a successor Trustee with respect to the
Securities of any series by mailing written notice of such event by first-class
mail, postage prepaid, to the Holders of Registered Securities, if any, of such
series as their names and addresses appear in the Security Register and, if
Securities of such series are issued as Bearer Securities, by publishing notice
of such event once in an Authorized Newspaper in each Place of Payment located
outside the United States. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.

(7)  In no event shall any retiring Trustee be
liable for the acts or omissions of any successor Trustee hereunder.

Section 6.10        Acceptance of Appointment by Successor.

(1)  Upon the appointment hereunder of any
successor Trustee with respect to all Securities, such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company, the Guarantor
and the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties hereunder of the
retiring Trustee; but, on the request of the Company, the Guarantor or such
successor Trustee, such retiring Trustee, upon payment of its charges, shall
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the retiring Trustee and, subject to Section
10.3, shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, provided for in Section 6.6.

(2)  Upon the appointment hereunder of any
successor Trustee with respect to the Securities of one or more (but not all)
series, the Company, the Guarantor, the retiring Trustee and such successor
Trustee shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and
to vest in, such successor Trustee all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, (2) if the retiring
Trustee is not retiring with respect to all 

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Securities, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust, that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee and that no Trustee shall be responsible for any notice given to,
or received by, or any act or failure to act on the part of any other Trustee
hereunder, and, upon the execution and delivery of such supplemental indenture,
the resignation or removal of the retiring Trustee shall become effective to
the extent provided therein, such retiring Trustee shall have no further
responsibility for the exercise of rights and powers or for the performance of
the duties and obligations vested in the Trustee under this Indenture with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates other than as hereinafter expressly set forth,
and such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company,
the Guarantor or such successor Trustee, such retiring Trustee, upon payment of
its charges with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates and subject to Section 10.3 shall
duly assign, transfer and deliver to such successor Trustee, to the extent
contemplated by such supplemental indenture, the property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates, subject to
its lien, provided for in Section 6.6.

(3)  Upon request of any Person appointed
hereunder as a successor Trustee, the Company and the Guarantor shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (1) or (2) of this Section, as the case may be.

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

Section 6.11        Merger, Conversion, Consolidation or
Succession to Business.

Any Person  into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to all or substantially all of the corporate agency or corporate trust business
of the Trustee shall be the successor of the
Trustee hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall have
been authenticated but not delivered by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee

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may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

Section 6.12        Appointment of Authenticating Agent.

The Trustee may appoint one or more Authenticating
Agents acceptable to the Company with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of that or those series issued upon original issue,
exchange, registration of transfer, partial redemption or partial repayment or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee’s certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent.

Each Authenticating Agent must be acceptable to the
Company and the Guarantor and, except as provided in or pursuant to this
Indenture, shall at all times be a Corporation that would be permitted by the
Trust Indenture Act to act as trustee under an indenture qualified under the
Trust Indenture Act, is authorized under applicable law and by its charter to
act as an Authenticating Agent and has a combined capital and surplus (computed
in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect specified in this Section.

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

An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee, the Company and the Guarantor.
The Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent, the Company and the
Guarantor. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and the
Guarantor and shall (i) mail written notice of such appointment by first-class
mail, postage prepaid, to all Holders of Registered Securities, if any, of the
series with respect to which such Authenticating Agent shall serve, as their
names and addresses appear in the Security Register, and (ii) if Securities of
the series are issued as Bearer Securities, publish notice of such appointment
at least once in an Authorized Newspaper in the place where such successor
Authenticating Agent has its principal office if such office is located outside
the United States. Any successor Authenticating Agent, upon acceptance of its
appointment hereunder, shall become vested with all the rights, powers 

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and duties of its
predecessor hereunder, with like effect as if originally named as an Authenticating
Agent. No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section.

The Company and the Guarantor (without duplication)
each agree to pay each Authenticating Agent from time to time reasonable compensation
for its services under this Section. If the Trustee makes such payments, it
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.6.

The provisions of Sections 3.8, 6.4 and 6.5 shall be
applicable to each Authenticating Agent.

If an Authenticating Agent is appointed with respect
to one or more series of Securities pursuant to this Section, the Securities of
such series may have endorsed thereon, in addition to or in lieu of the Trustee’s
certificate of authentication, an alternate certificate of authentication in
substantially the following form:

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

	
  

  	
  THE BANK OF NEW YORK, as

  	
   

  
	
   

  	
   

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  as Authenticating Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  	
   

  

 

If all of the Securities of any series may not be
originally issued at one time, and if the Trustee does not have an office
capable of authenticating Securities upon original issuance located in a Place
of Payment where the Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so requested in writing
(which writing need not be accompanied by or contained in an Officer’s Certificate
by the Company), shall appoint in accordance with this Section an
Authenticating Agent having an office in a Place of Payment designated by the
Company with respect to such series of Securities.

ARTICLE 7

HOLDERS LISTS AND REPORTS BY TRUSTEE, GUARANTOR AND
COMPANY

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

In accordance with Section 312(a) of the Trust
Indenture Act, the Company and the Guarantor shall furnish or cause to be
furnished to the Trustee

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(1)  semi-annually with respect to Securities of
each series not later than May 1 and November 1 of the year or upon such other
dates as are set forth in or pursuant to the Board Resolution or indenture
supplemental hereto authorizing such series, a list, in each case in such form
as the Trustee may reasonably require, of the names and addresses of Holders as
of the applicable date, and

(2)  at such other times as the Trustee may
request in writing, within 30 days after the receipt by the Company or the Guarantor
of any such request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished, provided, however, that
so long as the Trustee is the Security Registrar no such list shall be required
to be furnished.

Section 7.2          Preservation of Information;
Communications to Holders.

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

Every Holder of Securities or Coupons, by receiving
and holding the same, agrees with the Company, the Guarantor and the Trustee
that none of the Company, the Guarantor, the Trustee, any Paying Agent or any
Security Registrar shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders of Securities in
accordance with Section 312(c) of the Trust Indenture Act, regardless of the
source from which such information was derived, and that the Trustee shall not
be held accountable by reason of mailing any material pursuant to a request
made under Section 312(b) of the Trust Indenture Act.

Section 7.3          Reports by Trustee.

(1)  Within 60 days after September 15 of each
year commencing with the first September 15 following the first issuance of
Securities pursuant to Section 3.1, if required by Section 313(a) of the Trust
Indenture Act, the Trustee shall transmit, pursuant to Section 313(c) of the
Trust Indenture Act, a brief report dated as of such September 15 with respect
to any of the events specified in said Section 313(a) which may have occurred
since the later of the immediately preceding September 15 and the date of this
Indenture.

(2)  The Trustee shall transmit the reports
required by Section 313(a) of the Trust Indenture Act at the times specified
therein.

(3)  Reports pursuant to this Section shall be
transmitted in the manner and to the Persons required by Sections 313(c) and
313(d) of the Trust Indenture Act.

Section 7.4          Reports by Company and Guarantor.

The Company and the Guarantor, pursuant to Section
314(a) of the Trust Indenture Act, shall each:

(1)  file with the Trustee, within 15 days after
the Company or the Guarantor, as the case may be, is required to file the same
with the Commission, copies of the annual

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reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company or the Guarantor, as the case may be, may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934, as amended; or, if the Company or the
Guarantor, as the case may be, is not required to file information, documents
or reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934, as amended, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;

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

(3)  transmit within 30 days after the filing
thereof with the Trustee, in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act, such summaries of any information, documents
and reports required to be filed by the Company or the Guarantor, as the case
may be, pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the Commission.

Delivery of reports,
information and documents to the Trustee under this Section 7.4 is for
informational purposes only and the Trustee’s receipt of the foregoing shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s or the
Guarantor’s compliance with any of its respective covenants hereunder (as to
which the Trustee is entitled to rely exclusively on Officer’s Certificates and
Guarantor’s Officer’s Certificates, except as otherwise provided herein).

ARTICLE 8

CONSOLIDATION, AMALGAMATIONS, MERGER AND SALES

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

The Company shall not consolidate or amalgamate with
or merge into any other Person (whether or not affiliated with the Company), or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any other Person (whether or not affiliated
with the Company), and the Company shall not permit any other Person (whether
or not affiliated with the Company) to consolidate or amalgamate with or merge
into the Company or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to the Company; unless:

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(1)  in case the Company shall consolidate or
amalgamate with or merge into another Person or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
Person, the Person formed by such consolidation or amalgamation or into which
the Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company as an entirety or
substantially as an entirety shall be a Corporation organized and existing
under the laws of the United States of America or any state thereof or the
District of Columbia and shall expressly assume, by an indenture (or
indentures, if at such time there is more than one Trustee) supplemental
hereto, executed by the successor Person and the Guarantor and delivered to the
Trustee the due and punctual payment of the principal of, any premium and
interest (including any Additional Interest) on and any Additional Amounts with
respect to all the Securities and the performance of every obligation in this
Indenture and the Outstanding Securities on the part of the Company to be
performed or observed and shall provide for conversion or exchange rights in
accordance with the provisions of the Securities of any series that are
convertible or exchangeable into Common Stock or other securities;

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

(3)  in the case of the Securities of a series
issued to an Assured Guaranty Trust, such transaction is permitted under the
related Trust Agreement and does not give rise to any breach or violation of
such Trust Agreement; and

(4)  either the Company or the successor Person
shall have delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.

Section 8.2          Successor Person Substituted for
Company.

Upon any consolidation or amalgamation by the Company
with or merger of the Company into any other Person or any conveyance, transfer
or lease of the properties and assets of the Company substantially as an
entirety to any Person in accordance with Section 8.1, the successor Person
formed by such consolidation or amalgamation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein; and thereafter, except in the case of a lease, the
predecessor Person shall be released from all obligations and covenants under
this Indenture, the Securities and the Coupons.

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Section 8.3             Guarantor
May Consolidate, Etc., Only on Certain Terms.

The Guarantor shall not consolidate or amalgamate with
or merge into any other Person (whether or not affiliated with the Guarantor),
or convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any other Person (whether or not affiliated
with the Guarantor), and the Guarantor shall not permit any other Person
(whether or not affiliated with the Guarantor) to consolidate or amalgamate
with or merge into the Guarantor or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to the Guarantor;
unless:

(1)  in case the Guarantor shall consolidate or
amalgamate with or merge into another Person or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
Person, the Person formed by such consolidation or amalgamation or into which
the Guarantor is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Guarantor as an entirety or
substantially as an entirety shall be a Corporation organized and existing
under the laws of the United States of America, any state thereof or the
District of Columbia or Bermuda, or any other country which is on the date of
this Indenture a member of the Organization for Economic Cooperation and
Development, and shall expressly assume, by an indenture (or indentures, if at
such time there is more than one Trustee) supplemental hereto, executed by the
successor Person and the Company and delivered to the Trustee the due and
punctual payment of the principal of, any premium and interest (including any
Additional Interest) on and any Additional Amounts with respect to all the
Securities and the performance of every obligation in this Indenture and the
Outstanding Securities on the part of the Guarantor to be performed or observed
and shall provide for conversion or exchange rights in accordance with the
provisions of the Securities of any series that are convertible or exchangeable
into Common Stock or other securities;

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

(3)  in the case of Securities of a series issued
to an Assured Guaranty Trust, such transaction is permitted under the related
Guarantee Agreement and does not give rise to any breach or violation of such
Guarantee Agreement; and

(4)  either the Guarantor or the successor Person
shall have delivered to the Trustee a Guarantor’s Officer’s Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such transaction
have been complied with.

Section 8.4          Successor Person Substituted for
Guarantor.

Upon any consolidation or amalgamation by the
Guarantor with or merger of the Guarantor into any other Person or any
conveyance, transfer or lease of the properties and assets

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of the Guarantor
substantially as an entirety to any Person in accordance with Section 8.3, the
successor Person formed by such consolidation or amalgamation or into which the
Guarantor is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Guarantor under this Indenture with the same effect as if such
successor Person had been named as the Guarantor herein; and thereafter, except
in the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Securities and the Coupons.

ARTICLE 9

SUPPLEMENTAL INDENTURES

Section 9.1          Supplemental Indentures without
Consent of Holders.

Without the consent of any Holders of Securities or
Coupons, the Company (when authorized by or pursuant to a Board Resolution),
the Guarantor (when authorized by or pursuant to a Guarantor’s Board
Resolution) and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, for any of the following purposes:

(1)  to evidence the succession of another Person
to the Company or the Guarantor, and the assumption by any such successor of
the covenants of the Company or the Guarantor, as the case may be, contained
herein and in the Securities; or

(2)  to add to the covenants of the Company or the
Guarantor, as the case may be, for the benefit of the Holders of all or any
series of Securities (as shall be specified in such supplemental indenture or
indentures) or to surrender any right or power herein conferred upon the
Company or the Guarantor, as the case may be; or

(3)  to add to or change any of the provisions of
this Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of principal
of, any premium or interest (including any Additional Interest) on or any
Additional Amounts with respect to Securities, to permit Bearer Securities to
be issued in exchange for Registered Securities, to permit Bearer Securities to
be exchanged for Bearer Securities of other authorized denominations or to
permit or facilitate the issuance of Securities in uncertificated form,
provided any such action shall not adversely affect the interests of the
Holders of Outstanding Securities of any series or any Coupons appertaining
thereto in any material respect; or

(4)  to establish the form or terms of Securities
of any series and any Coupons appertaining thereto as permitted by Sections 2.1
and 3.1; or

(5)  to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Securities of
one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.9; or

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(6)  to cure any ambiguity or to correct or supplement
any provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not adversely affect, in any
material respect, the interests of the Holders of Securities of any series then
Outstanding or any Coupons appertaining thereto or, in the case of Securities
of a series issued to an Assured Guaranty Trust and for so long as any of the
Preferred Securities issued by such Assured Guaranty Trust shall remain
outstanding, the holders of such Preferred Securities; or

(7)  to add to, delete from or revise the
conditions, limitations and restrictions on the authorized amount, terms or
purposes of issue, authentication and delivery of Securities, as herein set
forth; or

(8)  to add any additional Events of Default with
respect to all or any series of Securities (as shall be specified in such
supplemental indenture); or

(9)  to supplement any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to Article 4,
provided that any such action shall not adversely affect the interests of any
Holder of an Outstanding Security of such series and any Coupons appertaining
thereto or any other Outstanding Security or Coupon or, in the case of
Securities of a series issued to an Assured Guaranty Trust and for so long as
any of the Preferred Securities issued by such Assured Guaranty Trust shall
remain outstanding, the holders of such Preferred Securities, in any material
respect; or

(10)  to secure the Securities; or

(11)  to make provisions with respect to conversion
or exchange rights of Holders of Securities of any series; or

(12)  to amend or supplement any provision
contained herein or in any supplemental indenture, provided that no such
amendment or supplement shall materially adversely affect the interests of the
Holders of any Securities then Outstanding.

Section 9.2          Supplemental Indentures with Consent
of Holders.

With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of each series
affected by such supplemental indenture (and, in the case of any series of
Securities held as assets of an Assured Guaranty Trust, such consent of holders
of the Preferred Securities and the Common Securities of such Assured Guaranty
Trust as may be required under the Trust Agreement of such Assured Guaranty
Trust), by Act of said Holders delivered to the Company, the Guarantor and the
Trustee, the Company (when authorized by or pursuant to a Company’s Board
Resolution), the Guarantor (when authorized by or pursuant to a Guarantor’s
Board Resolution) and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such series
under this Indenture or of the Securities of such series;

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provided, however, that
no such supplemental indenture, without the consent of the Holder of each
Outstanding Security affected thereby, shall

(1)  change the Stated Maturity of the principal
of, or any premium or installment of interest (including any Additional
Interest) on or any Additional Amounts with respect to, any Security, or reduce
the principal amount thereof or the rate (or modify the calculation of such
rate) of interest (including any Additional Interest) thereon or any Additional
Amounts with respect thereto, or any premium payable upon the redemption
thereof or otherwise, or change the obligation of the Company and the Guarantor
to pay Additional Amounts pursuant to the terms hereof (except as contemplated by
Section 8.1(1) and permitted by Section 9.1(1)), or reduce the amount of the
principal of an Original Issue Discount Security that would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to Section
5.2 or the amount thereof provable in bankruptcy pursuant to Section 5.4,
change the redemption provisions or adversely affect the right of repayment at
the option of any Holder as contemplated by Article 13, or change the Place of
Payment, Currency in which the principal of, any premium or interest (including
any Additional Interest) on, or any Additional Amounts with respect to any
Security is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date or, in the case of repayment at the
option of the Holder, on or after the date for repayment), or

(2)  reduce the percentage in principal amount of
the Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose Holders
is required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences) provided for in
this Indenture, or reduce the requirements of Section 15.4 for quorum or
voting, or

(3)  modify any of the provisions of this
Indenture relating to the subordination of the Securities or the Guarantee in
respect thereof in a manner adverse to Holders of Securities, or

(4)  modify or effect in any manner adverse to the
Holders the terms and conditions of the obligations of the Guarantor in respect
of the due and punctual payments of principal of, or any premium or interest
(including any Additional Interest) on, or any sinking fund requirements or
Additional Amounts with respect to, the Securities, or

(5)  modify any of the provisions of this Section,
Section 5.13 or Section 10.6, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby, or

(6)  make any change that adversely affects the
right to convert or exchange any Security into or for securities of the Company
or the Guarantor or other securities (whether or not issued by the Company or
the Guarantor), cash or property in accordance

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with its terms,
provided that, in the case of the Securities of a series issued to an Assured
Guaranty Trust, so long as any of the Preferred Securities of such Assured
Guaranty Trust remain outstanding, no such amendment shall be made that
adversely affects the holders of such Preferred Securities, and no termination
of this Indenture shall occur, and no waiver of any Event of Default or
compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of at least a majority of the liquidation
amount of such Preferred Securities then outstanding unless and until the
principal of, any premium or, subject to Section 3.7, interest (including any
Additional Interest) on, and any Additional Amounts with respect to, the
Securities of such series have been paid in full; and provided further that in
the case of the Securities of a series issued to an Assured Guaranty Trust, so
long as any of the Preferred Securities of such Assured Guaranty Trust remain
outstanding, no amendment shall be made to Section 5.8 of this Indenture
without the prior consent of the holder of each Preferred Security then
outstanding unless and until the principal of, any premium or, subject to
Section 3.7, interest (including any Additional Interest) on, and any
Additional Amounts with respect to, the Securities of such series have been
paid in full.

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

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

Section 9.3          Execution of Supplemental Indentures.

As a condition to executing, or accepting the
additional trusts created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trust created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Section 315 of the
Trust Indenture Act) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture and an Officer’s Certificate and Guarantor’s
Officer’s Certificate stating that all conditions precedent to the execution of
such supplemental indenture have been fulfilled. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Section 9.4          Effect of Supplemental Indentures.

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

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Section 9.5             Reference
in Securities to Supplemental Indentures.

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

Section 9.6          Conformity
with Trust Indenture Act.

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

Section 9.7          Effect on Senior Indebtedness.

No supplemental indenture shall directly or indirectly
modify or eliminate the provisions of Article 16 or Article 18, as the case may
be, in any manner which might terminate or impair the subordination of the
Securities of any series to Company Senior Indebtedness with respect to such
series or the subordination of the Guarantee in respect thereof to Guarantor
Senior Indebtedness with respect to such series, respectively, without the
prior written consent of the holders of such Company Senior Indebtedness or
Guarantor Senior Indebtedness, respectively.

Section 9.8          Notice of Supplemental Indenture.

Promptly after the execution by the Company, the
Guarantor and the Trustee of any supplemental indenture pursuant to this
Article, the Company shall transmit to the Holders of Outstanding Securities of
any series affected thereby a notice setting forth the substance of such
supplemental indenture; provided, however, that the failure to transmit such
notice shall not affect the validity of such supplemental indenture.

ARTICLE 10

COVENANTS

Section 10.1        Payment of Principal, any Premium,
Interest and Additional Amounts.

The Company covenants and agrees for the benefit of
the Holders of the Securities of each series that it will duly and punctually
pay the principal of, any premium and interest (including any Additional
Interest) on and any Additional Amounts with respect to the Securities of such
series in accordance with the terms thereof, any Coupons appertaining thereto
and this Indenture. Any interest due on any Bearer Security on or before the
Maturity thereof, and any Additional Amounts payable with respect to such
interest, shall be payable only upon presentation and surrender of the Coupons
appertaining thereto for such interest as they severally mature.

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Section 10.2           Maintenance
of Office or Agency.

The Company and the Guarantor shall maintain in each
Place of Payment for any series of Securities an Office or Agency where
Securities of such series (but not Bearer Securities, except as otherwise
provided below, unless such Place of Payment is located outside the United
States) may be presented or surrendered for payment, where Securities of such
series may be surrendered for registration of transfer or exchange, where
Securities of such series that are convertible or exchangeable may be
surrendered for conversion or exchange, and where notices and demands to or
upon the Company or the Guarantor in respect of the Securities of such series relating
thereto and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company and the Guarantor shall maintain,
subject to any laws or regulations applicable thereto, an Office or Agency in a
Place of Payment for such series which is located outside the United States
where Securities of such series and any Coupons appertaining thereto may be
presented and surrendered for payment; provided, however, that if the
Securities of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company and the Guarantor shall maintain a Paying Agent in
London, Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of such series are listed
on such exchange. The Company and the Guarantor will give prompt written notice
to the Trustee of the location, and any change in the location, of such Office
or Agency. If at any time the Company or the Guarantor shall fail to maintain
any such required Office or Agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of such series and any Coupons appertaining thereto may be presented
and surrendered for payment at the place specified for the purpose with respect
to such Securities as provided in or pursuant to this Indenture, and the
Company and the Guarantor hereby appoint the Trustee as their agent to receive
all such presentations, surrenders, notices and demands.

