Document:

Exhibit 10.2

 

STAGE SMART LIMITED

 

SERIES A PREFERENCE SHARES PURCHASE AGREEMENT

 

This
Series A Preference Shares Purchase Agreement is made as of the 16th day of October 2010 (the “Agreement”) by and among
STAGE SMART LIMITED, a British Virgin Islands company (the “Company”), STAGE SMART
(BEIJING) TECHNOLOGY LIMITED (思达齐马特(北京)科技有限公司), a
wholly-foreign owned enterprise established under the laws of the People’s
Republic of China (“PRC”) (the “PRC Subsidiary”), STAGE SMART (HONG
KONG) LIMITED, a Hong Kong company (the “HK Subsidiary”),
CRIStar (Beijing) Culture and Media Co., Ltd. (可视达(北京)文化传媒有限公司), a limited
liability company established under the laws of the PRC (the “PRC Domestic Company”),  UTStarcom, Inc., a Delaware company (the
“Investor”) and Smart Frontier
Holdings Limited, the sole shareholder of the Company (the “Shareholder”).  The PRC Subsidiary, the HK Subsidiary and the
PRC Domestic Company are referred to herein as the “Subsidiaries”
and each, a “Subsidiary.”  The Company and the Subsidiaries collectively
are referred to herein as the “Group Companies”
and each, a “Group Company.” The
Shareholder and the Investor collectively are referred to herein as the “Holders” and each, a “Holder.”

 

In
consideration of the mutual covenants and representations herein set forth, the
Group Companies, the Investor and the Shareholder agree as follows:

 

1.             Authorization, Sale and Purchase
of Shares.

 

Subject to the terms and conditions of this
Agreement, on or prior to the Closing (as defined in Section 2 below), the
Company shall have authorized (a) the sale and issuance to the Investor of
an aggregate of 9,600,000 of the Company’s Series A Preference Shares (the
“Series A Shares”)
at a price of US$2.08333 per share (the “Purchase
Price”), for an aggregate consideration of US$20,000,000, and
(b) the issuance of such Ordinary Shares (as defined in Section 3(d)(ii) below)
to be issued upon conversion of the Series A Shares (the “Conversion
Shares”).  The Series A Shares and the Conversion
Shares shall have the rights, preferences, privileges and restrictions set
forth in the Amended and Restated Memorandum of Association of the Company (the
“Amended Memorandum”)
and the Amended and Restated Articles of Association of the Company (the “Restated Articles”), each in
the form attached hereto as Exhibit A.

 

2.             Closing.

 

The
purchase, sale and issuance of the Series A Shares shall occur at a
closing (the “Closing”).  The Closing shall take place remotely via the
exchange of documents and signatures or at such other place as shall be
designated by the Company and the Investor purchasing Series A Shares in
the Closing.  At the Closing, the
Investor shall deliver to the Company the aggregate purchase price of the Series A
Shares and the Company shall deliver to the Investor a certified copy of the
Register of Members of the Company updated to reflect the Investor’s ownership
of the Series A Shares, and shall issue to the Investor a certificate
representing the Series A Shares 

 

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being purchased by the
Investor, registered in the name of such Investor.  At or before the Closing, the Group Companies
and the Holders will execute counterpart signature pages to this
Agreement, the Company and Holders will execute counterpart signature pages to
the Voting Agreement in substantially the form attached hereto as Exhibit B
(the “Voting
Agreement”), and the Company and Holders will execute
counterpart signature pages to the Ordinary Share Purchase Agreement in
substantially the form attached hereto as Exhibit C (the “Ordinary Share Agreement”
and, together with this Agreement and Voting Agreement,  the “Transaction Agreements”).

 

3.             Representations
and Warranties of the Group Companies and the Shareholder.

 

A
Schedule of Exceptions attached hereto (the “Schedule of Exceptions”) shall be
delivered to the Investor in connection with the execution of the Agreement.
Except as set forth in the Schedule of Exceptions delivered to the Investor at
the Closing, the Group Companies and the Shareholder (each a “Warrantor” and
collectively, the “Warrantors”)
hereby jointly and severally represent and warrant to the Investor as of the
date of this Agreement and as of the date of the Closing as set forth below.

 

(a)           Corporate Power.  The
Shareholder and each Group Company has full legal right, power and capacity as
may be required to execute, deliver and carry out the provisions of the
Transaction Agreements, and, with respect to the Company only, to issue and
sell the Series A Shares and the Conversion Shares to the Investor
pursuant hereto in the manner contemplated hereby and to carry out the
provisions of the Transaction Agreements.

 

(b)           Organization, Good Standing and
Qualification.  The Shareholder and each Group Company are
duly incorporated, validly existing and in good standing (or equivalent status
in the relevant jurisdiction) under the laws of its jurisdiction of formation,
and is qualified and authorized to do business as a foreign corporation in all
jurisdictions where the failure to be so qualified and/or authorized would be
reasonably likely to have Material Adverse Effect (as defined below) on the
business or the assets of such Group Company. 
As used in this Agreement, “Material
Adverse Effect” means a material adverse effect on the business,
assets (including intangible assets), liabilities, financial condition,
prospects, property or results of operations of the Group Companies, taken as a
whole.

 

(c)           Subsidiaries.

 

(i)            Group Structure.  Except for (x) the PRC Subsidiary, one
hundred percent (100%) of the equity interest of which is legally and
beneficially owned by the HK Subsidiary, (y) the HK Subsidiary, one
hundred percent (100%) of the equity interest of which is legally and
beneficially owned by the Company  and (z) the
PRC Domestic Company, which is controlled by the PRC Subsidiary via a series of
agreements, the Company does not own or control, directly or indirectly, or
hold any rights to acquire, any equity security or other interest of any other
corporation, limited partnership or other business entity.  The equity interests of the Subsidiaries are free
and clear of all liens and encumbrances. 
The Company is not a participant in any joint venture, partnership or
similar arrangement.  Except for the HK
Subsidiary which legally and beneficially owns one hundred percent (100%) of
the PRC Subsidiary and the PRC 

 

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Subsidiary which has the option to acquire the
equity of the PRC Domestic Company pursuant to the control agreements, none of
the Subsidiaries has any subsidiaries, nor do any of the Subsidiaries own or
control, directly or indirectly, or hold any rights to acquire, any equity
security or other interest in any other corporation, partnership, joint venture
or similar arrangement, or other business entity.  None of the Subsidiaries maintains any offices
or branches or subsidiaries except for such offices listed in Schedule 3(c)(i) of
the Schedule of Exceptions.

 

(ii)           Capitalization.  The authorized capital and the holders of all
of the issued and outstanding shares of capital stock of each Subsidiary are
listed in Schedule 3(c)(ii) of the Schedule of Exceptions.

 

(iii)          Options, Warrants and Rights;
Voting.  There are no outstanding
options, warrants, rights (including conversion or preemptive rights and rights
of first refusal), or agreements of any kind to purchase a Subsidiary’s
authorized and unissued shares of capital stock, or to compel such Subsidiary
to issue, repurchase, redeem any shares of capital stock of such Subsidiary.

 

(d)           Capitalization.  The Company shall have effected a 1 to 10,000
share split (the “Share Split”) of the Ordinary
Shares (as defined in Section 3(d)(ii) below) prior to the Closing.

 

Immediately prior to the Closing and giving effect
to the Share Split, the authorized and outstanding capitalization of the
Company consists of:

 

(i)            Preference Shares.  9,600,000 Preference Shares of the Company (“Preference
Shares”), par value US$0.0001
per share, all of which are designated as Series A Preference Shares, none
of which are issued and outstanding, and up to 9,600,000 of which may be sold
pursuant to this Agreement.  The rights,
privileges and preferences of the Series A Preference Shares will be as
stated in the Restated Articles.

 

(ii)           Ordinary Shares.  22,000,000 Ordinary Shares of the Company (“Ordinary Shares”), par value US$0.0001
per share, of which 10,000,000 shares are issued and outstanding, 9,600,000
shares have been reserved for issuance upon conversion of the Series A
Shares, and 2,177,778 shares have been reserved for issuance to employees,
consultants and directors pursuant to its 2010 Global Share Plan, under which
no options are issued and outstanding as of the date of this Agreement.. The
outstanding Ordinary Shares have been (1) duly authorized and validly
issued, and are fully paid and nonassessable, and (2) were issued in
compliance with all applicable non-U.S. and U.S. state and federal laws
concerning the issuance of securities.

 

(iii)          Options, Warrants and Rights.  Except for the conversion privileges of the
Preference Shares, there are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal), or
agreements of any kind to purchase any of the Company’s authorized and unissued
shares of capital stock or any equity interest in any other Group Company.

 

(iv)          Reserved Shares.  The Conversion Shares have been duly and
validly reserved for issuance.  When
issued in compliance with the provisions of this Agreement 

 

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and the Restated Articles,
the Series A Shares and the Conversion Shares will be duly authorized,
validly issued, fully paid and nonassessable, and will be free of any liens or
encumbrances other than liens and encumbrances created by or imposed upon the
Investor.

 

(v)           Market Stand-off.  All outstanding shares of the Company are
subject to a one hundred eighty (180) day “market stand-off” restriction upon
an initial public offering of the Company’s securities or such other period as
may be requested by the Company or an underwriter to accommodate regulatory
restrictions on (i) the publication or other distribution of research
reports and (ii) analyst recommendations and opinions, including, but not
limited to, the restrictions contained in NASD Rule 2711(f)(4) or
NYSE Rule 472(f)(4), or any successor provisions or amendments thereto).

 

(e)           Enforceability.  Each
of the Transaction Agreements, when executed and delivered by the Shareholder
and each Group Company, as applicable, will be duly and validly executed and
delivered by the Shareholder or such Group Company and will be the legally
binding obligations of the Shareholder or such Group Company enforceable
against it in accordance with their terms. 
All corporate action on the part of the Shareholder and each Group
Company, their officers, directors and shareholders necessary for the
authorization of the applicable Transaction Agreements, the performance of all
obligations of the Shareholder and each Group Company hereunder and thereunder
at the Closing, and the authorization, sale, issuance and delivery of the Series A
Shares pursuant hereto and the Conversion Shares pursuant to the Restated
Articles has been taken or will be taken prior to the Closing.

 

(f)            Offering.  Provided
that the representations and warranties made by the Investor herein are complete,
true and accurate, then the offer, issuance and sale of the Series A
Shares and the Conversion Shares pursuant to this Agreement and the Restated
Articles will be exempt from the registration requirements of Section 5 of
the U.S. Securities Act of 1933, as amended (the “Act”), and will have been registered or
qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable U.S. state
securities laws.  Neither the Company nor
any agent on its behalf has solicited any offers to sell or has offered to sell
all or any part of the Series A Shares to any person or persons so as to
bring the sale of such Series A Shares by the Company within the
registration and/or qualification provisions of the Act or any applicable U.S.
state securities laws.

 

(g)           Minutes Books.  The
minute books of each Group Company have been made available to the Investor and
such minutes books contain a complete summary of all meetings and actions taken
by the directors and shareholders of such Group Company since its time of
formation, and summarize all transactions referred to in such minutes
accurately in all material respects.  All
board and shareholder resolutions, articles and memoranda of association (and any
amendments thereto) and any other required filings of the Company have been
duly filed with the registrar of companies of the British Virgin Islands within
the required deadlines for such filings under the applicable laws.  Each Group Company maintains its books of
accounts and records in the usual, regular and ordinary manner, on a basis
consistent with prior practice, and which shall permit its financial statements
to be prepared in accordance with the applicable international financial
reporting standard.

 

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(h)           Title to Property and Assets.  Each
Group Company has good and marketable title to its material property and
assets, and has good title to all its material leasehold interests, in each
case subject to no mortgage, pledge, lien, lease, encumbrance or charge that
materially detracts from the value of the property subject thereto or
materially impairs the operations of such Group Company.  All facilities, machinery, equipment,
fixtures, vehicles and other properties owned, leased or used by the Group
Companies that are material to the business of the Group Companies are in good
operating condition and repair, normal wear and tear excepted, and are
reasonably fit and usable for the purposes for which they are being used.  Each Group Company is in compliance with all
material terms of each lease to which it is a party or is otherwise bound.

 

(i)            Litigation.  There
is no action, suit, proceeding, claim or investigation (“Action”) pending against any of the Group Companies for which a Group Company
has been notified or served or, currently threatened against a Group Company,
including but not limited to those involving the employment of current or
former employees, its activities or properties. 
To the knowledge of the Warrantor, there is no factual or legal basis
for any such Action.  None of the Group
Companies is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality.  There is no Action by
any Group Company currently pending or which a Group Company intends to
initiate.

 

(j)            Employee and Consultant
Confidentiality Agreements.  Each
current and former employee, officer or director of each Group Company has
executed the Company’s or the appropriate Subsidiary’s standard form of
confidential information and invention assignment agreement.  No such employee has excluded works or
inventions made prior to his or her employment with a Group Company from his or
her assignment of inventions pursuant to such employee’s confidential
information and invention assignment agreement. 
Each consultant of a Group Company that has had access to any of the
Group Companies’ intellectual property has entered into an agreement containing
appropriate confidentiality and invention assignment provisions.  To the knowledge of the Warrantors, no
officer, employee or consultant of any Group Company is in violation of such
confidential information and invention assignment agreement or any other
employee or consultant agreement or proprietary information agreement with any
other corporation or third party.

 

(k)           Intellectual Property Rights.

 

(i)            Ownership.  Each Group Company owns or possesses
sufficient legal rights to all patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses (software or otherwise), information,
processes and similar proprietary rights (“Intellectual Property”) necessary to the business of
such Group Company as presently conducted, without any conflict with or
infringement of the rights of others. 
Except for agreements with its own employees or consultants, standard
end-user license agreements, support/maintenance agreements and agreements
entered in the ordinary course of each Group Company’s business, there are no
outstanding options, licenses or agreements relating to the Intellectual
Property, and each Group Company is not bound by or a party to any options,
licenses or agreements with respect to the Intellectual Property of any other
person or entity.  No Group Company has
received any written communication alleging that such Group Company has
violated or, by conducting its business as currently conducted, would violate
any of the 

 

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Intellectual Property of
any other person or entity, nor is any Group Company aware of any basis
therefore.  Each Group Company is not
obligated to make any payments by way of royalties, fees or otherwise to any
owner or licensor of or claimant to any Intellectual Property with respect to
the use thereof in connection with the conduct of its business as presently
conducted.  There are no agreements,
understandings, instruments, contracts, judgments, orders or decrees to which
any Group Company is a party or by which any Group Company is bound which
involve indemnification by such Group Company with respect to infringements of
Intellectual Property.

 

(ii)           No Breach by Employees.  No Group Company is aware that any of its
respective employees is obligated under any contract or other agreement, or
subject to any judgment, decree or order of any court or administrative agency,
that would materially interfere with the use of his or her efforts to promote
the interests of such Group Company or that would conflict with the Group Company’s
business as presently conducted.  Neither
the execution nor delivery of this Agreement, nor the carrying on of each Group
Company’s business by the employees of such Group Company, nor the conduct of
such Group Company’s business as presently conducted, will, to the Warrantors’
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of such employees is now obligated.  No Group Company believes it is or that it
will be necessary to use any inventions of any of its employees made prior to
their employment with such Group Company.

 

(l)            Liabilities.

 

(i)            No Group Company has any liabilities
of any nature, whether accrued, absolute, contingent or otherwise, and whether
due or to become due, except for trade or business obligations and liabilities
incurred in the ordinary course of business since such Group Company’s
inception and as would be reflected on a balance sheet of the Company (on a consolidated
basis) prepared in accordance with applicable GAAP.  There has not been commenced against the
Company or any Group Company an involuntary case under any applicable national,
provincial, city, local or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect, or any case, proceeding or other action
for the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such entity or for any substantial part
of its property or for the winding up or liquidation of its affairs.

 

(ii)           With respect to assets, the balance
sheet of the Company would only include the investment in the HK Subsidiary,
the PRC Subsidiary and the PRC Domestic Company, the cash balance, and any
inter-company balance among the Company, the HK Subsidiary, the PRC Subsidiary
and the PRC Domestic Company. With respect to liabilities, the balance sheet
would include only the share capital, accumulated losses (only to extent that
such losses relate to administrative expenses associated with the maintenance
of the Company in good standing in the ordinary course of business, and lease
expenses and any legal expenses associated with equity or debt financings of
the Company), and any loans to the Company by its shareholders (if any).  The Company has not engaged in any
off-balance sheet financing.

 

(iii)          Both before and after giving effect to
the transactions contemplated hereby: (1) other than as provided in Section 3(m)(iii) of
the Schedule of 

 

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Exceptions, the aggregate assets, at a fair
valuation, of each Group Company, will exceed the aggregate liabilities of such
Group Company (including, without limitation, contingent, subordinated,
unmatured and unliquidated liabilities on existing debts, as such liabilities
may become absolute and matured), as the debt becomes absolute and matures: (2) no
Group Company will have incurred or intended to incur, and will not believe
that it will incur, debt beyond its ability to pay such debt as such debt
becomes absolute and matures; and (3) no Group Company will have (and will
have no reason to believe that it will have thereafter) unreasonably small
capital for the conduct of its business.

 

(m)          Compliance with Law and Other Instruments.

 

(i)            Each Group Company is in compliance
with all applicable statutes, laws, regulations and executive orders of the
PRC, the United States and all states, foreign countries or other governmental
bodies and agencies having jurisdiction over any Group Company’s business or
properties where a violation thereof would have a material and adverse impact
on such Group Company’s business.  No
Group Company has received any notice of any violation of any such statute,
law, regulation or order which has not been remedied prior to the date
hereof.  The execution, delivery, and
performance of and compliance with the Transaction Agreements, and the issuance
and sale of the Series A Shares pursuant hereto and of the Conversion
Shares pursuant to the Restated Articles, will not, with or without the passage
of time or giving of notice, result in any such violation, or be in conflict
with or constitute a default under any such term, or result in the creation of
any mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of a Group Company or the suspension, revocation, impairment, forfeiture
or nonrenewal of any permit, license, authorization or approval applicable to
such Group Company, its business or operations or any of its assets or properties,
or result in any violation of any such statute, law, regulation or order.  No Group Company is in violation or default
of any term of its constitutional documents, or in any material respect of any
provision of any mortgage, indenture, agreement, instrument or contract to
which it is party or by which it is bound or of any judgment, decree, order or
writ.  No Group Company has performed any
act or omitted any act, the occurrence or omission of which would result in
such Group Company’s loss of any material right granted under any license,
distribution agreement or other agreement required to be disclosed in the
Schedule of Exceptions.

 

(ii)           No Group Company, nor any director,
agent, employee or any other person acting for or on behalf of any Group Company,
has directly or indirectly (1) made any contribution, gift, bribe, payoff,
influence payment, kickback, or any other fraudulent payment in any form,
whether in money, property, or services to any public official or otherwise to (A) obtain
favorable treatment in securing business for a Group Company, (B) pay for
favorable treatment for business secured, or (C) obtain special
concessions or for special concessions already obtained, for or in respect of
any Group Company, in each case which would have been in violation of any
applicable law, or (2) established or maintained any fund or assets in
which any Group Company shall have proprietary rights that have not been
recorded in the books and records of a Group Company.

 

(iii)          Except as set forth in Schedule 3(m)(iii) of
the Schedule of Exceptions, no director, agent, employee or shareholder of any
Group Company is a government 

 

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official as such term is defined in the U.S. Foreign
Corrupt Practices Act of 1977, as amended (“US FCPA”).

