Document:

Unassociated Document

     

    Exhibit
      4.2

    

     

    

    

    

    

    

    

    

    NELNET,
      INC.

    

    AND

    

    DEUTSCHE
      BANK TRUST COMPANY AMERICAS

    as
      Trustee

    

    SUPPLEMENTAL
      INDENTURE

    

    Dated
      as
      of September 27, 2006

    

    to
      the

     

    INDENTURE

     

    Dated
      as
      of September 27, 2006

     

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    

    SUPPLEMENTAL
      INDENTURE, dated as of September 27, 2006 (the “Supplemental
      Indenture”),
      between NELNET, INC., a Nebraska corporation (the “Company”)
      having
      its principal office at 121 South 13th Street, Suite 201, Lincoln, Nebraska
      68508, and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation,
      as Trustee (the “Trustee”).

     

    WITNESSETH:

    WHEREAS,
      the Company and the Trustee have heretofore executed and delivered a certain
      Indenture, dated as of September 27, 2006 (the “Indenture”;
      capitalized terms not otherwise defined herein shall have the meanings set
      forth
      in the Indenture), providing for the issuance from time to time of
      Securities;

     

    WHEREAS,
      Section 9.01 of the Indenture provides that a supplemental indenture may be
      entered into by the Company and the Trustee without the consent of any Holder
      of
      any Securities to establish the form or terms of Securities of any series as
      permitted by Section 2.01 or 3.01 of the Indenture; 

     

    WHEREAS,
      pursuant to Sections 2.01 and 3.01 of the Indenture, the Company desires to
      provide for the establishment of a new series of Securities under the Indenture,
      the form and substance of such Securities and the terms, provisions and
      conditions thereof to be set forth as provided in the Indenture and this
      Supplemental Indenture;

     

    WHEREAS,
      the conditions set forth in the Indenture for the execution and delivery of
      this
      Supplemental Indenture have been satisfied; and

     

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

     

    NOW,
      THEREFORE, in consideration of the premises and the purchase of the Securities
      of the series established by this Supplemental Indenture by the Holders thereof
      from time to time on or after the date hereof, it is mutually covenanted and
      agreed, for the equal and proportionate benefit of all such Holders, that the
      Indenture is supplemented and amended, to the extent and for the purposes
      expressed herein, as follows: 

     

     ARTICLE
      I 

     

    DEFINITIONS

     

    1.1 For
      all
      purposes of this Supplemental Indenture, except as otherwise expressly provided
      or unless the context otherwise requires, (i) references to any Article,
      Section or subdivision thereof are references to an Article, Section or other
      subdivision of this Supplemental Indenture and (ii) capitalized terms not
      otherwise defined herein shall have the 

     

    
      
        
        

      

      
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    meanings
      set forth in the Indenture and the following terms used in this Supplemental
      Indenture have the following respective meanings:

     

    “Additional
      Interest”
means
      the interest, if any, that shall accrue on any interest on the CENts 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
      the
      CENts from the applicable Interest Payment Date.

     

    “APM
      Commencement Date”
means,
      with respect to any Deferral Period, the earlier of (i) the first Interest
      Payment Date following the commencement of such Deferral Period on which the
      Company pays any current interest on the CENts and (ii) the fifth
      anniversary of the commencement of such Deferral Period.

     

    “APM
      Period”
means,
      with respect to any Deferral Period, the period commencing on the APM
      Commencement Date and ending on the next Interest Payment Date on which the
      Company has raised an amount of Eligible Proceeds at least equal to the
      aggregate amount of accrued and unpaid deferred interest, including Additional
      Interest, on the CENts (other than any interest cancelled pursuant to
      Section 2.1(i)). 

     

    “Bankruptcy
      Event”
means
      any of the events set forth in Section 5.01(5) or Section 5.01(6) of the
      Indenture.

     

    “Business
      Day”
is
      any
      day, other than (i) a Saturday, Sunday or other day on which banking
      institutions in The City of New York are authorized or required by law or
      executive order to remain closed or (ii) on or after September 29, 2011, a
      day that is not a day on which dealings in deposits in U.S. dollars are
      transacted in the London interbank market.

     

    “Calculation
      Agent”
means
      Deutsche Bank Trust Company Americas, or any other firm appointed by the
      Company, acting as calculation agent for the CENts.

     

    “CENts”
has
      the
      meaning set forth in Section 2.1(a).

     

    “Common
      Stock Issuance Cap”
has
      the
      meaning set forth in Section 2.1(j)(1).

     

    “Deferral
      Period”
means
      each period beginning on an Interest Payment Date with respect to which the
      Company elects pursuant to Section 2.1(g) to defer all or part of any
      interest payment and ending on the earlier of (i) the tenth anniversary of
      such Interest Payment Date and (ii) the next Interest Payment Date on which
      the Company has paid the deferred amount, all deferred amounts with respect
      to
      any subsequent period and all other accrued interest on the CENts.

     

    “Eligible
      Proceeds”
means,
      with respect to any Interest Payment Date, the net proceeds (after underwriters’
or placement agents’ fees, commissions or discounts and other expenses relating
      to the issuance or sale) the Company has received during the 180-day period
      prior to such Interest Payment Date from the issuance or sale of Common Stock
      or
      Qualifying Preferred Stock up to the Preferred Stock Issuance Cap to Persons
      that are not Subsidiaries. 

     

    “Final
      Repayment Date”
has
      the
      meaning set forth in Section 2.1(d)(iii).

     

    
      
        
        

      

      
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    “Interest
      Payment Date”
means
      a
      Monthly Interest Payment Date, a Quarterly Interest Payment Date or a
      Semi-Annual Interest Payment Date, as the case may be. 

     

    “Interest
      Period”
means
      the period from and including any Interest Payment Date (or, in the case of
      the
      first Interest Payment Date, September 27, 2006) to but excluding the next
      Interest Payment Date.

     

    “Make-Whole
      Redemption Price”
means
      the present value of scheduled payments of principal and interest from the
      Redemption Date to September 29, 2011, on any CENts being redeemed, discounted
      to the Redemption Date on a semi-annual basis (assuming a 360-day year
      consisting of twelve 30-day months) at a discount rate equal to the Treasury
      Rate plus a spread of 0.375%. 

     

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

     

    (a) trading
      in
      securities generally on the New York Stock Exchange or any other national
      securities exchange or over-the-counter market on which the Common Stock and/or
      the Company’s preferred stock is then listed or traded shall have been suspended
      or its settlement generally shall have been materially disrupted; 

     

    (b) the
      Company would be required to obtain the consent or approval of its shareholders
      or a regulatory body (including, without limitation, any securities exchange)
      or
      governmental authority to issue Common Stock or Preferred Stock pursuant to
      Section 2.1(j) or to issue Qualifying Capital Securities pursuant to
      Section 2.1(d), as the case may be, and the Company fails to obtain such
      consent or approval notwithstanding its commercially reasonable efforts to
      obtain such consent or approval; or

     

    (c) an
      event
      occurs and is continuing as a result of which the offering document for the
      offer and sale of Common Stock or Preferred Stock or Qualifying Capital
      Securities, as the case may be, would, in the Company’s reasonable judgment,
      contain an untrue statement of a material fact or omit to state a material
      fact
      required to be stated in such offering document or necessary to make the
      statements in such offering document not misleading and either (i) the
      disclosure of such event, in the Company’s reasonable judgment, would have a
      material adverse effect on its business or (ii) the disclosure relates to a
      previously undisclosed proposed or pending material business transaction, the
      disclosure of which would impede the Company’s ability to consummate such
      transaction; provided
      that
      one
      or more events described in this clause (c) shall not constitute a Market
      Disruption Event (A) with respect to more than one Semi-Annual Interest
      Payment Date or two consecutive Quarterly Interest Payment Dates (or after
      the
      Scheduled Maturity Date, six consecutive Monthly Interest Payment Dates) in
      any
      APM Period with respect to the Company’s obligations pursuant to
      Section 2.1(j) or (B) with respect to more than six Monthly Interest
      Payment Dates (whether or not consecutive) in connection with the Company’s
      obligations pursuant to Section 2.1(d).

     

    “Monthly
      Interest Payment Date”
has
      the
      meaning set forth in Section 2.1(e).