Except as otherwise provided in or pursuant to this
Indenture, no payment of principal, premium, interest or Additional Amounts
with respect to Bearer Securities shall be made at any Office or Agency in the
United States or by check mailed to any address in the United States or by transfer
to an account maintained with a bank located in the United States; provided,
however, if amounts owing with respect to any Bearer Securities shall be
payable in Dollars, payment of principal of, any premium or interest on and any
Additional Amounts with respect to any such Security may be made at the
Corporate Trust Office of the Trustee or any Office or Agency designated by the
Company and the Guarantor in the Borough of Manhattan, The City of New York, if
(but only if) payment of the full amount of such principal, premium, interest
or Additional Amounts at all offices outside the United States maintained for
such purpose by the Company and the Guarantor in accordance with this Indenture
is illegal or effectively precluded by exchange controls or other similar
restrictions.

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

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location of any such
other Office or Agency. Unless otherwise provided in or pursuant to this
Indenture, the Company and the Guarantor hereby designate as the Place of
Payment for each series of Securities the Borough of Manhattan, The City of New
York, and initially appoint the Corporate Trust Office of the Trustee as the
Office or Agency of the Company in the Borough of Manhattan, The City of New
York for such purpose. The Company and the Guarantor may subsequently appoint a
different Office or Agency in the Borough of Manhattan, The City of New York
for the Securities of any series.

Unless otherwise specified with respect to any
Securities pursuant to Section 3.1, if and so long as the Securities of any
series (i) are denominated in a Foreign Currency or (ii) may be payable in a
Foreign Currency, or so long as it is required under any other provision of this
Indenture, then the Company will maintain with respect to each such series of
Securities, or as so required, at least one exchange rate agent.

Section 10.3        Money for Securities Payments to Be Held
in Trust.

If the Company shall at any time act as its own Paying
Agent, or if the Guarantor shall act as Paying Agent, with respect to any
series of Securities, it shall, on or before each due date of the principal of,
any premium or interest (including any Additional Interest) on or Additional
Amounts with respect to any of the Securities of such series, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum in the
currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
sufficient to pay the principal or any premium, interest (including any
Additional Interest) or Additional Amounts so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided, and shall
promptly notify the Trustee of its action or failure so to act.

Whenever the Company shall have one or more Paying
Agents for any series of Securities, it shall, on or prior to each due date of
the principal of, any premium or interest (including any Additional Interest)
on or any Additional Amounts with respect to any Securities of such series,
deposit with any Paying Agent a sum (in the currency or currencies, currency
unit or units or composite currency or currencies described in the preceding
paragraph) sufficient to pay the principal or any premium, interest (including
any Additional Interest) or Additional Amounts so becoming due, such sum to be
held in trust for the benefit of the Persons entitled thereto, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure so to act.

The Company shall cause each Paying Agent for any
series of Securities other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent shall:

(1)  hold all sums held by it for the payment of
the principal of, any premium or interest (including any Additional Interest)
on or any Additional Amounts with respect to Securities of such series in trust
for the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as provided in or pursuant to this
Indenture;

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(2)  give the Trustee notice of any default by the
Company or the Guarantor (or any other obligor upon the Securities of such
series) in the making of any payment of principal, any premium or interest
(including any Additional Interest) on or any Additional Amounts with respect
to the Securities of such series; and

(3)  at any time during the continuance of any
such default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.

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

Except as otherwise provided herein or pursuant
hereto, any money deposited with the Trustee or any Paying Agent, or then held by
the Company or the Guarantor, in trust for the payment of the principal of, any
premium or interest (including any Additional Interest) on or any Additional
Amounts with respect to any Security of any series or any Coupon appertaining
thereto and remaining unclaimed for two years after such principal or any such
premium or interest or any such Additional Amounts shall have become due and
payable shall be paid to the Company on Company Request (or if deposited by the
Guarantor, paid to the Guarantor on Guarantor Request), or (if then held by the
Company or the Guarantor) shall be discharged from such trust; and the Holder
of such Security or any Coupon appertaining thereto shall thereafter, as an
unsecured general creditor, look only to the Company and the Guarantor for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company and the Guarantor cause to be published once, in an
Authorized Newspaper in each Place of Payment for such series or to be mailed
to Holders of Registered Securities of such series, or both, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication or mailing nor shall
it be later than two years after such principal and any premium or interest or
Additional Amounts shall have become due and payable, any unclaimed balance of
such money then remaining will be repaid to the Company or the Guarantor, as
the case may be.

Section 10.4        Additional Amounts.

If any Securities of a series provide for the payment
of Additional Amounts, the Company agrees to pay to the Holder of any such
Security or any Coupon appertaining thereto Additional Amounts as provided in
or pursuant to this Indenture or such Securities. Whenever in this Indenture
there is mentioned, in any context, the payment of the principal of or any
premium or interest on, or in respect of, any Security of any series or any
Coupon or the net proceeds received on the sale or exchange of any Security of
any series, such mention shall be deemed to include mention of the payment of
Additional Amounts provided by the terms of such series

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established hereby or
pursuant hereto to the extent that, in such context, Additional Amounts are,
were or would be payable in respect thereof pursuant to such terms, and express
mention of the payment of Additional Amounts (if applicable) in any provision
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.

Except as otherwise provided in or pursuant to this
Indenture or the Securities of the applicable series, if the Securities of a
series provide for the payment of Additional Amounts, at least 10 days prior to
the first Interest Payment Date with respect to such series of Securities (or
if the Securities of such series shall not bear interest prior to Maturity, the
first day on which a payment of principal is made), and at least 10 days prior
to each date of payment of principal or interest if there has been any change
with respect to the matters set forth in the below-mentioned Officer’s
Certificate, the Company shall furnish to the Trustee and the principal Paying
Agent or Paying Agents, if other than the Trustee, an Officer’s Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and premium, if any, or interest on the Securities of
such series shall be made to Holders of Securities of such series or the
Coupons appertaining thereto who are United States Aliens without withholding
for or on account of any tax, assessment or other governmental charge described
in the Securities of such series. If any such withholding shall be required,
then such Officer’s Certificate shall specify by country the amount, if any,
required to be withheld on such payments to such Holders of Securities or
Coupons, and the Company agrees to pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officer’s Certificate
furnished pursuant to this Section 10.4.

Section 10.5        Corporate Existence.

Subject to Article 8, the Company and the Guarantor
shall do or cause to be done all things necessary to preserve and keep in full
force and effect their respective corporate existences and that of each of
their respective Subsidiaries and their respective rights (charter and
statutory) and franchises; provided, however, that the foregoing shall not
obligate the Company or the Guarantor or any of their respective Subsidiaries
to preserve any such right or franchise if the Company, the Guarantor or any
such Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of its business or the business of such Subsidiary and
that the loss thereof is not disadvantageous in any material respect to any
Holder.

Section 10.6        Waiver of Certain Covenants.

The Company or the Guarantor, as the case may be, may
omit in any particular instance to comply with any term, provision or condition
set forth in Section 10.5 with respect to the Securities of any series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series, by Act of such
Holders, either shall waive such compliance in such instance or generally shall
have waived compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to
the extent so expressly waived, and, until such waiver shall

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become effective, the
obligations of the Company and the Guarantor and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

Section 10.7        Company Statement as to Compliance;
Notice of Certain Defaults.

(1)  The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year, a written statement (which
need not be contained in or accompanied by an Officer’s Certificate) signed by
the principal executive officer, the principal financial officer or the
principal accounting officer of the Company, stating that

(2)  a review of the activities of the Company
during such year and of its performance under this Indenture has been made
under his or her supervision, and

(3)  to the best of his or her knowledge, based on
such review, (a) the Company has complied with all the conditions and covenants
imposed on it under this Indenture throughout such year, or, if there has been
a default in the fulfillment of any such condition or covenant, specifying each
such default known to him or her and the nature and status thereof, and (b) no
event has occurred and is continuing which is, or after notice or lapse of time
or both would become, an Event of Default, or, if such an event has occurred
and is continuing, specifying each such event known to him and the nature and
status thereof.

(4)  The Company shall deliver to the Trustee,
within five days after the occurrence thereof, written notice of any Event of
Default or any event which after notice or lapse of time or both would become
an Event of Default pursuant to clause (4) of Section 5.1.

Section 10.8        Guarantor Statement as to Compliance;
Notice of Certain Defaults.

(1)  The Guarantor shall deliver to the Trustee,
within 120 days after the end of each fiscal year, a written statement (which
need not be contained in or accompanied by a Guarantor’s Officer’s Certificate)
signed by the principal executive officer, the principal financial officer or
the principal accounting officer of the Guarantor, stating that

(2)  a review of the activities of the Guarantor
during such year and of performance under this Indenture has been made under
his or her supervision, and

(3)  to the best of his or her knowledge, based on
such review, (a) the Guarantor has complied with conditions and covenants
imposed on it under this Indenture throughout such year, or, if there has been
a default in the fulfillment of any such condition or covenant, specifying each
such default known to him or her and the nature and status thereof, and (b) no
event has occurred and is continuing which constitutes, or which after notice
or lapse of time or both would become, an Event of Default, or, if such an
event has occurred and is continuing, specifying each such event known to him
and the nature and status thereof.

 

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(4)  The Guarantor shall deliver to the Trustee,
within five days after the occurrence thereof, written notice of any event
which after notice or lapse of time or both would become an Event of Default
pursuant to clause (4) of Section 5.1.

Section 10.9        Additional Sums.

In the case of Securities of a series issued to an
Assured Guaranty Trust, except as otherwise specified as contemplated by
Section 3.1, in the event that (i) such Assured Guaranty Trust is the Holder of
all of the Outstanding Securities of such series, (ii) a Tax Event in respect
of such Assured Guaranty Trust shall have occurred and be continuing and (iii)
the Company shall not have (i) redeemed the Securities of such series pursuant
to Section 11.8 or (ii) terminated such Assured Guaranty Trust pursuant to
Section 9.2(b) of the related Trust Agreement, the Company shall pay to such
Assured Guaranty Trust (and its permitted successors or assigns under the
related Trust Agreement), for so long as such Assured Guaranty Trust (or its
permitted successor or assignee) is the registered holder of any Securities of
such series, such additional amounts as may be necessary in order that the
amount of Distributions then due and payable by such Assured Guaranty Trust on
the related Preferred Securities and Common Securities that at any time remain
outstanding in accordance with the terms thereof shall not be reduced as a
result of any Additional Taxes (the “Additional Sums”). Whenever in this
Indenture there is mentioned, in any context, the payment of the principal of
or any premium or interest on, or in respect of, any Security of any series or
any Coupon or the net proceeds received on the sale or exchange of any Security
of any series, such mention shall be deemed to include mention of the payment
of Additional Sums provided by the terms of such series established hereby or
pursuant hereto to the extent that, in such context, Additional Sums are, were
or would be payable in respect thereof pursuant to such terms, and express
mention of the payment of Additional Sums (if applicable) in any provision
hereof shall not be construed as excluding Additional Sums in those provisions
hereof where such express mention is not made, provided, however, that the
extension of an interest payment period pursuant to Section 3.11 or the terms
of the applicable Securities shall not extend the payment of any Additional
Sums that may be due and payable during such interest payment period.

Section 10.10        
Prohibition Against Dividends, etc.

Except as otherwise specified as contemplated by
Section 3.1, the Company and the Guarantor each covenant and agree with each
Holder of Securities of a series issued to an Assured Guaranty Trust that it
will not, and will not permit any of its Subsidiaries to, (a) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the outstanding capital stock of
the Company or the Guarantor, as the case may be, or (b) make any payment of
principal of, interest or premium, if any, on or repay, repurchase or redeem
any debt security of the Company or the Guarantor, as the case may be, that
ranks junior in interest to the Securities of such series or the Guarantee in
respect thereof, as the case may be, or make any guarantee payments with
respect to any guarantee by the Company or the Guarantor, as the case may be,
of the debt securities of any Subsidiary of the Company or the Guarantor, as
the case may be, if such guarantee ranks junior in interest to the Securities
of such series or the Guarantee in respect thereof, as the case may be (other
than (i) dividends or distributions on the Capital Stock of the Company paid or
made to the Guarantor and dividends or distributions in Common Stock of the
Company or the Guarantor, as the case

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may be, (ii) redemptions
or purchases of any rights outstanding under a shareholder rights plan of the
Company or the Guarantor, as the case may be, or the declaration of a dividend
of such rights or the issuance of stock under such plans in the future, (iii)
payments under any Preferred Securities Guarantee, and (iv) purchases of Common
Stock related to the issuance of Common Stock under any benefit plans of the
Company or the Guarantor, as the case may be, for its respective directors,
officers or employees) if at such time (1) there shall have occurred any event
of which the Company or the Guarantor, as the case may be, has actual knowledge
that (A) with the giving of notice or the lapse of time or both, would
constitute an Event o Default hereunder and (B) in respect of which the Company
or the Guarantor, as the case may be, shall not have taken reasonable steps to
cure, (2) the Guarantor shall be in default with respect to its payment of any
obligations under the related Preferred Securities Guarantee or (3) the Company
shall have given notice of its election to begin an Extension Period as
provided herein with respect to the Securities of such series and shall not
have rescinded such notice, or such Extension Period, or any extension thereof,
shall be continuing.

Section 10.11      Payment
of Expenses of each Assured Guaranty Trust.

The Guarantor covenants for the benefit of the Holders
of each series of Securities to pay or cause to be paid all of the obligations,
costs and expenses of each Assured Guaranty Trust (other than payments in
respect of Trust Securities) in accordance with the provisions of its Trust
Agreement and to pay the taxes of such Assured Guaranty Trust in accordance
with the provisions of its Trust Agreement in order to permit such Assured
Guaranty Trust to make distributions on and redemptions of its Preferred
Securities in accordance with such Trust Agreement.

Section 10.12      Ownership of Common Securities.

The Company covenants, as to each series of Securities
issued to an Assured Guaranty Trust in connection with the issuance of
Preferred Securities and Common Securities by that Assured Guaranty Trust, (a)
to maintain directly or indirectly 100% ownership of the Common Securities of
such Assured Guaranty Trust; provided, however, that any permitted successor of
the Company hereunder may succeed to the Company’s ownership of such Common
Securities, (b) not to voluntarily dissolve, wind-up or liquidate such Assured
Guaranty Trust, except in connection with (i) a distribution of the Securities
of such series to the holders of Preferred Securities and Common Securities in
liquidation of such Assured Guaranty Trust, (ii) the redemption of all of the
Preferred Securities and Common Securities of such Assured Guaranty Trust or
(iii) certain mergers, consolidations or amalgamations, each as permitted by
the Trust Agreement of such Assured Guaranty Trust and (c) to use its
reasonable efforts, consistent with the terms and provisions of the related
Trust Agreement, to cause such Assured Guaranty Trust to remain classified as a
grantor trust and not an association taxable as a corporation for United States
federal income tax purposes.

ARTICLE 11

REDEMPTION OF SECURITIES

Section 11.1        Applicability of Article.

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Redemption of Securities of any series at the option
of the Company as permitted or required by the terms of such Securities shall
be made in accordance with the terms of such Securities and (except as
otherwise provided herein or pursuant hereto) this Article.

Section 11.2        Election
to Redeem; Notice to Trustee.

The election of the Company to redeem any Securities
shall be evidenced by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company of (a) less than all of the
Securities of any series or (b) all of the Securities of any series, with the
same issue date, interest rate or formula, Stated Maturity and other terms, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Securities
of such series to be redeemed. If the Securities of a series are held by an
Assured Guaranty Trust, the Company shall also deliver a copy of such notice to
the Property Trustee of such Assured Guaranty Trust.

Section 11.3        Selection
by Trustee of Securities to be Redeemed.

If less than all of the Securities of any series with
the same issue date, interest rate or formula, Stated Maturity and other terms
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal amount of
Registered Securities of such series; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Registered
Security of such series not redeemed to less than the minimum denomination for
a Security of such series established herein or pursuant hereto.

The Trustee shall promptly notify the Company and the
Security Registrar (if other than itself) in writing of the Securities selected
for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.

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

Unless otherwise specified in or pursuant to this
Indenture or the Securities of any series, if any Security selected for partial
redemption is converted into other securities of the Company or exchanged for
securities of the Guarantor or another issuer in part before termination of the
conversion or exchange right with respect to the portion of the Security so
selected, the converted portion of such Security shall be deemed (so far as may
be) to be the portion selected for redemption. Securities which have been
converted or exchanged during a selection of Securities to be redeemed shall be
treated by the Trustee as Outstanding for the purpose of such selection.

Section 11.4        Notice of Redemption.

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Notice of redemption shall be given in the manner
provided in Section 1.6, not less than 30 nor more than 60 days prior to the
Redemption Date, unless a shorter period is specified in the Securities to be
redeemed, to the Holders of Securities to be redeemed. Failure to give notice
by mailing in the manner herein provided to the Holder of any Registered
Securities designated for redemption as a whole or in part, or any defect in
the notice to any such Holder, shall not affect the validity of the proceedings
for the redemption of any other Securities or portion thereof.

Any notice that is mailed to the Holder of any
Registered Securities in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not such Holder receives the
notice.

All notices of redemption shall state:

(1)  the Redemption Date,

(2)  the Redemption Price,

(3)  if less than all Outstanding Securities of
any series are to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or Securities to
be redeemed,

(4)  in case any Security is to be redeemed in
part only, the notice which relates to such Security shall state that on and
after the Redemption Date, upon surrender of such Security, the Holder of such
Security will receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining unredeemed,

(5)  that, on the Redemption Date, the Redemption
Price shall become due and payable upon each such Security or portion thereof
to be redeemed, and, if applicable, that interest thereon shall cease to accrue
on and after said date,

(6)  the place or places where such Securities,
together (in the case of Bearer Securities) with all Coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be surrendered for
payment of the Redemption Price and any accrued interest and Additional Amounts
pertaining thereto,

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

(8)  that, unless otherwise specified in such
notice, Bearer Securities of any series, if any, surrendered for redemption
must be accompanied by all Coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing Coupon or Coupons will be deducted
from the Redemption Price, unless security or indemnity satisfactory to the
Company, the Guarantor, the Trustee and any Paying Agent is furnished,

(9)  if Bearer Securities of any series are to be
redeemed and no Registered Securities of such series are to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not subject
to redemption on the Redemption Date

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pursuant to
Section 3.5 or otherwise, the last date, as determined by the Company, on which
such exchanges may be made,

(10)  in the case of Securities of any series that
are convertible into Common Stock of the Company or exchangeable for other
securities, the conversion or exchange price or rate, the date or dates on
which the right to convert or exchange the principal of the Securities of such
series to be redeemed will commence or terminate and the place or places where
such Securities may be surrendered for conversion or exchange, and

(11)  the CUSIP number or the Euroclear or the
Cedel reference numbers of such Securities, if any (or any other numbers used
by a Depository to identify such Securities).

A notice of redemption published as contemplated by
Section 1.6 need not identify particular Registered Securities to be redeemed.

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

Section 11.5        Deposit of Redemption Price.

On or prior to any Redemption Date, the Company or the
Guarantor shall deposit, with respect to the Securities of any series called
for redemption pursuant to Section 11.4, with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent or the Guarantor is
acting as Paying Agent, segregate and hold in trust as provided in Section
10.3) an amount of money in the applicable Currency sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 3.1 or in the
Securities of such series) any accrued interest (including any Additional
Interest) on and Additional Amounts with respect thereto, all such Securities
or portions thereof which are to be redeemed on that date.

Section 11.6        Securities Payable on Redemption Date.

Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company and the Guarantor shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest and the Coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided below, shall be
void. Upon surrender of any such Security for redemption in accordance with
said notice, together with all Coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the Company at the
Redemption Price, together with any accrued interest and Additional Amounts to
the Redemption Date; provided, however, that, except as otherwise provided in
or pursuant to this Indenture or the Bearer Securities of such series,
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only upon presentation and
surrender of Coupons for such interest (at an Office or Agency located outside
the United States except as otherwise provided in Section 10.2), and provided,
further, that, except as otherwise specified in or pursuant to this Indenture
or the Registered Securities of such

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series, installments of
interest on Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
Regular Record Dates therefor according to their terms and the provisions of
Section 3.7.

If any Bearer Security surrendered for redemption
shall not be accompanied by all appurtenant Coupons maturing after the
Redemption Date, such Security may be paid after deducting from the Redemption
Price an amount equal to the face amount of all such missing Coupons, or the
surrender of such missing Coupon or Coupons may be waived by the Company and
the Trustee if there be furnished to them such security or indemnity as they
may require to save each of them and any Paying Agent harmless. If thereafter
the Holder of such Security shall surrender to the Trustee or any Paying Agent
any such missing Coupon in respect of which a deduction shall have been made
from the Redemption Price, such Holder shall be entitled to receive the amount
so deducted; provided, however, that any interest or Additional Amounts
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an Office or Agency for such Security located outside of the
United States except as otherwise provided in Section 10.2.

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

Section 11.7        Securities Redeemed in Part.

Any Registered Security which is to be redeemed only
in part shall be surrendered at any Office or Agency for such Security (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Registered Security or
Securities of the same series, containing identical terms and provisions, of
any authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Security in global form is so surrendered,
the Company shall execute, and the Trustee shall authenticate and deliver to
the U.S. Depository or other Depository for such Security in global form as
shall be specified in the Company Order with respect thereto to the Trustee,
without service charge, a new Security in global form in a denomination equal
to and in exchange for the unredeemed portion of the principal of the Security
in global form so surrendered.