 

(iv)          No Group Company (including any of
their officers, directors, agents, distributors, employees or other Person
acting on behalf of any Group Company) have, directly or indirectly, taken any
action which would cause them to be in violation of the US FCPA or any rules or
regulations thereunder or any similar anti-corruption or anti-bribery legal
requirements applicable to the Company or any of its Subsidiaries in any
jurisdiction other than the United States, including the PRC, or used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, made, offered or authorized
any unlawful payment to foreign or domestic government officials or employees,
whether directly or indirectly, or made, offered or authorized any unlawful
bribe, rebate, payoff, influence payment, kickback or other similar unlawful
payment, whether directly or indirectly.

 

(n)           Agreements.  Except
as set forth in Schedule 3(n) of the Schedule of Exceptions, there are no
other agreements, understandings or proposed transactions to which a Group
Company is a party or by which it or any of its properties are bound that
involve (i) obligations (contingent or otherwise) of, or payments to, a
Group Company in the excess of US$10,000, (ii) the license of any material
Intellectual Property to or from a Group Company, or (iii) the payment of
dividends by a Group Company.  No Group
Company has breached, nor does any Warrantor have any knowledge of any claim or
threat that such Group Company has breached, any term or condition of any
agreement or understanding to which it is a party or by which its properties
are bound, the breach of which would reasonably be expected to result in a
material adverse effect on such Group Company’s business, and each such
agreement is in full force and effect in all material respects, and no other
party to such agreement is in material default thereunder.

 

(o)           Governmental Consents.  Subject
in part to information provided by the Investor, no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any PRC, U.S. federal, state or local or British Virgin Islands
governmental authority on the part of the Company, the Shareholder or any Group
Company is required in connection with the valid execution, delivery and
consummation of the transactions contemplated by this Agreement, except for
filings pursuant to the Act and the rules thereunder, and other applicable
state and federal securities laws.

 

(p)           Permits.  Each
Group Company has all requisite governmental approvals, franchises, permits,
licenses, registrations and any similar authority necessary for the conduct of
its business as now being conducted by it and operation of its assets and
property, the lack of which could materially and adversely affect the business,
properties, prospects or financial condition of such Group Company, and each
Group Company believes it can obtain, without undue burden or expense, any
similar authority for the conduct of its business as currently planned to be
conducted.  No Group Company is in
default in any material respect under any of such governmental approvals,
franchises, permits, licenses, registrations or other similar authority.  No Group Company has received any letter or
notice from any relevant authority notifying it of the revocation of any permit
or license issued to it for non-compliance or the need for compliance or
remedial actions in respect of the activities carried out directly or
indirectly by such Group Company.

 

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(q)           Related Party Transactions.  Except
as set forth in Schedule 3(q) of the Schedule of Exceptions, no officer or
director of a Group Company (a “Related
Party”) or an Immediate Family Member of such Related Party, or
any corporation, partnership or other entity in which such Related Party is an
officer or director (other than a Group Company) or partner, or in which such
Related Party has an ownership interest in excess of ten percent (10%) or
otherwise controls, is indebted to any Group Company, nor is any Group Company
indebted (or committed to make loans or extend or guarantee credit) to any of
them, other than (i) payment for salaries and services rendered,
(ii) reimbursement for reasonable expenses incurred on behalf of the
applicable Group Company, and (iii) standard employee benefits made
generally available to all employees (including outstanding stock option
agreements).  To the knowledge of the Warrantor(s),
none of such persons has any direct or indirect ownership interest in any firm
or corporation with which any Group Company is affiliated or with which any
Group Company has a business relationship, or any firm or corporation that
competes with any Group Company, except that a Related Party and an Immediate
Family Member of such Related Party may own stock (but not exceeding one
percent (1%) of the outstanding shares) in publicly traded companies that may
compete with a Group Company.  To the knowledge
of the Warrantor(s), no Related Party or Immediate Family Member of such
Related Party is directly or indirectly interested in any material contract
with any Group Company, except, in the case of a Related Party, for contracts
relating to their employment or service with the applicable Group Company
(including indemnification agreements in a form entered into with all such
officers or directors, as applicable, and relevant stock option agreements).
For purposes of this Agreement, an “Immediate Family Member” means a child,  stepchild,
grandchild, parent, step-parent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law,  or  sister-in-law,
including adoptive relationships, of a person referred to herein.

 

(r)            Tax Matters.

 

(i)            For the purposes of this Agreement,
the term “Tax” or,
collectively, “Taxes” means
(i) any and all U.S. federal, state, local, British Virgin Islands, PRC
and any other taxes, assessments and other governmental charges, duties, impositions
and liabilities, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, escheat,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts, (ii) any liability for the payment
of any amounts of the type described in clause (i) of this Section 3(s) as
a result of being a member of an affiliated, consolidated, combined, unitary or
similar group for any period (including any arrangement for group or consortium
relief or similar arrangement), and (iii) any liability for the payment of
any amounts of the type described in clauses (i) or (ii) of this
Section 3(s) as a result of any express or implied obligation to
indemnify any other person or as a result of any obligations under any
agreements or arrangements with any other person with respect to such amounts
and including any liability for taxes of a predecessor or transferor or
otherwise by operation of law.

 

(ii)           Each of the Group Companies has
prepared and timely filed all required U.S. federal, state, local, British
Virgin Islands, PRC and other returns, estimates, information statements and
reports, including amendments thereof and attachments and schedules thereto (“Returns”) relating to any and
all Taxes concerning or attributable to such 

 

9

 

Group Company or their
operations and such Returns are true and correct and completed in accordance
with applicable law.

 

(iii)          Each of the Group Companies has timely
paid all Taxes they are required to pay and timely paid or withheld with
respect to its employees and other third parties (and timely paid over any
Withheld Amounts to the appropriate Taxing authority) all U.S. federal and
state, British Virgin Islands, PRC and other income taxes, Federal Insurance
Contribution Act amounts, Federal Unemployment Tax Act amounts and other Taxes
of a similar nature, including those imposed by a non-U.S. Taxing authority,
required to be withheld, whether or not such payments are in connection with
any Return.

 

(iv)          None of the Group Companies has been
delinquent in the payment of any Tax, nor is there any Tax deficiency outstanding,
assessed or proposed against any Group Company, nor has any Group Company
executed any outstanding waiver of any statute of limitations on or extension
of the period for the assessment or collection of any Tax.

 

(v)           No audit or other examination of any
Return of any Group Company is presently in progress, nor has any Group Company
been notified of any request for such an audit or other examination.  No adjustment relating to any Return filed by
any Group Company has been proposed by any tax authority to such Group Company
or any representative thereof.  No claim
has ever been made by an authority in a jurisdiction where no Group Company
files Returns that any Group Company is or may be subject to taxation by that jurisdiction.

 

(vi)          No Group Company has any liabilities
for unpaid Taxes as of June 30, 2010, whether asserted or unasserted,
contingent or otherwise, and no Group Company has not incurred any liability
for Taxes other than in the ordinary course of business.

 

(vii)         The Company has made available to the
Investor or its legal counsel or accountants copies of all Tax returns for the
Group Companies filed for all periods since its inception.

 

(viii)        There are (and immediately following the
Closing there will be) no Liens on the assets of any Group Company to or
attributable to Taxes other than Liens for Taxes not yet due and payable.  There is no basis for the assertion of any
claim relating or attributable to Taxes which, if adversely determined, would
result in any Lien for Taxes on the assets of any Group Company.

 

(ix)           The Company is not, and has not been
at any time, a “United States Real Property Holding Corporation” within the
meaning of Section 897(c)(2) of the Internal Revenue Code of 1986, as
amended (the “Code”).

 

(x)            No
Group Company has (a) ever been a member of an affiliated group (within
the meaning of Code §1504(a)) filing a consolidated U.S. federal income tax
Return or a Return under similar state, local or non-U.S. Tax laws (other than
a group the common parent of which was Company), (b) ever been a
party to any Tax sharing, indemnification or allocation agreement, (c) any liability for the Taxes of any person under
Treas. Reg. § 1.1502-6 (or any similar provision of state, local or foreign
law, including any 

 

10

 

arrangement
for group or consortium relief or similar arrangement), as a transferee or
successor, by contract, by operation of law or otherwise and (d) ever been
a party to any joint venture, partnership or other agreement that could be
treated as a partnership for Tax purposes.

 

(xi)           No
Group Company has constituted either a “distributing corporation” or a “controlled
corporation” in a distribution of stock intended to qualify for tax-free
treatment under Section 355 of the Code.

 

(xii)          No
Group Company has participated in a reportable transaction under Treas.
Reg. § 1.6011-4(b), including any
transaction that is the same as or substantially similar to one of the types of
transactions that the Internal Revenue Service has determined to be a tax
avoidance transaction and identified by notice, regulation, or other form of
published guidance as a listed transaction, as set forth in Treas. Reg. § 1.6011-4(b)(2).

 

(xiii)         Each of the Group Company is in
compliance with all terms and conditions of any Tax exemption, Tax holiday or
other Tax reduction agreement or order (each, a “Tax Incentive”) and the
consummation of the transactions contemplated by this Agreement will not have
any adverse effect on the continued validity and effectiveness of any such Tax
Incentive.  Each of the Group Companies
has maintained all documentation necessary and adequate to substantiate any
credits, deductions and other tax attributes of such Group Company.

 

(xiv)        Each of the Group Companies is and has
at all times been resident for Tax purposes in its country of incorporation or
formation and is not and has not at any time been treated as resident in any
other country for any Tax purpose (including any arrangement for the avoidance
of double taxation).  No Group Company is
subject to Tax in any country other than its country of incorporation or
formation by virtue of having a permanent establishment or other place of
business or by virtue of having a source of income in that country.  No Group Company is liable for any tax as the
agent of any other person or business or constitutes a permanent establishment
or other place of business of any other person, business or enterprise for any
Tax purpose.

 

(xv)         Each of the Group Companies in
compliance in all material respects with all applicable transfer pricing laws
and regulations, including the execution and maintenance of contemporaneous
documentation substantiating the transfer pricing practices and methodology of
the Group Companies.  All intercompany
arrangements have been adequately documented, and such documents have been duly
executed, in a timely manner. The prices for any property or services (or for
the use of any property) provided by or to any Group Company are arm’s length
prices for purposes of all applicable transfer pricing laws, including Treasury
Regulations promulgated under Section 482 of the Code.

 

(xvi)        No
Group Company will be required to include any income or gain or exclude
any deduction or loss from income for any taxable period or portion thereof
after the Closing as a result of any (a) change in method of accounting
made prior to the Closing, (b) closing agreement under Section 7121
of the Code executed prior to the Closing, (c) deferred intercompany gain
or excess loss account under Treasury Regulations under Section 1502 of
the Code in connection with a transaction consummated prior to the Closing (or
in the case of each of (a), (b) and (c), under any similar provision of
applicable law), (d) installment sale or open

 

11

 

transaction disposition
consummated prior to the Closing or (e) amount received prior to the
Closing.

 

(xvii)                                              No Group Company is or has been a “Passive Foreign Investment Company”
within the meaning of Section 1297(a) of the Code or a “Controlled
Foreign Corporation” within the meaning of Section 957 of the Code.  No Group Company owns, directly or
indirectly, any interests in an entity that is or has been a Passive Foreign
Investment Company or a Controlled Foreign Corporation.

 

(xviii)                                           There is no contract, agreement, plan or arrangement to which any Group
Company is a party, including the provisions of this Agreement, covering any
Employee of the Group Companies, which, individually or collectively, could
give rise to the payment of any amount that would not be deductible pursuant to
Sections 280G, 404 or 162(m) of the Code or that would give rise to a
penalty under Section 409A of the Code or that would give rise to an
Employee penalty and Company reporting obligations under Section 409A of
the Code using Federal Form W-2, in Box 12 using Code Z or Form 1099-Misc,
in Box 15b and Box 7.

 

(s)                                  Employees.

 

All employees of each
Group Company are devoting their full professional time to such Group
Company.  No employee of any Group
Company is in violation of any material order, or any material provision of any
contract, relating to such employee’s relationship with such Group Company, or
that would materially interfere with such employee’s ability to promote the
interests of the Group Companies or that would conflict with the business of
the Group Companies.  Except as set forth
in Schedule 3(s) of the Schedule of Exceptions, no Group Company has any
Benefit Plans.  For purposes hereof, “Benefit Plan” means any plan,
contract or other arrangement, formal or informal, whether oral or written,
providing any benefit to any present or former officer, director or employee,
or dependent or beneficiary thereof, including any employment agreement or
profit sharing, deferred compensation, share option, performance share,
employee share purchase, bonus, severance, retirement, health or insurance
plan.  No officer or Key Employee, or any
group of employees of the Group Companies, intend to terminate their employment
with the applicable Group Company, nor do any of the Group Companies have a
present intention to terminate the employment of any of the foregoing.  No employee, consultant or independent
contractor of a Group Company is owed any back wages or other compensation for
services rendered except as set forth on Section 3(t) of the Schedule
of Exceptions.  No Group Company is bound
by or subject to (and none of its assets or properties are bound by or subject
to) any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested, or has sought to
represent any of the employees, representatives or agents of any Group
Company.  There is no labor strike, labor
slow down, labor claim, labor dispute or labor union organization activities
pending or, threatened between any Group Company and its employees.  Each Group Company has complied in all
material respects with all applicable laws related to employment and related to
the Benefit Plans, including making all required contributions required to be
made under the PRC social insurance and housing schemes, medical benefits,
insurance, retirement benefits, pensions, wages, hours, worker classification,
and collective bargaining, and the payment and withholding of taxes and other
sums as required by law except where noncompliance with any 

 

12

 

applicable law would not result in a Material
Adverse Effect.  For purposes of this
Agreement, “Key Employee”
means each
of the Persons listed in Exhibit D.

 

(t)                                    Changes.  Since the Company’s formation, there has not
been:

 

(i)                                     any event or condition of any type that has had or is reasonably likely
to have a material and adverse effect on the Group Companies’ business or
assets;

 

(ii)                                  any change in the assets, liabilities, financial condition or operating
results of any Group Company, except changes in the ordinary course of business
that have not caused, in the aggregate, a Material Adverse Effect;

 

(iii)                               any damage, destruction or loss, whether or not covered by insurance,
that would be reasonably likely to have a Material Adverse Effect;

 

(iv)                              any waiver or compromise by any Group Company of a valuable right or of a
material debt owed to it;

 

(v)                                 any satisfaction or discharge of any lien, claim, or encumbrance or
payment of any obligation by any Group Company, except in the ordinary course
of business and the satisfaction or discharge of which would not be reasonably
likely to have a Material Adverse Effect;

 

(vi)                              any material change to a material contract or agreement by which any
Group Company or any of its assets is bound or subject;

 

(vii)                           any material change in any compensation arrangement or agreement with any
employee, officer, director or shareholder;

 

(viii)                        any resignation or termination of employment of any officer or Key
Employee of any Group Company;

 

(ix)                                any mortgage, pledge, transfer of a security interest in, or, to the
knowledge of the Warrantors, lien, created by any Group Company, with respect
to any of its material properties or assets, except liens for taxes not yet due
or payable and liens that arise in the ordinary course of business and do not
materially impair such Company’s ownership or use of such property or assets;

 

(x)                                   any dividend, loans or guarantees made by any Group Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;

 

(xi)                                any declaration, setting aside or payment or other distribution in
respect of any Group Company’s share capital, or any direct or indirect
redemption, purchase, or other acquisition of any of such shares by any Group
Company;

 

13

 

(xii)                             any sale, assignment or transfer of any Group Company Intellectual
Property that could reasonably be expected to result in a Material Adverse
Effect;

 

(xiii)                          receipt of notice that there has been a loss of, or material order
cancellation by, any major customer of any Group Company;

 

(xiv)                         any other event or condition of any character, other than events
affecting the economy or the Company’s industry generally,  that could reasonably be expected to result
in a Material Adverse Effect; or

 

(xv)                            any arrangement or commitment by the Company or any Group Company to do
any of the things described in this Section 3(u).

 

(u)                                 Brokers or Finders.  No
Group Company has incurred, nor will any Group Company incur, directly or
indirectly, as a result of any action taken by any Group Company, any liability
for brokerage or finders’ fees or agents’ commissions or any similar charges in
connection with this Agreement or any of the transaction contemplated hereby.

 

(v)                                 No Other Business.  Each of the the Company and the Hong Kong
Subsidiary was formed solely to acquire and
hold an equity interest in its respective subsidiary and since its formation
has not engaged in any business and has not incurred any liability in the
course of its business of acquiring and
holding its equity interest in the Subsidiaries.  The Group Companies are engaged solely in the
Business and have no other activities.

 

(w)                               Other Representations and Warranties Relating
to the PRC Subsidiary and the PRC Domestic Company.

 

(i)                                     The constitutional
documents and certificates of the PRC
Subsidiary and the PRC Domestic Company are valid and have been duly approved
or issued (as applicable) by the competent PRC governmental authorities.

 

(ii)                                  All consents, approvals, authorizations, registrations or licenses
required under PRC laws for the due and proper establishment and operation of
the PRC Subsidiary and the PRC Domestic Company have been duly obtained from
the relevant PRC governmental authorities and are in full force and effect.

 

(iii)                               All filings and registrations with the PRC governmental authorities required
in respect of the PRC Subsidiary and its
operations (whether required to be filed by the PRC Subsidiary or any
shareholder thereof), including but not limited to the registrations with the
Ministry of Commerce (or any of its predecessors), the State Administration of
Industry and Commerce, the State Administration of Foreign Exchange (“SAFE”), tax bureau, customs
authorities, product registration authorities, and PRC
health regulatory authorities  have been duly
completed in accordance with the relevant rules and regulations, and, as
applicable, the relevant administration for industry and commerce has affixed
an annual inspection chop on its business license.

 

(iv)                              The registered capital of each of the PRC Subsidiary and the PRC Domestic
Company is fully paid up.  The HK
Subsidiary legally and beneficially owns 100% of 

 

14

 

the equity interest in the PRC Subsidiary. 
There are no outstanding rights, or commitments made by the HK
Subsidiary to sell any of its equity interest in the PRC Subsidiary.

 

(v)                                 Neither the PRC Subsidiary nor the PRC Domestic Company is in receipt of
any letter or notice from any relevant governmental authority concerning
revocation of any permits or licenses issued to it or the need for compliance
or remedial actions in respect of the activities carried out directly or
indirectly by it.

 

(vi)                              The PRC Subsidiary has been conducting and will conduct its business
activities within the permitted scope of business as set forth on its business
license and on its foreign-invested enterprise approval certificate as currently
in effect, copies of which have been provided to the Investor, and is otherwise
operating its business in full compliance with all relevant legal requirements and with
all requisite licenses, permits and approvals granted by competent PRC
governmental authorities.

 

(vii)                           In respect of approvals, licenses or permits requisite for the conduct of
any part of the business of the PRC Subsidiary which are subject to periodic renewal,
none of the Group Companies has any reason to believe that such requisite
renewals will not be timely granted by the relevant PRC governmental
authorities.

 

(viii)                        All PRC regulatory and corporate authorizations and approvals, where
applicable, have been obtained in respect of the transactions contemplated
herein, and such authorizations and approvals currently are, or will be as of
the Closing, valid and subsisting pursuant to PRC Law and in accordance with
their respective terms.

 

(ix)                                The PRC Domestic
Company is 100% controlled by the PRC Subsidiary through a series of control
agreements in the forms disclosed to the Investor.