     

    “One-month
      LIBOR”
means,
      with respect to any Interest Period beginning on or after the Scheduled Maturity
      Date, the rate (expressed as a percentage per annum) for deposits in

     

    
      
        
        

      

      
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    U.S. dollars
      for a one-month period commencing on the first day of that monthly interest
      period that appears on Telerate Page 3750 as of 11:00 a.m. (London
      time) on the LIBOR determination date for that Interest Period. If such rate
      does not appear on MoneyLine Telerate Page 3750, one-month LIBOR will be
      determined on the basis of the rates at which deposits in U.S. dollars for
      a one-month period commencing on the first day of that Interest Period and
      in a
      principal amount of not less than $1,000,000 are offered to prime banks in
      the
      London interbank market by four major banks in the London interbank market
      selected by the Calculation Agent (after consultation with the Company), at
      approximately 11:00 a.m., London time on the LIBOR determination date for
      that Interest Period. The Calculation Agent will request the principal London
      office of each of such banks to provide a quotation of its rate. If at least
      two
      such quotations are provided, one-month LIBOR with respect to that Interest
      Period will be the arithmetic mean (rounded upward if necessary to the nearest
      whole multiple of 0.00001%) of such quotations. If fewer than two quotations
      are
      provided, one-month LIBOR with respect to that Interest Period will be the
      arithmetic mean (rounded upward if necessary to the nearest whole multiple
      of
      0.00001%) of the rates quoted by three major banks in New York City
      selected by the Calculation Agent, at approximately 11:00 a.m.,
      New York City time, on the first day of that Interest Period for loans in
      U.S. dollars to leading European banks for a one-month period commencing on
      the first day of that Interest Period and in a principal amount of not less
      than
      $1,000,000. However, if fewer than three banks selected by the Calculation
      Agent
      to provide quotations are quoting as described above, one-month LIBOR for that
      Interest Period will be the same as one-month LIBOR as determined for the
      previous Interest Period or, in the case of the Interest Period commencing
      on
      the Scheduled Maturity Date, 5.33%. The establishment of one-month LIBOR for
      each Interest Period commencing on or after the Scheduled Maturity Date by
      the
      Calculation Agent shall (in the absence of manifest error) be final and binding.
      For purposes of this definition, “London
      banking day”
means
      any day on which commercial banks are open for general business (including
      dealings in deposits in U.S. dollars) in London, England; “LIBOR
      determination date”
means
      the second London banking day immediately preceding the first day of the
      relevant Interest Period; “MoneyLine
      Telerate Page”
means
      the display on MoneyLine Telerate, Inc., or any successor service, on the
      Telerate Page 3750 or any replacement page or pages on that service; and
“Telerate
      Page 3750”’
means
      the display designated on page 3750 on MoneyLine Telerate Page (or such
      other page as may replace the 3750 page on the service or such other
      service as may be nominated by the British Bankers’ Association for the purpose
      of displaying London interbank offered rates for U.S. Dollar
      deposits).

     

    “Preferred
      Stock”
means
      non-cumulative perpetual preferred stock of the Company. 

     

    “Preferred
      Stock Issuance Cap”
has
      the
      meaning set forth in Section 2.1(j)(1).

     

    “Qualifying
      Capital Securities”
has
      the
      meaning ascribed to it in the Replacement Capital Covenant.

     

    “Qualifying
      Preferred Stock”
means
      Preferred Stock that (i) contains no remedies other than Permitted Remedies
      (as
      such term is defined in the Replacement Capital Covenant), and (ii)(a) is
      subject to Intent-Based Replacement Disclosure and has a Mandatory Trigger
      Provision (as such terms are defined in the Replacement Capital Covenant),
      or
      (b) is subject to a replacement capital covenant substantially similar to the
      Replacement Capital Covenant.

     

    
      
        
        

      

      
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    “Quarterly
      Interest Payment Date”
has
      the
      meaning set forth in Section 2.1(e).

     

    “Regular
      Record Date”
for
      the
      interest payable on any Interest Payment Date with respect to the CENts means
      (i) in the case of CENts represented by one or more Global Securities, the
      Business Day preceding such Interest Payment Date and (ii) in the case of CENts
      not represented by one or more Global Securities, the date which is fifteen
      days
      next preceding such Interest Payment Date (whether or not a Business
      Day).

     

    “Repayment
      Date”
means
      the Scheduled Maturity Date and each Monthly Interest Payment Date thereafter
      until the Company shall have repaid or redeemed all of the CENts.

     

    “Replacement
      Capital Covenant”
means
      the Replacement Capital Covenant, dated as of September 27, 2006, of the
      Company, without giving any effect to any amendment or supplement
      thereto.

     

    “Scheduled
      Maturity Date”
has
      the
      meaning set forth in Section 2.1(d).

     

    “Semi-Annual
      Interest Payment Date”
has
      the
      meaning set forth in Section 2.1(e).

     

    “Senior
      Indebtedness”
has
      the
      meaning set forth in Section 2.1(q).

     

    “Tax
      Event”
means
      that the Company has requested and received an Opinion of Counsel experienced
      in
      such matters to the effect that, as a result of: 

     

    (a) any
      amendment to or change in the laws or regulations of the United States or any
      political subdivision or taxing authority of or in the United States that is
      enacted or becomes effective after the initial issuance of the CENts;

     

    (b) any
      proposed change in those laws or regulations that is announced after the initial
      issuance of the CENts; 

     

    (c) any
      official administrative decision or judicial decision or administrative action
      or other official pronouncement interpreting or applying those laws or
      regulations that is announced after the initial issuance of the CENts; or

     

    (d) any
      threatened challenge asserted in connection with an audit of the Company or
      its
      Subsidiaries, or a threatened challenge asserted in writing against any other
      taxpayer that has raised capital through the issuance of securities that are
      substantially similar to the CENts,

     

    there
      is
      more than an insubstantial risk that interest payable by the Company on CENts
      is
      not, or will not be, deductible by the Company, in whole or in part, for United
      States federal income tax purposes. 

     

    “Three-month
      LIBOR”
means,
      with respect to any Interest Period, the rate (expressed as a percentage per
      annum) for deposits in U.S. dollars for a three-month period commencing on
      the first day of that monthly interest period ending on the next interest
      payment date (for the purposes of this definition, the “Relevant
      Period”)
      that
      appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
      LIBOR determination date for that Interest Period. If such rate 

     

    
      
        
        

      

      
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    does
      not
      appear on MoneyLine Telerate Page 3750, three-month LIBOR will be
      determined on the basis of the rates at which deposits in U.S. dollars for
      the Relevant Period and in a principal amount of not less than $1,000,000 are
      offered to prime banks in the London interbank market by four major banks in
      the
      London interbank market selected by the Calculation Agent (after consultation
      with the Company), at approximately 11:00 a.m., London time on the LIBOR
      determination date for that Interest Period. The Calculation Agent will request
      the principal London office of each of such banks to provide a quotation of
      its
      rate. If at least two such quotations are provided, three-month LIBOR with
      respect to that Interest Period will be the arithmetic mean (rounded upward
      if
      necessary to the nearest whole multiple of 0.00001%) of such quotations. If
      fewer than two quotations are provided, three-month LIBOR with respect to that
      Interest Period will be the arithmetic mean (rounded upward if necessary to
      the
      nearest whole multiple of 0.00001%) of the rates quoted by three major banks
      in
      New York City selected by the Calculation Agent, at approximately
      11:00 a.m., New York City time, on the first day of that Interest
      Period for loans in U.S. dollars to leading European banks the Relevant
      Period and in a principal amount of not less than $1,000,000. However, if fewer
      than three banks selected by the Calculation Agent to provide quotations are
      quoting as described above, three-month LIBOR for that Interest Period will
      be
      the same as three-month LIBOR as determined for the previous Interest Period
      or,
      in the case of the Interest Period commencing on September 29, 2011, 5.37%.
      The
      establishment of three-month LIBOR for each Interest Period commencing on or
      after September 29, 2011 by the Calculation Agent shall (in the absence of
      manifest error) be final and binding. For purposes of this definition,
“London
      banking day”
means
      any day on which commercial banks are open for general business (including
      dealings in deposits in U.S. dollars) in London, England; “LIBOR
      determination date”
means
      the second London banking day immediately preceding the first day of the
      relevant Interest Period; “MoneyLine
      Telerate Page”
means
      the display on MoneyLine Telerate, Inc., or any successor service, on the
      Telerate Page 3750 or any replacement page or pages on that service; and
“Telerate
      Page 3750”’
means
      the display designated on page 3750 on MoneyLine Telerate Page (or such
      other page as may replace the 3750 page on the service or such other
      service as may be nominated by the British Bankers’ Association for the purpose
      of displaying London interbank offered rates for U.S. Dollar
      deposits).

     

    “Treasury
      Dealer”
means
      a
      nationally recognized firm that is a primary U.S. Government securities dealer
      specified by the Company for these purposes.

     

    “Treasury
      Price”
means
      the bid-side price for the Treasury Security as of the third trading day
      preceding the Redemption Date, as set forth in the daily statistical release
      (or
      any successor release) published by the Federal Reserve Bank of New York on
      that
      trading day and designated “Composite 3:30 p.m. Quotations for U.S.
      Government Securities”, except that: (i) if that release (or any successor
      release) is not published or does not contain that price information on that
      trading day; or (ii) if the Treasury Dealer determines that the price
      information is not reasonably reflective of the actual bid-side price of the
      Treasury Security prevailing at 3:30 p.m., New York City time, on that
      trading day, then Treasury Price will instead mean the bid-side price for the
      treasury security at or around 3:30 p.m., New York City time, on that
      trading day (expressed on a next trading day settlement basis) as determined
      by
      the Treasury Dealer through such alternative means as the Treasury Dealer
      considers to be appropriate under the circumstances.