Section 11.8        Right of Redemption of Securities Issued
to an Assured Guaranty Trust.

In the case of the Securities of a series issued to an
Assured Guaranty Trust, except as otherwise specified as contemplated by
Section 3.1, if a Special Event in respect of such Assured Guaranty Trust shall
occur and be continuing, the Company may, at its option, redeem the Securities
of such series within 90 days of the occurrence of such Special Event, in whole
but not in part, subject to the provisions of this Section 11.8 and the other
provisions of this Article 11. Unless otherwise specified in or pursuant to
this Indenture or the Securities of such series, the

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redemption price for any
Security so redeemed pursuant to this Section 11.8 shall be equal to 100% of
the principal amount of such Securities then Outstanding plus accrued and
unpaid interest, including any Additional Interest, to the date fixed for
redemption.

ARTICLE 12

SINKING FUNDS

Section 12.1        Applicability of Article.

The provisions of this Article shall be applicable to
any sinking fund for the retirement of Securities of a series, except as
otherwise permitted or required in or pursuant to this Indenture or any
Security of such series issued pursuant to this Indenture.

The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is herein referred to as
a “mandatory sinking fund payment,” and any payment in excess of such minimum
amount provided for by the terms of Securities of such series is herein
referred to as an “optional sinking fund payment”. If provided for by the terms
of Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series and this Indenture.

Section 12.2        Satisfaction of Sinking Fund Payments
with Securities.

The Company or the Guarantor may, in satisfaction of
all or any part of any sinking fund payment with respect to the Securities of
any series to be made pursuant to the terms of such Securities (1) deliver
Outstanding Securities of such series (other than any of such Securities
previously called for redemption or any of such Securities in respect of which
cash shall have been released to the Company), together in the case of any
Bearer Securities of such series with all unmatured Coupons appertaining
thereto, and (2) apply as a credit Securities of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, provided that such
series of Securities have not been previously so credited. Such Securities
shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be
reduced accordingly. If, as a result of the delivery or credit of Securities of
any series in lieu of cash payments pursuant to this Section 12.2, the
principal amount of Securities of such series to be redeemed in order to
satisfy the remaining sinking fund payment shall be less than $100,000, the
Trustee need not call Securities of such series for redemption, except upon
Company Request or Guarantor Request, and such cash payment shall be held by
the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall at the
request of the Company or the Guarantor from time to time pay over and deliver
to the Company or the Guarantor, as the case may be, any cash payment so being
held by the Trustee or such Paying Agent upon delivery by the Company or the
Guarantor to the Trustee of

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Securities of that series
purchased by the Company or the Guarantor having an unpaid principal amount
equal to the cash payment requested to be released to the Company or the
Guarantor.

Section 12.3        Redemption of Securities for Sinking
Fund.

Not less than 75 days prior to each sinking fund
payment date for any series of Securities, the Company shall deliver to the
Trustee an Officer’s Certificate specifying the amount of the next ensuing
mandatory sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by payment of
cash and the portion thereof, if any, which is to be satisfied by delivering
and crediting of Securities of that series pursuant to Section 12.2, and the
optional amount, if any, to be added in cash to the next ensuing mandatory
sinking fund payment, and will also deliver to the Trustee any Securities to be
so credited and not theretofore delivered. If such Officer’s Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the
amount therein specified. Not less than 60 days before each such sinking fund
payment date the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 11.4. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 11.6 and 11.7.

ARTICLE 13

REPAYMENT AT THE OPTION OF HOLDERS

Section 13.1        Applicability of Article.

Securities of any series which are repayable at the
option of the Holders thereof before their Stated Maturity shall be repaid in
accordance with the terms of the Securities of such series. The repayment of
any principal amount of Securities pursuant to such option of the Holder to
require repayment of Securities before their Stated Maturity, for purposes of
Section 3.9, shall not operate as a payment, redemption or satisfaction of the
Indebtedness represented by such Securities unless and until the Company, at
its option, shall deliver or surrender the same to the Trustee with a directive
that such Securities be cancelled. Notwithstanding anything to the contrary
contained in this Section 13.1, in connection with any repayment of Securities,
the Company may arrange for the purchase of any Securities by an agreement with
one or more investment bankers or other purchasers to purchase such Securities
by paying to the Holders of such Securities on or before the close of business
on the repayment date an amount not less than the repayment price payable by
the Company on repayment of such Securities, and the obligation of the Company
to pay the repayment price of such Securities shall be satisfied and discharged
to the extent such payment is so paid by such purchasers.

ARTICLE 14

SECURITIES IN FOREIGN CURRENCIES

Section 14.1        Applicability of Article.

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Whenever this Indenture provides for (i) any action
by, or the determination of any of the rights of, Holders of Securities of any
series in which not all of such Securities are denominated in the same
Currency, or (ii) any distribution to Holders of Securities, in the absence of
any provision to the contrary in the form of Security of any particular series
or pursuant to this Indenture or the Securities, any amount in respect of any
Security denominated in a Currency other than Dollars shall be treated for any
such action or distribution as that amount of Dollars that could be obtained
for such amount on such reasonable basis of exchange and as of the record date
with respect to Registered Securities of such series (if any) for such action,
determination of rights or distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such action,
determination of rights or distribution) as the Company or the Guarantor may specify
in a written notice to the Trustee.

ARTICLE 15

MEETINGS OF HOLDERS OF SECURITIES

Section 15.1        Purposes for Which Meetings May Be
Called.

A meeting of Holders of Securities of any series may
be called at any time and from time to time pursuant to this Article to make,
give or take any request, demand, authorization, direction, notice, consent,
waiver or other Act provided by this Indenture to be made, given or taken by
Holders of Securities of such series.

Section 15.2        Call, Notice and Place of Meetings.

(1)  The Trustee may at any time call a meeting of
Holders of Securities of any series for any purpose specified in Section 15.1,
to be held at such time and at such place in the Borough of Manhattan, The City
of New York, or, if Securities of such series have been issued in whole or in
part as Bearer Securities, in London or in such place outside the United States
as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 1.6, not less than 21 nor more than
180 days prior to the date fixed for the meeting.

(2)  In case at any time the Company (by or
pursuant to a Board Resolution), the Guarantor (by or pursuant to a Guarantor’s
Board Resolution) or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified
in Section 15.1, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed notice of or made the first publication of the notice of such meeting
within 21 days after receipt of such request (whichever shall be required
pursuant to Section 1.6) or shall not thereafter proceed to cause the meeting
to be held as provided herein, then the Company, the Guarantor or the Holders
of Securities of such series in the amount above specified, as the case may be,
may determine the time and the place in the Borough of Manhattan, The City of
New York, or, if Securities of such series are to be issued as Bearer
Securities, in

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London for such
meeting and may call such meeting for such purposes by giving notice thereof as
provided in clause (1) of this Section.

Section 15.3        Persons Entitled to Vote at Meetings.

To be entitled to vote at any meeting of Holders of
Securities of any series, a Person shall be (1) a Holder of one or more
Outstanding Securities of such series, or (2) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
Outstanding Securities of such series by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel, any representatives of the Guarantor and its counsel and any
representatives of the Company and its counsel.

Section 15.4        Quorum; Action.

The Persons entitled to vote a majority in principal
amount of the Outstanding Securities of a series shall constitute a quorum for any
meeting of Holders of Securities of such series. In the absence of a quorum
within 30 minutes after the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any reconvened
meeting, such reconvened meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such reconvened meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 15.2(1), except that such
notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage, as provided above,
of the principal amount of the Outstanding Securities of such series which
shall constitute a quorum.

Except as limited by the proviso to Section 9.2, any
resolution presented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted only by the affirmative vote of
the Holders of a majority in principal amount of the Outstanding Securities of
that series; provided, however, that, except as limited by the proviso to
Section 9.2, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other Act which this Indenture expressly
provides may be made, given or taken by the Holders of a specified percentage,
which is less than a majority, in principal amount of the Outstanding
Securities of a series may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid by the affirmative
vote of the Holders of such specified percentage in principal amount of the
Outstanding Securities of such series.

Any resolution passed or decision taken at any meeting
of Holders of Securities of any series duly held in accordance with this
Section shall be binding on all the Holders of Securities of such series and
the Coupons appertaining thereto, whether or not such Holders were present or
represented at the meeting.

 

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Section 15.5        Determination
of Voting Rights; Conduct and Adjournment of Meetings.

(1)  Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of such series in regard to
proof of the holding of Securities of such series and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 1.4 and the appointment of any proxy shall be proved in
the manner specified in Section 1.4 or by having the signature of the person
executing the proxy witnessed or guaranteed by any trust company, bank or
banker authorized by Section 1.4 to certify to the holding of Bearer
Securities. Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine without the
proof specified in Section 1.4 or other proof.

(2)  The Trustee shall, by an instrument in
writing, appoint a temporary chairman of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as provided in
Section 15.2(2), in which case the Company, the Guarantor or the Holders of
Securities of the series calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Persons entitled to
vote a majority in principal amount of the Outstanding Securities of such
series represented at the meeting.

(3)  At any meeting, each Holder of a Security of
such series or proxy shall be entitled to one vote for each $1,000 principal
amount of Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.

(4)  Any meeting of Holders of Securities of any
series duly called pursuant to Section 15.2 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series represented at the meeting;
and the meeting may be held as so adjourned without further notice.

Section 15.6        Counting Votes and Recording Action of
Meetings.

The vote upon any resolution submitted to any meeting
of Holders of Securities of any series shall be by written ballots on which
shall be subscribed the signatures of the Holders of Securities of such series
or of their representatives by proxy and the principal amounts and serial
numbers of the Outstanding Securities of such series held or represented by
them. The permanent chairman of the meeting shall appoint two inspectors of
votes who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the 

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meeting their verified
written reports in triplicate of all votes cast at the meeting. A record, at
least in triplicate, of the proceedings of each meeting of Holders of
Securities of any series shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors
of votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was given as provided in Section 15.2 and,
if applicable, Section 15.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and the Guarantor, and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.

ARTICLE 16

SUBORDINATION OF SECURITIES

Section 16.1        Agreement to Subordinate.

The Company covenants and agrees, and each Holder of
Securities issued hereunder and under any indenture supplemental hereto or
pursuant to a Board Resolution, Officer’s Certificate and Guarantor’s Officer’s
Certificate (“Additional Provisions”) by such Holder’s acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article 16; and each Holder of a Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.

The payment by the Company of the principal of, any
premium and interest (including any Additional Interest) on and any Additional
Amounts with respect to all Securities of each series issued hereunder and
under any Additional Provisions shall, to the extent and in the manner
hereinafter set forth, be subordinate in right of payment to the prior payment
in full of all Company Senior Indebtedness with respect to such series, whether
outstanding at the date of this Indenture or thereafter incurred.

No provision of this Article 16 shall prevent the
occurrence of any default or Event of Default hereunder.

Section 16.2        Default on Company Senior Indebtedness.

In the event and during the continuation of any
default by the Company in the payment of principal, premium, interest or any
other amount due on any Company Senior Indebtedness with respect to the
Securities of any series, or in the event that the maturity of any Company
Senior Indebtedness with respect to the Securities of any series has been
accelerated because of a default, then, in either case, no payment shall be
made by the Company with respect to the principal (including redemption and
sinking fund payments) of, any premium or interest (including any Additional
Interest) on, or any Additional Amounts with respect to, the Securities of such
series.

In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 16.2, such 

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payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders
of such Company Senior Indebtedness or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any of such
Company Senior Indebtedness may have been issued, as their respective interests
may appear, but only to the extent that the holders of such Company Senior
Indebtedness (or their representative or representatives or a trustee) notify
the Trustee in writing within 90 days of such payment of the amounts then due
and owing on such Company Senior Indebtedness and only the amounts specified in
such notice to the Trustee shall be paid to the holders of such Company Senior
Indebtedness.

Section 16.3        Liquidation;
Dissolution; Bankruptcy.

Upon any payment by the Company or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due upon
all Company Senior Indebtedness with respect to the Securities of any series
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company on account
of the principal of, premium or interest (including any Additional Interest) on,
or Additional Amounts with respect to, the Securities of such series; and upon
any such dissolution, winding-up, liquidation or reorganization, or in any such
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
would be entitled to receive from the Company, except for the provisions of
this Article 16, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them or it, directly to the holders of such Company Senior Indebtedness
(pro rata to such holders on the basis of the respective amounts of such
Company Senior Indebtedness held by such holders, as calculated by the Company)
or their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Company Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay such Company Senior Indebtedness in full, in money
or money’s worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Company Senior Indebtedness, before any payment
or distribution is made to the Holders of the Securities of such series or to
the Trustee.

In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, prohibited by the foregoing shall be
received by the Trustee before all such Company Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Company Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Company Senior Indebtedness may have been issued, as their respective interests
may appear, as calculated by the Company, for application to the payment of all
such Company Senior Indebtedness remaining unpaid to the extent necessary to
pay such Company Senior 

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Indebtedness in full in
money in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the benefit of the holders of such Company
Senior Indebtedness.

For purposes of this Article 16, the words “cash,
property or securities” shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article 16 with respect to the Securities of the relevant series to the payment
of all Company Senior Indebtedness with respect to the Securities of such
series that may at the time be outstanding, provided that (i) such Company
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment, and (ii) the rights of the holders of
such Company Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance, transfer or
lease of its property as an entirety, or substantially as an entirety, to
another Person upon the terms and conditions provided for in Sections 8.1 and
8.2 of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 16.3 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Sections 8.1 and 8.2 of this
Indenture. Nothing in Section 16.2 or in this Section 16.3 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.6 of this
Indenture.

Section 16.4        Subrogation.

Subject to the payment in full of all Company Senior
Indebtedness with respect to the Securities of any series, the rights of the
Holders of the Securities of such series shall be subrogated to the rights of
the holders of such Company Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to such
Company Senior Indebtedness until the principal of, any premium and interest
(including any Additional Interest) on, and any Additional Amounts with respect
to, the Securities of such series shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of such
Company Senior Indebtedness of any cash, property or securities to which the
Holders or the Trustee would be entitled except for the provisions of this
Article 16, and no payment over pursuant to the provisions of this Article 16
to or for the benefit of the holders of such Company Senior Indebtedness by
Holders of the Securities of such series or the Trustee, shall, as between the
Company, its creditors other than holders of such Company Senior Indebtedness,
and the Holders of the Securities of such series, be deemed to be a payment by
the Company to or on account of such Company Senior Indebtedness. It is
understood that the provisions of this Article 16 are and are intended solely
for the purposes of defining the relative rights of the Holders of the
Securities of each series, on the one hand, and the holders of the Company
Senior Indebtedness with respect to the Securities of such series on the other
hand.

Nothing contained in this Article 16 or elsewhere in
this Indenture, any Additional Provisions or in the Securities of any series is
intended to or shall impair, as between the Company, its creditors other than
the holders of Company Senior Indebtedness with respect to the Securities of
such series, and the Holders of the Securities of such series, the obligation
of the 

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Company, which is
absolute and unconditional, to pay to the Holders of the Securities of such
series the principal of, any premium and interest (including any Additional
Interest) on, and any Additional Amounts with respect to, the Securities of
such series as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities of such series and creditors of the Company, other
than the holders of such Company Senior Indebtedness, nor shall anything herein
or therein prevent the Trustee or the Holder of any Security of such series
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 16 of
the holders of such Company Senior Indebtedness in respect of cash, property or
securities of the Company, as the case may be, received upon the exercise of
any such remedy.

Upon any payment or distribution of assets of the
Company referred to in this Article 16, the Trustee, subject to the provisions
of Article 6 of this Indenture, and the Holders shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities of any series, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of Company Senior Indebtedness
with respect to the Securities of such series and other indebtedness of the
Company, as the case may be, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 16.

Section 16.5        Trustee to Effectuate Subordination.

Each Holder of Securities by such Holder’s acceptance
thereof authorizes and directs the Trustee on such Holder’s behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article 16 and appoints the Trustee such Holder’s
attorney-in-fact for any and all such purposes.

Section 16.6        Notice by the Company.

The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee in respect of
the Securities of any series pursuant to the provisions of this Article 16.
Notwithstanding the provisions of this Article 16 or any other provision of
this Indenture or any Additional Provisions, the Trustee shall not be charged
with knowledge of the existence of any facts that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities of any
series pursuant to the provisions of this Article 16, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Company Senior Indebtedness with
respect to the Securities of such series or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Article 6 of this Indenture, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 16.6 at least two
Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without 

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limitation, the payment
of the principal of, any premium or interest (including any Additional
Interest) on, or any Additional Amounts with respect to, any Security of such
series), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.

The Trustee, subject to the provisions of Article 6 of
this Indenture, shall be entitled to conclusively rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Company
Senior Indebtedness with respect to the Securities of any series (or a trustee
on behalf of such holder), to establish that such notice has been given by a
holder of such Company Senior Indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a
holder of such Company Senior Indebtedness to participate in any payment or
distribution pursuant to this Article 16, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such Company Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
16, and, if such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.

Upon any payment or distribution of assets of the
Company referred to in this Article 16, the Trustee and the Holders shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding-up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
Person making such payment or distribution, delivered to the Trustee or to the
Holders of the Securities of any series, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Company Senior Indebtedness with respect to the Securities of such series and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 16.

Section 16.7        Rights of the Trustee; Holders of
Company Senior Indebtedness.

The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article 16 in respect of any
Company Senior Indebtedness with respect to the Securities of any series at any
time held by it, to the same extent as any other holder of such Company Senior
Indebtedness, and nothing in this Indenture or any Additional Provisions shall
deprive the Trustee of any of its rights as such holder.

With respect to the holders of Company Senior
Indebtedness with respect to the Securities of any series, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 16, and no implied covenants or
obligations with respect to the holders of such Company Senior Indebtedness
shall be read into this Indenture or any Additional Provisions against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Company Senior Indebtedness 

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and, subject to the
provisions of Article 6 of this Indenture, the Trustee shall not be liable to
any holder of such Company Senior Indebtedness if it shall pay over or deliver
to Holders of the Securities of such series, the Company or any other Person
money or assets to which any holder of such Company Senior Indebtedness shall
be entitled by virtue of this Article 16 or otherwise.

Nothing in this Article 16 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 6.6.

Section 16.8        Subordination
May Not Be Impaired

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

Without in any way limiting the generality of the
foregoing paragraph, the holders of Company Senior Indebtedness with respect to
the Securities of any series may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of Securities of such
series, without incurring responsibility to such Holders and without impairing
or releasing the subordination provided in this Article 16 or the obligations
hereunder of the Holders of the Securities of such series to the holders of
such Company Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Company Senior Indebtedness, or otherwise amend or
supplement in any manner such Company Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Company Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing such Company Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of such Company Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.

ARTICLE 17

GUARANTEE AND INDEMNITY

Section 17.1        The Guarantee.

The Guarantor hereby unconditionally guarantees to
each Holder of a Security authenticated and delivered by the Trustee the due
and punctual payment of the principal of, any premium and interest (including
any Additional Interest) on, any Additional Amounts, and, if applicable, any
Additional Sums with respect to such Security and the due and punctual payment
of the sinking fund payments (if any) provided for pursuant to the terms of
such Security, when and as the same shall become due and payable, whether at
maturity, by acceleration, redemption, repayment or otherwise, in accordance
with the terms of such Security and of this Indenture. In case of the failure
of the Company punctually to pay any such principal, premium, interest
(including any Additional Interest), Additional Amounts, Additional Sums or
sinking fund 

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payment, the Guarantor
hereby agrees to cause any such payment to be made punctually when and as the
same shall become due and payable, whether at maturity, upon acceleration,
redemption, repayment or otherwise, and as if such payment were made by the
Company.

Section 17.2        Net Payments.

All payments of principal of and premium, if any,
interest (including any Additional Interest) and any other amounts on, or in
respect of, the Securities of any series or any Coupon appertaining thereto
shall be made by the Guarantor without withholding or deduction at source for,
or on account of, any present or future taxes, fees, duties, assessments or
governmental charges of whatever nature imposed or levied by or on behalf of
Bermuda (a “taxing jurisdiction”) or any political subdivision or taxing
authority thereof or therein, unless such taxes, fees, duties, assessments or
governmental charges are required to be withheld or deducted by (i) the laws
(or any regulations or ruling promulgated thereunder) of a taxing jurisdiction
or any political subdivision or taxing authority thereof or therein or (ii) an
official position regarding the application, administration, interpretation or
enforcement of any such laws, regulations or rulings (including, without
limitation, a holding by a court of competent jurisdiction or by a taxing
authority in a taxing jurisdiction or any political subdivision thereof). If a
withholding or deduction at source is required, the Guarantor shall, subject to
certain limitations and exceptions set forth below, pay to the Holder of any
such Security or any Coupon appertaining thereto such Additional Amounts as may
be necessary so that every net payment of principal, premium, if any, interest
or any other amount made to such Holder, after such withholding or deduction,
shall not be less than the amount provided for in such Security, any Coupons
appertaining thereto and this Indenture to be then due and payable; provided,
however, that the Guarantor shall not be required to make payment of such
Additional Amounts for or on account of:

(1)  any tax, fee, duty, assessment or
governmental charge of whatever nature which would not have been imposed but
for the fact that such Holder: (A) was a resident, domiciliary or national of,
or engaged in business or maintained a permanent 101 establishment or was
physically present in, the relevant taxing jurisdiction or any political
subdivision thereof or otherwise had some connection with the relevant taxing
jurisdiction other than by reason of the mere ownership of, or receipt of
payment under, such Security; (B) presented such Security for payment in the
relevant taxing jurisdiction or any political subdivision thereof, unless such
Security could not have been presented for payment elsewhere; or (C) presented
such Security more than thirty (30) days after the date on which the payment in
respect of such Security first became due and payable or provided for,
whichever is later, except to the extent that the Holder would have been
entitled to such Additional Amounts if it had presented such Security for
payment on any day within such period of thirty (30) days;

(2)  any estate, inheritance, gift, sale,
transfer, personal property or similar tax, assessment or other governmental
charge;

(3)  any tax, assessment or other governmental
charge that is imposed or withheld by reason of the failure by the Holder or
the beneficial owner of such Security to comply with any reasonable request by
the Guarantor addressed to the Holder within 90 days of 

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such request (A)
to provide information concerning the nationality, residence or identity of the
Holder or such beneficial owner or (B) to make any declaration or other similar
claim or satisfy any information or reporting requirement, which, in the case
of (A) or (B), is required or imposed by statute, treaty, regulation or
administrative practice of the relevant taxing jurisdiction or any political
subdivision thereof as a precondition to exemption from all or part of such
tax, assessment or other governmental charge; or (4) any combination of items
(1), (2) and (3); nor shall Additional Amounts be paid with respect to any
payment of the principal of, or premium, if any, interest or any other amounts
on, any such Security to any Holder who is a fiduciary or partnership or other
than the sole beneficial owner of such Security to the extent such payment
would be required by the laws of the relevant taxing jurisdiction (or any
political subdivision or relevant taxing authority thereof or therein) to be
included in the income for tax purposes of a beneficiary or partner or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner who would not have been entitled to such Additional Amounts had it been
the Holder of the Security.