 

(x)                                   No Untrue Statement of Material Fact.  No representation or warranty made by the
Shareholder or the Group Companies contained in this Agreement, and no
statement contained in the Disclosure Schedule or in any certificate, list or
other writing furnished to the Investor pursuant to any provision of this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.  The Shareholder and the Group Companies have
provided the Investor with all of the documents heretofore requested on behalf
of the Investor in writing, and all other material information concerning the
Group Company in the possession, custody or control of the Group Companies.

 

4.                                      Investor’s
Representations.  The
Investor hereby represents and warrants to the Company as set forth below:

 

(a)                                  Investment.  The Investor is acquiring the Series A
Shares and the Conversion Shares for investment for its own account, not as a
nominee or agent, and not with the view to, or for resale in connection with,
any distribution thereof.  The Investor
has no present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness or commitment providing for the disposition of the Series A
Shares or the Conversion Shares.  The
Investor understands that the Series A Shares to be purchased and the
Conversion Shares have not been registered under the Act, by reason of a
specific exemption from the registration 

 

15

 

provisions of the Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of the Investor’s representations as expressed herein or
otherwise made pursuant hereto.

 

(b)                                 Rule 144.  The Investor understands that the Series A
Shares constitute “restricted securities” within the meaning of Rule 144
promulgated under the Act (“Rule 144”) inasmuch as they are being acquired from
the Company in a private placement transaction. 
Under applicable laws and regulations, the Series A Shares may be
resold without registration under the Act only in certain limited
circumstances.  In this connection, the
Investor represents that it is familiar with Rule 144, and understands the
resale limitations imposed thereby and by the Act.  The Investor understands that under Rule 144,
except as otherwise provided by section (k) of that rule, the limitations
include, among other things: (i) the availability of certain current
public information about the issuer; (ii) the resale occurring not less
than one year after the party has purchased and paid for the securities to be
sold; and (iii) limitations on the amount of securities to be sold and the
manner of sale.  The Investor understands
that the current public information referred to above is not now available and
the Company has no present plans to make such information available.  The Investor acknowledges and understands
that the Company may not be in compliance with the current public information
requirement of Rule 144 at the time it wishes to sell the Series A
Shares, and that, in such event, it may be precluded from selling such Series A
Shares under Rule 144 to the extent that the Act applies to such transfer,
even if the minimum holding period of Rule 144 has been satisfied.  The Investor acknowledges that in the event
all of the requirements of Rule 144 are not met, registration under the
Act or compliance with another exemption from registration will be required for
any disposition of the Series A Shares and the Conversion Shares to the
extent that the Act applies to such transfer. 
Such Investor understands that although Rule 144 is not exclusive,
the Securities and Exchange Commission (the “SEC”) has expressed its opinion that persons
proposing to sell restricted securities received in a private offering other
than in a registered offering or pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales and that such persons and the brokers who
participate in the transactions do so at their own risk.

 

(a)                                  No Public Market.  The
Investor understands and acknowledges that no public market now exists for any
of the securities issued by the Company and that the Company has made no
assurances that a public market will ever exist for the Company’s securities.

 

(b)                                 Accredited Investor.  The
Investor is an “accredited investor” within the meaning of Regulation D, Rule 501(a),
promulgated by the Securities and Exchange Commission under the Securities Act.

 

5.                                      Conditions
to Closing of the Investor.  The
Investor’s obligation to purchase the Series A Shares at the Closing is
subject to the fulfillment of the following conditions:

 

(a)                                  Representations and Warranties and Covenants.  The
representations and warranties made by the Group Companies and the Shareholder
in Section 3 hereof shall be true and correct when made and true and
correct as of the date of the Closing, except for representations and
warranties made expressly as of another date, which representations and 

 

16

 

warranties shall be true and correct on and as of
such date.  The Group Companies and the
Shareholder shall have performed all covenants, obligations and conditions
herein required to be performed or observed by it on or prior to the Closing.

 

(b)                                 Qualifications; Authorizations.  All
authorizations, approvals, permits, qualifications or exemptions, if any, of
any governmental authority or regulatory body of the United States or of any
state or foreign body that are required in connection with the lawful issuance
and sale of the Series A Shares pursuant to the Transaction Agreements
shall be duly obtained and effective as of the date of the Closing, except for
such as may properly be obtained subsequent to the Closing.  The Company shall have fully satisfied
(including with respect to rights of timely notification) or obtained
enforceable waivers in respect of any preemptive or similar rights directly or
indirectly affecting any of its shares or securities, as applicable.

 

(c)                                  Memorandum and Articles of Association.  The
Amended Memorandum and the Restated Articles shall have been adopted by the
shareholder of the Company and shall be in full force and effect.

 

(d)                                 Board of Directors.  Effective
as of the date of the Closing, the authorized size of the Board of Directors
shall be five (5), of which three (3) shall be designated by the Investor,
and two (2) shall be designated by the Shareholder.  Jack Lu, Xie Yong Hong, Jason Sun, Zheng
Jiaqiang and Lin Song shall be the initial members of the Board of Directors
(each a “Director”).

 

(e)                                  Voting Agreement.  The
Company, the Investor and the Shareholder shall have entered into the Voting
Agreement.

 

(f)                                    Indemnification Agreements.  The
Company shall have entered into an indemnification agreement, in substantially
the form attached hereto as Exhibit E, with each Director.

 

(g)                                 Employment Agreements.  The
employees of the Company set forth on Schedule 5(g) (the “Senior Management”) shall have entered into
an Employment Agreement with the Company in substantially the form attached
hereto as Exhibit F.

 

(h)                                 Non-competition Agreements.  Each
of the Senior Management shall have entered into a Non-competition Agreement
with the Company in substantially the form attached hereto as Exhibit G.

 

(i)                                     Confidential Information and Invention
Assignment Agreements.  All officers and employees of the Group Companies shall have entered into
the applicable Group Company’s standard form of Confidential Information and
Invention Assignment Agreement, in substantially the form attached hereto as Exhibit H.

 

(j)                                     Compliance Certificate.  The Investor shall have
received a certificate executed and delivered by the chief executive officer of the Company in substantially the form
attached hereto as Exhibit I.

 

(k)                                  Secretary’s Certificate.  The
Secretary of the Company shall have delivered to the Investor a certificate in
substantially the form attached hereto as Exhibit J having attached

 

17

 

thereto (i) the Amended Memorandum and Restated
Articles as in effect at the time of the Closing, (ii) resolutions adopted
by the Board of Directors authorizing the transactions contemplated hereby, and
(iii) resolutions adopted by the Company’s shareholder approving and
authorizing the filing of the Amended Memorandum and Restated Articles and the
issuance of Series A Shares hereunder.

 

(l)                                     Completion of Due Diligence.  The
Investor shall have completed, to its satisfaction, business, legal and
financial due diligence review of the Group Companies.

 

(m)                               Company Structure.  The
Company shall have established a legal and business structure that is
acceptable to the Investor.

 

(n)                                 Sale of Ordinary Shares.  All conditions to the closing of the Ordinary
Share Agreement shall have been satisfied.

 

(o)                                 Control Agreements.  The PRC Subsidiary and the PRC Domestic
Company shall have entered into control agreements in forms satisfactory to the
Investor.  In addition, PRC Subsidiary or
its shareholders and each of the shareholders of the PRC Domestic Company shall
have entered into control agreements forms satisfactory to the Investor.

 

(p)                                 Intellectual Property Assignment. The Investor shall have received written
confirmations regarding the ownership and assignment of certain Intellectual
Property in forms satisfactory to the Investor.

 

(q)                                 Schedule of Exceptions. The Company shall have delivered to the
Investor the Schedule of Exceptions.

 

6.                                      Conditions
to Closing of the Company.  The
Company’s obligation to sell and issue the Series A Shares to the Investor
at the Closing is, at the option of the Company, subject to the fulfillment of
the following conditions:

 

(a)                                  Representations and Warranties Correct.  The representations and warranties made by
the Investor in Section 4 hereof shall be true and correct when made, and
shall be true and correct on the date of the Closing and the Investor shall
have performed all covenants, obligations and conditions herein required to be
performed or observed by it on or prior to the date of the Closing.

 

(b)                                 Memorandum and Articles of Association.  The Amended Memorandum and the Restated
Articles shall have been adopted by the shareholder of the Company and shall be
in full force and effect.

 

(c)                                  Voting Agreement.  The Company, the Investor and the Shareholder
shall have entered into the Voting Agreement.

 

18

 

7.                                      Post Closing Covenant.

 

(a)                                  SAFE Compliance.  The
Group Companies hereby agree and covenant to ensure and cause the continuing
compliance, including by their respective shareholders, after the Closing, with
rules and regulations issued by SAFE relating to registration of ownership
in non-PRC entities by PRC nationals.

 

(a)                                  Audited Financial Statements.  The Company shall provide to the Investor
audited consolidated financial statements of the Company as of September 30,
2010 (together with the auditor’s report and footnotes to the financial
statements) within thirty (30) days of the Closing.

 

8.                                      Miscellaneous.

 

(a)                                  Intent.  The
parties agree to execute such further instruments and to take such further
action as may reasonably be necessary to carry out the intent of this
Agreement.

 

(b)                                 Indemnity. In the event of (1) any breach or violation
of, or inaccuracy or misrepresentation in, any representation or warranty made
by the Shareholder or any Group Company contained herein or any of the other
Transaction Agreements (for purposes of determining the amount of the damages
and costs, no effect will be given to any qualification as to “materiality” or “Material
Adverse Effect” contained therein), or (2) any breach or violation of any
covenant or agreement contained herein or any of the other Transaction
Agreements by the Shareholder or any Group Company, (each of (1) and (2),
a “Breach”),
the Company and the Shareholder shall use best efforts to cure such Breach (to
the extent that such Breach is curable) to the reasonable satisfaction of the
Investor.  Notwithstanding the foregoing,
the Group Companies and the Shareholder shall also jointly indemnify the
Investor and its Affiliates, limited partners, members, stockholders,
employees, agents and representatives (each, an “Indemnitee”) for any and all losses,
liabilities, damages, liens,  claims,
obligations, penalties, settlements, deficiencies, costs and expenses,
including without limitation reasonable advisor’s fees and other reasonable
expenses of investigation, defense and resolution of any Breach or alleged
Breach paid, suffered, sustained or incurred by the Indemnitees (each, an “Indemnifiable Loss”)
resulting from, or arising out of, or due to, directly or indirectly, any
Breach or alleged Breach.

 

(c)                                  Market Stand-Off Agreement.  If requested by
the Company and an underwriter of Common Stock (or other securities) of the
Company, each Holder shall not sell or otherwise transfer, make any short sale
of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, of any Ordinary Share (or
other securities) of the Company held by such Holder (other than those included
in the registration) during the one hundred eighty (180) day period following
the effective date of the registration statement for the Company’s Initial
Public Offering filed under the Securities Act (or such other period as may be
requested by the Company or an underwriter to accommodate regulatory
restrictions on (i) the publication or other distribution of research
reports and (ii) analyst recommendations and opinions, including, but not
limited to, the restrictions contained in NASD Rule 2711(f)(4) or
NYSE Rule 472(f)(4), or any successor provisions or 

 

19

 

amendments
thereto). The obligations described herein shall not apply to a registration
relating solely to employee benefit plans on Form S-l or Form S-8 or
similar forms that may be promulgated in the future, or a registration relating
solely to a transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
and may stamp each such certificate with the appropriate legends with respect
to the shares of Common Stock (or other securities) subject to the foregoing
restriction until the end of such one hundred eighty (180) day (or other)
period.

 

(d)                                 Expenses.  Except as
set forth below, each party will pay the costs it incurs in connection with
transaction contemplated hereby. The Investor shall pay any reasonable costs
incurred by the Company in connection with the negotiation of the Transaction
Agreements and the Amended Memorandum and Restated Articles. The Shareholder
shall pay any reasonable costs incurred by the Company in connection with the
negotiation and execution of the term sheet for the transaction and any other
agreements required for the Closing.

 

(e)                                  Notices.  All notices and other communications required
or permitted hereunder shall be in writing and shall be sent by facsimile or
mailed by electronic, registered or certified mail or by overnight courier or
otherwise delivered by hand or by messenger, addressed:

 

(i)                                     if to the Investor, at the Investor’s address (attention: Chief Executive
Officer) as follows:

 

20F,
Tower E1, The Towers, Oriental Plaza

No. 1
East Chang An Ave

Dong
Cheng District

Beijing,
China 100738

 

with
a copy to:

 

Carmen
Chang, Esq.

Wilson Sonsini Goodrich & Rosati, P.C.

650 Page Mill Road

Palo Alto, CA  94304

Facsimile:  (650) 493-6811

 

(ii)                                  if to the Company or any of its Subsidiaries, at the address of the
Company’s principal corporate offices (attention: President), or at such other
address as the Company shall have furnished to the Investor in writing, as
follows:

 

Room 512, 5/F

Tower 1 Silvercord, 30 Canton Road

Tsimshatsui, Kowloon

Hong Kong

 

Where
a notice is sent by mail, service of the notice shall be deemed to be effected
by properly addressing, pre-paying and mailing a letter containing the notice,
and to have been 

 

20

 

effected
at the expiration of three (3) business days after the letter containing
the same is mailed as aforesaid.

 

Where
a notice is sent by overnight courier, service of the notice shall be deemed to
be effected by properly addressing, and sending such notice through an
internationally recognized express courier service, delivery fees pre-paid, and
to have been effected three (3) business days following the day the same
is sent as aforesaid.  Notwithstanding
anything to the contrary in this Agreement, notices sent to the Investor (and
their permitted assigns) shall only be delivered by internationally recognized
express courier service pursuant to this paragraph.

 

Where
a notice is delivered by facsimile, electronic mail, by hand or by messenger,
service of the notice shall be deemed to be effected upon delivery.

 

(f)                                    Successors and Assigns.  This
Agreement shall inure to the benefit of the successors and assigns of the Group
Companies, subject to the restrictions on transfer herein set forth, and be
binding upon the Investor, his heirs, executors, administrators, successors and
assigns.

 

(g)                                 Amendment.  This Agreement may be amended by a written
instrument executed by the Company and the Investor; provided, however,
that this Agreement may not be amended or terminated and the observance of any
term hereunder may not be waived with respect to the Investor without the
written consent of such Investor.

 

(h)                                 Governing Law.  This Agreement shall be governed by, and
construed and enforced, and the arbitrators shall decide any disputes submitted
by the parties of this Agreement, in accordance with the substantive laws of
New York as such laws are applied to agreements between New York residents
entered into and to be performed within New York.

 

(i)                                     Dispute Resolution.

 

(i)                                     Any dispute, controversy or claim arising out of or relating to this
Agreement, or the interpretation, breach, termination or validity hereof, shall
first be subject to resolution through consultation of the parties to such
dispute, controversy or claim.  Such
consultation shall begin within seven (7) days after one party hereto has
delivered to the other parties involved a written request for such
consultation.  If within thirty (30) days
following the commencement of such consultation the dispute cannot be resolved,
the dispute shall be submitted to arbitration upon the request of any party
with notice to the other parties.

 

(ii)                                  The arbitration shall be conducted in Hong Kong under the auspices of the
Hong Kong International Arbitration Centre (the “HKIAC”) in accordance with the UNCITRAL Arbitration Rules (“UNCITRAL Rules”) in effect,
which rules are deemed to be incorporated by reference into this Section 7(i).  There shall be three (3) arbitrators.  The complainant and the respondent to such
dispute shall each select one arbitrator within thirty (30) days after giving
or receiving the demand for arbitration. 
Such arbitrators shall be freely selected, and the parties shall not be
limited in their selection to any prescribed list.  The Chairman of the HKIAC shall select the
third arbitrator, who shall be qualified to practice law in New York. If either
party to the arbitration does not appoint an arbitrator who has consented to

 

21

 

participate within thirty (30) days after selection
of the first arbitrator, the relevant appointment shall be made by the Chairman
of the HKIAC.

 

(iii)          The arbitration proceedings shall be
conducted in English.  The arbitration
tribunal shall apply the UNCITRAL Rules in effect at the time of the
arbitration.  However, if such rules are
in conflict with the provisions of this Section 7(i), including the
provisions concerning the appointment of arbitrators, the provisions of this Section 7(i) shall
prevail.

 

(iv)          The arbitrators shall decide any
dispute submitted by the parties to the arbitration strictly in accordance with
the substantive law of New York, and shall not apply any other substantive law.

 

(v)           Each Party hereto shall cooperate
with any party to the dispute in making full disclosure of and providing
complete access to all information and documents requested by such party in
connection with such arbitration proceedings, subject only to any
confidentiality obligations binding on the Party receiving the request.

 

(vi)          The award of the arbitration tribunal
shall be final and binding upon the disputing parties, and any party to the
dispute may apply to a court of competent jurisdiction for enforcement of such
award.

 

(vii)         Any party to the dispute shall be
entitled to seek preliminary injunctive relief, if possible, from any court of
competent jurisdiction pending the constitution of the arbitral tribunal.

 

(j)            Specific
Enforcement.  The parties hereto agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed that,
notwithstanding Section 7(i), the parties shall be entitled to seek an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which they are entitled at law or in equity.

 

(k)           Survival.  The representations, warranties,
covenants and agreements made herein shall survive any investigation made by
any Investor  and the closing of the
transactions contemplated hereby, and shall terminate on the third anniversary
of the date of the Initial Closing; provided, that such termination date
shall not apply in the case of a fraudulent breach of any such representation,
warranty, covenant or agreement.

 

(l)            Broker’s
Fees.  The
Company shall indemnify and hold harmless the Investor from any liability for
any commission or compensation in the nature of a brokerage or finder’s fee or
agent’s commission (and the costs and expenses of defending against such
liability or asserted liability) for which the Investor or any of its
constituent partners, members, officers, directors, employees or representatives
is responsible to the extent such liability is attributable to any inaccuracy
or breach of the representations and warranties contained in Section 3(v).

 

(m)          Counterparts;
Facsimiles.  This Agreement may be executed in any number of counterparts, each of
which shall be enforceable against the parties actually executing such

 

22

 

counterparts, and all of
which together shall constitute one instrument. 
A facsimile, telecopy or other reproduction of this Agreement may be
executed by one or more parties hereto and delivered by such party by facsimile
or any similar electronic transmission device pursuant to which the signature
of or on behalf of such party can be seen. 
Such execution and delivery shall be considered valid, binding and
effective for all purposes.

 

(n)           Titles
and Subtitles.  The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this
Agreement.  All references in this
Agreement to sections, paragraphs and exhibits shall, unless otherwise
provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

(o)           Delays
or Omissions.  No delay or omission to exercise any right, power or remedy accruing to
any party under this Agreement, upon any breach or default of any other party
under this Agreement, shall impair any such right, power or remedy of such
non-breaching or non-defaulting party nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring.  Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in
such writing.  All remedies, either under
this Agreement or by law otherwise affording to any party, shall be cumulative
and not alternative.

 

(p)           Severability.  If
any provision of this Agreement shall be determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

 

(q)           Entire
Agreement.  This Agreement, and the documents referred to herein constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and any and all other written or oral agreements relating to the
subject matter hereof existing between the parties hereto are expressly
canceled.