     

    
      
        
        

      

      
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    “Treasury
      Rate”
means
      the semi-annual equivalent yield to maturity of the Treasury Security that
      corresponds to the Treasury Price (calculated in accordance with standard market
      practice and computed as of the second trading day preceding the redemption
      date). 

     

    “Treasury
      Security”
means
      the United States Treasury security that the Treasury Dealer determines would
      be
      appropriate to use, at the time of determination and in accordance with standard
      market practice, in pricing the CENts being redeemed in a tender offer based
      on
      a spread to United States Treasury yields.

     

    ARTICLE
      II

     

    TERMS
      OF SERIES OF SECURITIES

     

    2.1. Pursuant
      to Sections 2.01 and 3.01 of the Indenture, there is hereby established a
      series of Securities, the terms of which shall be as follows: 

     

    (a)  Designation.
      The
      securities of this series shall be known and designated as the “7.400%
      Fixed-to-Floating Rate Capital Efficient Notes” of the Company (the
“CENts”).

     

    (b)  Issue
      Price and Aggregate Principal Amount.
      The
      CENts shall be issued at a price of $999.84 per CENt, and the maximum aggregate
      principal amount of the CENts which may be authenticated and delivered under
      the
      Indenture and this Supplemental Indenture is $200,000,000 (except for CENts
      authenticated and delivered upon registration of transfer of, or exchange for,
      or in lieu of, other CENts pursuant to (i) Section 2.03, 3.04, 3.05, 3.06,
      9.06 or 11.07 of the Indenture or (ii) Article III of this Supplemental
      Indenture).

     

    (c)  Denominations.
      The
      CENts will be issued only in fully registered form, and the authorized
      denominations of the CENts shall be $1,000 principal amount and any integral
      multiple thereof. 

     

    (d)  Scheduled
      Maturity Date.
      (i) The
      principal amount of, and all accrued and unpaid interest on, the CENts shall
      be
      payable in full on September 29, 2036, or if such day is not a Business Day,
      the
      following Business Day (the “Scheduled Maturity Date”); provided
      that
      in
      the event the Company has delivered an Officers’ Certificate to the Trustee
      pursuant to clause (vii) of this Section 2.1(d) in connection with the
      Scheduled Maturity Date, (A) the principal amount of CENts payable on the
      Scheduled Maturity Date, if any, shall be the principal amount set forth in
      the
      notice of repayment accompanying such Officers’ Certificate, (B) such
      principal amount of CENts shall be repaid on the Scheduled Maturity Date
      pursuant to Article III, and (C) subject to clause (ii) of this
      Section 2.1(d), the remaining CENts shall remain outstanding and shall be
      payable on the immediately succeeding Monthly Interest Payment Date or such
      earlier date on which they are redeemed pursuant to Section 2.1(l) or shall
      become due and payable pursuant to Section 5.02 of the Indenture. The
      entire principal amount of the CENts outstanding shall be due and payable on
      the
      Scheduled Maturity Date in the event the Company does not deliver an Officers’
Certificate to the Trustee on or prior to the 10th Business
      Day immediately preceding the Scheduled Maturity Date.

     

    (ii) In
      the
      event the Company has delivered an Officers’ Certificate to the Trustee pursuant
      to clause (vii) of this Section 2.1(d) in connection with any Monthly
      Interest Payment 

     

    
      
        
        

      

      
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    Date,
      the
      principal amount of CENts payable on such Monthly Interest Payment Date shall
      be
      the principal amount set forth in the notice of repayment, if any, accompanying
      such Officers’ Certificate, such CENts shall be repaid on such Monthly Interest
      Payment Date pursuant to Article III, and the remaining CENts shall remain
      outstanding and shall be payable on the immediately succeeding Monthly Interest
      Payment Date or such earlier date on which it shall become due and payable
      pursuant to Section 5.02 of the Indenture. The entire principal amount of
      the CENts outstanding shall be due and payable on any Monthly Interest Payment
      Date in the event the Company does not deliver an Officers’ Certificate to the
      Trustee on or prior to the 10th Business
      Day immediately preceding such Monthly Interest Payment Date.

     

    (iii) The
      principal of, and all accrued and unpaid interest on, all outstanding CENts
      shall be due and payable on September 15, 2061, or if such day is not a Business
      Day, the following Business Day (the “Final Repayment Date”). 

     

    (iv) The
      obligation of the Company to repay the CENts pursuant to this
      Section 2.1(d) on any date prior to the Final Repayment Date shall be
      subject to (A) its obligations under Article XIII of the Indenture to the
      holders of Senior Indebtedness and (B) its obligations under
      Section 2.1(h) with respect to the payment of deferred interest on the
      CENts. 

     

    (v) Until
      the
      CENts are paid in full, the Company shall use “commercially reasonable efforts”
(as defined in clause (vi) below) subject to a Market Disruption
      Event:

     

    (A) to
      raise
      sufficient net proceeds from the issuance of Qualifying Capital Securities
      during a 180-day period ending on the date, not more than 15 and not less than
      10 Business Days prior to the Scheduled Maturity Date, on which the Company
      delivers the notice required by Section 3.1 to permit repayment of the
      CENts in full on the Scheduled Maturity Date pursuant to clause (i) of this
      Section 2.1(d); and

     

    (B) if
      the
      Company is unable for any reason to raise sufficient proceeds from the issuance
      of Qualifying Capital Securities to permit payment in full on the Scheduled
      Maturity Date or any subsequent Monthly Interest Payment Date on which the
      Company delivers the notice required by Section 3.1, to raise sufficient
      net proceeds from the issuance of Qualifying Capital Securities to permit
      repayment of the CENts in full on such date pursuant to clause (ii) of this
      Section 2.1(d); and

     

    the
      Company shall apply any such net proceeds to the repayment of the CENts as
      provided in clause (viii) of this Section 2.1(d).

     

    (vi) For
      purposes of this Section 2.1(d), “commercially reasonable efforts” to sell
      Qualifying Capital Securities means commercially reasonable efforts to complete
      the offer and sale of Qualifying Capital Securities to Persons other than
      Subsidiaries in public offerings or private placements. The Company shall not
      be
      considered to have made commercially reasonable efforts to effect a sale of
      Qualifying Capital Securities if it determines not to pursue or complete such
      sale due to pricing, coupon, dividend rate or dilution
      considerations.

     

    
      
        
        

      

      
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    (vii) The
      Company shall, if it has not raised sufficient net proceeds from the issuance
      of
      Qualifying Capital Securities pursuant to clause (v) above in connection
      with any Repayment Date, deliver an Officers’ Certificate to the Trustee, who
      shall forward such certificate to each holder of record of the CENts no more
      than 15 and no less than 10 Business Days in advance of such Repayment Date
      stating the amount of net proceeds, if any, raised pursuant to clause (v)
      above in connection with such Repayment Date. The Company shall be excused
      from
      its obligation to use commercially reasonable efforts to sell Qualifying Capital
      Securities pursuant to clause (v) above if such Officers’ Certificate
      further certifies that: (A) a Market Disruption Event was existing during
      the 180-day period preceding the date of such Officers’ Certificate or, in the
      case of any Repayment Date after the Scheduled Maturity Date, the 30-day period
      preceding the date of such Officers’ Certificate; and (B) either
      (1) the Market Disruption Event continued for the entire 180-day period or
      30-day period, as the case may be, or (2) the Market Disruption Event
      continued for only part of the period, but the Company was unable after
      commercially reasonable efforts to raise sufficient net proceeds during the
      rest
      of that period to permit repayment of the CENts in full. Each Officers’
Certificate delivered pursuant to this clause (vii), unless no principal
      amount of CENts is to be repaid on the applicable Repayment Date, shall be
      accompanied by a notice of repayment pursuant to Section 3.1 setting forth
      the principal amount of the CENts to be repaid on such Repayment Date, which
      amount shall be determined after giving effect to clause (viii) of this
      Section 2.1(d).

     

    (viii) Net
      proceeds of the issuance of any Qualifying Capital Securities that the Company
      is permitted to apply to repayment of the CENts on any Repayment Date will
      be
      applied, first,
      to pay
      deferred interest to the extent of Eligible Proceeds raised pursuant to
      Section 2.1(j), second,
      to pay
      current interest to the extent not paid from other sources and, third,
      to repay
      the principal of CENts, subject to a minimum principal amount of $5 million
      to
      be repaid on any Repayment Date; provided
      that
      if
      the Company is obligated to sell Qualifying Capital Securities and apply the
      net
      proceeds to payments of principal of or interest on any outstanding securities
      in addition to the CENts, then on any date and for any period the amount of
      net
      proceeds received by the Company from those sales and available for such
      payments shall be applied to the CENts and those other securities having the
      same scheduled maturity date as the CENts pro
      rata
      in
      accordance with their respective outstanding principal amounts and none of
      such
      net proceeds shall be applied to any other securities having a later scheduled
      maturity date until the principal of and all accrued and unpaid interest on
      the
      CENts has been paid in full.