Whenever in this Indenture there is mentioned, in any
context, the payment of the principal of or any premium, interest or any other
amounts on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding the payment of Additional Amounts in those
provisions hereof where such express mention is not made.

Except as otherwise provided in or pursuant to this
Indenture or the Securities of the applicable series, at least 10 days prior to
the first Interest Payment Date with respect to a series of Securities (or if
the Securities of such series shall not bear interest prior to Maturity, the
first day on which a payment of principal is made), and at least 10 days prior
to each date of payment of principal or interest if there has been any change
with respect to the matters set forth in the below-mentioned Guarantor’s
Officer’s Certificate, the Guarantor shall furnish to the Trustee and the
principal Paying Agent or Paying Agents, if other than the Trustee, a Guarantor’s
Officer’s Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal of and premium, if any, interest or
any other amounts on the Securities of such series shall be made to Holders of
Securities of such series or the Coupons appertaining thereto without
withholding for or on account of any tax, fee, duty, assessment or other
governmental charge described in this Section 17.2. If any such withholding
shall be required, then such Guarantor’s Officer’s Certificate shall specify by
taxing jurisdiction the amount, if any, required to be withheld on such
payments to such Holders of Securities or Coupons, and the Guarantor agrees to
pay to the Trustee or such Paying Agent the Additional Amounts required by this
Section 17.2. The Guarantor covenants to indemnify the Trustee and any Paying
Agent for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out
of or in connection with actions taken or omitted by any of them in reliance on
any Guarantor’s Officer’s Certificate furnished pursuant to this Section 17.2.

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Section 17.3           Guarantee
Unconditional, etc.

The Guarantor hereby agrees that its obligations
hereunder shall be as principal and not merely as surety, and shall be
absolute, irrevocable and unconditional, irrespective of, and shall be
unaffected by, any invalidity, irregularity or unenforceability of any Security
or this Indenture, any failure to enforce the provisions of any Security or
this Indenture, or any waiver, modification, consent or indulgence granted with
respect thereto by the Holder of such Security or the Trustee, the recovery of
any judgment against the Company or any action to enforce the same, or any
other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
merger, insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest or notice with respect to any
such Security or the Indebtedness evidenced thereby and all demands whatsoever,
and covenants that this Guarantee will not be discharged except by payment in full
of the principal of, any premium and interest (including any Additional
Interest) on, and any Additional Amounts, and, if applicable, any Additional
Sums and sinking fund payments required with respect to, the Securities and the
complete performance of all other obligations contained in the Securities. The
Guarantor further agrees, to the fullest extent that it lawfully may do so,
that, as between the Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, the Maturity of the obligations guaranteed hereby
may be accelerated as provided in Section 5.2 hereof for the purposes of this
Guarantee, notwithstanding any stay, injunction or prohibition extant under any
bankruptcy, insolvency, reorganization or other similar law of any jurisdiction
preventing such acceleration in respect of the obligations guaranteed hereby.

Section 17.4        Reinstatement.

This Guarantee shall continue to be effective or be
reinstated, as the case may be, if at any time payment on any Security, in
whole or in part, is rescinded or must otherwise be restored to the Company or
the Guarantor upon the bankruptcy, liquidation or reorganization of the Company
or otherwise.

Section 17.5        Subrogation.

The Guarantor shall be subrogated to all rights of the
Holder of any Security against the Company in respect of any amounts paid to
such Holder by the Guarantor pursuant to the provisions of this Guarantee;
provided, however, that the Guarantor shall not be entitled to enforce, or to
receive any payments arising out of or based upon, such right of subrogation
until the principal of, any premium and interest (including any Additional
Interest) on, and any Additional Amounts and, if applicable, any Additional
Sums and sinking fund payments required with respect to, all Securities shall
have been paid in full.

Section 17.6        Indemnity.

As a separate and alternative stipulation, the
Guarantor unconditionally and irrevocably agrees that any sum expressed to be
payable by the Company under this Indenture, the Securities or the Coupons but
which is for any reason (whether or not now known or becoming known to the
Company, the Guarantor, the Trustee or any Holder of any Security or Coupon)
not 

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recoverable from the
Guarantor on the basis of a guarantee will nevertheless be recoverable from it
as if it were the sole principal debtor and will be paid by it to the Trustee
on demand. This indemnity constitutes a separate and independent obligation
from the other obligations in this Indenture, gives rise to a separate and
independent cause of action and will apply irrespective of any indulgence
granted by the Trustee or any Holder of any Security or Coupon.

ARTICLE 18

SUBORDINATION OF GUARANTEE

Section 18.1        Agreement to Subordinate Guarantee.

The Guarantor covenants and agrees, and each Holder of
Securities issued hereunder and under any Additional Provisions, by such Holder’s
acceptance thereof likewise covenants and agrees, that all Securities shall be
issued subject to the provisions of this Article 18; and each Holder of a
Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.

The payment by the Guarantor pursuant to the Guarantee
of the principal of, any premium and interest (including any Additional
Interest) on, any Additional Amounts and, if applicable, any Additional Sums
with respect to all Securities of each series issued hereunder and under any
Additional Provisions shall, to the extent and in the manner hereinafter set
forth, be subordinate in right of payment to the prior payment in full of all
Guarantor Senior Indebtedness with respect to such series, whether outstanding
at the date of this Indenture or thereafter incurred.

No provision of this Article 18 shall prevent the
occurrence of any default or Event of Default hereunder.

Section 18.2        Default on Guarantor Senior
Indebtedness.

In the event and during the continuation of any
default by the Guarantor in the payment of principal, premium, interest
(including any Additional Interest) or any other amount due on any Guarantor
Senior Indebtedness with respect to the Securities of any series, or in the
event that the maturity of any Guarantor Senior Indebtedness with respect to
the Securities of any series has been accelerated because of a default, then,
in either case, no payment shall be made by the Guarantor pursuant to the
Guarantee with respect to the principal (including redemption and sinking fund
payments) of, any premium or interest (including any Additional Interest) on,
or any Additional Amounts or, if applicable, Additional Sums with respect to,
the Securities of such series.

In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 18.2, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of such
Guarantor Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Guarantor
Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that the holders of such Guarantor Senior
Indebtedness (or their representative or 

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representatives or a
trustee) notify the Trustee in writing within 90 days of such payment of the
amounts then due and owing on such Guarantor Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
such Guarantor Senior Indebtedness.

Section 18.3        Liquidation;
Dissolution; Bankruptcy.

Upon any payment by the Guarantor or distribution of
assets of the Guarantor of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Guarantor, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due upon
all Guarantor Senior Indebtedness with respect to the Securities of any series
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Guarantor pursuant
to the Guarantee on account of the principal of, premium or interest (including
any Additional Interest) on, or Additional Amounts or, if applicable,
Additional Sums with respect to, the Securities of such series; and upon any
such dissolution, winding-up, liquidation or reorganization, or in any such
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Guarantor, or distribution of assets of the Guarantor of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
would be entitled to receive from the Guarantor, except for the provisions of
this Article 18, shall be paid by the Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under this Indenture if
received by them or it, directly to the holders of such Guarantor Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts
of such Guarantor Senior Indebtedness held by such holders, as calculated by
the Guarantor) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Guarantor Senior
Indebtedness in full, in money or money’s worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Guarantor
Senior Indebtedness, before any payment or distribution is made pursuant to the
Guarantee to the Holders of the Securities of such series or to the Trustee.

In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Guarantor pursuant to the Guarantee of
any kind or character, whether in cash, property or securities, prohibited by
the foregoing shall be received by the Trustee before all such Guarantor Senior
Indebtedness is paid in full, or provision is made for such payment in money in
accordance with its terms, such payment or distribution shall be held in trust
for the benefit of and shall be paid over or delivered to the holders of such
Guarantor Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Guarantor, for
application to the payment of all such Guarantor Senior Indebtedness remaining
unpaid to the extent necessary to pay such Guarantor Senior Indebtedness in
full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of such
Guarantor Senior Indebtedness.

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For purposes of this Article 18, the words “cash,
property or securities” shall not be deemed to include shares of stock of the
Guarantor as reorganized or readjusted, or securities of the Guarantor or any
other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article 18 with respect to the Guarantee in respect of any series of Securities
to the payment of all Guarantor Senior Indebtedness with respect to the Securities
of such series that may at the time be outstanding, provided that (i) such
Guarantor Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of such Guarantor Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Guarantor with, or the merger of the Guarantor into,
another Person or the liquidation or dissolution of the Guarantor following the
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Sections 8.3 and 8.4 of this Indenture shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 18.3
if such other Person shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the conditions stated in Sections 8.3 and 8.4 of this
Indenture. Nothing in Section 18.2 or in this Section 18.3 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.6 of this
Indenture.

Section 18.4        Subrogation.

Subject to the payment in full of all Guarantor Senior
Indebtedness with respect to the Securities of any series, the rights of the
Holders of the Securities of such series shall be subrogated to the rights of
the holders of such Guarantor Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Guarantor applicable to
such Guarantor Senior Indebtedness until the principal of, any premium and
interest (including any Additional Interest) on, and any Additional Amounts or,
if applicable, Additional Sums with respect to, the Securities of such series
shall be paid in full; and, for the purposes of such subrogation, no payments
or distributions to the holders of such Guarantor Senior Indebtedness of any
cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article 18, and no payment over
pursuant to the provisions of this Article 18 to or for the benefit of the
holders of such Guarantor Senior Indebtedness by Holders of the Securities of
such series or the Trustee, shall, as between the Guarantor, its creditors
other than holders of such Guarantor Senior Indebtedness, and the Holders of
the Securities of such series, be deemed to be a payment by the Guarantor to or
on account of such Guarantor Senior Indebtedness. It is understood that the provisions
of this Article 18 are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities of each series, on the one
hand, and the holders of such Guarantor Senior Indebtedness with respect to the
Securities of such series on the other hand.

Nothing contained in this Article 18 or elsewhere in
this Indenture, any Additional Provisions or in the Securities of any series is
intended to or shall impair, as between the Guarantor, its creditors other than
the holders of Guarantor Senior Indebtedness with respect to the Securities of
such series, and the Holders of the Securities of such series, the obligation
of the Guarantor, which is absolute and unconditional, to pay to the Holders of
the Securities of such series pursuant to the Guarantee the principal of, any
premium and interest (including any Additional Interest) on, and any Additional
Amounts or, if applicable, Additional Sums with

 

 102
 

 

respect to, the Securities of such series as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the
Securities of such series and creditors of the Guarantor, other than the
holders of such Guarantor Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security of such series from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 18 of
the holders of such Guarantor Senior Indebtedness in respect of cash, property
or securities of the Guarantor, as the case may be, received upon the exercise
of any such remedy.

Upon any payment or distribution of assets of the
Guarantor referred to in this Article 18, the Trustee, subject to the
provisions of Article 6 of this Indenture, and the Holders shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities of any series, for the purposes of ascertaining the Persons entitled
to participate in such distribution, the holders of Guarantor Senior
Indebtedness with respect to the Securities of such series and other
indebtedness of the Guarantor, as the case may be, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 18.

Section 18.5        Trustee to Effectuate Subordination.

Each Holder of Securities by such Holder’s acceptance
thereof authorizes and directs the Trustee on such Holder’s behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article 18 and appoints the Trustee such Holder’s
attorney-in-fact for any and all such purposes.

Section 18.6        Notice by the Guarantor.

The Guarantor shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Guarantor that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities of any series pursuant to the provisions of this
Article 18. Notwithstanding the provisions of this Article 18 or any other
provision of this Indenture or any Additional Provisions, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities of any series pursuant to the provisions of this Article 18, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Guarantor or a holder or holders of Guarantor Senior
Indebtedness with respect to the Securities of such series or from any trustee
therefor; and before the receipt of any such written notice, the Trustee,
subject to the provisions of Article 6 of this Indenture, shall be entitled in
all respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 18.6 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment pursuant to the Guarantee of the principal of, any premium or interest
(including any Additional Interest) on, or any Additional Amounts or, if
applicable, Additional Sums with respect to, any Security of such series),
then, anything herein contained to the

 103
 

 

contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purposes
for which they were received, and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such
date.

The Trustee, subject to the provisions of Article 6 of
this Indenture, shall be entitled to conclusively rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Guarantor
Senior Indebtedness with respect to the Securities of any series (or a trustee
on behalf of such holder), to establish that such notice has been given by a
holder of such Guarantor Senior Indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of such Guarantor Senior Indebtedness to participate in any payment or
distribution pursuant to this Article 18, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such Guarantor Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
18, and, if such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.

Upon any payment or distribution of assets of the
Guarantor referred to in this Article 18, the Trustee and the Holders shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding-up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
Person making such payment or distribution, delivered to the Trustee or to the
Holders of the Securities of any series, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Guarantor Senior Indebtedness with respect to the Securities of such series and
other indebtedness of the Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 18.

Section 18.7        Rights of the Trustee; Holders of
Guarantor Senior Indebtedness.

The Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article 18 in respect of any
Guarantor Senior Indebtedness with respect to the Securities of any series at
any time held by it, to the same extent as any other holder of such Guarantor
Senior Indebtedness, and nothing in this Indenture or any Additional Provisions
shall deprive the Trustee of any of its rights as such holder.

With respect to the holders of Guarantor Senior
Indebtedness with respect to the Securities of any series, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 18, and no implied covenants or
obligations with respect to the holders of such Guarantor Senior Indebtedness
shall be read into this Indenture or any Additional Provisions against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Guarantor Senior Indebtedness and, subject to the provisions of
Article 6 of this Indenture, the Trustee shall not be liable to any holder of such
Guarantor Senior Indebtedness if it shall pay over or deliver to Holders of the

 104
 

 

Securities of such series, the Guarantor or any other
Person money or assets to which any holder of such Guarantor Senior
Indebtedness shall be entitled by virtue of this Article 18 or otherwise.

Nothing in this Article 18 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 6.6.

Section 18.8        Subordination May Not Be Impaired.

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

Without in any way limiting the generality of the
foregoing paragraph, the holders of Guarantor Senior Indebtedness with respect
to the Securities of any series may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of Securities of such
series, without incurring responsibility to such Holders and without impairing
or releasing the subordination provided in this Article 18 or the obligations
hereunder of the Holders of the Securities of such series to the holders of
such Guarantor Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Guarantor Senior Indebtedness, or otherwise amend or
supplement in any manner such Guarantor Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Guarantor Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing such Guarantor
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Guarantor Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Guarantor and any other Person.

*  *  *

 105
 

 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Indenture to be duly executed, and
their respective corporate seals to be hereunto affixed, all as of the day and
year first above written.

	
  

  	
  ASSURED GUARANTY US HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED GUARANTY,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 106Exhibit 4.2

 

FIRST
SUPPLEMENTAL SUBORDINATED INDENTURE

dated as of December 20, 2006

among

ASSURED GUARANTY US HOLDINGS INC.,

Issuer,

ASSURED GUARANTY LTD.,

Guarantor,

and

THE BANK OF NEW YORK,

Trustee

   
 

 

 

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  	
   

  
	
  ARTICLE 1

  	
   

  	
   

  	
   

  
	
  DEFINITIONS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.   Definitions of Terms

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  	
   

  
	
  GENERAL TERMS
  AND CONDITIONS OF THE CAPITAL SECURITIES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.   Designation and Principal Amount

  	
   

  	
  11

  	
   

  
	
  Section 2.02.   Maturity

  	
   

  	
  12

  	
   

  
	
  Section 2.03.   Form and Payment

  	
   

  	
  12

  	
   

  
	
  Section 2.04.   Interest

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  	
   

  
	
  REDEMPTION OF
  THE CAPITAL SECURITIES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.   Optional Redemption

  	
   

  	
  15

  	
   

  
	
  Section 3.02.   Redemption Procedure for Capital Securities

  	
   

  	
  16

  	
   

  
	
  Section 3.03.   Payment of Securities Called for Redemption

  	
   

  	
  16

  	
   

  
	
  Section 3.04.   No Sinking Fund

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  	
   

  
	
  OPTIONAL DEFERRAL
  OF INTEREST

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.   Optional Deferral of Interest

  	
   

  	
  17

  	
   

  
	
  Section 4.02.   Notices of Deferral

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  	
   

  
	
  EVENTS OF DEFAULT

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.   Events of Default

  	
   

  	
  18

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.   Certain Restrictions During Optional Deferral Periods

  	
   

  	
  20

  	
   

  
	
  Section 6.02.   Obligation to Effect Certain Sales of Qualifying Securities;
  Alternative Coupon Satisfaction Mechanism

  	
   

  	
  21

  	
   

  
	
  Section 6.03.   Payment of Expenses

  	
   

  	
  24

  	
   

  
	
  Section 6.04.   Payment upon Resignation or Removal

  	
   

  	
  24

  	
   

  

 

 i
 

 

 

	
  

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  	
   

  
	
  SUBORDINATION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.   Agreement to Subordinate

  	
   

  	
  24

  	
   

  
	
  Section 7.02.   Liquidation; Dissolution; Bankruptcy

  	
   

  	
  24

  	
   

  
	
  Section 7.03.   Default on Company Senior Indebtedness

  	
   

  	
  25

  	
   

  
	
  Section 7.04.   When Distribution Must Be Paid Over

  	
   

  	
  25

  	
   

  
	
  Section 7.05.   Subrogation

  	
   

  	
  26

  	
   

  
	
  Section 7.06.   Relative Rights

  	
   

  	
  26

  	
   

  
	
  Section 7.07.   Rights of the Trustee; Holders of Company Senior Indebtedness

  	
   

  	
  27

  	
   

  
	
  Section 7.08.   Subordination May Not Be Impaired

  	
   

  	
  27

  	
   

  
	
  Section 7.09.   Distribution

  	
   

  	
  27

  	
   

  
	
  Section 7.10.   Authorization to Effect Subordination

  	
   

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  	
   

  
	
  NOTICE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.01.   Notice by the Company

  	
   

  	
  28

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  	
   

  
	
  FORM OF CAPITAL
  SECURITY

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.01.   Form of Capital Security

  	
   

  	
  29

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  	
   

  
	
  ORIGINAL ISSUE
  OF CAPITAL SECURITIES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.01.   Original Issue of Capital Securities

  	
   

  	
  38

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
   

  	
   

  
	
  LIMITATION ON CLAIMS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 11.01.   Limitation on Claim for Deferred Interest

  	
   

  	
  39

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
   

  	
   

  
	
  DEFEASANCE of CERTAIN
  COVENANTS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.01.   Termination of the Company’s Obligations Under Certain Covenants

  	
   

  	
  39

  	
   

  
	
  Section 12.02.   Application of Trust Money

  	
   

  	
  41

  	
   

  
	
  Section 12.03.   Repayment to Company

  	
   

  	
  41

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 13.01.   Ratification of Indenture

  	
   

  	
  41

  	
   

  

 

 ii
 

 

 

	
  Section 13.02.   Trustee Not Responsible for Recitals; Concerning the Calculation
  Agent

  	
   

  	
  41

  	
   

  
	
  Section 13.03.   Governing Law

  	
   

  	
  42

  	
   

  
	
  Section 13.04.   Separability

  	
   

  	
  42

  	
   

  
	
  Section 13.05.   Counterparts

  	
   

  	
  42

  	
   

  

 

 iii

 

 

FIRST
SUPPLEMENTAL SUBORDINATED INDENTURE, dated as of December 20, 2006 (the “First Supplemental Subordinated Indenture”), among Assured
Guaranty US Holdings Inc., a corporation duly organized and existing under the
laws of the State of Delaware (the “Company”),
Assured Guaranty Ltd., a company duly organized and existing under the laws of
Bermuda (the “Guarantor”), and The Bank of New
York, a banking corporation duly organized and existing under the laws of the
State of New York, as trustee (the “Trustee”),
supplementing the Indenture, among the Company, the Guarantor, and the Trustee,
dated as of December 1, 2006 (the “Base Indenture”).