 

(r)            No Commitment for Additional Financing.  The
Company acknowledges and agrees that the Investor has not made any
representation, undertaking, commitment or agreement to provide or assist the
Company in obtaining any financing, investment or other assistance, other than
the purchase of the Series A Shares as set forth herein and subject to the
conditions set forth herein.  In
addition, the Company acknowledges and agrees that (i) no oral statements
made by the Investor or its representatives on or after the date of this
Agreement shall create an obligation, commitment or agreement to provide or
assist the Company in obtaining any financing or investment, (ii) the
Company shall not rely on any such statement by the Investor or its
representatives, and (iii) an obligation, commitment or agreement to
provide or assist the Company in obtaining any financing or investment may only
be created by a written agreement, signed by the Investor and the Company,
setting forth the terms and conditions of such financing or investment and
stating that the parties intend for such writing to be a binding obligation or
agreement.  The Investor shall have the
right, in it sole and absolute discretion, to refuse or decline to participate
in any other financing of or

 

23

 

investment
in the Company, and shall have no obligation to assist or cooperate with the
Company in obtaining any financing, investment or other assistance.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

24

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  STAGE SMART LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lin Song

  
	
   

  	
   

  	
  Lin
  Song, Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRC SUBSIDIARY:

  
	
   

  	
   

  
	
   

  	
  STAGE
  SMART (BEIJING) TECHNOLOGY LIMITED

  
	
   

  	
  (思达齐马特(北京)科技有限公司)

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Fan Changqing

  
	
   

  	
   

  	
  Fan
  Changqing, Legal Representative

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HK SUBSIDIARY:

  
	
   

  	
   

  
	
   

  	
  STAGE SMART (HONG KONG) LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Han Dahai

  
	
   

  	
   

  	
  Han
  Dahai, Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRC DOMESTIC COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  可视达(北京)文化传媒有限公司

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Li Yang

  
	
   

  	
   

  	
  Li
  Yang, Legal Representative

  

 

SIGNATURE PAGE TO

SERIES A PREFERENCE SHARES PURCHASE AGREEMENT

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

 

 

	
   

  	
  INVESTOR:

  
	
   

  	
   

  
	
   

  	
  UTSTARCOM, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jack Lu

  
	
   

  	
   

  	
  Jack
  Lu, Chief Executive Officer

  

 

SIGNATURE PAGE TO

SERIES A PREFERENCE SHARES PURCHASE AGREEMENT

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

 

 

	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  
	
   

  	
  SMART FRONTIER HOLDINGS LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Zhang Mingliang

  
	
   

  	
   

  	
  Zhang
  Mingliang, Director

  

 

SIGNATURE PAGE TO

SERIES A PREFERENCE SHARES PURCHASE AGREEMENT

 

 

Exhibit A

 

Amended and Restated Memorandum and Articles of
Association

 

 

Exhibit B

 

Voting Agreement

 

 

Exhibit C

 

Ordinary Share Purchase Agreement

 

 

Exhibit D

 

Key Employee

 

 

 

Exhibit E

 

Form of Indemnification Agreement

 

 

Exhibit F

 

Form of Employment Agreement

 

 

Exhibit G

 

Form of Non-competition Agreement

 

 

Exhibit H

 

Confidential Information and Invention Assignment
Agreement

 

 

Exhibit I

 

Form of Compliance
Certificate

 

              
      , 2010

 

Capitalized
terms used herein without definition have the meanings assigned to such terms
in that certain Series A Preference Shares Purchase Agreement (the “Share Purchase Agreement”),
dated
                ,
by and among STAGE SMART LIMITED, a British Virgin Islands company (the “Company”), STAGE SMART (BEIJING)
TECHNOLOGY LIMITED (思达齐马特(北京)科技有限公司), a wholly-foreign owned
enterprise established under the laws of the People’s Republic of China (“PRC”) (the “PRC Subsidiary”), STAGE SMART (HONG KONG)
LIMITED, a Hong Kong company (the “HK Subsidiary”),
and 可视达(北京)文化传媒有限公司, a limited
liability company established under the laws of the PRC (the “PRC Domestic Company”),  UTStarcom, Inc., a Delaware company (the
“Investor”), Smart Frontier Holdings
Limited, the sole shareholder of the Company (the “Shareholder”).

 

THE UNDERSIGNED, Lin Song, the Chief Executive Officer of the Company, hereby
certifies on behalf of the Company that the conditions specified in Section 5(a) through
(i) of the Share Purchase Agreement have
been fulfilled as of the date hereof.

 

(signature page follows)

 

 

IN WITNESS WHEREOF, the undersigned has set
forth his signature on this Compliance Certificate as of the date first set
forth above.

 

 

	
   

  	
  STAGE SMART LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
  Lin Song

  
	
   

  	
  Title:
  Chief Executive Officer

  

 

 

Exhibit J

 

Form of Secretary’s
Certificate

 

              
      , 2010

 

Capitalized
terms used herein without definition have the meanings assigned to such terms
in that certain Series A Preference Shares Purchase Agreement (the “Share Purchase Agreement”),
dated
                ,
by and among STAGE SMART LIMITED, a British Virgin Islands company (the “Company”), STAGE SMART (BEIJING)
TECHNOLOGY LIMITED (思达齐马特(北京)科技有限公司), a wholly-foreign owned
enterprise established under the laws of the People’s Republic of China (“PRC”) (the “PRC
Subsidiary”), STAGE SMART (HONG KONG) LIMITED, a Hong Kong
company (the “HK Subsidiary”), and 可视达(北京)文化传媒有限公司, a limited
liability company established under the laws of the PRC (the “PRC Domestic Company”),  UTStarcom, Inc., a Delaware company (the
“Investor”), Smart Frontier Holdings
Limited, the sole shareholder of the Company (the “Shareholder”).

 

THE UNDERSIGNED, Li Yang, the Secretary of the Company, hereby certifies on
behalf of the Company as follows.

 

1.             Attached as Exhibit A
is a true and complete copy of the Amended and Restated Memorandum of
Association of the Company (the “Amended Memorandum”)
and the Amended and Restated Articles of Association of the Company (the “Restated Articles”) as in effect on
the date hereof. No steps have been taken by the board of directors or
shareholder of the Company to authorize or effect any amendment or other
modification to the Amended Memorandum or the Restated Articles, other than as
may be contemplated by the Share Purchase Agreement.

 

2.             Attached as Exhibit B
is a true and complete copy of the resolutions duly adopted by the board of
directors of the Company authorizing the transactions contemplated by the Share
Purchase Agreement. The resolutions (i) were adopted in compliance with
the Company’s Amended Memorandum and Restated Articles, (ii) have not been
amended, modified or rescinded since their adoption and (iii) are in full
force and effect as of the date hereof.

 

3.             Attached as Exhibit C
is a true and complete copy of the resolutions duly adopted by the Shareholder
relating to the transactions contemplated by the Share Purchase Agreement. The
resolutions (i) were adopted in compliance with the Company’s Amended
Memorandum and Restated Articles, (ii) have not been amended, modified or
rescinded since their adoption and (iii) are in full force and effect as
of the date hereof.

 

(signature page follows)

 

 

IN WITNESS WHEREOF, the undersigned has set
forth his signature on this Secretary’s Certificate as of the date first set
forth above.

 

 

	
   

  	
  STAGE SMART LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
  Li Yang

  
	
   

  	
  Title:
  SecretaryExhibit 4.1

 

Execution Version

 

 

JUNIOR SUBORDINATED INDENTURE

 

between

 

 

DEERFIELD CAPITAL CORP.

 

 

and

 

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION,

as Trustee

 

 

 

Dated as of October 20, 2010

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  I

  	
  DEFINITIONS
  AND OTHER PROVISIONS OF GENERAL APPLICATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
  Section 1.2.

  	
  Compliance
  Certificate and Opinions

  	
  17

  
	
  Section 1.3.

  	
  Forms
  of Documents Delivered to Trustee

  	
  17

  
	
  Section 1.4.

  	
  Acts
  of Holders

  	
  18

  
	
  Section 1.5.

  	
  Notices,
  Etc.

  	
  20

  
	
  Section 1.6.

  	
  Notice
  to Holders; Waiver

  	
  21

  
	
  Section 1.7.

  	
  Effect
  of Headings and Table of Contents

  	
  21

  
	
  Section 1.8.

  	
  Successors
  and Assigns

  	
  21

  
	
  Section 1.9.

  	
  Separability
  Clause

  	
  21

  
	
  Section 1.10.

  	
  Benefits
  of Indenture

  	
  21

  
	
  Section 1.11.

  	
  Governing
  Law

  	
  22

  
	
  Section 1.12.

  	
  Submission
  to Jurisdiction

  	
  22

  
	
  Section 1.13.

  	
  Non-Business
  Days

  	
  22

  
	
  Section 1.14.

  	
  Reserved

  	
  22

  
	
  Section 1.15.

  	
  Account

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
  SECURITY
  FORMS

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Form
  of Security

  	
  23

  
	
  Section 2.2.

  	
  Restricted
  Legend

  	
  26

  
	
  Section 2.3.

  	
  Form
  of Trustee’s Certificate of Authentication

  	
  28

  
	
  Section 2.4.

  	
  Temporary
  Securities

  	
  29

  
	
  Section 2.5.

  	
  Definitive
  Securities

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
  THE
  SECURITIES

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Payment
  of Principal and Interest

  	
  29

  
	
  Section 3.2.

  	
  Denominations

  	
  31

  
	
  Section 3.3.

  	
  Execution,
  Authentication, Delivery and Dating

  	
  31

  
	
  Section 3.4.

  	
  Global
  Securities

  	
  32

  
	
  Section 3.5.

  	
  Registration,
  Transfer and Exchange Generally

  	
  34

  
	
  Section 3.6.

  	
  Mutilated,
  Destroyed, Lost and Stolen Securities

  	
  36

  
	
  Section 3.7.

  	
  Persons
  Deemed Owners

  	
  36

  
				

 

i

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 3.8.

  	
  Cancellation

  	
  36

  
	
  Section 3.9.

  	
  Reserved

  	
  37

  
	
  Section 3.10.

  	
  Reserved

  	
  37

  
	
  Section 3.11.

  	
  Agreed
  Tax Treatment

  	
  37

  
	
  Section 3.12.

  	
  CUSIP
  Numbers

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IV

  	
  SATISFACTION
  AND DISCHARGE

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Satisfaction
  and Discharge of Indenture

  	
  37

  
	
  Section 4.2.

  	
  Application
  of Trust Money

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
  REMEDIES

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Events
  of Default

  	
  39

  
	
  Section 5.2.

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
  40

  
	
  Section 5.3.

  	
  Collection
  of Indebtedness and Suits for Enforcement by Trustee

  	
  41

  
	
  Section 5.4.

  	
  Trustee
  May File Proofs of Claim

  	
  42

  
	
  Section 5.5.

  	
  Trustee
  May Enforce Claim Without Possession of Securities

  	
  42

  
	
  Section 5.6.

  	
  Application
  of Money Collected

  	
  42

  
	
  Section 5.7.

  	
  Limitation on Suits

  	
  43

  
	
  Section 5.8.

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

  	
  43

  
	
  Section 5.9.

  	
  Restoration
  of Rights and Remedies

  	
  43

  
	
  Section 5.10.

  	
  Rights
  and Remedies Cumulative

  	
  44

  
	
  Section 5.11.

  	
  Delay
  or Omission Not Waiver

  	
  44

  
	
  Section 5.12.

  	
  Control
  by Holders

  	
  44

  
	
  Section 5.13.

  	
  Waiver
  of Past Defaults

  	
  44

  
	
  Section 5.14.

  	
  Undertaking
  for Costs

  	
  45

  
	
  Section 5.15.

  	
  Waiver
  of Usury, Stay or Extension Laws

  	
  45

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
  THE
  TRUSTEE

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Corporate
  Trustee Required

  	
  45

  
	
  Section 6.2.

  	
  Certain
  Duties and Responsibilities

  	
  46

  
	
  Section 6.3.

  	
  Notice
  of Defaults

  	
  47

  
	
  Section 6.4.

  	
  Certain
  Rights of Trustee

  	
  47

  
				

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 6.5.

  	
  May
  Hold Securities

  	
  49

  
	
  Section 6.6.

  	
  Compensation;
  Reimbursement; Indemnity

  	
  49

  
	
  Section 6.7.

  	
  Resignation
  and Removal; Appointment of Successor

  	
  50

  
	
  Section 6.8.

  	
  Acceptance
  of Appointment by Successor

  	
  51

  
	
  Section 6.9.

  	
  Merger,
  Conversion, Consolidation or Succession to Business

  	
  51

  
	
  Section 6.10.

  	
  Not
  Responsible for Recitals or Issuance of Securities

  	
  52

  
	
  Section 6.11.

  	
  Appointment
  of Authenticating Agent

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
  HOLDER’S
  LISTS AND REPORTS BY COMPANY

  	
  53

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Company
  to Furnish Trustee Names and Addresses of Holders

  	
  53

  
	
  Section 7.2.

  	
  Preservation
  of Information, Communications to Holders

  	
  54

  
	
  Section 7.3.

  	
  Reports
  by Company

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
  CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
  55

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Company
  May Consolidate, Etc., Only on Certain Terms

  	
  55

  
	
  Section 8.2.

  	
  Successor
  Company Substituted

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
  SUPPLEMENTAL
  INDENTURES

  	
  56

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Supplemental
  Indentures without Consent of Holders

  	
  56

  
	
  Section 9.2.

  	
  Supplemental
  Indentures with Consent of Holders

  	
  57

  
	
  Section 9.3.

  	
  Execution
  of Supplemental Indentures

  	
  58

  
	
  Section 9.4.

  	
  Effect
  of Supplemental Indentures

  	
  58

  
	
  Section 9.5.

  	
  Reference
  in Securities to Supplemental Indentures

  	
  58

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  X

  	
  COVENANTS

  	
  58

  
	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Payment
  of Principal, Premium, if any, and Interest

  	
  58

  
	
  Section 10.2.

  	
  Money
  for Security Payments to be Held in Trust

  	
  58

  
	
  Section 10.3.

  	
  Statement
  as to Compliance

  	
  60

  
	
  Section 10.4.

  	
  Calculation
  Agent

  	
  60

  
	
  Section 10.5.

  	
  Reserved

  	
  60

  
	
  Section 10.6.

  	
  Additional
  Covenants

  	
  60

  
	
  Section 10.7.

  	
  Waiver
  of Covenants

  	
  61

  
	
  Section 10.8.

  	
  Treatment
  of Securities

  	
  61

  
				

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 10.9.

  	
  Asset
  Management and Management Company Covenants

  	
  62

  
	
  Section 10.10.

  	
  Seller
  Notes

  	
  62

  
	
  Section 10.11.

  	
  Further
  Additional Covenants

  	
  63

  
	
  Section 10.12.

  	
  Inspections

  	
  64

  
	
  Section 10.13.

  	
  Maintenance
  of Corporate Tax Status

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  REDEMPTION
  OF SECURITIES

  	
  65

  
	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
  Optional
  Redemption; In-Kind Redemption

  	
  65

  
	
  Section 11.2.

  	
  Reserved

  	
  65

  
	
  Section 11.3.

  	
  Election
  to Redeem; Notice to Trustee

  	
  65

  
	
  Section 11.4.

  	
  Selection
  of Securities to be Redeemed

  	
  65

  
	
  Section 11.5.

  	
  Notice
  of Redemption

  	
  66

  
	
  Section 11.6.

  	
  Deposit
  of Redemption Price

  	
  67

  
	
  Section 11.7.

  	
  Payment
  of Securities Called for Redemption

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII

  	
  SUBORDINATION
  OF SECURITIES

  	
  67

  
	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
  Securities
  Subordinate to Senior Debt

  	
  67

  
	
  Section 12.2.

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

  	
  68

  
	
  Section 12.3.

  	
  Payment
  Permitted If No Default

  	
  69

  
	
  Section 12.4.

  	
  Subrogation
  to Rights of Holders of Senior Debt

  	
  69

  
	
  Section 12.5.

  	
  Provisions
  Solely to Define Relative Rights

  	
  70

  
	
  Section 12.6.

  	
  Trustee
  to Effectuate Subordination

  	
  70

  
	
  Section 12.7.

  	
  No
  Waiver of Subordination Provisions

  	
  70

  
	
  Section 12.8.

  	
  Notice
  to Trustee

  	
  71

  
	
  Section 12.9.

  	
  Reliance
  on Judicial Order or Certificate of Liquidating Agent

  	
  71

  
	
  Section 12.10.

  	
  Trustee
  Not Fiduciary for Holders of Senior Debt

  	
  72

  
	
  Section 12.11.

  	
  Rights
  of Trustee as Holder of Senior Debt; Preservation of Trustee’s Rights

  	
  72

  
	
  Section 12.12.

  	
  Article
  Applicable to Paying Agents

  	
  72

  
	
  Section 12.13.

  	
  Article
  Applicable to Shareholders Act

  	
  72

  
				

 

iv

 

TABLE OF CONTENTS

(continued)

 

SCHEDULES
AND EXHIBITS

 

	
  Schedule
  A

  	
  -

  	
   

  	
  Determination
  of LIBOR

  
	
  Schedule
  B

  	
  -

  	
   

  	
  Indebtedness

  
	
  Exhibit
  A

  	
  -

  	
   

  	
  Form
  of Officer’s Financial Certificate

  

 

v

 

JUNIOR SUBORDINATED INDENTURE, dated as of October 20,
2010, between DEERFIELD CAPITAL CORP., a Maryland corporation (the “Company”), and THE BANK OF NEW YORK MELLON TRUST COMPANY,
National Association, a national banking association, as Trustee (in such capacity,
the “Trustee”).

 

RECITALS OF THE COMPANY

 

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

 

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

 

NOW, THEREFORE, this Indenture witnesseth:

 

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

 

ARTICLE I

 

DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION

 

Section 1.1.            Definitions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

(h)           a reference to any agreement, document or instrument is a
reference to that agreement, document or instrument as it may be amended,
supplemented or otherwise modified from time to time.

 

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

 

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

 

“Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
“control,” when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing. Notwithstanding anything to the contrary contained herein, having a
minority representation on any board of directors shall not in and of itself
constitute “control”.

 

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

 

“Attributable Indebtedness” means, when used with respect to
any sale and leaseback transaction, as at the time of determination, the
present value (discounted at a rate equivalent to the Company’s or its
Subsidiary’s, as applicable, then-current weighted average cost of funds for
borrowed money as at the time of determination, compounded on a semi-annual
basis) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in any such sale and leaseback
transaction.

 

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

 

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

 

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

 

“Business Day” means any day other than (i) a Saturday or Sunday,
(ii) a day on which banking institutions in the City of New York are authorized
or required by law or executive order 

 

2

 

to
remain closed or (iii) a day on which the Corporate Trust Office of the Trustee
is closed for business.

 

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

 

“Capital Lease” means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee that,
in accordance with GAAP, is or should be accounted for as a capital lease on
the balance sheet of that Person.

 

“Capital Stock” means, with respect to any Person, any and
all shares, interests, participations or other equivalents, including
membership interests (however designated, whether voting or nonvoting), of
equity of such Person, including, if such Person is a partnership, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of property of, such partnership, whether outstanding on
the date hereof or issued hereafter; provided, however, Capital
Stock shall not include any indebtedness, warrant, option or right that is
convertible into or exchangeable into Capital Stock until such time that such
indebtedness, warrant, option or right is actually so converted or exchanged
into Capital Stock.

 

“Cash” means Money or a credit balance in a Deposit Account.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

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

 

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

 

“Company Leverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated Company Debt to (b) Consolidated
EBITDA of the Company and its Subsidiaries for the last four fiscal quarters of
the Company ending on, or most recently before, such date, provided that such
ratio shall be calculated after giving pro forma effect to any acquisitions,
dispositions, mergers or combinations by the Company and its Subsidiaries.