     

    (e)  Rate
      of
      Interest.
      The
      CENts shall bear interest (i) from and including September 27, 2006 to but
      excluding September 29, 2011 at the annual rate of 7.400%, computed on the
      basis
      of a 360-day year comprised of twelve 30-day months, (ii) from and including
      September 29, 2011 to but excluding the Scheduled Maturity Date at an annual
      rate equal to Three-month LIBOR plus 3.375%, computed on the basis of a 360-day
      year and the actual number of days elapsed, and (iii) thereafter, as to any
      unpaid amounts that remain outstanding, at an annual rate equal to One-month
      LIBOR plus 3.375%, computed on the basis of a 360-day year and the actual number
      of days elapsed. Subject to Sections 2.1(g), (h) and (i), interest on the
      CENts shall be payable in cash (i) semi-annually in arrears on March 29 and
      September 29 of each year, commencing on March 29, 2007, until September 29,
      2011 (each such date, a “Semi-Annual
      Interest Payment Date”),
      (ii)
      quarterly in arrears on March 29, June 29, September 29 and December 29,
      commencing December 29, 2011 until the Scheduled Maturity Date, or if such
      day
      is not a Business Day, the following Business Day (each such date, a
“Quarterly
      Interest 

     

    
      
        
        

      

      
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    Payment
      Date”)
      and
      (iii) thereafter, monthly in arrears on the last day of each month, or if
      such day is not a Business Day, the Business Day immediately preceding such
      Business Day (each such date, a “Monthly
      Interest Payment Date).
      Any
      installment of interest (or portion thereof) deferred in accordance with
      Section 2.1(g) or otherwise unpaid shall bear interest, to the extent
      permitted by law, at the rate of interest then in effect on the CENts, from
      the
      relevant Interest Payment Date, compounded on each subsequent Interest Payment
      Date, until paid in accordance with Section 2.1(h) or cancelled in
      accordance with Section 2.1(i).

     

    (f)  To
      Whom
      Interest Payable.
      Interest
      shall be payable to the Person in whose name the CENts are registered at the
      close of business on the Regular Record Date next preceding the Interest Payment
      Date, except that (i) interest payable on any CENts pursuant to their
      repayment in full in accordance with Article III and (ii) interest
      payable on the Final Repayment Date shall be paid to the Person to whom
      principal is paid. 

     

    (g)  Option
      to Defer Interest Payments.
      (i) The
      Company shall have the right, at any time and from time to time prior to the
      Final Repayment Date to defer the payment of interest on the CENts for one
      or
      more consecutive Interest Periods that do not exceed 10 years; provided
      that no
      Deferral Period shall extend beyond the Final Repayment Date or the earlier
      repayment or redemption in full of the CENts; provided,
      further, that
      if
      the Company has given notice of its election to defer interest payments but
      the
      Deferral Period has not yet commenced or a Deferral Period is continuing, the
      Company shall not, and shall not permit any Subsidiary to:
      (i) declare or pay any dividends or distributions on, or redeem, purchase,
      acquire or make a liquidation payment with respect to, any of the Company’s
      capital stock, (ii) other than any repayment of the CENts pursuant to
      Section 2.1(d) and, except for any partial payments of deferred interest
      that may be made pursuant to Section 2.1(i), make any payment of principal
      of, or interest or premium, if any, on, or repay, repurchase or redeem any
      of
      the Company’s debt securities that rank pari
      passu
      with or
      junior to the CENts or (iii) make any guarantee payments with respect to
      any guarantee by the Company of the debt securities of any Subsidiary if such
      guarantee ranks pari
      passu
      with or
      junior in interest to the CENts. Notwithstanding the foregoing provisions of
      this Section 2.1(g), the Company and its Subsidiaries may (A) pay dividends
      or
      distributions in additional shares of the Company’s capital stock, (B) declare
      or pay a dividend in connection with the implementation of a shareholders’
rights plan, or issue stock under such a plan, or the redeem or repurchase
      any
      rights distributed pursuant to such a plan, and (C) purchase Common Stock for
      issuance pursuant to any employee benefit plans.

     

    (ii)At
      the end
      of any Deferral Period, the Company shall pay all deferred interest on the
      CENts
      that has not been cancelled pursuant to Section 2.1(i) (together with Additional
      Interest thereon, if any, at the rate specified for the CENts) to the extent
      permitted by applicable law, to the Persons in whose names that Securities
      are
      registered at the close of business on the Regular Record Date with respect
      to
      the Interest Payment Date at the end of such Deferral Period.

     

    (iii)Subject
      to
      Section 2.1(r), in the case of any Deferral Period that does not terminate
      on or prior to the first anniversary of the commencement of such Deferral
      Period, the restrictions set forth in clause (i) above shall continue in effect
      in respect of any redemption, purchase or repurchase of securities that rank
      pari
      passu
      with or
      junior to the CENts until the first anniversary of the termination of such
      Deferral Period.

     

    
      
        
        

      

      
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    (iv)Upon
      termination of any Deferral Period and upon the payment of all deferred interest
      and any Additional Interest then due on any Interest Payment Date that has
      not
      been cancelled pursuant to the last sentence of Section 2.1(h), the Company
      may elect to begin a new Deferral Period pursuant to clause (i) of this Section
      2.1(g).

     

    (v)The
      Company may elect to pay interest on any Interest Payment Date during any
      Deferral Period to the extent permitted by Section 2.1(h).

     

    (vi)The
      Company shall give written notice of its election to begin or extend any
      Deferral Period (i) to the Holders of the CENts and the Trustee at least
      one Business Day prior to the Regular Record Date for the next succeeding
      Interest Payment Date. 

     

    (h)  Payment
      of Deferred Interest.
      The
      Company will not pay deferred interest on the CENts (including Additional
      Interest thereon) prior to the Final Repayment Date from any source other than
      Eligible Proceeds. Notwithstanding the foregoing, the Company may pay current
      interest during a Deferral Period from any available funds. To the extent that
      the Company applies proceeds from the sale of Common Stock and Preferred Stock
      to pay interest on the CENts, such proceeds shall be allocated first to deferred
      payments of interest (including Additional Interest thereon) in chronological
      order based on the date each payment was first deferred; provided
      that no
      such proceeds will be applied to deferred interest payments (including
      Additional Interest thereon) attributable to the first five years of any
      Deferral Period to the extent such proceeds exceed the amounts described in
      clause (1) of Section 2.1(j) until all other deferred interest
      payments (and Additional Interest thereon) with respect to such Deferral Period
      have been paid in full. The payment of interest from any other source shall
      be
      applied to current or deferred interest as directed by the Company and notified
      to the Trustee prior to the applicable Interest Payment Date. To the extent
      any
      payment allocable to any installment of interest (including Additional Interest
      thereon) is insufficient to pay such installment in full, such payment shall
      be
      applied pro
      rata to
      the
      outstanding CENts. If the Company has outstanding securities in addition to
      the
      CENts under which it is obligated to sell Common Stock or Qualifying Preferred
      Stock and apply the net proceeds to the payment of deferred interest, then
      on
      any date and for any period the amount of net proceeds received by the Company
      from those sales and available for payment of the deferred interest shall be
      applied to the CENts and those other securities on a pro
      rata
      basis in
      proportion to the total amounts that are due on the CENts and such other
      securities. 

     

    (i)  Cancellation
      of Deferred Interest.
      At the
      expiration of any Deferral Period that continues for 10 years, if
      (i) no Event of Default is continuing, (ii) the Company has not, due
      to clause (1) of Section 2.1(j), raised sufficient proceeds from the
      sale of Qualifying Common Stock and Preferred Stock to pay all deferred interest
      (and Additional Interest thereon) attributable to the portion of the Deferral
      Period prior to the APM Commencement Date and (iii) the Company has not
      previously cancelled interest pursuant to this Section 2.1(i), the
      obligation of the Company to pay any remaining deferred and unpaid interest
      (including Additional Interest thereon) attributable to that portion of the
      Deferral Period that the Company was unable to pay due to clause (1) of Section
      2.1(j) shall be permanently cancelled.