WHEREAS,
the Company executed and delivered the Base Indenture to provide for the future
issuance of the Company’s subordinated unsecured debentures, notes or other
evidence of indebtedness, to be issued from time to time in one or more series
as might be determined by the Company under the Base Indenture;

WHEREAS,
pursuant to the terms of the Base Indenture and this First Supplemental
Subordinated Indenture (together, the “Junior
Subordinated  Indenture”),
the Company desires to provide for the establishment of a new series of its
Securities to be known as its Series A Enhanced Junior Subordinated Debentures
due 2066 (the “Capital Securities”), which shall
be in the form of junior subordinated debentures, with specific terms and
provisions, the form and substance of such Capital Securities and the terms,
provisions and conditions thereof to be set forth as provided in the Junior
Subordinated Indenture;

WHEREAS,
the Guarantor has duly authorized the execution and delivery of this First Supplemental
Subordinated Indenture to provide for the guarantee of the Capital Securities
provided for herein (the “Subordinated Guarantee”);
and all acts necessary to make this First Supplemental Subordinated Indenture a
valid agreement of the Guarantor, in accordance with its terms, have been
performed; and,

WHEREAS,
the Company has requested that the Trustee execute and deliver this First
Supplemental Subordinated Indenture, and all requirements necessary to make
this First Supplemental Subordinated Indenture a valid instrument in accordance
with its terms, and to make the Capital Securities, when executed by the
Company and authenticated and delivered by the Trustee, the valid obligations
of the Company, have been done and performed, and the execution and delivery of
this First Supplemental Subordinated Indenture has been duly authorized in all
respects:

NOW
THEREFORE, in consideration of the purchase and acceptance of the Capital
Securities by the Holders thereof, and for the purpose of setting forth, as provided
in the Base Indenture, the form and substance of the Capital Securities and the
terms, provisions and conditions thereof, the Company and the Guarantor
covenant and agree with the Trustee as follows:

 1
 

 

 

ARTICLE 1

DEFINITIONS

Section 1.01.  Definitions of Terms.  Unless the context otherwise
requires:

(a)           a term not defined herein that is
defined in the Base Indenture has the same meaning when used in this First
Supplemental Subordinated Indenture;

(b)           the definition of any term in this
First Supplemental Subordinated Indenture that is also defined in the Base
Indenture shall supersede the definition of such term in the Base Indenture
with respect to the Capital Securities;

(c)           a term defined anywhere in this First
Supplemental Subordinated Indenture has the same meaning throughout;

(d)           the singular includes the plural and
vice versa;

(e)           headings are for convenience of
reference only and do not affect interpretation;

(f)            the following terms have the
meanings given to them in this Section 1.01(f):

“Alternative Coupon Satisfaction Mechanism” has the meaning
provided in Section 6.02(a) hereof.

“Base Indenture” shall have the meaning set
forth in the recitals of this First Supplemental Subordinated Indenture.

“Business Day” means any day which is not a Saturday, a
Sunday, a legal holiday or a day on which banking institutions or trust
companies located in New York City are authorized or obligated by law to close.

“Calculation Agent” means, initially, the Trustee.

“Capital Securities” shall have the meaning set forth in the
recitals of this First Supplemental Subordinated Indenture.

“Commercially Reasonable Efforts” has the meaning provided in
Section 6.02(a) hereof.

“Company” shall have the meaning set forth in the preamble of
this First Supplemental Subordinated Indenture until a successor Person shall
have become such pursuant to the applicable provisions of the Base Indenture,
and thereafter “Company” shall mean such successor Person, and any other
obligor under the Securities (including the Capital Securities).

 2
 

 

 

“Company Senior Indebtedness” means, with
respect to the Capital Securities, all Indebtedness of the Company outstanding
at any time, except (a) the Capital Securities, (b) Indebtedness incurred for
the purchase of goods or materials or for services obtained in the ordinary
course of business, (c) Indebtedness as to which, by the terms of the
instrument creating or evidencing the same, it is provided that such
Indebtedness is subordinated to or pari passu with the Capital Securities, or
(d) Indebtedness of the Company to any of its Subsidiaries.  Company Senior Indebtedness will continue to
be Company Senior Indebtedness and entitled to the benefits of the
subordination provisions irrespective of any amendment, modification or waiver
of any term of the Company Senior Indebtedness or extension or renewal of the
Company Senior Indebtedness.

“Comparable Treasury Issue” means the U.S. Treasury security
selected by the Quotation Agent as having a term comparable to the period from
the Redemption Date to December 15, 2016 that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities with a term comparable to such period.

“Comparable Treasury Price” means, with respect to a
Redemption Date (1) the average of four Reference Treasury Dealer Quotations
for such Redemption Date, after excluding the highest and lowest Reference
Treasury Dealer Quotations, or (2) if the Quotation Agent obtains fewer than
four such Reference Treasury Dealer Quotations, the average of all such
quotations.

“Compounded Interest” means accrued and unpaid interest on
the Capital Securities, together with interest thereon, to the extent permitted
by applicable law, compounded semi-annually or quarterly, as applicable, at the
then applicable Coupon Rate.

“Coupon Rate” means the Fixed Rate during the Fixed Rate
Period and the Floating Rate during the Floating Rate Period.

“Current stock market price” of the Guarantor’s Common Stock
on any date means the closing sale price per share (or if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on that
date as reported in composite transactions by the New York Stock Exchange or,
if the Guarantor’s Common Stock is not then listed on the New York Stock
Exchange, as reported by the principal U.S. securities exchange on which the
Guarantor’s Common Stock is traded. If the Guarantor’s Common Stock is not
listed on any U.S. securities exchange on the relevant date, the “current stock
market price” shall mean the last quoted bid price for the Guarantor’s Common
Stock in the over-the-counter market on the relevant date as reported by the
National Quotation Bureau or similar organization. If the Guarantor’s Common
Stock is not so quoted, the “current stock market price”
shall mean the average of the mid-point of the last bid and ask prices for the
Guarantor’s Common Stock on the relevant date from

 3
 

 

each of at least three nationally recognized
independent investment banking firms selected by the Guarantor for this
purpose.

“Current Interest Payment Date” has the meaning provided in
Section 6.02(a) hereof.

“Depositary”, with respect to the Capital Securities, means
The Depository Trust Company or any successor clearing agency.

“Discharged” has the meaning provided in Section 12.01
hereof.

“Distributions” means, as to a security or combination of
securities, dividends, interest payments or other income distributions to the
holders thereof that are not Subsidiaries of the Guarantor.

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

“Fifth Deferral Anniversary” has the meaning provided in
Section 6.02(a) hereof.

“Fixed Rate” means the rate of interest on the Capital
Securities during the Fixed Rate Period as provided in Section 2.04(a) hereof.

“Fixed Rate Period” means the period from, and including, the
date of initial issuance of the Capital Securities to, but excluding, December
15, 2016 or earlier redemption.

“Floating Rate” means the rate of interest on the Capital
Securities during the Floating Rate Period as provided in Section 2.04(b)
hereof.

“Floating Rate Period” means the period from, and including,
December 15, 2006 to, but excluding, the Maturity Date or earlier redemption.

“Foregone Interest” has the meaning provided in Section 11.01
hereof.

“Guarantor” shall have the meaning set forth
in the preamble of this First Supplemental Subordinated Indenture until a
successor Person shall have become such pursuant to the applicable provisions
of the Base Indenture, and thereafter “Guarantor” shall mean such successor
Person.

“Guarantor Senior Indebtedness” means, with respect to the
Subordinated Guarantees, all Indebtedness of the Guarantor outstanding at any
time, except (a) the Subordinated Guarantees, (b) Indebtedness incurred for the
purchase of goods or materials or for services obtained in the ordinary course
of business, (c) Indebtedness as to which, by the terms of the instrument creating
or evidencing the same, it is provided that such Indebtedness is subordinated
to or pari passu with the Subordinated Guarantees, or (d ) Indebtedness of the
Guarantor to any of its Subsidiaries. 
Guarantor Senior Indebtedness will continue

 4
 

 

to be Guarantor Senior Indebtedness and entitled to
the benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any term of the Guarantor Senior Indebtedness or
extension or renewal of the Guarantor Senior Indebtedness.

“H.15(519)” means the weekly statistical release designated
as such, or any successor publication, published by the Federal Reserve System
Board of Governors, available through the Board of Governors of the Federal
Reserve System’s website at http://www.federalreserve.gov/releases/H15/ or any
successor site or publication.

“Intent-based replacement disclosure” means, as to any
security or combination of securities, that the issuer has publicly stated its
intention, either in the prospectus or other offering document under which such
securities were initially offered for sale or in filings with the Commission
made by the issuer under the Exchange Act, prior to or contemporaneously with
the issuance of such securities, to redeem or repurchase such securities only with
the proceeds of specified replacement capital securities that have terms and
provisions at the time of redemption or repurchase that are as or more
equity-like than the securities then being redeemed or repurchased, raised
within 180 days prior to the applicable redemption or repurchase date.

“Interest Payment Date” means (i) up to, and including,  December 15, 2016, each June 15 and December
15, commencing June 15, 2007; and (ii) after December 15, 2016, each March 15,
June 15, September 15 and December 15, commencing March 15, 2017; provided that
if any such day from, and including, March 15, 2017 is not a Business Day, then
the Interest Payment Date shall be the immediately succeeding Business Day,
except that if such Business Day is in the next succeeding calendar month, then
such Interest Payment Date will be the immediately preceding Business Day.

“Interest Payment Period” means the semi-annual or quarterly
period, as applicable, from and including, an Interest Payment Date to, but
excluding, the next succeeding Interest Payment Date, except for the first
Interest Payment Period which shall be determined from, and including, the date
of initial issuance of the Capital Securities (subject to Section 2.01) to, but
excluding, June 15, 2007.

“Junior Subordinated Indenture” shall have
the meaning set forth in the preamble of this First Supplemental Subordinated
Indenture.

“LIBOR Determination Date” means the second London Banking
Day immediately preceding the first day of an Interest Payment Period in the Floating
Rate Period.

“London Banking Day” means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.

 5
 

 

 

“Make-Whole Rate” means the Treasury Rate plus (x) in the
case of a Tax Event or a Rating Agency Event, 50 basis points, and (y) in the
case of a redemption for any other reason, 30 basis points.

“Make-Whole Redemption Amount” means the sum of the present
value of (i) the aggregate principal amount outstanding of the Capital
Securities discounted from the Interest Payment Date falling on December 15,
2016 to the Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the applicable Make-Whole Rate, and (ii)
the present values of scheduled semi-annual interest payments from the
Redemption Date through and including the Interest Payment Date on December 15,
2016, each discounted from such Interest Payment Date to the Redemption Date on
a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the applicable Make-Whole Rate, plus any accrued and unpaid
interest, together with any Compounded Interest to the Redemption Date, as
calculated by the Calculation Agent.

“Market Disruption Event” means the occurrence or existence
of any of the following events or sets of circumstances:

(i)    trading in securities generally on the
principal exchange on which the Company’s or the Guarantor’s securities are
then listed and traded shall have been suspended or the settlement of such
trading generally shall have been materially disrupted or minimum prices shall
have been established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority having
jurisdiction;

(ii)   a material disruption or banking moratorium
occurs or has been declared in commercial banking or securities settlement or
clearance services in the United States;

(iii)  the Guarantor would be required to obtain the
consent or approval of its shareholders or the Company or the Guarantor would
be required to obtain the consent or approval of a regulatory body (including,
without limitation, any securities exchange) or governmental authority to issue
the Company’s or the Guarantor’s securities, and the Company or the Guarantor
fail to obtain such consent or approval notwithstanding the Company’s and the
Guarantor’s commercially reasonable efforts to such effect;

(iv)  there is such a material adverse change in
general domestic or international economic, political or financial conditions,
including without limitation as a result of terrorist activities, such that
trading in the Company’s or the Guarantor’s securities shall have been
materially disrupted or the effect of international conditions on the financial
markets in the United States is such, as to make it, in the Company’s or the

 6
 

 

Guarantor’s judgment,
impracticable to proceed with the offer and sale of the Company’s or the
Guarantor’s securities; or

(v)   an event occurs and is continuing as a result
of which the offering document for such offer and sale of securities would, in
that issuer’s reasonable judgment, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and either (1) the
disclosure of that event at such time, in that issuer’s judgment, would have a
material adverse effect on its business or (2) the disclosure relates to a
previously undisclosed proposed or pending material transaction, the disclosure
of which would impede that issuer’s ability to consummate such transaction,
provided that no single suspension period contemplated by this paragraph (v)
may exceed ninety consecutive days and multiple suspension periods contemplated
by this paragraph (v) may not exceed an aggregate of 180 days in any 360-day
period.

“Maturity Date” means the date on which the Capital
Securities mature as specified in Section 2.02 hereof and on which the
principal shall be due and payable together with all accrued and unpaid
interest thereon including Compounded Interest.

“Non-Cumulative Perpetual Preferred Stock” means
non-cumulative perpetual preferred stock of the Company or the Guarantor or
their Subsidiaries that (i) contains no remedies other than Permitted Remedies
and (ii)(a) is subject to Intent-Based Replacement Disclosure and provides for
mandatory deferral tied to the breach of certain financial triggers, or (b) is
subject to a replacement capital covenant substantially similar to the
Replacement Capital Covenant applicable to the Capital Securities.

“Optional Deferral” has the meaning provided in Section 4.01
hereof.

“Optional Deferral Period” has the meaning provided in
Section 4.01 hereof.

“Optionally Deferred Interest” has the meaning provided in
Section 4.01 hereof.

“Other Covenant Default” has the meaning provided in Section
5.01(b) hereof.

“Other Covenant Default Notice” has the meaning provided in
Section 5.01(c) hereof.

“Par
Redemption Amount” means a cash redemption price of 100% of the
principal amount of the Capital Securities to be redeemed, plus accrued and
unpaid interest, together with any Compounded Interest, on such Capital Securities
to the Redemption Date.

 7

 

“Parity Debt Securities” has the meaning provided in Section
6.01(a) hereof.

“Parity Guarantees” has the meaning provided in Section
6.01(a) hereof.

“Permitted Remedies” means, with respect to any securities,
one or more of the following remedies:

(a)           rights in favor of the holders of
such securities permitting such holders to elect one or more directors of the
issuer (including any such rights required by the listing requirements of any
stock or securities exchange on which such securities may be listed or traded),
and

(b)           complete or partial prohibitions on
the issuer paying Distributions on or repurchasing common shares or other
securities that rank pari passu with or junior as to Distributions to such
securities for so long as Distributions on such securities, including unpaid
Distributions, remain unpaid.

“Preferred Stock Issuance Cap” has the meaning provided in
Section 6.02(a) hereof.

“Primary Treasury Dealer” means (1) Banc of America
Securities LLC, Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner
& Smith Incorporated and (2) any additional primary U.S. government
securities dealers in New York City selected by the Company and their
successors.

“Qualifying Securities” means Qualifying Warrants and
Non-Cumulative Perpetual Preferred Stock of the Company or the Guarantor or
their Subsidiaries.

“Qualifying Warrants” means net share settled warrants to
purchase the Guarantor’s Common Stock that (i) have an exercise price greater
than the current stock market price of the Guarantor’s Common Stock as of their
date of issuance; and (ii) the Guarantor or its Subsidiaries is not entitled to
redeem for cash and the holders are not entitled to require the Guarantor or
its Subsidiaries to repurchase for cash in any circumstances.

“Quotation Agent” means one of the Reference Treasury Dealers
appointed by the Company.

“Rating Agency” is any nationally recognized statistical
rating organization within the meaning of Rule 15c3-1 under the Exchange Act,
that, on the initial issue date of the Capital Securities, publishes a rating
for the Company or the Guarantor.

“Rating Agency Event” means the determination by the Company
or the Guarantor of a change by any Rating Agency in the equity credit criteria
for securities such as the Capital Securities resulting in a lower equity
credit to the 

 8
 

 

Company or the Guarantor than the equity credit
assigned by such Rating Agency to the Capital Securities on their issue date.

“Reference Treasury Dealer” means a Primary Treasury Dealer;
provided, however, that if any of the Primary Treasury Dealers ceases to be a
Primary Treasury Dealer, the Company will substitute another Primary Treasury
Dealer.

“Reference Treasury Dealer Quotations” means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Quotation Agent at 5:00 p.m., New
York City time, on the third Business Day preceding such Redemption Date.

“Replacement Capital Covenant” means that Replacement Capital
Covenant, dated December 20, 2006, entered into by the Company and the
Guarantor, for the benefit of a specified class of Covered Debtholders (as defined
in the Replacement Capital Covenant).

“Registered Security” means any Security in the form
established pursuant to Section 9.01 hereof which is registered as to principal
and interest in the Securities Register.

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

“Subordinated Guarantee” means the unconditional guarantee of
the payment of the principal of, any premium or interest on, and any Additional
Amounts with respect to the Capital Securities by the Guarantor, as more fully
set forth in Article 17 of the Base Indenture.

“Tax Event” means, with respect to the Capital Securities,
the receipt by the Company or the Guarantor of an Opinion of Counsel, rendered
by a law firm with experience in such matters, to the effect that, as a result
of (a) any amendment to, or change (including any announced prospective change)
in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, (b) any official
administrative pronouncement (including a private letter ruling, technical
advice memorandum or similar pronouncement) or judicial decision interpreting
or applying such laws or regulations, or (c) a threatened challenge asserted in
connection with an audit of the Guarantor or the Company or any of their
Subsidiaries, or a threatened challenge asserted in writing against any other
taxpayer that has raised capital through the issuance of securities that are
substantially similar to the Capital Securities, which amendment or change is
effective or which pronouncement or decision is announced or which challenge
occurs on or after the date hereof, there is more than an insubstantial
increase in the risk that interest accruing or payable by the Company on the
Capital Securities is not or, at any time subsequent to the 

 9
 

 

Company’s or the Guarantor’s receipt of such opinion,
will not be, wholly deductible by the Company for United States federal income
tax purposes.

“Telerate Page 3750” means the display on Moneyline Telerate,
Inc. on page 3750 or any successor service or page for the purpose of
displaying the London interbank offered rates of major banks.

“3-Month LIBOR,” with respect to an Interest Payment Period
during the Floating Rate Period, means the rate (expressed as a percentage per
year) for deposits in U.S. dollars for a three-month period that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the relevant LIBOR
Determination Date.

If
3-Month LIBOR cannot be determined for an Interest Payment Period as described
above, the Company will select four major banks in the London interbank market.
The Company will request that the principal London offices of those four
selected banks provide their offered quotations to prime banks in the London
interbank market at approximately 11:00 a.m., London time, on the LIBOR
Determination Date for such Interest Payment Period to the Company and the
Calculation Agent, and if the Calculation Agent is then not the Trustee, to the
Trustee. These quotations will be for deposits in U.S. dollars for a
three-month period. Offered quotations must be based on a principal amount
equal to an amount that is representative of a single transaction in U.S.
dollars in the market at the time.

If
two or more quotations are provided, “3-Month LIBOR”
for such Interest Payment Period will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the Company will select three
offered rates quoted by three major banks in New York City on the LIBOR
Determination Date for such Interest Payment Period. The rates quoted will be
for loans in U.S. dollars for a three-month period. Rates quoted must be based
on a principal amount equal to an amount that is representative of a single
transaction in U.S. dollars in the market at the time. If fewer than three New
York City banks selected by the Company are quoting rates, “3-Month LIBOR” for the applicable Interest Payment Period
will be the same as for the immediately preceding Interest Payment Period or,
if the immediately preceding Interest Payment Period is an Interest Payment
Period during the Fixed Rate Period, the same as for the most recent quarter
for which 3-Month LIBOR can be determined.

“Treasury Rate” means the yield, under the heading that
represents the average for the week immediately prior to the Redemption Date,
appearing in the most recently published statistical release designated “H.15(519)” or any successor publication that is published
weekly by the Board of Governors of the Federal Reserve System and that
establishes yields on actively traded U.S. Treasury securities adjusted to
constant maturity under the caption “Treasury Constant
Maturities,” for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after the end
of the relevant Interest Payment Period, yields for the two published
maturities most 

 10
 

 

closely corresponding to the Comparable Treasury Issue
will be determined and the Treasury Rate will be interpolated or extrapolated
from such yields on a straight line basis, rounding to the nearest month). If
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, “Treasury Rate” means the rate per year equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate will be calculated on the third
Business Day preceding the Redemption Date.

“Trustee” shall, with respect to the Capital Securities, have
the meaning set forth in the preamble of this First Supplemental Subordinated
Indenture until a successor Trustee shall have become such with respect to the
Capital Securities pursuant to the applicable provisions of the Base Indenture,
and thereafter “Trustee” shall, with respect to the Capital Securities, mean
such successor Trustee.

“Underwriting Agreement” means the Underwriting Agreement,
dated December 13, 2006, among the Company, the Guarantor and the underwriters
of the Capital Securities therein named.

“Warrant Issuance Cap” has the meaning provided in Section
6.02(a) hereof.

ARTICLE 2

GENERAL TERMS AND CONDITIONS OF THE CAPITAL SECURITIES

Section 2.01.  Designation and Principal
Amount.  (a) There is hereby
authorized a series of Securities designated the Series A Enhanced Junior
Subordinated Debentures due 2066, which shall be in the form of junior
subordinated debentures issued by the Company under the Base Indenture as
supplemented by this First Supplemental Subordinated Indenture, limited in
aggregate principal amount to $150,000,000, which amount shall be as set forth
in any Company Order for the authentication and delivery of Capital Securities
pursuant to Section 3.3 of the Base Indenture.