 

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

 

“Conflict” or “Conflicting”
means, with respect to any Contractual Obligation, Organizational Document,
Requirement of Law, Consent or Other Action or any other item, any conflict
with, breach of or default under, or any triggering of any remedial rights,
benefits, or obligations under or in connection with, the terms of such item.

 

3

 

“Consent(s) and/or Other Action” means any consent,
authorization, Judgment, directive, approval, license, certificate,
registration, permit, exemption, filing, notice, declaration or other action
by, with or to any Person.

 

“Consolidated Amortization Expense” shall mean, for any
period, the amortization expense of the Company and its Subsidiaries (including
discount amortization on investments, loans and debt issuance) for such period,
determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Company Debt” means, for the Company and its
Subsidiaries, as of any date of determination, the aggregate principal amount
of Indebtedness of the type specified in clauses (a), (b), (d), (e) and (f) of
the definition of “Indebtedness”
and non-contingent obligations of the type specified in clause (c) of such
definition, less any such Indebtedness permitted under Section 10.11(a).

 

“Consolidated Depreciation Expense” shall mean, for any
period, the depreciation expense of the Company and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.

 

“Consolidated EBITDA” means, for any period, Consolidated Net
Income of the Company and its Subsidiaries for such period, adjusted by (x)
adding thereto, in each case only to the extent (and in the same proportion)
deducted in determining such Consolidated Net Income and without duplication
(and with respect to the portion of Consolidated Net Income attributable to any
Subsidiary of the Company only if a corresponding amount would be permitted at
the date of determination to be distributed to the Company by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its Organization Documents and all Contractual Obligations and Requirements of
Law applicable to such Subsidiary or its equity holders):  (a) Consolidated Interest Expense for such
period; (b) Consolidated Amortization Expense for such period; (c) Consolidated
Depreciation Expense for such period; (d) Consolidated Tax Expense for such
period; (e) costs and expenses incurred in connection with any acquisition and
other one-time or non-recurring charges; (f) non-cash stock or option based
compensation; and (g) the aggregate amount of all other non-cash charges
reducing Consolidated Net Income (excluding any non-cash charge that results in
an accrual of a reserve for cash charges in any future period) for such period,
and (y) subtracting therefrom, only to the extent (and in the same proportion)
included in determining such Consolidated Net Income and without duplication
the aggregate amount of all non-cash items (other than any pay-in-kind
interest, pay-in-kind dividends, capitalized interest and similar non-cash
interest and dividends payable on, or in connection with, Financial Assets)
increasing Consolidated Net Income, including any non-cash gains on the sale of
Investments (other than the accrual of revenue or recording of receivables in
the ordinary course of business) for such period.  It is agreed that a reduction in the carrying
value of an asset (whether through write-down or write-off or increase in a
loan loss or other valuation reserve) constitutes a non-cash item for purposes
of this definition.

 

“Consolidated Interest Expense” means for any period, the
total consolidated interest expense of the Company and its Subsidiaries for
such period with respect to Consolidated Company Debt plus, without
duplication:  (a) imputed interest on
obligations under any Capital 

 

4

 

Lease
and Attributable Indebtedness of the Company and its Subsidiaries for such
period; (b) commissions, discounts and other fees and charges owed by the
Company or any of its Subsidiaries with respect to letters of credit securing
financial obligations, bankers’ acceptance financing and receivables financings
for such period; (c) amortization of debt issuance costs, debt discount or
premium and other financing fees and expenses incurred by the Company or any of
its Subsidiaries for such period; (d) all interest paid or payable with respect
to discontinued operations of the Company or any of its Subsidiaries for such
period; (e) the interest portion of any deferred payment obligations of the
Company or any of its Subsidiaries for such period; and (f) all interest on any
Indebtedness of the Company or any of its Subsidiaries of the type described in
clause (g) or (h) of the definition of “Indebtedness”
for such period.

 

“Consolidated Net Income” means for any period, the
consolidated net income (or loss) of any Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided
that in calculating Consolidated Net Income of the Company and its
Subsidiaries for any period, there shall be excluded (a) the income (or
deficit) of any Person (other than a Subsidiary of the Company or the Company)
in which the Company or any of its Subsidiaries has an ownership interest,
except to the extent that any such income is actually received by the Company
or such Subsidiary in the form of dividends or similar distributions and (b)
the income (or deficit) of, but not any actual cash dividends received from,
any Subsidiary of the Company, if a corresponding amount would not be permitted
at the date of determination to be distributed to the Company by such
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its Organizational Documents and all Contractual Obligations (other
than under any document in relation to the Seller Notes (or any refinancing
thereof), the Securities or the March 4th Securities)
and Requirements of Law applicable to such Subsidiary or its equity holders)
provided further that in calculating Consolidated Net Income of the Company and
its Subsidiaries for any period, there shall be included the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of the
Company or is merged into or consolidated with the Company or any of its
Subsidiaries.

 

“Consolidated Net Worth” means, at any date, the aggregate
equity of the Company, the Company and their Subsidiaries on a consolidated
basis determined in accordance with GAAP (which equity shall include any
preferred stock issued by the Company or the Company or any of their Subsidiaries
so long as such preferred stock is subordinate and subject in right of payment
to the prior payment in full of all Senior Debt and the Securities).

 

“Consolidated Tax Expense” shall mean, for any period, the
tax expense of the Company and its Subsidiaries, for such period, determined on
a consolidated basis in accordance with GAAP.

 

“Contractual Obligations” means, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which its property
is bound.

 

“Control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise, and the terms “Controlling”
and “Controlled” shall have meanings
correlative thereto.

 

5

 

“Corporate Trust Office” means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of this Indenture is located at 525
William Penn Place, 7th Floor, Pittsburgh, Pennsylvania 15259, Attn:
Global Corporate Trust — Deerfield Capital Corp.  All notices and correspondence to the Trustee
hereunder shall be initially addressed to Mudassir Mohamed, telephone number
(713) 483-6029.

 

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

 

“Deerfield & Co.” means Deerfield & Company LLC, a
Delaware limited liability company

 

“Deerfield Special Purpose Entities” means (i) Bridgeport CLO
Ltd., Bridgeport CLO II Ltd., Buckingham CDO Ltd., Buckingham CDO II Ltd.,
Buckingham CDO III Ltd., Burr Ridge CLO Plus Ltd., DFR Middle Market CLO Ltd.,
DWFC, LLC, Coltrane CLO P.L.C., Cumberland II CLO Ltd., Forest Creek CLO Ltd.,
Gillespie CLO PLC, Knollwood CDO Ltd., Knollwood CDO II Ltd., Long Grove CLO
Ltd., Market Square CLO Ltd., Marquette Park CLO Ltd., Mid Ocean CBO 2000-1
Ltd., Mid Ocean CBO 2001-1 Ltd., NorthLake CDO I, Limited, Oceanview CBO I,
Ltd., Pinetree CDO Ltd., River North CDO Ltd., Rosemont CLO, Ltd., Schiller
Park CLO Ltd., Valeo Investment Grade CDO Ltd., and Valeo Investment Grade CDO
II Ltd., and (ii) any Person in which the Company or any of its Subsidiaries
made or maintains an investment and (x) to which the Company or any of its
Subsidiaries provides investment management services or (y) which is directly
or indirectly Controlled by the Company.

 

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

 

“Deposit Account” shall have the meaning accorded to such
term in the UCC.

 

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

 

6

 

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

 

“Designated Preferred Stock” means the shares of series A
preferred stock of the Company, par value $0.001 per share, having a
liquidation preference of $10.00 per share received by the Purchasers and the
other sellers in connection with the acquisition by the Company of Deerfield
& Co. and any shares of such Series A preferred stock issued as a dividend
paid-in-kind thereon, and any security into which such series A preferred stock
or any portion thereof is converted, exchanged, reclassified, recapitalized or
the like.

 

“Disqualified Capital Stock” means any Capital Stock that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, (i) matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part, on or prior to a date that is 181 days after the Seller Notes Maturity
Date, (ii) is convertible into or exchangeable (unless at the sole option of
the issuer thereof) for (a) debt securities or (b) any Capital Stock referred
to in clause (i) above, in each case at any time on or prior to a date that is
181 days after the Seller Notes Maturity Date, (iii) contains any repurchase
obligation which may come into effect prior to payment in full of all
Obligations and (iv) provides the holders of such Capital Stock with any rights
to receive any cash upon the occurrence of a change of control (provided
that any Capital Stock that would not constitute Disqualified Capital Stock
but for provisions thereof giving holders thereof (or the holders of any
security into or for which such Capital Stock is convertible, exchangeable or
exercisable) the right to require the issuer thereof to redeem such Capital
Stock upon the occurrence of a change in control or an asset sale occurring
prior to the first anniversary of the Seller Notes Maturity Date shall not
constitute Disqualified Capital Stock if such Capital Stock provides that the
issuer thereof will not redeem any such Capital Stock pursuant to such
provisions prior to the repayment in full of the Seller Notes.  In no event shall Disqualified Capital Stock
include trust preferred securities or any Designated Preferred Stock.

 

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

 

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

 

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

 

“Equity Interests” means (a) the partnership interests
(general or limited) in a partnership, (b) the membership interests in a
limited liability company and (c) the shares or stock interests (both common
stock and preferred stock) in a corporation or (d) any similar equity interests
in any entity; provided, however, Equity Interests shall not
include any indebtedness, warrant, option or right convertible into or
exchangeable for Capital Stock until such time that such indebtedness, warrant,
option or right is actually so converted or exchanged into Capital Stock.

 

7

 

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

 

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

 

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

 

“Fair Market Value” means (i) with respect to any asset or
group of assets at any date, the value of the consideration obtainable in a
sale of such asset at such date assuming a sale by a willing seller to a
willing purchaser dealing at arm’s length and arranged in an orderly manner
having regard to the nature and characteristics of such asset, as reasonably
determined in good faith by the Company and (ii) with respect to any marketable
security that cannot be valued in accordance with the preceding clause (i), the
closing sale price of such security on the Business Day preceding such date, as
appearing in any published list of any national securities exchange or the
NASDAQ Stock Market or, if there is no such closing sale price of such
security, the final price for the purchase of such security at face value
quoted on such Business Day by a financial institution of recognized standing
regularly dealing in Securities of such type and selected by the Company.

 

“Financial Assets” means (i) all financial assets (as defined
in the UCC) and (ii) Capital Stock in any Deerfield Special Purpose Entity,
securities (including equity and debt, and whether or not such securities are
themselves backed by mortgages, loans or other Financial Assets), bonds, notes,
debentures, loans, derivative instruments, collateralized loan obligations,
collateralized debt obligations, “warehouse” loan facilities, loan
securitization facilities or any other similar credit facilities or investment
vehicles.

 

“GAAP” means generally accepted accounting principles in the
United States set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or
such other principles as may be approved by a significant segment of the
accounting profession in the United States, that are applicable to the
circumstances as of the date of determination, consistently applied.

 

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

 

“Governmental Authority” means any nation or government, any
state or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, administrative tribunal, central bank,
public office, court, arbitration or mediation panel, or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of government.

 

“Government Obligation” means (a) any security that is (i) a
direct obligation of the United States of America of which the full faith and
credit of the United States of America is pledged or (ii) an obligation of a
Person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case (i) or (ii), is not callable or redeemable at
the option of the issuer thereof, and (b) any 

 

8

 

depositary
receipt issued by a “bank” (as defined in Section 3(a)(2) of the Securities
Act) as custodian with respect to any Government Obligation that is specified
in clause (a) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any Government Obligation that is so specified and held, provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.

 

“Guaranty and Pledge Agreements” means (a) the Series A
Guaranty and Pledge Agreement dated as of December 21, 2007 among the parties
to the Series A Note Purchase Agreement and (b) the Series B Guaranty and
Pledge Agreement dated as of December 21, 2007 among the parties to the Series
B Note Purchase Agreement.

 

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

 

“Indebtedness” means, as applied to any Person:  (a)(i) all indebtedness for borrowed money,
and (ii) all Disqualified Capital Stock; (b) all obligations issued, undertaken
or assumed as the deferred purchase price of Property or services (other than
trade payables entered into in the ordinary course of business); (c) the
principal amount of all letters of credit issued for the account of such Person
and without duplication, all drafts drawn thereunder and all reimbursement or
payment obligations with respect to letters of credit, surety bonds and other
similar instruments issued by such Person; (d) all obligations evidenced by
notes, bonds, debentures or similar instruments (other than checks in the
ordinary course of the business), including obligations so evidenced incurred
in connection with the acquisition of Property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
Property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default section thereof are
limited to repossession or sale of such Property); (f) all monetary obligations
under any Capital Lease; (g) all indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in Property (including accounts and contracts rights) owned by such Person,
even though such Person has not assumed or become liable for the payment of
such indebtedness (the amount of any such obligation shall be deemed to be the
lower of (x) an amount equal to the stated or determinable amount of such
obligation and (y) the Fair Market Value of the property securing such
obligation, unless the maximum amount for which such Person may be liable is
not stated or determinable, in which case the amount of such obligation shall
be such Person’s maximum reasonably anticipated liability in respect thereof as
determined by the Company in good faith); and (h) any direct or indirect
liability, contingent or otherwise, with respect to any Indebtedness or other
similar obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide
assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto (the amount of any such obligation shall be
deemed to be the lower of (x) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such 

 

9

 

assurance
is made and (y) the maximum amount for which such assuring Person may be liable
pursuant to the terms of the instrument embodying such assurance, unless such
primary obligation and the maximum amount for which such assuring Person may be
liable are not stated or determinable, in which case the amount of such
obligation shall be such assuring Person’s maximum reasonably anticipated
liability in respect thereof as determined by the Company in good faith); provided
that Indebtedness shall exclude (i) obligations under repurchase agreements
and obligations due to brokers and broker-dealers in the ordinary course of
business, (ii) obligations under trust preferred securities or debt securities
that are convertible into Qualified Capital Stock of the Company or any of its
Subsidiaries.

 

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

 

“In-Kind Redemption Price” has the meaning set forth in Section
11.1.

 

“Interest Payment Date” means January 30, April 30, July 30
and October 30 of each year, commencing on October 30, 2010, during the term of
this Indenture.

 

“Interest Period” means the period commencing on the day
after an Interest Payment Date and continuing through and including the next
succeeding Interest Payment Date.

 

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

 

“Judgment” means any judgment, order, writ, decision, decree,
award or injunction of any Governmental Authority.

 

“Laws” means, collectively, all international, foreign,
Federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority.

 

“LIBOR” has the meaning specified in Schedule A.

 

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

 

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

 

“License” means any license, permit, directive,
authorization, approval or stipulation required to operate the Business at any
location.

 

“Lien” means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), other charge or
security interest, or any preference, priority or other agreement or
preferential arrangement of any kind or nature whatsoever, 

 

10

 

including
without limitation, any conditional sale or other title retention agreement or
any capital lease obligation having substantially the same economic effect as
any of the foregoing.

 

“Management Agreement” means the Management Agreement, dated
December 21, 2007, between the Company and Deerfield Capital Management LLC.

 

“Management Company” means Deerfield Capital Management LLC,
a Delaware limited liability company.

 

“March 4th Indenture” means that certain Junior
Subordinated Indenture, dated March 4, 2010, by and between the Company and the
Trustee.

 

“March 4th Securities” means the securities
issued pursuant to the March 4th Indenture.

 

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

 

“Money” shall have the meaning accorded to such term in the
UCC.

 

“Net Income” means, with respect to the Company, the
consolidated net income (or loss) of the Company and its Subsidiaries for such
period as determined in accordance with GAAP, adjusted to the extent included
in calculating such consolidated net income (or loss), by excluding the
following:

 

(i)            all extraordinary gains or losses in
such period;

 

(ii)           net losses in respect of dispositions
of assets by the Company or any of its Subsidiaries;

 

(iii)          the net income (or loss) of any
Subsidiary to the extent that the declaration of dividend or distributions by
that Subsidiary of that income is not at the time permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary;

 

(iv)          the net income (or loss) of any other
entity of the Company accounted for under the equity method of accounting,
except to the extent of the amount of dividends or other distributions actually
paid or made to such entity subject to the limitations contained in clause
(iii) above);

 

(v)           any interest income resulting from
loans or investments in Affiliates (other than Subsidiaries), other than cash
interest income actually received;

 

(vi)          costs and expenses incurred in
connection with or as a result of the consummation of any tender offer or merger;

 

11

 

(vii)         non cash charges, including, but not
limited to, depreciation, amortization, write-offs, write-downs, provisions or
impairment charges; and,

 

(viii)        the cumulative effect of a change in
accounting principles.

 

In
determining Net Income, gains or losses resulting from the early retirement, or
extinguishment of indebtedness for money borrowed, including any fees and
expenses associated therewith, shall be deducted or added back, respectively.

 

“Non-Recourse Indebtedness” means Indebtedness incurred by the
Company or any of its Subsidiaries with respect to which the applicable
creditor has recourse only to a particular asset and not to the general balance
sheet of the Company or any of its Subsidiaries and is not recourse to the
general balance sheet of the Company or any of its Subsidiaries.

 

“Note Purchase Agreements” means (a) the Series A
Note Purchase Agreement dated as of December 21, 2007 among the Company,
Deerfield & Co., Triarc Deerfield Holdings LLC and other purchasers
signatory thereto and (b) the Series B Note Purchase Agreement dated
as of December 21, 2007 among the Company, Deerfield & Co.,
Triarc Deerfield Holdings LLC and other purchasers signatory thereto.

 

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

 

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

 

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

 

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

 

“Organizational Documents” means, (a) with respect to
any corporation, the certificate or articles of incorporation and the bylaws
(or equivalent or comparable constitutive documents with respect to any non-U.S.
jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other
form of business entity, the partnership, joint venture or other applicable
agreement of formation or organization and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation or
organization with the applicable Governmental Authority in the jurisdiction of
its formation or organization and, if applicable, any certificate or articles
of formation or organization of such entity.

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

“Payment Account” has the meaning set forth in Section 1.15.

 

“Permitted Management Fees” means the management fees and
expenses paid under the Management Agreement.

 

“Permitted Refinancing Indebtedness” means any Indebtedness
of the Company or the Management Company issued in exchange for, or the net
proceeds of which are used to refinance (including renewals, extensions,
refunds or defeasances) Indebtedness permitted by Section 10.11(a);
provided that (a) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
original principal amount plus accrued interest (or accreted value, if
applicable) of the Indebtedness so refinanced (plus the amount of
reasonable costs and expenses (including any premiums) incurred in connection
therewith); (b) such Permitted Refinancing Indebtedness has a final
maturity date not earlier than the earlier of 

 

13

 

(i) the
final maturity date of, at the time of such refinancing, the Indebtedness being
refinanced and (ii) a date that is at least 180 days after the Seller
Notes Maturity Date; and (c) if the Indebtedness being refinanced is
subordinated to the Seller Notes, such Permitted Refinancing Indebtedness has
(to the extent the Indebtedness being refinanced originally had a final
maturity date later than the final maturity date of the Notes) a final maturity
date later than the final maturity date of, and is subordinated in right of
payment to, the Seller Notes on terms at least as favorable to the holders of
the Seller Notes as those contained in the documentation governing the
Indebtedness being refinanced.

 

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

 

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

 

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

 

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

 

“Property” means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including Capital Stock and leasehold interests.

 

“Qualified Capital Stock” of any Person means any Capital
Stock of such Person that is not Disqualified Capital Stock.