     

    (j)  Alternative
      Payment Mechanism.
      Immediately following any APM Commencement Date and until the termination of
      the
      related Deferral Period, the Company shall 

     

    
      
        
        

      

      
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    issue
      Common Stock or Qualifying Preferred Stock until the Company has raised an
      amount of Eligible Proceeds at least equal to the aggregate and unpaid amount
      of
      deferred interest on the CENts (including Additional Interest thereon) and
      applied such Eligible Proceeds on the next Interest Payment Date to the payment
      of deferred interest (including Additional Interest thereon) in accordance
      with
      Section 2.1(h); provided
      that:

     

    (1)  the
      foregoing obligations shall not apply to the extent that (i) the number of
      shares of any issuance of Common Stock the proceeds of which are applied to
      pay
      interest on the CENts pursuant to this Section 2.1(j), together with the
      number of shares of all prior issuances of Common Stock applied to deferred
      interest attributable to the first five years of any Deferral Period (including
      Additional Interest thereon), would exceed an amount equal to 2% of the total
      number of shares of Common Stock issued and outstanding as of the fourth trading
      day preceding the date of issuance (the “Common
      Stock Issuance Cap”)
      and
      (ii) the net proceeds of any issuance of Preferred Stock applied to pay
      interest on the CENts pursuant to this Section 2.1(j), together with the
      net proceeds of all prior issuances of Preferred Stock applied, would exceed
      25%
      of the aggregate principal amount of the CENts initially issued under the
      Indenture (the “Preferred
      Stock Issuance Cap”);

     

    (2)  the
      foregoing obligations shall not apply in respect of any Interest Payment Date
      if
      the Company shall have provided to the Trustee no more than 15 and no less
      than
      10 Business Days prior to such Interest Payment Date an Officers’
Certificate stating that (i) a Market Disruption Event was existing after
      the immediately preceding Interest Payment Date and (ii) either
      (A) the Market Disruption Event continued for the entire period from the
      Business Day immediately following the preceding Interest Payment Date to the
      Business Day immediately preceding the date on which such Officers’ Certificate
      is provided or (B) the Market Disruption Event continued for only part of
      such period but the Company was unable after commercially reasonable efforts
      to
      raise sufficient Eligible Proceeds during the rest of that period to pay all
      accrued and unpaid interest due on the Interest Payment Date with respect to
      which such Officers’ Certificate is being delivered; and

     

    (3)  to
      the
      extent that the Company has raised some but not all Eligible Proceeds necessary
      to pay all deferred interest (including Additional Interest thereon) on any
      Interest Payment Date pursuant to this Section 2.1(j) and subject to the
      Common Stock Issuance Cap and the Preferred Stock Issuance Cap, such Eligible
      Proceeds shall be applied in accordance with Section 2.1(h).

     

    For
      the
      avoidance of doubt, once the Company reaches the Common Stock Issuance Cap,
      the
      Company shall not be required to issue more Common Stock with respect to
      deferred interest attributable to the first five years of any Deferral Period
      (including Additional Interest thereon) pursuant to Section 2.1(j) even if
      the number of shares of Common Stock issued and outstanding referred to in
      clause (i) of this Section 2.1(j)(1) subsequently increases. The
      Company shall not be excused from its obligations under this Section 2.1(j)
      if it determines not to pursue or complete the sale of Common Stock or
      Qualifying Preferred Stock due to pricing, dividend rate or dilution
      considerations.

     

    
      
        
        

      

      
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    (k)  Events
      of Default.
      Solely
      for purposes of the CENts, clauses (1) through (4) of Section 5.01 of
      the Indenture shall not apply. In addition to clauses (5) through (7) of
      Section 5.01 of the Indenture, the following clauses (1) and (2) shall
      constitute Events of Default:

     

    (1) default
      in
      the payment of interest, including Additional Interest but not including
      interest cancelled pursuant to Section 2.1(i), in full on any CENt for a
      period of 30 days after the conclusion of a ten-year period following the
      commencement of any Deferral Period;

     

    (2) default
      in
      the payment of the principal of the CENts when due, whether at maturity, upon
      redemption or otherwise, subject in the case of any repayment pursuant to
      Section 2.1(d) to the limitations set forth therein.

    

    For
      the
      avoidance of doubt, and without prejudice to any other remedies that may be
      available to the Trustee or the Holders of the CENts under the Indenture, no
      breach by the Company of any other covenant or obligation under the Indenture
      or
      the terms of the CENts shall be an Event of Default with respect to the
      CENts.

     

    (l)  Redemption.
      The
      CENts shall be redeemable (a) in whole or in part at the option of the
      Company at any time on or after September 29, 2011 at a Redemption Price equal
      to 100% of the principal amount of such CENts plus accrued and unpaid interest
      to the Redemption Date, provided that in the event of a redemption in part
      that
      the principal amount outstanding after such redemption is at least $50,000,000
      or (b) in whole but not in part, prior to September 29, 2011, within
      90 days following the occurrence of a Tax Event at a Redemption Price equal
      to the greater of, (1) 100% of the principal amount of the Securities then
      Outstanding or (2) the Make-Whole Redemption Price.

     

    (m)  Replacement
      Capital Covenant.
      The
      Company shall not modify the Replacement Capital Covenant to impose additional
      restrictions on the type or amount of Qualifying Capital Securities for purposes
      of determining the extent to which repayment, redemption or repurchase of the
      CENts is permitted, except with the consent of the Holders of a majority by
      principal amount of the CENts. Except as aforesaid, the Company may modify
      the
      Replacement Capital Covenant without the consent of the Holders of the
      CENts.

     

    (n)  Limitation
      on Claims in the Event of Bankruptcy, Insolvency or Receivership.
      Each
      Holder, by such Holder’s acceptance of the CENts, agrees that if a Bankruptcy
      Event shall occur prior to the redemption or repayment of such CENts, such
      Holder shall have no claim for, and thus no right to receive, any interest
      deferred pursuant to Section 2.1(g) (including Additional Interest thereon)
      that has not been paid pursuant to Section 2.1(h) to the extent the amount
      of such interest exceeds two years of accumulated and unpaid interest (including
      Additional Interest thereon) on such Holder’s CENts.

     

    (o)  Sinking
      Fund.
      The
      CENts shall not be subject to any sinking fund or similar provisions.

     

    
      
        
        

      

      
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    (p)  Forms.
      The
      CENts shall be substantially in the form of Annex A attached hereto, with
      such modifications thereto as may be approved by the authorized officer
      executing the same.

     

    (q)  Subordination.
      The
      subordination provisions of Article XIII of the Indenture shall apply;
provided
      that for
      the purposes of the CENts (but not for the purposes of any other Securities
      unless specifically set forth in the terms of such Securities or the instrument
      creating the same), “Senior
      Indebtedness”
as
      used
      in connection with the CENts has the meaning in ascribed to it in the Indenture,
      except that (i) all other Securities issued under the Indenture shall also
      be
      Senior Indebtedness, unless, by their express terms or by the express terms
      of
      the supplemental indenture under which such Securities are issued, such
      Securities rank pari
      passu
      or junior
      to the CENts and (ii) Senior Indebtedness shall not include trade accounts
      payable or accrued liabilities arising in the ordinary course of business.
      

     

    (r)  Business
      Combinations.
      If the
      Company engages in any transaction that is subject to Section 8.01 of the
      Indenture, where immediately after the consummation of such transaction more
      than 50% of the voting stock of the Person formed by such transaction, or the
      Person that is the surviving entity of such transaction, or the Person to whom
      such properties and assets are conveyed, transferred or leased in such
      transaction, is owned by the shareholders of the other party to such
      transaction, then Sections 2.1(h) and (i) shall not apply to any interest
      on the CENts that is deferred and unpaid as of the date of consummation of
      the
      Business Combination and with respect to any Deferral Period that is terminated
      on the next Interest Payment Date following the date of consummation of such
      transaction, clause (iii) of Section 2.1(g) shall not
      apply.

     

    ARTICLE
      III

     

    REPAYMENT
      OF THE CENTS

     

    3.1. Repayment.
      The
      Company shall, not more than 15 nor less than 10 Business Days prior to
      each Repayment Date, notify the Trustee of the CENts of the principal amount
      of
      CENts to be repaid on such date pursuant to Section 2.1(d). 

     

    3.2. Selection
      of Securities to be Repaid.
      If less
      than all the CENts are to be repaid on any Repayment Date (unless such repayment
      affects only a single CENt), the particular CENts to be repaid shall be selected
      not more than 60 days prior to such Repayment Date by the Trustee, from the
      Outstanding CENts not previously repaid or called for redemption, by lot,
provided
      that the
      portion of the principal amount of any CENt not repaid shall be in an authorized
      denomination (which shall not be less than the minimum authorized denomination)
      for such CENt. 

     

    The
      Trustee shall promptly notify the Company in writing of the CENts selected
      for
      partial repayment and the principal amount thereof to be repaid. For all
      purposes hereof, unless the context otherwise requires, all provisions relating
      to the repayment of CENts shall relate, in the case of any CENt repaid or to
      be
      repaid only in part, to the portion of the principal amount of such CENt which
      has been or is to be repaid. If the Company shall so direct, CENts registered
      in

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    the
      name
      of the Company, any Affiliate or any Subsidiary thereof shall not be included
      in
      the CENts selected for repayment.

     

    3.3. Notice
      of Repayment.
      Notice
      of repayment shall be given by first-class mail, postage prepaid, mailed not
      later than the 15th day, and not earlier than the 10th day, prior to
      the Repayment Date, to each Holder of Securities to be repaid, at the address
      of
      such Holder as it appears in the Securities Register.

     

    Each
      notice of repayment shall identify the CENts to be repaid (including CUSIP
      number, if a CUSIP number has been assigned to the CENts) and shall
      state:

     

    (a) the
      Repayment Date;

     

    (b) if
      less
      than all Outstanding CENts are to be repaid, the identification (and, in the
      case of partial repayment, the respective principal amounts) of the particular
      CENts to be redeemed;

     

    (d) that
      on
      the Repayment Date, the principal amount of the CENts to be repaid will become
      due and payable upon each such CENt or portion thereof, and that interest
      thereon, if any, shall cease to accrue on and after said date; and

     

    (e) the
      place
      or places where such CENts are to be surrendered for payment of the principal
      amount thereof.