(b)   The Company may, from time to time, subject
to compliance with any other applicable provisions of this First Supplemental
Subordinated Indenture but without the consent of the Holders, create and issue
pursuant to this First Supplemental Subordinated Indenture an unlimited
principal amount of additional Capital Securities (in excess of any amounts
theretofore issued) having the same terms and conditions to those of the other
outstanding Capital Securities, except that any such additional Capital
Securities (i) may have a different issue date and issue price from other
outstanding Capital Securities and (ii) may have a different amount of interest
payable on the first Interest Payment Date after issuance than is 

 11
 

 

payable on other outstanding Capital Securities. Such
additional Capital Securities shall constitute part of the same series of
Capital Securities hereunder, unless any such adjustment pursuant to this
Section 2.01(b) shall cause such additional Capital Securities to constitute,
as determined pursuant to an Opinion of Counsel, a different class of
Securities than the original series of Capital Securities for U.S. federal
income tax purposes.

Section 2.02.  Maturity.  The Maturity Date will be December
15, 2066. Notwithstanding the preceding sentence, in the event that the
Maturity Date is not a Business Day, then the Maturity Date will be the next
succeeding day which is a Business Day, and no interest shall accrue on the
amount payable on such date or at such time for the period from and after such
Maturity Date to such next succeeding Business Day, except that if such
Business Day is in the next succeeding calendar month, then the Maturity Date
will be the immediately preceding day which is a Business Day.

Section 2.03.  Form and Payment.  (a) Except
as provided in Section 2.04, the Capital Securities shall be issued as fully
Registered Securities in global form in denominations of $2,000 and integral
multiples of $1,000 in excess thereof, and the Company shall execute and the
Trustee shall, in accordance with this Section, authenticate and deliver one or
more Registered Securities in global form that (i) shall represent and shall be
denominated in an amount equal to the aggregate principal amount of all of the
Capital Securities issued and not yet cancelled, (ii) shall be registered in
the name of the Depositary or its nominee, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary’s instructions and
(iv) shall bear a legend substantially to the following effect: “Unless and
until it is exchanged in whole or in part for Capital Securities in definitive
registered form, this Capital Security may not be transferred except as a whole
by the Depositary to the nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.”

(b)   Unless and until it is exchanged in whole or
in part for Capital Securities in the form of definitive Registered Securities,
a global Registered Security representing all or a portion of the Capital
Securities may not be transferred except as a whole by the Depositary to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee to
a successor Depositary for such series or a nominee of such successor
Depositary.

(c)   If at any time the Depositary for any Capital
Securities represented by one or more global Registered Securities notifies the
Company that it is unwilling or unable to continue as Depositary for such
Capital Securities or if at any time the Depositary ceases to be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation, the Company shall appoint a successor Depositary that is a clearing
agency registered under the 

 12
 

 

Exchange Act and any other applicable statute or
regulation with respect to such Capital Securities. If a successor Depositary
eligible under this Section is not appointed for such Capital Securities by the
Company within 90 days after the Company receives such notice or becomes aware
of such ineligibility, then the Company shall execute, and the Trustee, upon
receipt of an Officer’s Certificate for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the global Registered Security or Securities representing such Registered
Securities in exchange for such global Registered Security or Securities.

(d)   Upon the exchange of any Capital Securities
in the form of a global Registered Security for definitive Registered
Securities, such global Registered Security shall be cancelled by the Trustee
or an agent of the Company or the Trustee. 
The definitive Registered Securities issued in exchange for a global
Registered Security pursuant to this Section 2.03 shall be registered in such
names and in denominations of $2,000 and integral multiples of $1,000 in excess
thereof, bearing identical terms as the Registered Security they replace, as
the Depositary for such global Registered Security, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee or an agent of the Company or the Trustee. The Trustee or such agent
shall deliver such definitive Registered Securities to or as directed by the
Persons in whose names such definitive Registered Securities are so registered.

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

(f)    Principal and interest on the Capital
Securities issued in the form of definitive Registered Securities will be
payable, the transfer of such Capital Securities will be registrable and such
Capital Securities will be exchangeable for Capital Securities bearing
identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register.

Section 2.04.  Interest.  (a) From, and including, the date
of issuance to, but excluding, December 15, 2016 or earlier Redemption Date,
the Capital Securities will bear interest, accruing from the date of initial
issuance, at the per annum rate of 6.40% (the “Fixed Rate”),
payable semi-annually in arrears on each Interest Payment Date in respect of an
Interest Payment Period during the Fixed Rate Period.

 13
 

 

 

(b)   The amount of interest payable on any
Interest Payment Date or Redemption Date in respect of an Interest Payment
Period during the Fixed Rate Period will be computed on the basis of a 360-day
year consisting of twelve 30-day months and will include interest accrued from,
and including, the last scheduled Interest Payment Date for which interest has
been paid or duly provided for (or, if none, the issue date) to, but excluding,
the scheduled Interest Payment Date or Redemption Date, as the case may be.
Interest calculated for any period less than a 30-day month will be calculated
based on the actual number of days elapsed in such month.

(c)   In the event that any Interest Payment Date
during the Fixed Rate Period is not a Business Day, payment of the interest
payable on such Interest Payment Date will be made on the next succeeding
Business Day (and without any interest or other payment in respect of any such
delay).

(d)   From, and including December 15, 2016 to, but
excluding, the Maturity Date or earlier Redemption Date, the Capital Securities
will bear interest at the per annum rate of 3-Month LIBOR plus a margin equal
to 2.38% (the “Floating Rate”), payable quarterly
in arrears on each Interest Payment Date in respect of an Interest Payment
Period during the Floating Rate Period.

(e)   The Calculation Agent will calculate the
applicable Floating Rate and the amount of interest payable on each quarterly
Interest Payment Date relating to an Interest Payment Period during the
Floating Rate Period. Promptly upon such determination, the Calculation Agent
will notify the Company and, if the Trustee is not then serving as the
Calculation Agent, the Trustee, of the Floating Rate for the new quarterly
Interest Payment Period. The Floating Rate determined by the Calculation Agent,
absent manifest error, will be binding and conclusive on the Company and the
Holders of the Capital Securities and the Trustee.

(f)    Interest payments during the Floating Rate
Period will include accrued interest from and including the last date in
respect of which interest has been duly paid or provided for to, but not
including, the next succeeding Interest Payment Date, the Redemption Date or
the Maturity Date, as the case may be. The amount of interest payable will be
computed on the basis of a 360-day year and the actual number of days elapsed
in each quarterly Interest Payment Period.

(g)   All percentages resulting from any interest
rate calculation will be rounded upward or downward, as appropriate, to the
next higher or lower one-hundred-thousandth of a percentage point.

(h)   Otherwise than in connection with the
Maturity or early redemption of the Capital Securities or the payment in whole
or in part of deferred or overdue interest on the Capital Securities, interest
on the Capital Securities may be paid only on an Interest Payment Date (except
as provided for under Section 2.04(c)).

 14
 

 

 

(i)    To the extent permitted by applicable law,
interest not paid when due hereunder, including, without limitation, all
Optionally Deferred Interest, will accrue and compound semi-annually (during
the Fixed Rate Period) or quarterly (during the Floating Rate Period) at the
applicable Coupon Rate on each Interest Payment Date until paid (except as
provided for under Section 2.04(c)). References to “interest”
in the Base Indenture and this First Supplemental Subordinated Indenture
include references to such Compounded Interest.

(j)    The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will be paid
to the Person in whose name the Capital Securities is registered at the close
of business on the day next preceding the Interest Payment Date; provided, that
in the event the Capital Securities will not continue to remain in book-entry
form or are not in the form of a global certificate, the Company will have the
right to select record dates, which will be at least one Business Day before an
Interest Payment Date.

ARTICLE 3

REDEMPTION OF THE CAPITAL SECURITIES

Article
11 of the Base Indenture shall be superseded by this Article 3 with respect to
the Capital Securities.

Section 3.01.  Optional Redemption.

(a)   The Company shall have the right, at its option, to redeem the
Capital Securities for cash, in whole or in part, on and after December 15,
2016, at a cash redemption price equal to the Par Redemption Amount; provided
that if the Capital Securities are not redeemed in whole, at least $50,000,000
aggregate principal amount of the Capital Securities (excluding any Capital
Securities held by the Company or any of its Affiliates) remains outstanding
after giving effect to such redemption.

(b)   Prior to December 15, 2016, the Company shall
have the right, at its option, to redeem the Capital Securities in whole but
not in part, including, but not limited to, upon the occurrence of a Tax Event
or a Rating Agency Event, at a cash redemption price of the greater of (i) the
Par Redemption Amount and (ii) the Make-Whole Redemption Amount.

(c)   With respect to any redemption of Capital
Securities as a result of a Tax Event, the Redemption Date will be within 180
days following the occurrence of such Tax Event; provided,
however, that if at that time the
Company or the Guarantor is able to eliminate, within the 180-day period, the
Tax Event by taking some ministerial action (such as making an election or
filing a form) that has no adverse effect on the Guarantor or the Company or
the Holders of the Capital Securities, the Guarantor and the Company will
pursue such action 

 15
 

 

in lieu of redemption. The Company will have no right
or obligation to redeem the Capital Securities while pursuing such measure.

Section 3.02.  Redemption Procedure for
Capital Securities.  The
Company will mail, or cause the Trustee to mail, notice of every redemption of
Capital Securities by first class mail, postage prepaid, addressed to the
Holders of record of the Capital Securities to be redeemed at such Holder’s
respective last address appearing on the Company’s books. Any redemption
pursuant to this Article 3 will be made upon not less than fifteen days nor
more than sixty days notice before the Redemption Date to the registered
Holders of the Capital Securities. If the Capital Securities are to be redeemed
in part pursuant to Section 3.01, the Capital Securities will be redeemed pro
rata or by lot or by any other method utilized by the Trustee that the Trustee
shall deem fair and appropriate. Any notice mailed as provided in this Section
3.02 shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice, but failure duly to give such notice by mail, or
any defect in such notice or in the mailing thereof, to any Holder of the
Capital Securities designated for redemption shall not affect the validity of
the proceedings for the redemption of any other Capital Securities. Each such
notice given to a Holder shall state: (i) the Redemption Date; (ii) the
Redemption Price; (iii) that the Capital Securities are being redeemed pursuant
to the Junior Subordinated Indenture or the terms of the Capital Securities
together with the facts permitting such redemption; (iv) if less than all
outstanding Capital Securities are to be redeemed, the identification (and, in
the case of partial redemption, the principal amounts) of the particular
Capital Securities to be redeemed; (v) the place or places where the Capital
Securities are to be redeemed; and (vi) that interest on the Capital Securities
to be redeemed will cease to accrue on the Redemption Date. Notwithstanding the
foregoing, if the Capital Securities are issued in book-entry form through The
Depository Trust Company or any other similar facility, notice of redemption
may be given to the Holders of Capital Securities at such time and in any
manner permitted by such facility. The Redemption Price shall be paid prior to
12:00 noon, New York City time, on the Redemption Date or at such earlier time
as the Company determines and specifies in the notice of redemption. The Company
shall deposit with the Trustee or with a Paying Agent an amount of money
sufficient to pay the Redemption Price of such Capital Securities or any
portion thereof which are to be redeemed on that date.

Section 3.03.  Payment of Securities Called
for Redemption.  If any notice
of redemption has been given as provided in Section 3.02, the Capital
Securities or portion of the Capital Securities with respect to which such
notice has been given shall become due and payable on the date and at the place
or places stated in such notice at the applicable Redemption Price. From and
after such date, the Capital Securities to be redeemed shall cease to bear
interest. If any Capital Securities called for redemption shall not be so paid
upon surrender thereof for redemption, the principal of and premium, if any, on
such Capital Securities shall, until paid, bear interest from the Redemption
Date at the Coupon Rate. On presentation and surrender of such Capital
Securities at a place of payment in said 

 16
 

 

notice specified, the said securities or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
Redemption Price. Upon presentation of any Capital Securities redeemed in part
only, the Company and the Guarantor shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company,
new Capital Securities of the same series, of authorized denominations, in
aggregate principal amount equal to the unredeemed portion of the Capital
Securities so presented and having the same original issue date, Maturity Date
and terms. If a Registered Security in global form is so surrendered, such new
Capital Securities will also be a new Registered Security in global form.

Section 3.04.  No Sinking Fund.  The Capital Securities are not
entitled to the benefit of any sinking fund.

ARTICLE 4

OPTIONAL DEFERRAL OF INTEREST

Section
3.11 of the Base Indenture shall be superseded by this Article 4 with respect
to the Capital Securities.

Section 4.01.  Optional Deferral of Interest.  (a) So long as no Event of Default
has occurred and is continuing under the Junior Subordinated Indenture, the
Company may elect at any time during the term of the Capital Securities, and
from time to time, to defer one or more payments of interest on such Capital
Securities (an “Optional Deferral” and any such
deferred interest, “Optionally Deferred
Interest” and such continuous period of Optional Deferral, an “Optional Deferral Period”) for up to ten years. Optionally
Deferred Interest will continue to accrue and compound semi-annually or
quarterly, as applicable, on each Interest Payment Date, to the extent
permitted by applicable law, at the applicable Coupon Rate.

(b)   Following the earlier of (i) the Fifth
Deferral Anniversary (as defined in Section 6.02) or (ii) a payment, during an
Optional Deferral Period, of current interest on the Capital Securities, the
provisions of Section 6.02 hereof will apply, and the Company and the Guarantor
must (except upon an Event of Default with respect to the Capital Securities)
make Commercially Reasonable Efforts to sell certain Qualifying Securities. If
such efforts are successful, the Company must pay Optionally Deferred Interest
out of the net proceeds from the sale of such Qualifying Securities on the next
succeeding Interest Payment Date following the Fifth Deferral Anniversary or
the Current Interest Payment Date, as applicable, but the Company cannot pay
such Optionally Deferred Interest from sources other than the net proceeds from
the sale of such Qualifying Securities. Additionally, during any Optional
Deferral Period, the restrictions on payment by the Company and the Guarantor
of dividends and other distributions on Capital Stock pursuant to Section 6.01
hereof will apply. There is no limit on the number of Optional Deferral Periods
that the Company may begin.

 17
 

 

 

(c)   If the Company defers interest for a period
of 10 consecutive years from the commencement of an Optional Deferral Period,
the Company will be required to pay all accrued and unpaid interest (including
Compounded Interest) at the conclusion of the 10-year period, and to the extent
it does not do so, the Guarantor will be required to make Subordinated
Guarantee payments in accordance with Article 17 of the Base Indenture.  If the Company fails to pay in full all
accrued and unpaid interest (including Compounded Interest) at the conclusion
of the 10-year period, due to an Optional Deferral or otherwise, such failure
continues for 30 days and the Guarantor fails to make Subordinated Guarantee payments
with respect thereto, an Event of Default will occur.

Section 4.02.  Notices of Deferral.  The Company shall provide a notice
of any Optional Deferral to the Trustee no more than sixty and no fewer than
fifteen days prior to the relevant Interest Payment Date.  A notice of Optional Deferral, once given,
will be irrevocable and the deferral of payments on the related Interest
Payment Date will be considered an Optional Deferral.

ARTICLE 5

EVENTS OF DEFAULT

Section 5.01.  Events of Default.  (a) Section 5.1 of the Base
Indenture is hereby amended and supplemented with respect to the Capital
Securities by deleting clauses (1), (3), (4), (5) and (6) thereof and adding
the following additional Events of Default, in each case for purposes of
specifying Events of Default that gives a right to declare an acceleration of
payment of the Capital Securities:

(i)    default for thirty calendar days in the
payment of any interest on the Capital Securities when it becomes due and
payable (whether or not such payment is prohibited by the subordination
provisions); however, a default under this provision will not arise if the
Company has properly deferred the interest in connection with an Optional
Deferral Period or when the provisions of Section 6.02 hereof apply; or

(ii)    any non-payment of interest, whether due to
an Optional Deferral or otherwise, that continues for ten consecutive years or
extends beyond the Maturity Date of, or the Redemption Date for, the Capital
Securities, without all accrued and unpaid interest (including Compounded
Interest) having been paid in full; provided, however,
that if the Guarantor pays all accrued and unpaid interest (including
Compounded Interest) in full in accordance with Section 17.1 of the Base
Indenture, within 30 days after a non-payment of interest that has continued
for ten consecutive years, then there shall be no Event of Default.

(b)   For the avoidance of doubt, Events of Default
with respect to the Capital Securities that gives a right to declare an
acceleration of payment of the 

 18
 

 

Capital Securities do not include failure to comply
with or breach of the Company’s other covenants set forth in Article 6 hereof
with respect to the Capital Securities or a covenant set forth in the Base
Indenture (an “Other Covenant Default”), including
the covenant to sell Qualifying Securities through the Alternative Coupon
Satisfaction Mechanism to meet certain interest payment obligations.

(c)   Holders of the Capital Securities may not
themselves institute a proceeding against the Company on account of an Other
Covenant Default unless the Trustee fails to institute such a proceeding.
However, the Holders of a majority in principal amount of the Capital
Securities may direct the Trustee to bring such a proceeding if an Other
Covenant Default continues for a period of 60 days after delivery of written
notice to the Company from the Trustee or to the Company and the Trustee from
the Holders of a majority in principal amount of the Capital Securities (“Other Covenant Default Notice”), subject to the terms
hereof.  Except with respect to the
covenants contained in Article 10 of the Base Indenture, the Trustee shall not
be required to take any action in case of an Other Covenant Default (other than
to give notice of such default to the Holders of the Capital Securities) unless
so directed by the Holders of the Capital Securities. In the case of an Other
Covenant Default resulting from the Company’s or the Guarantor’s breach of its
covenants contained in Article 10 of the Base Indenture, such Other Covenant
Default, after its continuance for 60 days after delivery of the Other Covenant
Default Notice, will be treated as an Event of Default with respect to the
Capital Securities, and the Trustee will have all of the rights, duties and
obligations, and the Holders of the Capital Securities will have all of the
rights, in respect of such Other Covenant Default as if such Other Covenant
Default were such an Event of Default, except that there will be no right to
accelerate the payment of the Capital Securities.

(d)   Subject to the provisions of Section 5.01(c)
hereof, as to Other Covenant Defaults, the provisions of Section 5.7 of the
Base Indenture shall apply with respect to limitations on suits, proceedings
and remedies.

(e)   Within ninety days after an Event of Default,
the Trustee must give to the Holders of the Capital Securities notice of all
uncured and unwaived defaults by the Company known to it. However, except in
the case of default in payment or interest, the Trustee may withhold such
notice if it determines that such withholding is in the interest of such
Holders of the Capital Securities.

ARTICLE 6

COVENANTS

Article
10 of the Base Indenture is hereby supplemented with respect to the Capital
Securities by the following additional covenants of the Company and the
Guarantor:

 19

 

Section 6.01.  Certain Restrictions During
Optional Deferral Periods. (a) On any date on
which accrued interest through the most recent Interest Payment Date has not
been paid in full, whether because of an Optional Deferral, or otherwise, the
Company and the Guarantor will not, and will not permit any Subsidiary to:

(i)    declare or pay any dividends on, make
distributions regarding, or redeem, repurchase, purchase, acquire or make a
liquidation payment with respect to, any shares of Capital Stock of the Company
or the Guarantor, other than:

(A)  purchases of the Capital Stock of the
Guarantor in connection with employee or agent benefit plans or the
satisfaction of its obligations under any contract or security then outstanding
requiring the Guarantor to purchase Capital Stock or under any dividend
reinvestment plan;

(B)   in connection with the reclassifications of
any class or series of the Guarantor’s Capital Stock, or the exchange or
conversion of one class or series of the Guarantor’s Capital Stock for or into
another class or series of the Guarantor’s Capital Stock;

(C)   the purchase of fractional interests in
shares of the Guarantor’s Capital Stock in connection with the conversion or
exchange provisions of that Capital Stock or the security being converted or
exchanged;

(D)  dividends or distributions of the Guarantor’s
Capital Stock, or rights to acquire Common Stock, or repurchases or redemptions
of common stock, in each case solely from the issuance or exchange of Common
Stock; or

(E)   any declaration of a dividend in connection
with the implementation of a shareholders rights plan, or issuances of Capital
Stock under any such plan in the future, or redemptions or repurchases of any
rights outstanding under a shareholder rights plan;

(ii)   make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company or the Guarantor that rank in right of payment equally with or
junior to the Capital Securities or the Subordinated Guarantees, respectively,
other than any payment, repurchase or redemption in respect of debt securities
of the Company that rank in right of payment equally with the Capital
Securities or debt securities of the Guarantor that rank equally with the
Subordinated Guarantees (“Parity Debt Securities”)

 20
 

 

made ratably and in
proportion to the respective amount of (A) accrued and unpaid amounts on such
Parity Debt Securities, on the one hand, and (B) accrued and unpaid amounts on
the Capital Securities or the Subordinated Guarantees, as applicable, on the
other hand; and

(iii)  make any guarantee payments with respect to
any guarantee by the Company or the Guarantor of the debt securities of any
Subsidiary, if such guarantee ranks in right of payment equally with or junior
to the Capital Securities or the Subordinated Guarantees, respectively, other
than any payment in respect of guarantees that rank equally with the Capital
Securities and the Subordinated Guarantees (“Parity
Guarantees”) made ratably and in proportion to the respective amount
of (A) accrued and unpaid amounts on such Parity Guarantees, on the one hand,
and (B) accrued and unpaid amounts on the Capital Securities or the
Subordinated Guarantees, as applicable, on the other hand.