 

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

 

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

 

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

 

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

 

“Requirement of Law” or “Requirements of Law”
means any requirement, direction, policy or procedure of any Law or License,
Judgment, or Consent or Other Action.

 

14

 

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

 

“Restricted Payment” means, with respect to any Person, (i) any
dividend or other distribution (whether direct or indirect, and whether in Cash,
securities or other property) with respect to any class of Capital Stock of
such Person now or hereafter outstanding, other than a dividend payable to the
holders of any class of Capital Stock solely in shares of Capital Stock of such
Person, (ii) any payment (whether direct or indirect, and whether in Cash,
securities or other property), including any sinking fund or similar deposit,
on account of the purchase, full or partial redemption, full or partial
withdrawal, retirement, acquisition, cancellation or termination of any such
Capital Stock or of any option, warrant or other right to acquire any such
Capital Stock, and (iii) any management (or similar) fees payable to an
Affiliate of such Person, except for management fees in an amount up to
$1,500,000 per annum.

 

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

 

“Securities” or “Security” has
the meaning set forth in the first recital of this Indenture and means any debt
securities or debt security, as the case may be, authenticated and delivered
under this Indenture.

 

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

 

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

 

“Seller Note Documents” means (a) the Note Purchase
Agreements; (b) the Seller Notes; (c) the Guaranty and Pledge
Agreements; (d) any other guarantee of the obligations of the issuer of
the Seller Notes; (e) collateral assignments for the benefit of the
holders of the Seller Notes and the agent therefor; and (f) any
Contractual Obligation, filings and recordings executed, delivered or filed,
including any amendments, supplements, renewals, extensions or replacements
thereof, executed pursuant to or in connection with any of the documents
refereed to in clauses (a) through (e) above or any agreements or
other documents relating to any Permitted Refinancing Indebtedness thereof.

 

“Seller Notes” means, collectively, (i) those certain Series A
Senior Secured Notes issued by DFR Merger Company, LLC and Deerfield &
Co. due in calendar year 2012 and (ii) those certain Series B Senior
Secured Notes issued by DFR Merger Company, LLC and Deerfield & Co.
due in calendar year 2012.

 

“Seller Notes  Maturity Date”
means the fifth anniversary of December 21, 2007.

 

15

 

“Senior Debt” means the principal of and any premium and
interest on (including interest accruing on or after the filing of any petition
in bankruptcy or for reorganization relating to the Company, whether or not
such claim for post-petition interest is allowed in such proceeding) all Debt
of the Company, whether incurred on or prior to the date of this Indenture or
thereafter incurred, unless it is provided in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, that such
obligations are not superior in right of payment to the Securities issued under
this Indenture; provided, that Senior Debt shall
not be deemed to include any other debt securities (and guarantees, if any, in
respect of such debt securities) issued to any trust (or a trustee of any such
trust), partnership or other entity affiliated with the Company that is a
financing vehicle of the Company (a “financing entity”) in connection with the
issuance by such financing entity of equity securities or other securities
pursuant to an instrument that ranks pari passu with
or junior in right of payment to this Indenture; provided
further, however, the Seller Notes and
any Permitted Refinancing Indebtedness thereof shall be Senior Debt.

 

“Shareholders Act” means the Shareholders Communication Act
of 1985 (as amended from time to time).

 

“Special Record Date” for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.1.

 

“Stated Maturity” means October 30, 2035.

 

“Subsidiary” of a Person means a corporation, partnership,
joint venture, limited liability company or other business entity which is
Controlled by such Person.

 

“Taxes” has the meaning set forth in Section 3.1(g).

 

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

 

“Trust Indenture Act” means the Trust Indenture Act of 1939,
as amended and as in effect on the date as of this Indenture.

 

“UCC” or “Uniform Commercial Code”
means the Uniform Commercial Code as in effect from time to time as adopted in
the State of New York

 

“Unsecured Debt” means, with respect to any Person, any Debt
of such Person that is not secured in any manner by any Lien on any property,
including without limitation, the Securities; provided,
however, that the term “Unsecured Debt” shall not include any unsecured revolving
bank lines of credit.

 

“Voting Stock” means, with respect to any Person, any class
or classes of Capital Stock pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the board of directors of such Person.

 

16

 

Section 1.2.            Compliance Certificate and
Opinions.

 

(a)           Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall, if requested by the Trustee, furnish to the Trustee an Officers’
Certificate stating that all conditions precedent (including covenants
compliance with which constitutes a condition precedent), if any, provided for
in this Indenture relating to the proposed action have been complied with and
an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent (including covenants compliance with which constitutes a
condition precedent), if any, have been complied with.

 

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

 

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

 

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

 

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

 

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

 

Section 1.3.            Forms of Documents
Delivered to Trustee.

 

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

 

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

 

17

 

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

 

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

 

Section 1.4.            Acts of Holders.

 

(a)           Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given to or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
thereof duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments (including any appointment of an agent) is or are delivered to the
Trustee, and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the “Act”
of the Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section 1.4.

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

(h)           With respect to any record date set pursuant to paragraph (f) or
(g) of this Section 1.4, the party hereto that sets such
record date may designate any day as the “Expiration Date”
and from time to time may change the Expiration Date to any earlier or later
day; provided, that no such change shall be
effective unless notice of the proposed new Expiration Date is given to the
other party hereto in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record date
set pursuant to this Section 1.4, the party hereto that 

 

19

 

set such record date shall be deemed to have
initially designated the ninetieth (90th) day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing,
no Expiration Date shall be later than the one hundred eightieth (180th) day after the applicable
record date.

 

Section 1.5.            Notices, Etc. to Trustee and Company.

 

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

 

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

 

(ii)           the Company by the Trustee or any Holder shall be
sufficient for every purpose hereunder if in writing and mailed, first class,
postage prepaid, to the Company addressed to it at Deerfield Capital Corp.,
6250 North River Road, Rosemont, Illinois 60018, or at any other address
previously furnished in writing to the Trustee by the Company.

 

(b)           The Trustee may, but is not required to, rely upon and
comply with instructions and directions sent by email or facsimile, (or any
other reasonable means of communication) by persons believed by the Trustee in
good faith to be authorized to provide such instructions or direction;
provided, however, that the Trustee may require such additional evidence,
confirmation or certification from any such party or parties as the Trustee, in
its reasonable discretion, deems necessary or advisable before acting or
refraining from acting upon any such instruction or direction.

 

(c)           Subject to Section 1.5(b) above, the
Trustee agrees to accept and act upon instructions or directions pursuant to
this Agreement sent by unsecured email, facsimile transmission or other similar
unsecured electronic methods; provided, however, that any Person providing such
instructions or directions shall provide to the Trustee an incumbency
certificate listing such designated persons, which incumbency certificate shall
be amended whenever a person is to be added or deleted from the listing.  If such Person elects to give the Trustee
email or facsimile instructions (or instructions by a similar electronic
method) the Trustee’s understanding of such instructions shall be deemed
controlling.  The Trustee shall not be
liable for any losses, costs or expenses arising directly or indirectly from
the Trustee’s reliance upon and compliance with such instructions
notwithstanding such instructions conflict or are inconsistent with a
subsequent written instruction.  Each
Person providing instructions or directions to the Trustee hereunder agrees to
assume all risks arising out of the use of such electronic methods to submit
instructions and directions to the Trustee, including without limitation the risk
of the Trustee acting, in good faith, on unauthorized instructions, and the
risk of interception and misuse by third parties.

 

20

 

Section 1.6.            Notice to Holders; Waiver.

 

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

 

Section 1.7.            Effect of Headings and
Table of Contents.

 

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

 

Section 1.8.            Successors and Assigns.

 

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

 

Section 1.9.            Separability Clause.

 

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

 

Section 1.10.          Benefits of Indenture.

 

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

 

21

 

Section 1.11.          Governing Law.

 

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

 

Section 1.12.          Submission to Jurisdiction.

 

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

 

Section 1.13.          Non-Business Days.

 

If
any Interest Payment Date, Redemption Date or Stated Maturity of any Security
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or the Securities) payment of interest, premium, if any, or principal
or other amounts in respect of such Security shall not be made on such date,
but shall be made on the next succeeding Business Day (and no interest shall
accrue in respect of the amounts whose payment is so delayed for the period
from and after such Interest Payment Date, Redemption Date or Stated Maturity,
as the case may be, until such next succeeding Business Day) except that, if
such Business Day falls in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the Interest Payment Date or Redemption
Date or at the Stated Maturity.

 

Section 1.14.          Reserved.

 

Section 1.15.          Account.

 

In
connection with any funds received by the Trustee hereunder and any payments
made on account of any Holder of Securities, the Trustee shall, on or prior to
the date of this Indenture, establish a segregated non-interest bearing trust
account in the name of the Trustee, which shall be designated as the payment
account (the “Payment Account”).  The Trustee may establish any number of
subaccounts as it deems necessary or advisable for purposes of performing its
obligations under this Indenture.  The
only permitted withdrawals from or application of funds on deposit in, or
otherwise to the credit of, the Payment Account shall be to pay amounts due and
payable to the Trustee pursuant to Section 6.6 hereof and to the
Holders on account of the Securities in accordance with their terms and the
provisions of this Indenture.  Amounts in
the Payment Account shall be held uninvested.

 

22

 

ARTICLE II

 

SECURITY FORMS

 

Section 2.1.            Form of Security.

 

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

 

DEERFIELD CAPITAL CORP.

 

Junior Subordinated Note due 2035

 

	
  No.                        

  	
   

  	
  $25,000,000   

  

 

Deerfield
Capital Corp., a corporation organized and existing under the laws of Maryland
(hereinafter called the “Company,”)
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
                              ,
or registered assigns, the principal sum of Twenty-Five Million Dollars
($25,000,000) [if the Security is a
Global Security, then insert— or such other principal amount
represented hereby as may be set forth in the records of the Securities
Registrar hereinafter referred to in accordance with the Indenture]
on October 30, 2035.  The Company
further promises to pay interest on said principal sum from October [   ],
2010, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, quarterly in arrears on January 30, April 30,
July 30 and October 30 of each year, commencing October 30,
2010, or if any such day is not a Business Day, on the next succeeding Business
Day (and no interest shall accrue in respect of the amounts whose payment is so
delayed for the period from and after such Interest Payment Date until such
next succeeding Business Day), except that, if such Business Day falls in the
next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case, with the same force and effect as if made
on the Interest Payment Date, at a variable rate equal to LIBOR plus 3.5% per
annum, until the principal hereof is paid or duly provided for or made available
for payment; provided, further,
that any overdue principal, premium, if any, and any overdue installment of
interest shall bear Additional Interest at a variable rate equal to LIBOR plus
3.5% per annum (to the extent that the payment of such interest shall be
legally enforceable), compounded quarterly, from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand.

 

The
amount of interest payable for any Interest Period shall be computed on the
basis of a 360-day year and the actual number of days elapsed in the relevant
Interest Period.  The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest installment.  Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
not less than ten (10) days 

 

23

 

prior
to such Special Record Date, or be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.

 

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

 

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

 

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

 

[FORM OF REVERSE OF SECURITY]

 

This
Security is one of a duly authorized issue of securities of the Company (the “Securities”) issued under the Junior Subordinated Indenture,
dated as of October [   ], 2010 (the “Indenture”),
between the Company and The Bank of New York Mellon Trust Company, National
Association, as Trustee (in such capacity, the “Trustee,”
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the holders of Senior Debt,
the Holders of the Securities and the holders of the Preferred Securities, and
of the terms upon which the Securities are, and are to be, authenticated and
delivered.

 

All
terms used in this Security that are not defined herein shall have the meanings
assigned to them in the Indenture.

 

24

 

The
Company may, on any date, at its option, upon not less than thirty (30) days’
nor more than sixty (60) days’ written notice to the Holders of the Securities
(unless a shorter notice period shall be satisfactory to the Trustee), and
subject to the terms and conditions of Article XI of the Indenture,
(i) redeem this Security in whole at any time or in part from time to time
at a Redemption Price equal to one hundred percent (100%) of the principal
amount hereof (or of the redeemed portion hereof, as applicable), together, in
the case of any such redemption, with accrued interest, including any
Additional Interest, through but excluding the date fixed as the Redemption
Date or (ii) redeem this Security in whole at any time or in part from
time to time by delivering to a Holder certain replacement securities
acceptable to such Holder in its sole discretion in an aggregate principal
amount greater than or equal to the principal amount hereof, exclusive of any
accrued interest.

 

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

 

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

 

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

 

As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is restricted to transfers to “Qualified
Purchasers” (as such term is defined in the Investment Company Act of 1940, as
amended), and is registrable in the Securities Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company
maintained for such purpose, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Securities Registrar
and duly executed by, the Holder hereof or such Holder’s attorney duly
authorized in writing, and 

 

25

 

thereupon
one or more new Securities, of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated
transferee or transferees.

 

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

 

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

 

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

 

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

 

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

 

IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed on
this [        ] day of October, 2010.

 

	
   

  	
  DEERFIELD
  CAPITAL CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Section 2.2.            Restricted Legend.

 

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

 

[IF THIS SECURITY IS A GLOBAL SECURITY, INSERT: THIS SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE
ONLY IN THE LIMITED

 

26

 

CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE
OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.

 

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

 

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

 

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

 

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

 

27

 

INTEREST
ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES.

 

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

 

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

 

Section 2.3.            Form of Trustee’s
Certificate of Authentication.

 

The
Trustee’s certificate of authentication shall be in substantially the following
form: This is one of the Securities referred to in the within-mentioned
Indenture.

 

Dated:

 

	
   

  	
  [TRUSTEE], not in its individual capacity, but solely as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

28

 

Section 2.4.            Temporary Securities.

 

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

 

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

 

Section 2.5.            Definitive Securities.

 

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

 

ARTICLE III

 

THE SECURITIES

 

Section 3.1.            Payment of Principal and
Interest.

 

(a)           The unpaid principal amount of the Securities shall bear
interest at a variable rate equal to LIBOR plus 3.5% per annum, until such
principal is paid or duly provided for, such interest to accrue from the
Original Issue Date, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for. 
Any overdue principal, premium, if any, and any overdue installment of
interest shall bear Additional Interest at the rate equal to a variable rate of
LIBOR plus 3.5% per annum, compounded quarterly from the dates such amounts are
due until they are paid or funds for the payment thereof are made available for
payment.

 

(b)           Interest and Additional Interest on any Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, except that interest and any Additional Interest

 

29

 

payable on the Stated Maturity (or any date of
principal repayment upon early maturity) of the principal of a Security or on a
Redemption Date shall be paid to the Person to whom principal is paid. The
initial payment of interest on any Security that is issued between a Regular
Record Date and the related Interest Payment Date shall be payable as provided
in such Security.

 

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

 

(i)            The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest (a “Special
Record Date”), which shall be fixed in the following manner.  At least thirty (30) days prior to the date
of the proposed payment, the Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest. 
Thereupon the Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest, which shall be not more than fifteen (15) days and not
less than ten (10) days prior to the date of the proposed payment and not
less than ten (10) days after the receipt by the Trustee of the notice of
the proposed payment.  The Trustee shall
promptly notify the Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed, first
class, postage prepaid, to each Holder of a Security at the address of such
Holder as it appears in the Securities Register not less than ten (10) days
prior to such Special Record Date. 
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered on such Special Record Date; or

 

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

 

(d)           Payments of interest on the Securities shall include
interest accrued through and including the respective Interest Payment
Dates.  Interest payments for the
Securities shall be 

 

30

 

computed and paid on the basis of a 360-day year and
the actual number of days elapsed in the relevant Interest Period.

 

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

 

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

 

(g)           Any and all payments by the Company or any Paying Agent to
or for the account of any Holder under the Securities shall be made free and
clear of and without deduction for any and all present or future taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, including any interest,
penalties and additions to tax, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority as a result of the
Securities being treated as equity for U.S. federal income tax purposes (“Taxes”), except as required by law.  If the Company or any Paying Agent shall be
required by any law to deduct any Taxes from or in respect of any amount
payable under the Securities to any Holder as a result of the Securities being
treated as equity for U.S. federal income tax purposes, (i) the Company or
Paying Agent shall make such deductions, (ii) the Company or Paying Agent
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable laws, (iii) within thirty (30)
days after the date of such payment, the Company or Paying Agent shall furnish
to the Holder the original or a certified copy of a receipt evidencing payment
thereof, and (iv) the amount payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 3.1(g)), each Holder
receives an amount equal to the sum it would have received had no such
deductions been made.

 

Section 3.2.            Denominations.

 

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

 

Section 3.3.            Execution, Authentication,
Delivery and Dating.

 

(a)           At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities in an aggregate
principal amount (including all 

 

31

 

then Outstanding Securities) not in excess of
Twenty-Five Million Dollars ($25,000,000) executed by the Company to the
Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon:

 

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

 

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

 

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

 

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

 

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

 

Section 3.4.            Global Securities.

 

(a)           Upon the election of the Holder after the Original Issue
Date, which election need not be in writing, the Securities owned by such
Holder shall be issued in the form of one or more Global Securities registered
in the name of the Depositary or its nominee. 
Each Global Security 

 

32

 

issued under this Indenture shall be registered in
the name of the Depositary designated by the Company for such Global Security
or a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

Section 3.5.            Registration, Transfer and
Exchange Generally.

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

Section 3.6.            Mutilated, Destroyed, Lost
and Stolen Securities.

 

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

 

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

 

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

 

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

 

(e)           Every new Security issued pursuant to this Section 3.6
in lieu of any mutilated, destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Company, whether or not
the mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.

 

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

 

Section 3.7.            Persons Deemed Owners.

 

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

 

Section 3.8.            Cancellation.

 

All
Securities surrendered for payment, redemption, transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such 

 

36

 

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

 

Section 3.9.            Reserved.

 

Section 3.10.          Reserved.

 

Section 3.11.          Agreed Tax Treatment.

 

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

 

Section 3.12.          CUSIP Numbers.

 

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

 

ARTICLE IV

 

SATISFACTION AND DISCHARGE

 

Section 4.1.            Satisfaction and Discharge
of Indenture.

 

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

 

(a)           either

 

37

 

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

 

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

 

(A)          have become due and payable, or

 

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

 

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

 

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

 

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

 

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

 

38

 

Section 4.2.            Application of Trust Money.

 

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

 

ARTICLE V

 

REMEDIES

 

Section 5.1.            Events of Default.

 

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

 

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

 

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

 

(c)           default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture and continuance of such default or
breach for a period of thirty (30) days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least twenty five percent (25%) in
aggregate principal amount of the Outstanding Securities a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or

 

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

 

39

 

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

 

(f)            any holder of the Seller Notes (i) exercises any
rights of foreclosure against any collateral of the Company or any of its
Subsidiaries or (ii) takes any other affirmative steps in furtherance of a
foreclosure against any collateral of the Company or any of its Subsidiaries;
or

 

(g)           the occurrence of any “event of default”, which has not
been cured or waived, pursuant to any underlying document relating to any
indebtedness the proceeds of which are used to refinance all or any portion of
the Seller Notes; or

 

(h)           the occurrence of an Event of Default
under, and as defined in, Section 5.1(a) of the March 4th Indenture.

 

Section 5.2.            Acceleration of Maturity;
Rescission and Annulment.

 

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

 

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

 

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

 

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

 

(B)           any accrued Additional Interest on all Securities,

 

40

 

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

 

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

 

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

 

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

 

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

 

(a)           The Company covenants that if:

 

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

 

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

 

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

 

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

 

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

 

41

 

Section 5.4.            Trustee May File
Proofs of Claim.