     

    Notice
      of
      repayment shall be given by the Trustee in the name and at the expense of the
      Company and shall be irrevocable. The notice if mailed in the manner herein
      provided shall be conclusively presumed to have been duly given, 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 CENts designated for
      repayment as a whole or in part shall not affect the validity of the proceedings
      for the repayment of any other CENts.

     

    3.4.
      Deposit
      of Repayment Amount.
      Prior to
      10:00 a.m. New York City time on the Repayment Date specified in the
      notice of repayment given as provided in Section 3.3, 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 10.03 of the Indenture) an amount of money sufficient
      to pay the principal amount of, and any accrued interest (including Additional
      Interest) on, all the CENts which are to be repaid on that date.

     

    3.5. Payment
      of CENts Subject to Repayment.
      If any
      notice of repayment has been given as provided in Section 3.3, the CENts or
      portion of the CENts 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. On presentation and surrender of such CENt at a Place of Payment in
      said
      notice specified, the said securities or the specified portions thereof shall
      be
      paid by the Company at their principal amount, together with accrued interest
      (including any Additional Interest) to the Repayment Date; provided
      that,
      except in
      the case of a repayment in full of all outstanding CENts, installments of
      interest whose Stated Maturity is on or prior to the Repayment Date will be
      payable to the Holders of such CENts, or one or more Predecessor Securities,
      registered as 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    such
      at
      the close of business on the relevant Record Dates according to their terms
      and
      the provisions of Section 3.07 of the Indenture.

     

    Upon
      presentation of any CENt repaid in part only, the Company shall execute and
      the
      Trustee shall authenticate and make available for delivery to the Holder
      thereof, at the expense of the Company, a new CENt or CENts, of authorized
      denominations, in aggregate principal amount equal to the portion of the CENt
      not repaid and so presented and having the same date of original issuance,
      Stated Maturity and terms.

     

    If
      any
      CENt called for repayment shall not be so paid upon surrender thereof, the
      principal of such CENt shall, until paid, bear interest from the Repayment
      Date
      at the rate prescribed therefore in the CENt.

     

    ARTICLE
      IV

     

    MISCELLANEOUS

     

    4.1. If
      any
      provision of this Supplemental Indenture limits, qualifies or conflicts with
      the
      duties imposed by any of Sections 310 to 317, inclusive, of the Trust
      Indenture Act of 1939 through operation of Section 318(c) thereof, such
      imposed duties shall control. 

     

    4.2. The
      Article headings herein are for convenience only and shall not affect the
      construction hereof.

     

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

     

    4.4. In
      case
      any provision of this Supplemental Indenture 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.

     

    4.5. Nothing
      in
      this Supplemental Indenture is intended to or shall provide any rights to any
      parties other than those expressly contemplated by this Supplemental Indenture.
      

     

    4.6. THIS
      SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
      THE
      LAWS OF THE STATE OF NEW YORK. 

     

    4.7. The
      Trustee makes no representations as to the validity or sufficiency of this
      Supplemental Indenture. The recitals and statements herein are deemed to be
      those of the Company and not of the Trustee. 

     

    4.8. Notwithstanding
      anything to the contrary contained in this Supplemental Indenture, the consent
      of the Holders of the CENts shall not be required to effect any amendment
      required in order to make this Supplemental Indenture consistent with the
      description of the Supplemental Indenture contained in the Prospectus, dated
      May
      12, 2005, as supplemented by the Prospectus Supplement, dated September 22,
      2006.

     

    *
      * *
      *

    
      
        
        

      

      
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    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. 

     

     

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

     

    

    NELNET,
      INC.

     

    By: /s/
      Thomas G. McCurley

          
      Name: Thomas G. McCurley

          
      Title: Managing Director

     

    DEUTSCHE
      BANK TRUST COMPANY

    AMERICAS,
      as Trustee

     

    by
      DEUTSCHE BANK NATIONAL TRUST

    COMPANY

     

    By: /s/
      Irina Golovashchuk

          
      Name: Irina Golovashchuk

          
      Title: Assistant Vice President

     

    By: /s/
      Yana Kalachikova

          
      Name: Yana Kalachikova

          
      Title: Assistant Vice President

     

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Annex
      A -
      Form of CENt

    

    UNLESS
      AND
      UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL SECURITIES
      REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
      WHOLE (I) BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR (II) BY A NOMINEE
      OF THE DEPOSITARY OR THE DEPOSITARY TO A SUCCESSOR DEPOSITARY OR A NOMINEE
      OF
      SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
      REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK,
      NEW
      YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
      PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
      OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
      DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
      TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
      IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
      HEREIN.

    

    

    NELNET,
      INC.

     

    7.400%
      Fixed-to-Floating Rate Capital Efficient Note

     

    No.
      

     

    $

     

    NELNET,
      INC., a corporation organized and existing under the laws of the State of
      Nebraska (hereinafter called the “Company,” which term includes any successor
      corporation under the Indenture hereinafter referred to), for value received,
      hereby promises to pay Cede & Co. or its registered assigns, the principal
      sum of on September 15, 2061, or if such day is not a Business Day (as
      hereinafter defined), the following Business Day (the “Final Repayment Date”);
provided
      that the
      principal amount of, and all accrued and unpaid interest on, this Security
      shall
      be payable in full on September 29, 2036, or if such day is not a Business
      Day, the following Business Day (the “Scheduled Maturity Date”) or any
      subsequent Interest Payment Date (as hereinafter defined) to the extent set
      forth in the Supplemental Indenture hereinafter referred to. The Company further
      promises to pay interest on said principal sum from September 29, 2006 or from
      the most recent Interest Payment Date for which interest has been paid or duly
      provided for. This Security shall bear interest (i) from and including
      September 27, 2006 to but excluding September 29, 2011 at the annual rate
      of 7.400%, payable (subject to deferral as set forth herein) semi-annually
      in
      arrears on March 29 and September 29 of each year, commencing on March
      29, 2007, (ii) from and including September 29, 2011 to but excluding the
      September 29, 2036 (or if earlier, until the principal hereof is paid in full),
      at an annual rate equal to Three-month LIBOR (as defined in the Supplemental
      Indenture) plus 3.375%, payable (subject to deferral as set forth herein)
      quarterly in arrears on March 29, June 29, September 29 and December 29,
      commencing December 29, 2011 and (iii) thereafter, as to any unpaid amounts

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    that
      remain outstanding, at an annual rate equal to One-month LIBOR (as defined
      in
      the Supplemental Indenture) plus 3.375%, payable (subject to deferral as set
      forth herein) on the last day of each calendar month, in arrears, commencing
      on
      October 31, 2036, until the principal thereof is paid or duly provided for
      or
      made available for payment (each such day referred to in clause (i), (ii)
      or (iii), an “Interest Payment Date”). In the event any Interest Payment Date
      before September 29, 2011 is not a Business Day, the interest payable on such
      day shall be paid on the following Business Day and no interest will accrue
      as a
      result of such postponement. In the event that any Interest Payment Date on
      or
      after September 29, 2011 would otherwise fall on a day that is not a Business
      Day, that Interest Payment Date shall be paid on the immediately preceding
      Business Day. Any installment of interest (or portion thereof) deferred in
      accordance with the Supplemental Indenture or otherwise unpaid on the relevant
      Interest Payment Date shall bear interest, to the extent permitted by law,
      at
      the rate of interest then in effect on this Security, from the relevant Interest
      Payment Date, compounded on each subsequent Interest Payment Date, until paid
      or
      cancelled in accordance with the Supplemental Indenture.

     

    From
      and
      including September 27, 2006 to but excluding September 29, 2011, the
      amount of interest payable on this Security shall be computed on the basis
      of a
      360-day year comprised of twelve 30-day months; thereafter, the amount of
      interest payable on this Security shall be computed on the basis of a 360-day
      year and the actual number of days elapsed. A “Business Day” shall mean any day
      other than (i) a Saturday or Sunday or other day on which banking
      institutions in the city of New York are authorized or required by law or
      executive order to remain closed, or (ii) on or after September 29, 2011, a
      day on which dealings in deposits in U.S. dollars are not transacted in the
      London interbank market. The interest installment so payable, and punctually
      paid or duly provided for, on any Interest Payment Date will, 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, which shall be (i) the Business
      Day next preceding such Interest Payment Date if this Security is issued in
      the
      form of a Global Security, or (ii) the fifteenth day (whether or not a
      Business Day) preceding such Interest Payment Date if this Security is not
      issued in the form of a Global Security, except that (i) interest payable
      on this Security pursuant to its repayment in full in accordance with
      Article III of the Supplemental Indenture and (ii) interest payable on
      the Final Repayment Date shall be paid to the Person to whom principal is paid.
      Any such interest installment 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 of this series
      not less than 10 days prior to such Special Record Date, or be paid at any
      time
      in any other lawful manner not inconsistent with the requirements of any
      securities exchange or automated quotation system on which the Securities of
      this series may be listed or traded, and upon such notice as may be required
      by
      such exchange or self-regulatory organization, all as more fully provided in
      said Indenture.