(b)   In addition, if any Optional Deferral Period
lasts longer than one year, the Company and the Guarantor will not, subject to
the same limited exceptions as noted in (a) above and unless required to do so
by any applicable regulatory authority, repurchase, or permit any Subsidiary to
purchase, the Guarantor’s Common Stock for a one-year period following the date
on which all Optionally Deferred Interest has been paid.  If the Company or the Guarantor is involved
in a business combination where immediately after its consummation more than
50% of the surviving entity’s voting stock is owned by the shareholders of the
other party to the business combination, then the immediately preceding
sentence will not apply to any Optional Deferral Period that is terminated on
the next Interest Payment Date following the date of consummation of the
business combination.

Section 6.02.  Obligation to Effect Certain
Sales of Qualifying Securities; Alternative Coupon Satisfaction Mechanism.  (a) If any Optionally Deferred
Interest is outstanding due to an Optional Deferral, commencing with the first
to occur of:

(i)    the date that is five years after the first
Interest Payment Date as of which the Company deferred payment of interest on
the Capital Securities, and for which Optionally Deferred Interest remains
outstanding (the “Fifth Deferral Anniversary”),
or

(ii)   a payment of current interest on the Capital
Securities (a “Current Interest Payment Date”),

the Company and the Guarantor shall make Commercially
Reasonable Efforts to effect sales of Qualifying Securities in an amount that
will generate sufficient net proceeds to enable the Company to pay all accrued
and unpaid interest (including Compounded Interest) in full on the Capital
Securities (the “Alternative Coupon 

 21
 

 

Satisfaction Mechanism”), which
obligation will continue until all unpaid interest (including Compounded
Interest) has been paid in full; provided that the obligation of the Company
and the Guarantor to make Commercially Reasonable Efforts to sell Qualifying
Securities to satisfy the Company’s obligation to pay interest is subject to
Market Disruption Events, is subject to the ACSM Cap (defined below), and does
not apply if an Event of Default with respect to the Capital Securities has
occurred and is continuing.

The
net proceeds received by the Company and the Guarantor from the issuance of
Qualifying Securities (i) during the 180 days prior to any Interest Payment
Date on which the Company is required to use the Alternative Coupon
Satisfaction Mechanism and (ii) designated by the Company or the Guarantor at
or before the time of such issuance as available to pay interest on the Capital
Securities will, at the time such proceeds are delivered to the Trustee to
satisfy the relevant interest payment, be deemed to satisfy the Company’s
obligations to pay interest on the Capital Securities pursuant to the
Alternative Coupon Satisfaction Mechanism. 
Any interest not so paid will continue to be treated as Optionally
Deferred Interest and such interest will continue to accrue and compound as
provided herein.

Under
the Alternative Coupon Satisfaction Mechanism, the Company and the Guarantor
and their Subsidiaries are not required to issue Qualifying Securities to the
extent that (i) with respect to Optionally Deferred Interest attributable to
the first 5 years of any Optional Deferral Period (including Compounded
Interest thereon), the number of shares of the Guarantor’s Common Stock
underlying any issuance of Qualifying Warrants applied to pay such interest,
together with the number of shares underlying all prior issuances of Qualifying
Warrants during such Optional Deferral Period so applied, would exceed 2% of
the total number of issued and outstanding shares of the Guarantor’s Common
Stock as of the date of the Guarantor’s then most recent publicly available
consolidated financial statements (the “Warrant Issuance Cap”)
or (ii) the net proceeds of any issuance of Non-Cumulative Perpetual Preferred
Stock applied to pay interest on the Capital Securities pursuant to the
Alternative Coupon Satisfaction Mechanism, together with the net proceeds of
all prior issuances of Non-Cumulative Perpetual Preferred Stock so applied,
would exceed 25% of the aggregate principal amount of the Capital Securities
initially issued under the Indenture (the “Preferred Stock Issuance
Cap”).

Once
the Guarantor reaches the Warrant Issuance Cap, the Guarantor is not required
to issue more Qualifying Warrants under the Alternative Coupon Satisfaction
Mechanism with respect to Optionally Deferred Interest attributable to the
first 5 years of any Optional Deferral Period (including Compounded Interest
thereon) even if there is a subsequent increase in the number of outstanding
shares of the Guarantor’s Common Stock. The Warrant Issuance Cap will cease to
apply following the fifth anniversary of the commencement of any Optional
Deferral Period, at which point the Company may only pay any Optionally
Deferred Interest, regardless of the time at which it was deferred, using 

 22
 

 

the Alternative Coupon Satisfaction Mechanism, subject
to the Preferred Stock Issuance Cap and any Market Disruption Event. If the
Warrant Issuance Cap has been reached during a Optional Deferral Period and the
Company subsequently pays all Optionally Deferred Interest payments (and
Compound Interest amounts) prior to the fifth anniversary of such Optional
Deferral Period, the Warrant Issuance Cap will cease to apply, and will only
apply again once the Company starts a new Optional Deferral Period. The
Preferred Stock Issuance Cap will apply so long as the Capital Securities remain
outstanding and all proceeds of issuances of Non-Cumulative Perpetual Preferred
Stock used to pay Optionally Deferred Interest hereunder will count against
such Preferred Stock Issuance Cap.

As
used in this Section 6.02, the term “Commercially Reasonable Efforts”
to sell Qualifying Securities means commercially reasonable efforts on the part
of the Company and the Guarantor to complete the offer and sale of Qualifying
Securities to third parties that are not Subsidiaries of the Company or the
Guarantor in public offerings or private placements, provided that the Company
and the Guarantor will be deemed to have made such Commercially Reasonable
Efforts during a Market Disruption Event regardless of whether the Company or
the Guarantor makes any offers or sales during such Market Disruption Event.
For the avoidance of doubt, neither the Company nor the Guarantor will be
considered to have made such Commercially Reasonable Efforts to effect a sale
of Qualifying Securities if either determines to not pursue or complete such
sale solely due to pricing, dividend rate or dilution considerations.

(b)   Following the Fifth Deferral Anniversary or a
Current Interest Payment Date, the Company shall apply the net proceeds
received by it from sales of shares of its Qualifying Securities to the payment
of accrued and unpaid interest (including Compounded Interest), with net
proceeds to be paid promptly after receipt until all accrued and unpaid
interest (including Compounded Interest) amounts owing have been paid in full.

(c)   In the event that net proceeds received by
the Company from one or more sales of shares of its Qualifying Securities
following such Fifth Deferral Anniversary or the Current Interest Payment Date
are not sufficient to satisfy the full interest amount, such net proceeds will
be paid to the Holders of the Capital Securities on a pro rata basis.

(d)   Any interest payment made pursuant to the
provisions of this Section 6.02 will first be allocated to payment of the
interest due on that Interest Payment Date. Any payment of interest in excess
of the amount of the interest due on that Interest Payment Date will be applied
first against any then existing accrued and unpaid interest, in chronological
order beginning with the earliest unpaid Interest Payment Date, and then
against any accrued and unpaid Compounded Interest. If the Company has
outstanding at such time any debt securities ranking pari passu with the
Capital Securities under the terms of which the Company is obligated to sell
Qualifying Securities and apply the net proceeds 

 23
 

 

to payment of deferred interest on such pari passu
securities and the Company at such time is required to apply such proceeds to
pay the deferred interest on such pari passu securities, then on any date and
for any period the amount of net proceeds received by the Company from such
sales and available for payment of such deferred interest shall be applied to
the Capital Securities and such pari passu securities on a pro rata basis.

Section 6.03.  Payment of Expenses.  In connection with the offering,
sale and issuance of the Capital Securities, the Company, in its capacity as
borrower with respect to the Capital Securities, shall pay the compensation of
the Trustee under the Junior Subordinated Indenture in accordance with the
provisions of Section 6.7 of the Base Indenture.

Section 6.04.  Payment upon Resignation or
Removal.  Upon termination of
this First Supplemental Subordinated Indenture or the Base Indenture or the
removal or resignation of the Trustee, the Company shall pay to the Trustee all
amounts accrued to the date of such termination, removal or resignation.

ARTICLE 7

SUBORDINATION

Article
16 of the Base Indenture shall be superseded by this Article 7 with respect to
the Capital Securities.

Section 7.01.  Agreement to Subordinate.  The Company agrees, and each
Holder by accepting any Capital Securities agrees, that, unless otherwise
specified pursuant to Section 3.01 hereof with respect to any series of Capital
Securities, the indebtedness evidenced by the Capital Securities is
subordinated in right of payment, to the extent and in the manner provided in
this Article 7, to the prior payment in full of all Company Senior
Indebtedness, and that the subordination is for the benefit of, and shall be
enforceable directly by, the holders of Company Senior Indebtedness, without
any act or notice of acceptance hereof or reliance hereon.

Section 7.02.  Liquidation; Dissolution;
Bankruptcy.  In the event of:

(a)   any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceeding relating to the Company, its creditors or its property;

(b)   any proceeding for the liquidation,
dissolution or other winding up of the Company voluntary or involuntary,
whether or not involving insolvency or bankruptcy proceedings;

(c)   any assignment by the Company for the benefit
of creditors; or

 24
 

 

 

(d)   any other marshalling of the assets of the
Company,

all Company Senior Indebtedness (including, without
limitation, interest accruing after the commencement of any such proceeding,
assignment or marshalling of assets) shall first be paid in full before any
payment or distribution, whether in cash, securities or other property, shall
be made by the Company on account of the Capital Securities. In any such event,
any payment or distribution, whether in cash, securities or other property,
which would otherwise (but for the provisions of this Article 7) be payable or
deliverable in respect of the Capital Securities (including any such payment or
distribution which may be payable or deliverable by reason of the payment of
any other indebtedness of the Company being subordinated to the payment of the
Capital Securities) shall be paid or delivered directly to the holders of
Company Senior Indebtedness, or to their representatives, in accordance with
the priorities then existing among such holders until all Company Senior
Indebtedness shall have been paid in full. Payments on the Capital Securities
in the form of other securities of the Company or those of any other corporation
provided for by a plan of reorganization or a readjustment, the payment of
which is subordinate, at least to the extent provided in the subordination
provisions of this Junior Subordinated Indenture with respect to the
indebtedness evidenced by the Capital Securities, to the payment of all Company
Senior Indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment, shall be
paid or delivered directly to the holders of Company Senior Indebtedness and
then, if any amounts remain, to the Holders of Capital Securities.

Section 7.03.  Default on Company Senior
Indebtedness.  If (i) the
Company defaults in the payment of any principal (or premium, if any) or
interest on any Company Senior Indebtedness, whether at maturity or at a date
fixed for prepayment or declaration or otherwise or (ii) an event of default
occurs with respect to any Company Senior Indebtedness permitting any holder
thereof to accelerate the maturity thereof and written notice of such event of
default, requesting that payments on the Capital Securities cease, is given to
the Company by the holders of Company Senior Indebtedness, then unless and
until such default in payment or event of default shall have been cured or
waived or shall have ceased to exist, no direct or indirect payment, in cash,
property or securities, by set-off or otherwise, may be made or agreed to be
made on account of the Capital Securities or interest thereon or in respect of
any repayment, redemption, retirement, purchase or other acquisition of the
Capital Securities.  Nothing in Section
7.02 hereof or in this Section 7.03 shall apply to claims of or payments to,
the Trustee under or pursuant to Section 6.03 hereof and Section 6.7 of the
Base Indenture.

Section 7.04.  When Distribution Must Be Paid
Over.  Unless otherwise
specified pursuant to Section 3.01 hereof with respect to any series of Capital
Securities, if a payment on account of or in respect of the Capital Securities
is made to the Trustee or any Holder at a time when a Responsible Officer of
the Trustee or such Holder has actual knowledge that because of this Article 7
such 

 25
 

 

payment should not have been made to it, the Trustee
or such Holder who receives the payment shall hold it in trust for the benefit
of, and, upon written request, shall pay it over to, the holders of Company
Senior Indebtedness as their interests may appear, or their agents or
representatives, for application to the payment of all principal, premium, if
any, and interest then payable with respect to any Company Senior Indebtedness.

Section 7.05.  Subrogation.  Company Senior Indebtedness shall
not be deemed to have been paid in full unless the holders thereof shall have
received cash, securities or other property equal to the amount of such Company
Senior Indebtedness then outstanding. After all Company Senior Indebtedness is
paid in full and until the Capital Securities are paid in full, Holders of the
Capital Securities shall be subrogated (equally and ratably with all other
indebtedness as to which the right to receive payment is pari passu with the
Capital Securities) to the rights of holders of Company Senior Indebtedness to
receive any further payments that are applicable to Company Senior Indebtedness
to the extent that payments or distributions otherwise payable to the Holders
have been applied to the payment of Company Senior Indebtedness, and such
payments or distributions received by any Holder of Capital Securities, by
reason of such subrogation, of cash, securities or other property which
otherwise would be paid or distributed to the holders of Company Senior
Indebtedness, shall, as between the Company and its creditors other than the
holders of Company Senior Indebtedness, on the one hand, and the Holders of
Capital Securities, on the other, be deemed to be a payment by the Company on
account of Company Senior Indebtedness, and not on account of Capital
Securities.  Upon any payment or
distribution of assets of the Company referred to in this Article 7, the
Trustee and the Holders shall be entitled to conclusively rely upon any order
or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Capital Securities, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the
holders of Company Senior Indebtedness with respect to the Securities of such
series and other indebtedness of the Company, as the case may be, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article 7.

Section 7.06.  Relative Rights.  This Article 7 defines the
relative rights of Holders of Capital Securities and holders of Company Senior
Indebtedness. Unless otherwise specified in Article 11 hereof or pursuant to
Section 3.01 hereof with respect to any series of Capital Securities, nothing
in this Junior Subordinated Indenture shall:

(a)   impair, as between the Company and Holders,
the obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Capital Securities in accordance with their
terms;

 26
 

 

 

(b)   affect the relative rights of Holders other
than their rights in relation to holders of Company Senior Indebtedness; or

(c)   prevent the Trustee or any Holder from
exercising its available remedies upon a default, an Other Covenant Default or
Event of Default, subject to the rights of holders and owners of Company Senior
Indebtedness to receive distributions and payments otherwise payable to
Holders.

If
the Company fails because of this Article 7 to pay principal of or interest on
Capital Securities on the due date, subject to Section 5.01 hereof, the failure
is still, or after notice or lapse of time or both would become, an Event of
Default.

Section 7.07.  Rights of the Trustee; Holders
of Company Senior Indebtedness.  (a)
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article 7 in respect of any Company Senior Indebtedness with
respect to the Capital Securities at any time held by it, to the same extent as
any other holder of such Company Senior Indebtedness, and nothing in this
Supplemental Indenture or the Base Indenture shall deprive the Trustee of any
of its rights as such holder.

(b)   With respect to the holders of Company Senior
Indebtedness, with respect to the Securities of any series, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 7 subject to Article 8 hereof,
and no implied covenants or obligations with respect to the holders of such
Company Senior Indebtedness shall be read into this Junior Subordinated
Indenture or any Additional Provisions against the Trustee. The Trustee shall
not be deemed to owe any fiduciary duty to the holders of such Company Senior
Indebtedness and, subject to the provisions of Section 6.2 of the Base
Indenture, the Trustee shall not be liable to any holder of such Company Senior
Indebtedness if it shall pay over or deliver to Holders of Capital Securities,
the Company or any other Person money or assets to which any holder of such
Company Senior Indebtedness shall be entitled by virtue of this Article 7 or
otherwise.

Nothing
in this Article 7 shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 6.03 hereof and Section 6.7 of the Base Indenture.

Section 7.08.  Subordination May Not Be
Impaired.  No present or
future holder of any Company Senior Indebtedness shall be prejudiced in the
right to enforce subordination of the indebtedness constituting the Capital
Securities by any act or failure to act on the part of the Company.

Section 7.09.  Distribution.  Upon any payment or distribution
of assets of the Company referred to in this Article 7, the Trustee and the
Holders shall be entitled to rely upon any order or decree made by any court of
competent 

 27
 

 

jurisdiction or upon any certificate of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of the Company Senior
Indebtedness and other Debt of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 7.

Section 7.10.  Authorization to Effect
Subordination.  Each Holder of
Capital Securities by his acceptance thereof authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in this Article 7 (to the extent the same may be
modified pursuant to Section 3.01 hereof with respect to any series of Capital
Securities), and appoints the Trustee his attorney-in-fact for any and all such
purposes.

ARTICLE 8

NOTICE

Section 8.01.  Notice by the Company.  Subject to Section 4.02 hereof,
the Company shall give prompt written notice to a Responsible Officer of the
Trustee of any fact known to the Company that would prohibit the making of any
payment of monies to or by the Trustee in respect of the Capital Securities
pursuant to the provisions of Article 7 hereof; provided that failure to give
such notice shall not affect the subordination of the Capital Securities to the
Company Senior Indebtedness as provided in Article 7 hereof.  Notwithstanding any of the provisions of the
Base Indenture and this First Supplemental Subordinated Indenture or of any
Additional Provisions, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment of monies
to or by the Trustee in respect of the Capital Securities pursuant to the
provisions of the Base Indenture or this First Supplemental Subordinated
Indenture unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder or holders of
Company Senior Indebtedness with respect to the Capital Securities from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Article 6 of the Base Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Article 8 at least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on or any Additional Amounts with respect
to, any Capital Securities), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were received,
and shall not be affected by any notice to the contrary that may be received by
it within two Business Days prior to such date.

 28
 

 

 

The
Trustee, subject to the provisions of Article 6 of the Base Indenture, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Company Senior Indebtedness with
respect to the Securities of any series (or a trustee on behalf of such
holder), to establish that such notice has been given by a holder of such Company
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of such Company
Senior Indebtedness to participate in any payment or distribution pursuant to
Article 7, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Company Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under Article 7, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

ARTICLE 9

FORM OF CAPITAL SECURITY

Section 9.01.  Form of Capital Security
..  The Capital Securities and
the Trustee’s Certificate of Authentication to be endorsed thereon are to be
substantially in the following forms:

(FORM OF FACE OF DEBENTURE)

[IF THE DEBENTURE IS TO BE A REGISTERED SECURITY IN GLOBAL FORM, INSERT
- THIS DEBENTURE IS A REGISTERED SECURITY IN GLOBAL FORM WITHIN THE MEANING OF
THE JUNIOR SUBORDINATED INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. THIS DEBENTURE IS
EXCHANGEABLE FOR DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
JUNIOR SUBORDINATED INDENTURE, AND NO TRANSFER OF THIS DEBENTURE MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR DEBENTURES IN DEFINITIVE REGISTERED FORM, THIS DEBENTURE
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF
THE 

 29
 

 

DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]

[UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

ASSURED GUARANTY U.S. HOLDINGS INC.

6.40%
Series A Enhanced Junior Subordinated Debentures due 2066

	
  No. R-1

  	
  CUSIP No. 

  	
  $150,000,000

  

 

ASSURED
GUARANTY U.S. HOLDINGS INC., a corporation organized and existing under the
laws of Delaware (hereinafter called the “Company”, which
term includes any successor corporation under the Junior Subordinated Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of ONE HUNDRED AND FIFTY
MILLION dollars ($150,000,000) on December 15, 2066 (the “Maturity
Date”). Notwithstanding the preceding sentence, in the event that
the Maturity Date is not a Business Day, then the Maturity Date will be the
next succeeding day which is a Business Day, and no interest shall accrue on
the amount payable on such date or at such time for the period from and after
such Maturity Date to such next succeeding Business Day, except that if such
Business Day is in the next succeeding calendar month, then the Maturity Date
will be the immediately preceding day which is a Business Day. The Company
further promises to pay interest on said principal sum from December 20, 2006
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for. From, and including, December 20, 2006 to, but excluding,
December 15, 2016 or earlier Redemption Date (the “Fixed Rate
Period”), the Capital Securities will bear interest, accruing from
the date of initial issuance, at the per annum rate of 6.40% (the “Fixed Rate”), payable (subject to the interest deferral
provisions of the First Supplemental Subordinated Indenture) semi-annually in arrears
on each Interest Payment Date in respect of an Interest 

 30
 

 

Payment Period during the Fixed Rate Period. From, and
including December 15, 2016 to, but excluding, the Maturity Date or earlier
Redemption Date (the “Floating Rate Period”),
the Capital Securities will bear interest at the per annum rate of 3-Month
LIBOR plus a margin equal to 2.38% (the “Floating Rate”),
payable (subject to the interest deferral provisions of the First Supplemental
Subordinated Indenture) quarterly in arrears on each Interest Payment Date in
respect of an Interest Payment Period during the Floating Rate Period. “Interest Payment Date” means (i) up to, and including,
December 15, 2016, each June 15 and December 15, commencing June 15, 2007; and
(ii) after December 15, 2016, each March 15, June 15, September 15 and December
15, commencing March 15, 2017; provided that if any such day from, and
including, March 15, 2007 is not a Business Day, then the Interest Payment Date
shall be the immediately succeeding Business Day, except that if such Business
Day is in the next succeeding calendar month, then such Interest Payment Date
will be the immediately preceding Business Day. “Interest
Payment Period” means the semi-annual or quarterly period, as
applicable, from and including, an Interest Payment Date to, but excluding, the
next succeeding Interest Payment Date, except for the first Interest Payment
Period which shall be determined from, and including, the date of initial
issuance of the Capital Securities (subject to Section 2.01 of the First
Supplemental Subordinated Indenture) to, but excluding, June 15, 2007.  The amount of interest payable on any
Interest Payment Date or Redemption Date in respect of an Interest Payment
Period during the Fixed Rate Period will be computed on the basis of a 360-day
year consisting of twelve 30-day months and will include interest accrued from,
and including, the last scheduled Interest Payment Date for which interest has
been paid or duly provided for (or, if none, the issue date) to, but excluding,
the scheduled Interest Payment Date or Redemption Date, as the case may be.
Interest calculated for any period less than a 30-day month will be calculated
based on the actual number of days elapsed in such month. In the event that any
Interest Payment Date during the Fixed Rate Period is not a Business Day,
payment of the interest payable on such Interest Payment Date will be made on
the next succeeding Business Day (and without any interest or other payment in
respect of any such delay). Interest payments during the Floating Rate Period
will include accrued interest from and including the last date in respect of
which interest has been duly paid or provided for to, but not including, the
next succeeding Interest Payment Date, the Redemption Date or the Maturity
Date, as the case may be. The amount of interest payable will be computed on
the basis of a 360-day year and the actual number of days elapsed in each
quarterly Interest Payment Period. All percentages resulting from any interest
rate calculation will be rounded upward or downward, as appropriate, to the
next higher or lower one-hundred-thousandth of a percentage point. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Base Indenture, be paid to the
Person in whose name this Capital Security is registered at the close of
business on the day next preceding the Interest Payment Date; provided, that in
the event the Capital Securities will not continue to remain in book-entry form
or are not in the form of a global certificate, the Company will have the right
to 

 31
 

 

select record dates, which will be at least one
Business Day before an Interest Payment Date. The principal of (and premium, if
any) and the interest (including Compounded Interest) on this Capital Security
shall be payable at the office or agency of the Trustee maintained for that
purpose in the United States, in any coin or currency of the United States of
America which at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Register.