 

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

 

Section 5.5.            Trustee May Enforce Claim
Without Possession of Securities.

 

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

 

Section 5.6.            Application of Money
Collected.

 

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

 

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

 

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

 

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

 

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

 

42

 

Section 5.7.            Limitation on Suits.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.9.            Restoration of Rights and
Remedies.

 

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

 

43

 

Section 5.10.          Rights and Remedies
Cumulative.

 

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

 

Section 5.11.          Delay or Omission Not
Waiver.

 

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

 

Section 5.12.          Control by Holders.

 

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

 

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

 

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

 

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

 

Section 5.13.          Waiver of Past Defaults.

 

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

 

(i)            in the payment of the principal of or any premium or
interest (including any Additional Interest) on any Outstanding Security
(unless such Event of Default has been cured and the Company has paid to or
deposited with the Trustee a sum sufficient to pay all installments of interest
(including any Additional Interest) due and past due and all principal of and
any premium on all Outstanding Securities due otherwise than by acceleration),
or

 

44

 

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

 

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

 

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

 

Section 5.14.          Undertaking for Costs.

 

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

 

Section 5.15.          Waiver of Usury, Stay or
Extension Laws.

 

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

 

ARTICLE VI

 

THE TRUSTEE

 

Section 6.1.            Corporate Trustee Required.

 

There
shall at all times be a Trustee hereunder with respect to the Securities.  The Trustee shall be a corporation or
national banking association organized and doing business under the laws of the
United States or of any state thereof, authorized to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or 

 

45

 

examination
by Federal or state authority and having an office within the United States.  If such entity publishes reports of condition
at least annually, pursuant to law or to the requirements of such supervising
or examining authority, then, for the purposes of this Section 6.1,
the combined capital and surplus of such entity shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.  If at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 6.1, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article VI.

 

Section 6.2.            Certain Duties and
Responsibilities.

 

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

 

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

 

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

 

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

 

(c)           Notwithstanding the foregoing, no provision of this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.  Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section 6.2. 
To the extent that, at law or in equity, the Trustee has duties and
liabilities relating to the Holders, the Trustee shall not be liable to any
Holder for the Trustee’s good faith reliance on the provisions of this
Indenture.  The provisions of this
Indenture, to the extent that they restrict the duties and liabilities of the
Trustee otherwise existing at law or in equity, are agreed by the Company and
the Holders to replace such other duties and liabilities of the Trustee.

 

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

 

46

 

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

 

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

 

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

 

Section 6.3.            Notice of Defaults.

 

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

 

Section 6.4.            Certain Rights of Trustee.

 

Subject
to the provisions of Section 6.2:

 

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

 

(b)           if (i) in performing its duties under this Indenture
the Trustee is required to decide between alternative courses of action, (ii) in
construing any of the provisions of this Indenture the Trustee finds ambiguous
or inconsistent with any other provisions contained herein or (iii) the
Trustee is unsure of the application of any provision of this Indenture, then,
except as to any matter as to which the Holders are entitled to decide under
the terms of this Indenture, the Trustee shall deliver a notice to the Company
requesting the Company’s written instruction as to the course of action to be
taken and the Trustee shall take such action, or refrain from taking such
action, as the Trustee shall be instructed in writing to take, or to refrain
from taking, by the Company; provided, that
if the Trustee does not receive such instructions from the Company 

 

47

 

within ten (10) Business Days after it has
delivered such notice or such reasonably shorter period of time set forth in
such notice the Trustee may, but shall be under no duty to, take such action,
or refrain from taking such action, as the Trustee shall deem advisable and in
the best interests of the Holders, in which event the Trustee shall have no
liability except for its own negligence, bad faith or willful misconduct;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

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

 

Section 6.5.            May Hold Securities.

 

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

 

Section 6.6.            Compensation;
Reimbursement; Indemnity.

 

(a)           The Company agrees:

 

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

 

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

 

(iii)          to the fullest extent permitted by applicable law, to
indemnify the Trustee and its Affiliates, and their officers, directors,
shareholders, agents, representatives and employees for, and to hold them
harmless against, any loss, damage, liability, tax (other 

 

49

 

than income, franchise or
other taxes imposed on amounts paid pursuant to (i) or (ii) hereof),
penalty, expense or claim of any kind or nature whatsoever incurred without
negligence, bad faith or willful misconduct on its part arising out of or in
connection with the acceptance or administration of this trust or the
performance of the Trustee’s duties hereunder, including the reasonable costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.

 

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

 

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

 

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

 

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

 

Section 6.7.            Resignation and Removal;
Appointment of Successor.

 

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

 

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

 

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

 

(d)           If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any reason, at a time when no Event of Default shall have occurred and be
continuing, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee, and such successor Trustee and the retiring Trustee shall
comply 

 

50

 

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

 

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

 

Section 6.8.            Acceptance of Appointment
by Successor.

 

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

 

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

 

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

 

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

 

Any
Person into which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding
to all or substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, provided, that such Person shall be
otherwise qualified and eligible under this Article VI.  In case any Securities 

 

51

 

shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation or as otherwise provided above
in this Section 6.9 to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or
in the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.

 

Section 6.10.          Not Responsible for
Recitals or Issuance of Securities.

 

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

 

Section 6.11.          Appointment of
Authenticating Agent.

 

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

 

(b)           Any Person into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any Person succeeding to all or
substantially all of the corporate trust business of an Authenticating Agent
shall be the successor Authenticating Agent hereunder, provided such Person
shall be otherwise eligible 

 

52

 

under this Section 6.11, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.

 

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

 

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

 

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

 

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

 

Dated:

 

	
   

  	
  [AUTHENTICATING
  AGENT]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authenticating
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

ARTICLE VII

 

HOLDER’S LISTS AND REPORTS
BY COMPANY

 

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

 

The
Company will furnish or cause to be furnished to the Trustee, at such times as
the Trustee may request in writing, within fifteen (15) days after the receipt
by the Company of any such request, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of a date not
more than five (5) days prior to the delivery thereof, in each case to the
extent such information is in the possession or control of the Company and has
not otherwise been received by the Trustee in its capacity as Securities
Registrar.

 

53

 

Section 7.2.            Preservation of
Information, Communications to Holders.

 

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

 

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

 

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

 

Section 7.3.            Reports by Company.

 

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

 

(b)           The Company shall furnish to each of (i) the Trustee,
(ii) the Holders and to subsequent holders of Securities, (iii) TP
Management LLC, c/o Fortress Investment Group, 400 Galleria Parkway, Suite 1500,
Atlanta, Georgia 30339, Attn: Joel A. Holsinger (or such other address as
designated by TP Management LLC) and (iv) any beneficial owner of the
Securities reasonably identified to the Company (which identification may be
made either by such beneficial owner or by TP Management LLC), a duly completed
and executed certificate substantially and substantively in the form attached
hereto as Exhibit A, including the financial statements referenced
in such Exhibit, which certificate and financial statements shall be so
furnished by the Company not later than forty-five (45) days after the end of
each of the first three fiscal quarters of each fiscal year of the Company and
not later than ninety (90) days after the end of each fiscal year of the
Company.

 

(c)           The Company intends to file its annual and quarterly
information with the Securities and Exchange Commission (the “Commission”) in electronic form pursuant to Regulation S-T
of the Commission using the Commission’s Electronic Data Gathering, Analysis
and Retrieval (“EDGAR”) system. The Trustee is
hereby authorized and directed to access the EDGAR system for purposes of
retrieving the financial information so filed. Compliance with the foregoing
shall constitute delivery by the Company of its financial statements to the
Trustee in compliance with the provisions of Section 314(a) of the
Trust Indenture Act, if applicable. The Trustee shall have no duty to search
for or obtain any electronic or other filings that the Company makes with the
Commission, regardless of whether such filings are periodic, supplemental or
otherwise. Delivery of reports, information and documents to the Trustee
pursuant to this Section 7.3(c) shall be solely for purposes
of compliance with this Section 7.3(c) 

 

54

 

and, if applicable, with Section 314(a) of
the Trust Indenture Act. The Trustee’s receipt of such reports, information and
documents shall not constitute notice to it of the content thereof or any
matter determinable from the content thereof, including the Company’s
compliance with any of its covenants hereunder, as to which the Trustee is
entitled to rely upon Officers’ Certificates.

 

ARTICLE VIII

 

CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE

 

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

 

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

 

(a)           if the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the entity formed by such consolidation
or into which the Company is merged or the Person that acquires by conveyance
or transfer, or that leases, the properties and assets of the Company
substantially as an entirety shall (i) be an entity organized and existing
under the laws of the United States of America or any State or Territory
thereof or the District of Columbia and (ii) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest (including any Additional Interest)
on all the Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed;

 

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

 

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

 

Section 8.2.            Successor Company
Substituted.

 

(a)           Upon any consolidation or merger by the Company with or
into any other Person, or any conveyance, transfer or lease by the Company of
its properties and all or substantially all of its assets to any Person, in
each case, in accordance with Section 8.1 and the execution and
delivery to the Trustee of the supplemental indenture described in Section 8.1(a),
the successor entity formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such 

 

55

 

successor Person had been named as the Company
herein; and in the event of any such conveyance or transfer, following the
execution and delivery of such supplemental indenture, the Company shall be
discharged from all obligations and covenants under the Indenture and the
Securities.

 

(b)           Such successor Person may cause to be executed, and may
issue either in its own name or in the name of the Company, any or all of the
Securities issuable hereunder that theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities that previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication, and
any Securities that such successor Person thereafter shall cause to be executed
and delivered to the Trustee on its behalf. 
All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture.

 

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

 

ARTICLE IX

 

SUPPLEMENTAL
INDENTURES

 

Section 9.1.            Supplemental Indentures without
Consent of Holders.

 

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

 

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

 

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

 

(c)           to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other provision
herein, or to make or amend any other provisions with respect to matters or
questions arising under this Indenture, which shall not be inconsistent with
the other provisions of this Indenture, provided, that
such action pursuant to this clause (c) shall not adversely affect in any
material respect the interests of any Holders; or

 

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

 

56

 

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

 

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

 

Section 9.2.            Supplemental Indentures
with Consent of Holders.

 

(a)           Subject to Section 9.1, with the consent of
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities which have responded within ten (10) Business Days
after delivery to the Holders by the Company or the Trustee of a notice
summarizing such amendment and requesting the approval of the Holders (for the
avoidance of doubt, the failure by any Holder to respond within such time
period shall not be deemed consent of any such Holder to such amendment), by
Act of said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of Securities
under this Indenture; provided, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security,

 

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

 

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

 

(iii)          modify any of the provisions of this Section 9.2,
Section 5.13 or Section 10.7, except to increase any
percentage in aggregate principal amount of the Outstanding Securities, the
consent of whose Holders is required for any reason, or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Security.

 

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

 

57

 

Section 9.3.            Execution of Supplemental
Indentures.

 

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

 

Section 9.4.            Effect of Supplemental
Indentures.

 

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

 

Section 9.5.            Reference in Securities to
Supplemental Indentures.

 

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

 

ARTICLE X

 

COVENANTS

 

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

 

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

 

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

 

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

 

58

 

otherwise disposed of as herein provided, and will
promptly notify the Trustee in writing of its failure so to act.

 

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

 

(c)           The Company will cause each Paying Agent for the
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 10.2, that such Paying Agent will (i)
comply with the provisions of this Indenture and the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities.

 

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

 

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

 

59

 

Section 10.3.          Statement as to Compliance.

 

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

 

Section 10.4.          Calculation Agent.

 

(a)           The Company hereby agrees that for so long as any of the
Securities remain Outstanding, there will at all times be an agent appointed to
calculate LIBOR in respect of each Interest Payment Date in accordance with the
terms of Schedule A (the “Calculation Agent”).  The Company has initially appointed the
Trustee as Calculation Agent for purposes of determining LIBOR for each
Interest Payment Date.  The Calculation
Agent may be removed by the Company at any time.  If the Calculation Agent is unable or
unwilling to act as such or is removed by the Company, the Company will
promptly appoint as a replacement Calculation Agent the London office of a
leading bank which is engaged in transactions in three-month U.S. dollar
deposits in the international market and which does not control or is not
controlled by or under common control with the Company or its Affiliates.  The Calculation Agent may not resign its
duties without a successor having been duly appointed.

 

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

 

Section 10.5.          Reserved.

 

Section 10.6.          Additional Covenants.

 

The Company covenants and agrees with each Holder of
Securities that if an Event of Default shall have occurred and be continuing,
it shall not (i) declare or pay any dividends or 

 

60

 

distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company’s Equity Interests, (ii) vote in favor of or permit or
otherwise allow any of its Subsidiaries (other than wholly-owned subsidiaries)
to declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to or otherwise retire, any
shares of any such Subsidiary’s preferred stock or other Equity Interests
entitling the holders thereof to a stated rate of return (for the avoidance of
doubt, whether such preferred stock or other Equity Interests are perpetual or
otherwise), (iii) make any payment of principal of or any interest or premium,
if any, on or repay, repurchase or redeem any debt securities of the Company
that rank pari passu in all respects with or
junior in interest to the Securities (other than (A) repurchases, redemptions
or other acquisitions of Equity Interests of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors or consultants, in connection
with a dividend reinvestment or stockholder stock purchase or similar plan with
respect to any Equity Interests or in connection with the issuance of Equity
Interests of the Company (or securities convertible into or exercisable for
such Equity Interests) as consideration in an acquisition transaction entered
into prior to the Event of Default, (B) as a result of an exchange, conversion,
reclassification or combination of any class or series of the Company’s Equity
Interests (or any Equity Interests of a Subsidiary of the Company) for any
class or series of the Company’s Equity Interests or of any class or series of
the Company’s indebtedness for any class or series of the Company’s Equity
Interests, (C) the purchase of fractional interests in Equity Interests of the
Company pursuant to the conversion or exchange provisions of such Equity
Interests or the security being converted or exchanged, (D) any declaration of
a dividend in connection with any Rights Plan, the issuance of rights, Equity
Interests or other property under any Rights Plan or the redemption or
repurchase of rights pursuant thereto or (E) any dividend in the form of Equity
Interests, warrants, options or other rights where the dividend Equity
Interests or the Equity Interests issuable upon exercise of such warrants,
options or other rights is the same Equity Interests as that on which the
dividend is being paid or ranks pari passu with
or junior to such Equity Interests).

 

Section 10.7.          Waiver of Covenants.

 

The
Company may omit in any particular instance to comply with any covenant or
condition contained in Section 10.6, 10.9, 10.10 or 10.11
if, before or after the time for such compliance, the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities which have
responded within ten (10) Business Days after delivery to the Holders by the
Company or the Trustee of a notice requesting the waiver of such covenant by
the Holders (for the avoidance of doubt, the failure by any Holder to respond
within such time period shall not be deemed consent of any such Holder to such
waiver) shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company in respect of any such covenant or condition shall
remain in full force and effect.

 

Section 10.8.          Treatment of Securities.

 

The
Company will treat the Securities as indebtedness, and the amounts, other than
payments of principal, payable in respect of the principal amount of such
Securities as interest, 

 

61

 

for
all U.S. federal income tax purposes. 
All payments in respect of the Securities will be made free and clear of
U.S. withholding tax to any beneficial owner thereof that has provided a
properly completed and executed Internal Revenue Service Form W-9 or W-8BEN (or
any substitute or successor form) claiming a complete exemption from U.S.
withholding tax, or any other applicable form establishing a complete exemption
from U.S. withholding tax.

 

Except
as provided for in Section 3.1(g), to the extent that the Company is
required to withhold and pay over any amounts to any jurisdiction with respect
to payments of principal of or interest on the Securities, the amount withheld
shall be deemed to be a payment to the Holder of, or owner of a beneficial
interest in, such Securities.

 

Section
10.9.          Asset Management and Management Company Covenants.

 

(a)           The Company or its Subsidiaries shall be solely
responsible for all asset management activities of the Company and its
Subsidiaries, unless otherwise required by law or regulation; provided that
the Company or its Subsidiaries may enter into joint venture and similar
arrangements with third parties in connection with the asset management
activities if such activities are undertaken on an arm’s-length basis and any
fees or other benefits received by the Company or its Subsidiaries shall be
subject to all of the limitations set forth in Sections 10.6 and 10.11(b).

 

(b)           The Company may, and may permit any its Subsidiaries to,
directly or indirectly (a) sell, transfer, pledge or issue, in one or more
transactions, any direct or indirect beneficial ownership interests in the
Management Company which results in (i) any Person, whether directly or
indirectly, other than the Company (and/or any Subsidiaries wholly owned, directly
or indirectly, by the Company) owning any equity interests in the Management
Company or any rights to distributions from the Management Company or (ii) any
Person other than the Company (and/or any Subsidiary wholly owned, directly or
indirectly, by the Company) having responsibility for the management of the
Management Company and the administration of the day-to-day business and
affairs of the Management Company or (b) sell, transfer, pledge or assign any
material asset of the Management Company; provided that all proceeds
received by the Company or its Subsidiaries shall be subject to all of the
limitations set forth in Sections 10.6 and 10.11(b).

 

(c)           The Company may permit the Management Company to incur
Debt and Indebtedness; provided that all proceeds received by the
Company or its Subsidiaries shall be subject to all of the limitations set
forth in Sections 10.6 and 10.11(b).

 

Section
10.10.        Seller Notes.

 

The Company shall not, and shall cause the
Management Company not to, enter into or permit any Affiliate of any of them to
enter into any amendment of the Seller Notes without the prior written consent
of the Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities; provided,
that the Company, the
Management Company and/or any Affiliate of any of them may amend any of the
Seller Notes without obtaining such consent if (i) such amendment does not
increase the interest rate or shorten the maturity of such Seller Notes and
(ii) the terms of such amendment, taken as a whole, do not result in a material
adverse 

 

62

 

change to the Management Company, the Company or
their respective businesses or the holders of the Securities.  Notwithstanding the foregoing, the Company may
permit the issuer of the Seller Notes to make payments in kind, in lieu of
interest.