     

    The
      Company shall have the right, at any time and from time to time prior to the
      Final Repayment Date to defer the payment of interest on this Security for
      one
      or more consecutive Interest Periods that do not exceed 10 years; provided,
      however,
      that no
      Deferral Period (as hereinafter defined) shall extend beyond the Final Repayment
      Date or the earlier repayment or 

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    redemption
      in full of the Securities; provided,
      further,
      that
      during any such Deferral Period (and, except as provided in the Supplemental
      Indenture with respect to certain transactions, in the case of any Deferral
      Period that does not terminate on the Interest Payment Date falling closest
      to
      the first anniversary of the commencement of such Deferral Period, until the
      first anniversary of the termination of such Deferral Period), if the Company
      has given notice of its election to defer interest payments but the Deferral
      Period has not yet commenced or a Deferral Period is continuing, the Company
      shall not, and shall not permit any Subsidiary, to: (i) declare or pay any
      dividends or distributions on, or redeem, purchase, acquire or make a
      liquidation payment with respect to, any of the Company’s capital stock,
      (ii) other than any repayment of the Securities of this series pursuant to
      the Supplemental Indenture or any partial payments of deferred interest that
      may
      be made pursuant to Section 2.1(j) of the Supplemental Indenture, make any
      payment of principal of or interest or premium, if any, on or repay, repurchase
      or redeem any debt security of the Company (including other Securities of this
      series or other junior subordinated debt) that ranks pari
      passu
      with or
      junior in interest to this Security or (iii) make any guarantee payments
      with respect to any guarantee by the Company of the debt securities of any
      Subsidiary that by their terms rank pari
      passu with
      or
      junior in interest to this Security (other than (a) dividends or
      distributions in the additional shares of the Company’s capital stock,
      (b) any declaration or payment of a dividend in connection with the
      implementation of a shareholders’ rights plan, or the issuance of stock under
      such a plan or the redemption or repurchase of any rights distributed pursuant
      to such a plan or (c) purchases of Common Stock for issuance pursuant to
      any employee benefit plans. Each period beginning on the Interest Payment Date
      with respect to which the Company elects to defer all or part of any interest
      payment and ending on the earlier of (i) the Interest Payment Date falling
      on or about the tenth anniversary of such Interest Payment Date and
      (ii) the next Interest Payment Date on which the Company has paid all
      accrued and unpaid interest on this Security that has not been cancelled is
      referred to as a “Deferral Period.” At the end of any such Deferral Period, the
      Company shall pay all interest then accrued and unpaid on this Security
      (together with Additional Interest thereon, if any, to the extent permitted
      by
      applicable law), except for any interest that is cancelled pursuant to the
      Supplemental Indenture, to the Person in whose name this Security is registered
      at the close of business on the Regular Record Date with respect to the Interest
      Payment Date at the end of such Deferral Period. Upon termination of any
      Deferral Period, the Company may elect to begin a new Deferral Period, subject
      to the above requirements and provided
      that if
      any accrued and unpaid interest and any Additional Interest due during a prior
      Deferral Period has been cancelled, no additional amounts shall be cancelled
      in
      respect of a subsequent Deferral Period. The Company may elect to pay current
      interest on any Interest Payment Date during any Deferral Period to the extent
      permitted, and shall pay deferred interest (including Additional Interest
      thereon) to the extent required, by the Supplemental Indenture.

     

    The
      Company shall give written notice of its election to begin or extend any
      Deferral Period to the Holders of the Securities at least one Business Day
      prior
      to the Regular Record Date for the next succeeding Interest Payment
      Date.

     

    Payment
      of
      principal of (and premium, if any) and interest on this Security will be made
      at
      the Corporate Trust Office of the Trustee, 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; provided,
      however,
      that at
      the option of the Company payment of interest may be made (i) by check
      mailed to the address of the Person entitled thereto as such address shall
      appear in the 

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    Securities
      Register or (ii) by wire transfer in immediately available funds at such
      place and to such account as may be designated in writing at least 15 days
      before the relevant Interest Payment Date by the Person entitled thereto as
      specified in the Securities Register.

     

    The
      Securities are subordinated in right of payment, in the manner and to the extent
      set forth in the Indenture, to the prior payment in full of all Senior
      Indebtedness (as defined in the Supplemental Indenture). 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 behalf to take
      such actions as may be necessary or appropriate to effectuate the subordination
      so provided and (c) appoints the Trustee his attorney-in-fact for any and
      all such purposes. Each Holder hereof, by his acceptance hereof, waives all
      notice of the acceptance of the subordination provisions contained herein and
      in
      the Indenture by each holder of Senior Indebtedness, whether now outstanding
      or
      hereafter incurred, and waives reliance by each such holder upon said
      provisions.

     

    Reference
      is hereby made to the further provisions of this Security set forth on the
      reverse hereof, which further provisions shall for all purposes have the same
      effect as if set forth at this place.

     

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

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

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

     

    

    
      	
              NELNET,
                INC.

            
	 	 
	 	 
	
              By:
                

            	 
	 	
              Name:

            
	 	
              Title:

            

    

    

    

    
      	
              Attest:

            
	 
	 
	 
	
              Name:

              Title:

            

    

    

    

    Dated:
      

    

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

    

    

    
      	
              DEUTSCHE
                BANK TRUST 
COMPANY AMERICAS,

               
                as
                Trustee

            
	 	 
	
              by

            	
              DEUTSCHE
                BANK NATIONAL TRUST COMPANY

            
	 	 
	
              By:
                

            	 
	 	
              Name:

            
	 	
              Title:

            

    

    

    

    Dated:
      

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    REVERSE
      OF SECURITY

     

    This
      Security is one of a duly authorized issue of securities of the Company (herein
      called the “Securities”), issued and to be issued in one or more series under an
      Indenture, dated as of September 27, 2006 (herein called the “Indenture”, and
      such supplemental indenture dated as of September 27, 2006, herein called the
      “Supplemental Indenture”), between the Company and Deutsche Bank Trust Company
      Americas, as Trustee (herein called 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 Trustee,
      the Company and the Holders of the Securities, and of the terms upon which
      the
      Securities are, and are to be, authenticated and delivered. This Security is
      one
      of the series designated on the face hereof, limited in aggregate principal
      amount of $200,000,000.

     

    All
      terms
      used in this Security that are defined in the Supplemental Indenture or in
      the
      Indenture shall have the meanings assigned to them in the Supplemental Indenture
      or the Indenture, as the case may be.

     

    The
      Company may, at its option, and subject to the terms and conditions of the
      Supplemental Indenture and Article XI of the Indenture, redeem this Security
      in
      whole or in part at any time on or after September 29, 2011 at a Redemption
      Price equal to 100% of the principal amount of this Security plus accrued and
      unpaid interest to the date of redemption, provided that in the event of a
      redemption in part that the principal amount outstanding after such redemption
      is at least $50,000,000.

     

    Upon
      the
      occurrence and during the continuation of a Tax Event the Company may, at its
      option, at any time within 90 days of the occurrence of such Tax Event and
      prior
      to September 29, 2011, redeem this Security, in whole but not in part, subject
      to the terms and conditions of Article XI of the Indenture and Section 2.1(k)
      of
      the Supplemental Indenture, at a redemption price equal to the greater of
      (1) 100% of the principal amount of this Security (plus accrued and unpaid
      interest through the Redemption Date) or (2) the present value of scheduled
      payments of principal and interest from the Redemption Date to September 29,
      2011, on this Security, discounted to the Redemption Date on a semi-annual
      basis
      (assuming a 360-day year consisting of twelve 30-day months) at a discount
      rate
      equal to the Treasury Rate plus a spread of 0.375%. 

     

    In
      the
      event of redemption or repayment of this Security in part only, a new Security
      or Securities of this series for the portion hereof not redeemed or repaid
      will
      be issued in the name of the Holder hereof upon the cancellation
      hereof.

     

    The
      Indenture contains provisions for satisfaction and discharge of the entire
      indebtedness of this Security upon compliance by the Company with certain
      conditions set forth in the Indenture.

     

    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 

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

    amount
      of
      the Outstanding Securities of each series to be affected by such supplemental
      indenture. The Indenture also contains provisions permitting Holders of a
      majority in aggregate principal amount of the securities of each series issued
      under the Indenture at the time Outstanding, on behalf of the Holders of all
      securities of such series, to waive compliance by the Company with certain
      provisions of the Indenture and any past defaults in the performance of any
      of
      the covenants contained in the Indenture, or established pursuant to the
      Indenture with respect to such series, and its consequences, except a default
      in
      the payment of the principal of or premium, if any, or interest on any of the
      securities of such series. Any such consent or waiver by the registered Holders
      of this Security (unless revoked as provided in the Indenture) 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 hereof or in lieu hereof, whether or not notation of such consent
      or
      waiver is made upon this Security.