The
indebtedness evidenced by this Capital Security is, to the extent provided in
the Junior Subordinated Indenture, subordinate and junior in right of payment
to the prior payment in full of all Company Senior Indebtedness, and this
Capital Security is issued subject to the provisions of the Junior Subordinated
Indenture with respect thereto. Each Holder of this Capital Security, 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 acknowledge or 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, hereby waives all
notice of the acceptance of the subordination provisions contained herein and
in the Junior Subordinated Indenture by each holder of Company 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 Capital Security set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

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

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

Dated: December 20, 2006 

	
  

  	
  ASSURED GUARANTY U.S.

  
	
   

  	
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 32
 

 

 

	
  

  	
  ASSURED GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  Attest:

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

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

	
  

  	
  THE BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:   

  
	
   

  	
   

  	
  Title:   Authorized Signatory

  

 

[REVERSE OF DEBENTURE]

This
Debenture is one of a duly authorized issue of securities of the Company
(herein called the “Capital Securities”),
issued and to be issued in one or more series under an Indenture, dated as of December
1, 2006 (herein called the “Base Indenture”),
between the Company the Guarantor, and The Bank of New York (herein called the “Trustee”, which term includes any successor trustee under
the Indenture), as supplemented by a First Supplemental Subordinated Indenture,
dated as of December 20, 2006 (the “First Supplemental
Subordinated Indenture” and the Base Indenture as so supplemented,
the “Junior Subordinated Indenture”), to which Junior Subordinated Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Capital Securities, and of the
terms upon which the Capital Securities are, and are to be, authenticated and
delivered. This Capital Security is one of the series designated on the face
hereof, limited in aggregate principal amount to $150,000,000.

 33

 

All
terms used in this Capital Security that are defined in the Junior Subordinated
Indenture shall have the meanings assigned to them in the Junior Subordinated
Indenture.

Notwithstanding
the provisions of Article 11 of the Base Indenture, the
Company shall have the right, at its option, to redeem the Capital Securities
for cash, in whole or in part, on and after December 15, 2016, at a cash
redemption price equal to the Par Redemption Amount; provided that if the
Capital Securities are not redeemed in whole, at least $50,000,000 aggregate
principal amount of the Capital Securities (excluding any Capital Securities
held by the Company or any of its Affiliates) remains outstanding after giving
effect to such redemption. Prior to December 15, 2016, the Company shall
have the right, at its option, to redeem the Capital Securities in whole but
not in part, including, but not limited to, upon the occurrence of a Tax Event
or a Rating Agency Event, at a cash redemption price of the greater of (i) the
Par Redemption Amount and (ii) the Make-Whole Redemption Amount. With respect
to any redemption of Capital Securities as a result of a Tax Event, the
Redemption Date will be within 180 days following the occurrence of such Tax
Event; provided, however,
that if at that time the Company or the Guarantor is able to eliminate, within
the 180-day period, the Tax Event by taking some ministerial action (such as
making an election or filing a form) that has no adverse effect on the
Guarantor or the Company or the Holders of the Capital Securities, the
Guarantor and the Company will pursue such action in lieu of redemption. The
Company will have no right or obligation to redeem the Capital Securities while
pursuing such measure.

Any
redemption will be made upon not less than fifteen days nor more than sixty
days notice before the Redemption Date to the registered Holders of the Capital
Securities. If the Capital Securities are to be redeemed in part, the Capital
Securities will be redeemed pro rata or by lot or by any other method utilized
by the Trustee that the Trustee shall deem fair and appropriate. Any notice
mailed as provided in the Junior Subordinated Indenture shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice, but failure duly to give such notice by mail, or any defect in such
notice or in the mailing thereof, to any Holder of the Capital Securities
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other Capital Securities. Each such notice given to a
Holder shall state: (1) the Redemption Date; (2) the Redemption Price; (3) that
the Capital Securities are being redeemed pursuant to the Junior Subordinated
Indenture or the terms of the Capital Securities together with the facts
permitting such redemption; (4) if less than all outstanding Capital Securities
are to be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Capital Securities to be redeemed; (5)
the place or places where the Capital Securities are to be redeemed; and (6)
that interest on the Capital Securities to be redeemed will cease to accrue on
the Redemption Date. Notwithstanding the foregoing, if the Capital Securities
are issued in book-entry form through The Depository Trust Company or any other
similar facility, notice of redemption may be given to the Holders of Capital
Securities at such time and in any manner permitted by such 

 34
 

 

facility. The Redemption Price shall be paid prior to
12:00 noon, New York City time, on the Redemption Date or at such earlier time
as the Company determines and specifies in the notice of redemption. The
Company shall deposit with the Trustee or with a Paying Agent an amount of
money sufficient to pay the Redemption Price of such Capital Securities or any
portion thereof which are to be redeemed on that date.

If
any notice of redemption has been given as provided in the Junior Subordinated
Indenture, the Capital Securities or portion of the Capital Securities with
respect to which such notice has been given shall become due and payable on the
date and at the place or places stated in such notice at the applicable
Redemption Price. From and after such date, the Capital Securities to be
redeemed shall cease to bear interest. If any Capital Securities called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal of and premium, if any, on such Capital Securities shall, until paid,
bear interest from the Redemption Date at the Coupon Rate. On presentation and
surrender of such Capital Securities at a place of payment in said notice
specified, the said securities or the specified portions thereof shall be paid
and redeemed by the Company at the applicable Redemption Price. Upon
presentation of any Capital Securities redeemed in part only, the Company and
the Guarantor shall execute and the Trustee shall authenticate and deliver to
the Holder thereof, at the expense of the Company, new Capital Securities of
the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Capital Securities so presented and
having the same original issue date, Maturity Date and terms. If a Registered
Security in global form is so surrendered, such new Capital Securities will
also be a new Registered Security in global form.

The
Capital Securities are not entitled to the benefit of any sinking fund.

If
an Event of Default with respect to Capital Securities of this series for which
the remedy of acceleration is available shall occur and be continuing, the
principal of the Capital Securities of this series may be declared due and
payable in the manner, with the effect and subject to the conditions provided
in the Junior Subordinated Indenture.

The
Junior Subordinated Indenture contains provisions for satisfaction, discharge
and defeasance at any time of the entire indebtedness of this Capital Security
upon compliance by the Company with certain conditions set forth in the Junior
Subordinated Indenture.

The
Junior Subordinated Indenture permits, with certain exceptions as therein
provided, the Company and the Trustee at any time to enter into a supplemental
indenture or indentures for the purpose of modifying in any manner the rights
and obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental 

 35
 

 

indenture. The Junior Subordinated Indenture also
contains provisions permitting Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive compliance by the
Company with certain provisions of the Junior Subordinated Indenture and
certain past defaults under the Junior Subordinated Indenture and their
consequences. Any such consent or waiver by the Holder of this Capital Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Capital Security and of any Capital Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Capital Security.

So
long as no Event of Default has occurred and is continuing under the Junior
Subordinated Indenture, the Company may elect at any time during the term of
the Capital Securities, and from time to time, to defer one or more payments of
interest on such Capital Securities (an “Optional Deferral”
and any such deferred interest, “Optionally Deferred
Interest” and such continuous period of Optional Deferral, an “Optional Deferral Period”) for up to ten years. Optionally
Deferred Interest will continue to accrue and compound semi-annually or
quarterly, as applicable, on each Interest Payment Date, to the extent
permitted by applicable law, at the applicable Coupon Rate.

Following
the earlier of (i) the Fifth Deferral Anniversary (as defined in Section 6.02
of the First Supplemental Subordinated Indenture) or (ii) a payment, during an
Optional Deferral Period, of current interest on the Capital Securities, the
provisions of Section 6.02 of the First Supplemental Subordinated Indenture
will apply, and the Company and the Guarantor must (except upon an Event of
Default with respect to the Capital Securities) make Commercially Reasonable
Efforts to sell certain Qualifying Securities. If such efforts are successful,
the Company must pay Optionally Deferred Interest out of the net proceeds from
the sale of such Qualifying Securities on the next succeeding Interest Payment
Date following the Fifth Deferral Anniversary or the Current Interest Payment
Date, as applicable, but the Company cannot pay such Optionally Deferred
Interest from sources other than the net proceeds from the sale of such
Qualifying Securities. Additionally, during any Optional Deferral Period, the
restrictions on payment by the Company and the Guarantor of dividends and other
distributions on Capital Stock pursuant to Section 6.01 of the First
Supplemental Subordinated Indenture will apply. There is no limit on the number
of Optional Deferral Periods that the Company may begin.

If
the Company defers interest for a period of 10 consecutive years from the
commencement of an Optional Deferral Period, the Company will be required to
pay all accrued and unpaid interest (including Compounded Interest) at the
conclusion of the 10-year period, and to the extent it does not do so, the
Guarantor will be required to make Subordinated Guarantee payments in
accordance with Article 17 of the Base Indenture.  If the Company fails to pay in full all
accrued and unpaid interest (including Compounded Interest) at the conclusion
of the 10-year period, due to an Optional Deferral or otherwise, such failure
continues for 

 36
 

 

30 days and the Guarantor fails to make Subordinated
Guarantee payments with respect thereto, an Event of Default will occur.

The
Company shall provide a notice of any Optional Deferral to the Trustee no more
than sixty and no fewer than fifteen days prior to the relevant Interest
Payment Date.  A notice of Optional
Deferral, once given, will be irrevocable and the deferral of payments on the
related Interest Payment Date will be considered an Optional Deferral.

Each
Holder of a Capital Security, by such Holder’s acceptance thereof, agrees that
upon any payment or distribution of assets to creditors of the Company upon any
liquidation, dissolution, winding up, reorganization, or in connection with any
insolvency, receivership or proceeding with respect to the Company, whether
voluntary or not, such Holder shall not have a claim for, and thus no right to
receive, interest that is unpaid (including Compounded Interest thereon) and
has not been settled through the application of the Alternative Coupon
Satisfaction Mechanism, to the extent that the aggregate amount of such
interest (including Compounded Interest thereon) relates to the first two years
of the portion of the Optional Deferral Period for which interest has not so
been paid.

Except
as provided in the immediately preceding paragraph and Article 11 of the First
Supplemental Subordinated Indenture, no reference herein to the Junior
Subordinated Indenture and no provision of this Capital Security or of the
Junior Subordinated Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Capital Security at the times, place and
rate, and in the coin or currency, herein prescribed.

Upon
the exchange of any Capital Securities in the form of a global Registered
Security for definitive Registered Securities, such global Registered Security
shall be cancelled by the Trustee or an agent of the Company or the Trustee.  The definitive Registered Securities issued
in exchange for a global Registered Security pursuant to Section 2.03 of the
First Supplemental Subordinated Indenture shall be registered in such names and
in denominations of $2,000 and integral multiples of $1,000 in excess thereof,
bearing identical terms as the Registered Security they replace, as the
Depositary for such global Registered Security, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee or
an agent of the Company or the Trustee. The Trustee or such agent shall deliver
such definitive Registered Securities to or as directed by the Persons in whose
names such definitive Registered Securities are so registered.

All
Capital Securities issued upon any transfer or exchange of Capital Securities
shall be valid obligations of the Company and the Guarantor, respectively,
evidencing the same debt, and entitled to the same benefits under the 

 37
 

 

Junior Subordinated Indenture, as the Capital
Securities surrendered upon such transfer or exchange.

Principal
and interest on the Capital Securities issued in the form of definitive
Registered Securities will be payable, the transfer of such Capital Securities
will be registrable and such Capital Securities will be exchangeable for Capital
Securities bearing identical terms and provisions at the office or agency of
the Trustee; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the Holder at such address as shall
appear in the Security Register.

No
recourse shall be had for the payment of the principal of or the interest on
this Capital Security, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Junior Subordinated Indenture, against
any incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.

The
Company agrees and, by its acceptance of this Capital Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Capital Security agrees to treat this Capital Security as
indebtedness for United States federal, state and local tax purposes.

THE JUNIOR SUBORDINATED INDENTURE AND THIS CAPITAL SECURITY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

ARTICLE 10

ORIGINAL ISSUE OF CAPITAL SECURITIES

Section 10.01.  Original Issue of Capital
Securities .  Capital
Securities in the aggregate principal amount not to exceed $150,000,000, except
as provided in Section 2.01(b) hereof, may, upon execution of this First
Supplemental Subordinated Indenture, be executed by the Company and the Guarantor
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Capital Securities to or upon the
written order of the Company, signed by its Chief Executive Officer, its
President, or any Vice President and its Treasurer or an Assistant Treasurer,
without any further action by the Company.

 38
 

 

The
Company shall file with the Trustee promptly at the end of each calendar year
(i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on Outstanding Securities
as of the end of the year and (ii) such other specific information relating to
such original issue discount as may then be relevant under the Internal Revenue
Code of 1986, as amended from time to time.

ARTICLE 11

LIMITATION ON CLAIMS

Section 11.01.  Limitation on Claim for
Deferred Interest.  Each
Holder of a Capital Security, by such Holder’s acceptance thereof, agrees that
upon any payment or distribution of assets to creditors of the Company upon any
liquidation, dissolution, winding up, reorganization, or in connection with any
insolvency, receivership or proceeding with respect to the Company, whether
voluntary or not, such Holder shall not have a claim for, and thus no right to
receive, interest that is unpaid (including Compounded Interest thereon) and
has not been settled through the application of the Alternative Coupon
Satisfaction Mechanism, to the extent that the aggregate amount of such
interest (including Compounded Interest thereon) relates to the first two years
of the portion of the Optional Deferral Period for which interest has not so
been paid. Amounts to which the Holders of the Capital Securities would have
been entitled to receive hereunder, but for operation of this Section 11.01 are
referred to as “Foregone Interest.”

ARTICLE 12

DEFEASANCE OF CERTAIN COVENANTS

Section 12.01.  Termination of the Company’s
Obligations Under Certain Covenants.  Subject
to Article 16 of the Base Indenture, the Company, at its option, either (a)
shall be deemed to have been Discharged (as defined below) from its obligations
with respect to the Capital Securities on the ninety-first day after the
applicable conditions set forth below have been satisfied or (b) shall cease to
be under any obligation to comply with any term, provision or condition set
forth in Section 10.7 of the Base Indenture and Article 6 hereof with respect
to the Capital Securities and the Guarantor shall cease to be under any
obligation to comply with any term, provision or condition set forth in Section
10.8 of the Base Indenture and Article 17 thereof with respect to the
Subordinated Guarantees, at any time after the applicable conditions set forth
below have been satisfied:

(i)    the Company shall have deposited or caused
to be deposited irrevocably with the Trustee as trust funds in trust,
specifically assigned as security for, and dedicated solely to, the benefit of
the Holders of the Capital Securities (A) money in an amount, or (B) Government
Obligations which through the payment of interest and principal in respect 

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thereof in
accordance with their terms will provide, not later than one day (or, if such
day is not a Business Day, the first day preceding such day which is not a
Business Day) before the due date of any payment, money in an amount, or (C) a
combination of (A) and (B), sufficient, in the opinion of a nationally
recognized firm of independent registered public accounting firm selected by
the Company expressed in a written certification thereof delivered to the Trustee,
to pay and discharge the principal of and interest, if any, on the outstanding
Capital Securities on the dates such principal and interest, if any, are due;

(ii)   if the Capital Securities are then listed on
the New York Stock Exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Company’s exercise of its option
under this paragraph would not cause such Capital Securities to be delisted;

(iii)  no Event of Default, or event which with the
giving of notice or lapse of time, or both, would become an Event of Default,
with respect to the Capital Securities under Section 5.1 of the Base Indenture
as amended and supplemented by Section 5.01 hereof shall have occurred and be
continuing on the date of such deposit and the Company shall have furnished to
the Trustee an Officers’ Certificate to such effect; and

(iv)  the Company shall have delivered to the
Trustee the following: (A) an Opinion of Counsel or to the effect that Holders
of the Capital Securities will not recognize income, gain or loss for U.S.
Federal income tax purposes as a result of the Company’s exercise of its option
under this Section 12.01 and will be subject to U.S. Federal income tax on the
same amount and in the same manner and at the same times as would have been the
case if such option had not been exercised and (B) either (1) an Opinion of
Counsel or (2) a no-action letter from, or issued by, the Commission, whichever
of (1) or (2) the Company shall determine, to the effect that the deposit with
the Trustee of money and/or Government Securities as trust funds as provided in
this Section 12.01 will not be considered an investment company required to be
registered under the Investment Company Act of 1940, as amended. The Company
shall give notice to the Holders of the Capital Securities at the time
Government Obligations are deposited with the Trustee.

“Discharged” means, for purposes of this Section 12.01, that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by, and obligations under, the Capital Securities and to have
satisfied all the obligations under this Junior Subordinated Indenture relating
to the Capital Securities (and the Trustee, at the expense of the Company,
shall execute such instruments as may be requested by the Company acknowledging
the same), except (A) the rights of Holders of Capital Securities to receive,
solely from the trust fund described above, payment of the principal of and
interest, if any, on 

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such Capital Securities when such payments are due;
(B) the Company’s obligations with respect to such Securities under Sections
1.10, 3.5, 3.6, 4.3, 6.7, 6.9, 7.1, 10.2 and 10.3 of the Base Indenture; and
(C) the rights, powers, duties and immunities of the Trustee hereunder. Notwithstanding
the satisfaction and discharge of this Junior Subordinated Indenture with
respect to any Capital Securities, the obligations of the Company to the
Trustee and any predecessor Trustee under Sections 1.10 and 6.7 of the Base
Indenture shall survive.

Section 12.02.  Application of Trust
Money.  All moneys and
Government Obligations deposited with the Trustee pursuant to Section 12.01
and, with respect to Government Obligations, the principal and interest in
respect thereof, shall be held irrevocably in trust and applied by it to the
payment in accordance with the provisions of the Capital Securities and this
Junior Subordinated Indenture, either directly or through any Paying Agent
(including the Company if acting as its own Paying Agent), to the Holders of
the Capital Securities for the payment or redemption of which such money has
been deposited with the Trustee, of all sums due and to become due thereon for
principal and interest, if any, but such money need not be segregated from
other funds except to the extent required by law.

Section 12.03.  Repayment to Company.  The Trustee and the Paying Agent
shall promptly pay to the Company upon request any excess money or securities
held by them at any time. Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the principal
of or interest on any Capital Security and remaining unclaimed for two years
after such principal or interest has become due and payable shall be paid to
the Company on request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Capital Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease.

ARTICLE 13

MISCELLANEOUS

Section 13.01.  Ratification of
Indenture.  The Base Indenture
as supplemented by this First Supplemental Subordinated Indenture, is in all
respects ratified and confirmed, and this First Supplemental Subordinated
Indenture shall be deemed part of the Base Indenture in the manner and to the
extent herein and therein provided.

Section 13.02.  Trustee Not Responsible for
Recitals; Concerning the Calculation Agent. 
The recitals herein contained are made by the Company or the
Guarantor and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Calculation Agent shall have all of the rights,
immunities, and protections accorded the Trustee under the Indenture.

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Section 13.03.  Governing Law.  This First Supplemental
Subordinated Indenture and each Capital Security shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said State applicable to
contracts made and to be performed entirely within said State.

Section 13.04.  Separability.  In case any one or more of the
provisions contained in this First Supplemental Subordinated Indenture or in
the Capital Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this First Supplemental Subordinated
Indenture or of the Capital Securities, but this First Supplemental
Subordinated Indenture and the Capital Securities shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein or
therein.

Section 13.05.  Counterparts.  This First Supplemental
Subordinated Indenture may be executed in any number of counterparts each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.

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IN WITNESS WHEREOF, the parties hereto have caused
this First Supplemental Subordinated Indenture to be duly executed by their
respective officers thereunto duly authorized, on the date or dates indicated
in the acknowledgments and as of the day and year first above written.

	
  

  	
   

  	
  ASSURED GUARANTY U.S. 

  
	
   

  	
   

  	
  HOLDINGS INC.,

  
	
   

  	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSURED GUARANTY LTD, as 

  
	
   

  	
   

  	
  Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NEW YORK, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

 43

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