 

Section 10.11.        Further Additional
Covenants

 

The
Company agrees as follows:

 

(a)           that it may incur, and any of its Subsidiaries may incur,
any Indebtedness; provided that all proceeds received by the Company or
its Subsidiaries shall be subject to all of the limitations set forth in Sections
10.6 and 10.11(b); and

 

(b)           not to make, or permit any of its Subsidiaries to directly
or indirectly make any Restricted Payments, provided that: (i) the
Company and its Subsidiaries may distribute dividends of Capital Stock (other
than Disqualified Capital Stock) in respect of its Capital Stock; (ii) the
Company and its Subsidiaries may make Restricted Payments to the Company and
any of its direct and indirect wholly-owned Subsidiaries; (iii) the Company and
its Subsidiaries may make Restricted Payments with respect to any Designated
Preferred Stock; (iv) the Company and its Subsidiaries may purchase the Company’s
or any of its Subsidiary’s common stock or options to purchase common stock
from current officers, directors or employees of the Company or any of its
Subsidiaries upon the death, disability or termination of employment of such
officer, director or employee (at current market value prices to the extent
available); (v) the Company may repurchase shares of its common stock; provided
that the aggregate amount used for the purposes permitted under this clause
(v) shall not exceed $1,000,000; (vi) the Company and its Subsidiaries may make
Restricted Payments to the Company and its Subsidiaries to be used by such
Person (A) to the extent necessary to pay the Permitted Management Fees and (B)
to the extent necessary for the Company and its Subsidiaries to pay any taxes
which are due an payable by the Company and its Subsidiaries; provided that
in the case of this subclause (B), such amount shall not exceed the lesser of
(x) the amount of such taxes that are due and payable and (y) the amount of
taxes that would be due and payable by each Subsidiary making such Restricted
Payment if such Subsidiary were the parent of a consolidated group consisting
of itself and its Subsidiaries; (vii) the Company may make Restricted Payments
to any of its Subsidiaries to be used by such Person to the extent necessary to
pay any management or similar fee to any Affiliate; provided that (A) no
Event of Default has occurred and is continuing or would occur as a result
thereof and (B) such management or similar fee shall be on fair and reasonable
terms that, taken as a whole, are not less favorable to the relevant Subsidiary
of the Company, as applicable, as could be obtainable by such Person at the
time in a comparable arm’s-length transaction with a Person other than an
Affiliate of the Company; (viii) the Company may at any time make Restricted
Payments up to (w) $10,000,000, plus, after March 4, 2010, (x) 50% of Net
Income earned after March 4, 2010, plus, after March 4, 2010, (y) 100% of any
equity contributions in the Company made after March 4, 2010 in the form of
cash and 100% of the fair market value of any equity contributions in the
Company made after March 4, 2010 in a form other than cash, provided that (A)
such fair market value shall be confirmed by a reputable source independent
from the Company and the Company shall promptly provide a copy of such
confirmation to Taberna Preferred Funding III, Ltd. (“Taberna III”) or
(B) evidence of such fair market value is first provided to, and reasonably
acceptable to, TP Management LLC as collateral manager for Taberna III, less
(z) an amount equal to the aggregate amount of any and 

 

63

 

all Restricted Payments made pursuant to this clause
(ix); provided that (A) no Event of Default has occurred and is continuing or
would occur as a result thereof, and (B) any such Restricted Payment shall not
render the Company insolvent; and (ix) if no Event of Default has occurred and
is continuing or would occur as a result thereof, the Company has a Company
Leverage Ratio less than 2.50:1.00 for the previous 12 months and the
Consolidated Net Worth is not less than $50,000,000 for the previous 12 months
(provided that if the Company or any of its Subsidiaries completes any
acquisition, strategic transaction or consolidation, then the Consolidated Net
Worth for any previous 12-month period shall be calculated on a pro forma basis
to reflect the combined entity after such acquisition, strategic transaction or
consolidation), the Company or any Subsidiary may make Restricted Payments up
to an amount equal to 30% of the Consolidated Net Income of the Company for the
previous 12 months provided that any such Restricted Payment shall not
cause the Consolidated Net Worth of the Company to fall below $50,000,000.  Notwithstanding the foregoing, this Section
10.11(b) shall not apply to any Deerfield Special Purpose Entity to the
extent and so long as compliance by such entity with, or such entity’s
agreement to be subject to, the restrictions set forth in this Section
10.11(b) contravenes or Conflicts with such entity’s Organizational
Documents or any Contractual Obligation, in existence as the date hereof, or
entered into after the date hereof in the ordinary course of business, or
Requirement of Law applicable to such entity or any of its Properties.

 

(c)           The Restricted Payment covenants set forth in Section
10.11(b) above shall be eliminated and of no further force or effect if the
total aggregate outstanding principal amount of the (i) March 4th Securities and (ii) the Securities, is less
than $75,000,000; provided  that, any payments that would
otherwise constitute Restricted Payments subsequent to such elimination
hereunder do not render the Company insolvent.

 

Section 10.12.        Inspections

 

Taberna
Capital Management LLC shall have the right, upon not less than three (3)
Business Days prior written notice to the Company to have representatives and
agents of Taberna Capital Management LLC to visit and inspect, at such
reasonable time during normal business hours as stated in such notice, any of
the Company’s and the Management Company’s properties, to examine their
respective corporate, financial and operating records, and make abstracts
therefrom, and to discuss their affairs, finances and accounts with their
respective directors and officers, all (unless an Event of Default has occurred
and is then continuing) at the expense of Taberna Capital Management LLC (which
expense shall not be reimbursable by any of the Company, the Management Company
or any of their respective Subsidiaries); provided that Taberna Capital
Management LLC may not exercise their rights under this Section 10.12
more than once in any fiscal quarter of the Company, unless an Event of Default
is continuing, in which case Taberna Capital Management LLC may do any of the
foregoing at the expense of the Company or the Management Company at any
reasonable time during normal business hours and as often as may reasonably be
desired.

 

Section 10.13.        Maintenance of Corporate
Tax Status.

 

The Company represents and warrants that it is
taxable as a corporation for United States federal income tax purposes, and
covenants that it shall take no action, nor permit any action to 

 

64

 

be
taken, that would cause the Company or any successor to cease to be taxable as
a corporation for United States federal income tax purposes.

 

ARTICLE XI

 

REDEMPTION OF SECURITIES

 

Section 11.1.          Optional Redemption;
In-Kind Redemption.

 

The
Company may, at its option, on any date, redeem the Securities in whole at any
time or in part from time to time, (i) at a redemption price equal to one
hundred percent (100%) of the principal amount thereof (or of the redeemed
portion thereof, as applicable), together, in the case of any such redemption,
with accrued and unpaid interest, including any Additional Interest, to but
excluding the date fixed as the Redemption Date (the “Optional
Redemption Price”), or (ii) by delivering to the Holders
certain replacement securities acceptable to the Holders in their sole discretion
in par amounts greater than or equal to the Securities being redeemed,
exclusive of any accrued interest on the Securities being redeemed (the “In-Kind Redemption Price”). 
The Company shall pay accrued interest on the Securities being redeemed
in connection with the Company’s payment of the In-Kind Redemption Price.  The Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities may agree to waive or
alter the notice requirements set forth in Section 11.5 hereof with
respect to any redemption.

 

Section 11.2.          Reserved.

 

Section 11.3.          Election to Redeem; Notice
to Trustee.

 

The
election of the Company to redeem any Securities, in whole or in part, shall be
evidenced by or pursuant to a Board Resolution. 
In case of any redemption at the election of the Company, the Company
shall, not less than two (2) Business Days and not more than seventy-five (75)
days prior to the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such date and of
the principal amount of the Securities to be redeemed and provide the
additional information required to be included in the notice or notices
contemplated by Section 11.5.  In
the case of any redemption of Securities, in whole or in part, (a) prior to the
expiration of any restriction on such redemption provided in this Indenture or
the Securities or (b) pursuant to an election of the Company which is subject
to a condition specified in this Indenture or the Securities, the Company shall
furnish the Trustee with an Officers’ Certificate and an Opinion of Counsel
evidencing compliance with such restriction or condition.

 

Section 11.4.          Selection of Securities to
be Redeemed.

 

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

 

65

 

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

 

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

 

Section 11.5.          Notice of Redemption.

 

(a)           Notice of redemption shall be given by the Company not
less than two (2) Business Days and not more than sixty (60) days prior to the
Redemption Date to each Holder of Securities to be redeemed, in whole or in
part (unless a shorter notice shall be satisfactory to the Trustee).

 

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

 

(i)            the Redemption Date;

 

(ii)           the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the estimate of
the Redemption Price, as calculated by the Company, together with a statement
that it is an estimate and that the actual Redemption Price will be calculated
on the fifth (5th) Business Day
prior to the Redemption Date (and if an estimate is provided, a further notice
shall be sent of the actual Redemption Price on the date that such Redemption
Price is calculated);

 

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

 

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

 

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

 

(c)           Notice of redemption of Securities to be redeemed, in
whole or in part, at the election of the Company shall be given by the Company
or, at the Company’s request, by the Trustee in the name and at the expense of
the Company and shall be irrevocable. 
The notice if mailed in the manner provided above shall be conclusively
presumed to have been duly given, 

 

66

 

whether or not the Holder receives such notice. In
any case, a failure to give such notice by mail or any defect in the notice to
the Holder of any Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any
other Security.

 

Section 11.6.          Deposit of Redemption
Price.

 

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

 

Section 11.7.          Payment of Securities
Called for Redemption.

 

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

 

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

 

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

 

ARTICLE XII

 

SUBORDINATION OF SECURITIES

 

Section 12.1.          Securities Subordinate to
Senior Debt.

 

The
Company covenants and agrees, and each Holder of a Security, by its acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article XII, the payment of the principal
of and any premium and interest (including any Additional Interest) on each and
all of the Securities is hereby expressly made subordinate and subject in right
of payment to the prior payment in full of all Senior Debt.  Notwithstanding anything to the contrary
contained herein, the March 4th Securities shall not be Senior
Debt or otherwise entitled to the subordination provisions of this Article
XII, and the Securities shall be pari passu in
right of payment with respect to the March 4th Securities. 
For the avoidance of doubt, the Securities are not “Senior Debt” as
defined in the March 4th Indenture or otherwise entitled to the
subordination provisions of Article XII in the March 4th Indenture.

 

67

 

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

 

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

 

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

 

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

 

68

 

Debt at the time outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Debt remaining unpaid, to the extent necessary to pay all such
Senior Debt (including any interest thereon accruing after the commencement of
any Proceeding) in full.  In the event of
the failure of the Trustee or any Holder to endorse or assign any such payment,
distribution or security, each holder of Senior Debt is hereby irrevocably
authorized to endorse or assign the same.

 

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

 

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

 

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

 

Section 12.3.          Payment Permitted If No
Default.

 

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

 

Section 12.4.          Subrogation to Rights of
Holders of Senior Debt.

 

Subject
to the payment in full of all amounts due or to become due on all Senior Debt,
or the provision for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Debt pursuant to the provisions of this Article
XII (equally and ratably with the holders of all indebtedness of the
Company that by its express terms is subordinated to Senior Debt of the Company
to substantially the same extent as the Securities are subordinated to the
Senior Debt and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt) to the rights of
the holders of such Senior Debt to receive payments and distributions of cash, 

 

69

 

property
and securities applicable to the Senior Debt until the principal of and any
premium and interest (including any Additional Interest) on the Securities
shall be paid in full.  For purposes of
such subrogation, no payments or distributions to the holders of the Senior
Debt of any cash, property or securities to which the Holders of the Securities
or the Trustee would be entitled except for the provisions of this Article
XII, and no payments made pursuant to the provisions of this Article XII
to the holders of Senior Debt by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior Debt,
and the Holders of the Securities, be deemed to be a payment or distribution by
the Company to or on account of the Senior Debt.

 

Section 12.5.          Provisions Solely to
Define Relative Rights.

 

The
provisions of this Article XII are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt on the other hand.  Nothing contained in this Article XII
or elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as between the Company and the Holders of the Securities, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Securities the principal of and any premium and interest
(including any Additional Interest) on the Securities as and when the same
shall become due and payable in accordance with their terms, (b) affect the
relative rights against the Company of the Holders of the Securities and
creditors of the Company other than their rights in relation to the holders of
Senior Debt or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, including filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article XII of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.

 

Section 12.6.          Trustee to Effectuate
Subordination.

 

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

 

Section 12.7.          No Waiver of Subordination
Provisions.

 

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

 

(b)           Without in any way limiting the generality of paragraph
(a) of this Section 12.7, the holders of Senior Debt may, at any time
and from to time, without the consent of or notice to the Trustee or the
Holders of the Securities, without incurring responsibility to such Holders of
the Securities and without impairing or releasing the subordination provided in
this Article XII or 

 

70

 

the obligations hereunder of such Holders of the
Securities to the holders of Senior Debt, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Senior Debt, or otherwise amend or supplement in any
manner Senior Debt or any instrument evidencing the same or any agreement under
which Senior Debt is outstanding, (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior Debt,
(iii) release any Person liable in any manner for the payment of Senior Debt
and (iv) exercise or refrain from exercising any rights against the Company and
any other Person.

 

Section 12.8.          Notice to Trustee.

 

(a)           The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the Company that would
prohibit the making of any payment to or by the Trustee in respect of the
Securities.  Notwithstanding the
provisions of this Article XII or any other provision of this Indenture,
the Trustee shall not be charged with knowledge of the existence of any facts
that would prohibit the making of any payment to or by the Trustee in respect
of the Securities, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof from the Company or a holder of Senior
Debt or from any trustee, agent or representative therefor; provided that
if the Trustee shall not have received the notice provided for in this Section
12.8 at least two (2) Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, the
payment of the principal of and any premium on or interest (including any
Additional Interest) on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be
received by it within two (2) Business Days prior to such date.

 

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

 

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

 

Upon
any payment or distribution of assets of the Company referred to in this Article
XII, the Trustee and the Holders of the Securities shall be entitled to
conclusively rely upon any order or decree entered by any court of competent
jurisdiction in which such Proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the 

 

71

 

Trustee
or to the Holders of Securities, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Senior Debt and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XII.

 

Section 12.10.        Trustee Not Fiduciary for
Holders of Senior Debt.

 

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

 

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

 

The
Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article XII with respect to any Senior Debt that may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.

 

Section 12.12.        Article Applicable to
Paying Agents.

 

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

 

Section 12.13.        Article Applicable to Shareholders
Act

 

With
respect to Securities issued in the United States, the Shareholders Act
requires the Trustee to disclose to the issuers, upon their request, the name,
address and securities position of its customers who are (a) the “beneficial
owners” (as defined in the Shareholders Act) of the issuer’s Securities, if the
beneficial owner does not object to such disclosure, or (b) acting as a “respondent
bank” (as defined in the Shareholders Act) with respect to the Securities.  Under the Shareholders Act, “respondent banks”
do not have the option of objecting to such disclosure upon the issuers’
request.  The Shareholders Act defines a “beneficial
owner” as any person who has, or shares, the power to vote a security (pursuant
to an agreement or otherwise), or who directs the voting of a security.  The Shareholders Act defines a “respondent
bank” as any bank, association or other entity that exercises fiduciary powers
which holds securities on behalf of beneficial owners and deposits such
securities for safekeeping with a bank, such as the Trustee.  Under the Shareholders Act, each Holder is
either the “beneficial owner” or a “respondent bank.”

 

72

 

For
Purposes of this Indenture, until the Trustee receives a contrary written
instruction from a Holder, the Trustee shall assume that such Holder is the
beneficial owner of the Securities.

 

For
purposes of this Indenture, until the Trustee receives a contrary instruction
from a Holder, the Trustee shall release the name, address and securities
position to any issuer which requests such information pursuant to the
Shareholders Act for the specific purpose of direct communications between such
issuer and such Holder.  With respect to
Securities issued outside of the United States, information shall be released
to issuers only if required by law or regulation of the particular country in
which the Securities are located.

 

* * * *

 

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

 

* * * *

 

73

 

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

 

	
   

  	
  DEERFIELD
  CAPITAL CORP., a Maryland

  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert A. Contreras

  
	
   

  	
  Name:
  Robert A. Contreras

  
	
   

  	
  Title:   General Counsel

  

 

[signatures continue on
following page]

 

Taberna/Deerfield

Junior
Subordinated Indenture

 

 

	
   

  	
  THE
  BANK OF NEW YORK MELLON TRUST

  COMPANY, NATIONAL ASSOCIATION,

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  David Morganti

  
	
   

  	
  Name:
  David Morganti

  
	
   

  	
  Title:   Relationship Manager

  

 

Taberna/Deerfield

Junior
Subordinated Indenture

 

 

Schedule A

 

DETERMINATION OF LIBOR

 

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

 

(1)           On
the second LIBOR Business Day (as defined below) prior to an Interest Payment
Date (each such day, a “LIBOR Determination
Date”), LIBOR for any given security shall for the following
interest payment period equal the rate, as obtained by the Calculation Agent
from Bloomberg Financial Markets Commodities News, for three-month Eurodollar deposits that appears on Dow Jones Telerate
Page 3750 (as defined in the International Swaps and Derivatives Association,
Inc. 1991 Interest Rate and Currency Exchange Definitions), or such other page
as may replace such Page 3750, as of 11:00 a.m. (London time) on such LIBOR
Determination Date.

 

(2)           If,
on any LIBOR Determination Date, such rate does not appear on Dow Jones
Telerate Page 3750 or such other page as may replace such Page 3750, the
Calculation Agent shall determine the arithmetic mean of the offered quotations
of the Reference Banks (as defined below) to leading banks in the London
interbank market for three-month Eurodollar deposits in an amount determined by
the Calculation Agent by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by
the Calculation Agent to the Reference Banks. If, on any LIBOR Determination
Date, at least two of the Reference Banks provide such quotations, LIBOR shall
equal such arithmetic mean of such quotations. 
If, on any LIBOR Determination Date, only one or none of the Reference
Banks provide such quotations, LIBOR shall be deemed to be the arithmetic mean
of the offered quotations that leading banks in the City of New York selected
by the Calculation Agent are quoting on the relevant LIBOR Determination Date
for three-month Eurodollar deposits in an amount determined by the Calculation
Agent by reference to the principal London offices of leading banks in the
London interbank market; provided that, if the Calculation Agent is
required but is unable to determine a rate in accordance with at least one of
the procedures provided above, LIBOR shall be LIBOR as determined on the
previous LIBOR Determination Date.

 

(3)           As
used herein: “Reference Banks” means four major
banks in the London interbank market selected by the Calculation Agent; and “LIBOR Business Day” means a day on which commercial banks
are open for business (including dealings in foreign exchange and foreign
currency deposits) in London.

 

Schedule A-1

 

Exhibit A

 

Form of Officer’s Financial Certificate

 

The
undersigned, the Chief Financial Officer of Deerfield Capital Corp. (the “Company”) hereby certifies, pursuant to Section 7.3(b) of
the Junior Subordinated Indenture, dated as of October [   ],
2010 (the “Indenture”), among the Company and The
Bank of New York Mellon Trust Company, National Association, as trustee, that,
as of [date], [20    ], the Company and its consolidated
subsidiaries had the following ratios and balances:

 

As
of [Quarterly/Annual Financial Date], 20   

 

	
  Senior secured indebtedness for borrowed money
  (“Debt”)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Senior unsecured Debt

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Subordinated Debt

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Debt

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Ratio of (x) senior secured and unsecured Debt to
  (y) total Debt

  	
   

  	
   

  	
  %

  

 

·              A table describing
the quarterly report calculation procedures is provided on page
    hereof

 

[FOR
FISCAL YEAR END:  Attached hereto are the
audited consolidated financial statements (including the balance sheet, income
statement and statement of cash flows, and notes thereto, together with the
report of the independent accountants thereon) of the Company and its consolidated
subsidiaries for the three years ended [date], 20    .]

 

[FOR
FISCAL QUARTER END:  Attached hereto are
the unaudited consolidated financial statements (including the balance sheet
and income statement) of the Company and its consolidated subsidiaries for the
fiscal quarter ended [date], 20    .]

 

The
financial statements fairly present in all material respects, in accordance
with U.S. generally accepted accounting principles (“GAAP”),
the financial position of the Company and its consolidated subsidiaries, and
the results of operations and changes in financial condition as of the date,
and for the [quarter] [annual] period ended [date], 20    ,
and such financial statements have been prepared in accordance with GAAP
consistently applied throughout the period involved (except as otherwise noted
therein).

 

Exhibit A-1

 

IN
WITNESS WHEREOF, the undersigned has executed this Officer’s
Financial Certificate as of this      day of
                    ,
20    .

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Deerfield
  Capital Corp.

  
	
   

  	
   

  	
  One
  O’Hare Center, 12th Floor

  
	
   

  	
   

  	
  6250
  N. River Road

  
	
   

  	
   

  	
  Rosemont,
  IL 60018

  
	
   

  	
   

  	
  (773)
  380-1600

  

 

Exhibit A-2

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