     

    As
      provided in and subject to the provisions of the Indenture, if an Event of
      Default arising from a default in the payment of interest (including Additional
      Interest but not including interest cancelled pursuant to the Supplemental
      Indenture) in full for a period of 30 days after the conclusion of a 10-year
      period following the commencement of any Deferral Period with respect to the
      Securities at the time Outstanding, occurs and is continuing, then and in each
      such case that the Trustee or the Holders of not less than 25% in principal
      amount of the Outstanding Securities may declare the principal amount, and
      accrued interest (including Additional Interest), of all the Securities of
      this
      series to be due and payable immediately, by a notice in writing to the Company
      (and to the Trustee if given by Holders), provided
      that the
      payment of principal and interest (including any Additional Interest) on such
      Securities shall remain subordinated to the extent provided in Article XIII
      of
      the Indenture and in the Supplemental Indenture.

     

    Each
      Holder, by such Holder’s acceptance hereof, agrees that if a Bankruptcy Event
      shall occur prior to the redemption or repayment of this Security, such Holder
      shall have no claim for, and thus no right to receive, any interest deferred
      pursuant to the Supplemental Indenture (including Additional Interest thereon)
      that has not been paid out of the proceeds of the issuance of certain securities
      in accordance with the Supplemental Indenture to the extent the amount of such
      interest exceeds two years of accumulated and unpaid interest (including
      Additional Interest thereon) on this Security. In addition, at the expiration
      of
      any Deferral Period that continues for 10 years, in certain circumstances set
      forth in the Supplemental Indenture the obligation of the Company to pay
      deferred interest (including Additional Interest thereon) with respect to
      certain Interest Payment Dates during such Deferral Period shall be permanently
      cancelled.

     

    No
      reference herein to the Indenture or the Supplemental Indenture and no provision
      of this Security or of the Indenture or the Supplemental Indenture shall alter
      or impair the obligation of the Company, which is absolute and unconditional,
      to
      pay the principal of (and premium, if any) and interest on this Security at
      the
      times, places 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 registrable in the Securities Register, upon
      surrender of this Security for registration of transfer at the office or agency
      of the Company maintained under Section 1002 of the Indenture duly endorsed
      by,
      or accompanied by written instrument of transfer in form satisfactory to the
      Company and the Security Registrar duly executed by, the Holder hereof or

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

    his
      attorney duly authorized in writing, and thereupon one or more new Securities
      of
      this series, of authorized denominations and for the same aggregate principal
      amount, will be issued to the designated transferee or transferees. No service
      charge shall be made for any such registration of transfer or exchange, but
      the
      Company may require payment of a sum sufficient to cover any tax or other
      governmental charge payable in connection therewith.

     

    Prior
      to
      due presentment of this Security for registration of transfer, the Company,
      the
      Trustee and any agent of the Company or the Trustee may treat the Person in
      whose name this 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
      Securities of this series are issuable only in registered form without coupons
      in denominations of $1,000 and any integral multiple thereof. As provided in
      the
      Indenture and subject to certain limitations therein set forth, Securities
      of
      this series are exchangeable for like aggregate principal amount of Securities
      of a different authorized denomination, as requested by the Holder surrendering
      the same.

     

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

     

    THE
      INDENTURE, THE SUPPLEMENTAL INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY
      AND
      CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

     

     

     

     

    A-8Unassociated Document

    Exhibit
      10.1

     

     

    Replacement
      Capital Covenant,
      dated as
      of September 27, 2006 (this “Replacement
      Capital Covenant”),
      by
      Nelnet, Inc., a Delaware corporation (together with its successors and assigns,
      the “Corporation”),
      in
      favor of and for the benefit of each Covered Debtholder (as defined
      below).

     

    Recitals

     

    A. On
      the
      date hereof, the Corporation is issuing $200,000,000 aggregate principal amount
      of its 7.400% Fixed-to-Floating Capital Efficient Notes (the “CENts”).

     

    B. This
      Replacement Capital Covenant is the “Replacement
      Capital Covenant”
referred
      to in the Prospectus Supplement, dated September 22, 2006, relating to the
      CENts
      (together with the Prospectus, dated May 12, 2005 attached thereto, the
“Prospectus
      Supplement”).

     

    C. The
      Corporation is entering into and disclosing the content of this Replacement
      Capital Covenant in the manner provided below with the intent that the covenants
      provided for in this Replacement Capital Covenant be enforceable by each Covered
      Debtholder and that the Corporation be estopped from disregarding the covenants
      in this Replacement Capital Covenant, in each case to the fullest extent
      permitted by applicable law.

     

    D. The
      Corporation acknowledges that reliance by each Covered Debtholder upon the
      covenants in this Replacement Capital Covenant is reasonable and foreseeable
      by
      the Corporation and that, were the Corporation to disregard its covenants in
      this Replacement Capital Covenant, each Covered Debtholder would have sustained
      an injury as a result of its reliance on such covenants. 

     

    NOW,
      THEREFORE,
      the
      Corporation hereby covenants and agrees as follows in favor of and for the
      benefit of each Covered Debtholder.

     

    SECTION
      1.  Definitions.
      Capitalized terms used in this Replacement Capital Covenant (including the
      Recitals) have the meanings set forth in Schedule I hereto. 

     

    SECTION
      2.  Limitations
      on Redemption and Repurchase of CENts.
      The
      Corporation hereby promises and covenants to and for the benefit of each Covered
      Debtholder that the Corporation shall not repay, redeem or repurchase all or
      any
      part of the CENts on or before September 15, 2051 except to the extent that
      the
      principal amount repaid or the applicable redemption or repurchase price does
      not exceed the sum of the following amounts:

     

    (i)  the
      Applicable Percentage of the aggregate amount of net cash proceeds received
      by
      the Corporation and its Subsidiaries since the most recent Measurement Date
      from
      the sale of Common Stock and rights to acquire Common Stock (including Common
      Stock and rights to acquire Common Stock issued pursuant to the Corporation’s
      reinvestment plan or employee benefit plans) to Persons other than the
      Corporation and its Subsidiaries; plus

     

    (ii)  100%
      of
      the aggregate amount of net cash proceeds received by the Corporation and its
      Subsidiaries since the most recent Measurement Date from the sale of

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Mandatorily
      Convertible Preferred Stock and Debt Exchangeable for Equity to Persons other
      than the Corporation and its Subsidiaries; plus

     

    (iii)  100%
      of
      the aggregate amount of net cash proceeds received by the Corporation and its
      Subsidiaries since the most recent Measurement Date from the sale of Qualifying
      Capital Securities to Persons other than the Corporation and its Subsidiaries.
      

     

    SECTION
      3.  Covered
      Debt.
      (a)
      The
      Corporation represents and warrants that the Initial Covered Debt is Eligible
      Debt. 

     

    (b)  On
      or
      during the 30-day period immediately preceding any Redesignation Date with
      respect to the Covered Debt then in effect, the Corporation shall identify
      the
      series of Eligible Debt that will become the Covered Debt on and after such
      Redesignation Date in accordance with the following procedures:

     

    (i)  the
      Corporation shall identify each series of its then outstanding long-term
      indebtedness for money borrowed that is Eligible Debt;

     

    (ii)  if
      only
      one series of the Corporation’s then outstanding long-term indebtedness for
      money borrowed is Eligible Debt, such series shall become the Covered Debt
      commencing on the related Redesignation Date;

     

    (iii)  if
      the
      Corporation has more than one outstanding series of long-term indebtedness
      for
      money borrowed that is Eligible Debt, then the Corporation shall identify the
      series that has the latest occurring final maturity date as of the date the
      Corporation is applying the procedures in this Section 3(b) and such series
      shall become the Covered Debt on the next Redesignation Date;

     

    (iv)  the
      series
      of outstanding long-term indebtedness for money borrowed that is determined
      to
      be Covered Debt pursuant to clause (ii), (iii), (iv) or (v) above shall be
      the
      Covered Debt for purposes of this Replacement Capital Covenant for the period
      commencing on the related Redesignation Date and continuing to but not including
      the Redesignation Date as of which a new series of outstanding long-term
      indebtedness is next determined to be the Covered Debt pursuant to the
      procedures set forth in this Section 3(b); and

     

    (v)  in
      connection with such identification of a new series of Covered Debt, the
      Corporation shall give the notice provided for in Section 3(c) within the time
      frame provided for in such section.

     

    (c)  Notice.
      In order
      to give effect to the intent of the Corporation described in Recital C, the
      Corporation covenants that (i) simultaneously with the execution of this
      Replacement Capital Covenant or as soon as practicable after the date hereof,
      it
      shall (A) give notice to the Holders of the Initial Covered Debt, in the manner
      provided in the indenture relating to the Initial Covered Debt, of this
      Replacement Capital Covenant and the rights granted to such Holders hereunder
      and (B) file a copy of this Replacement Capital Covenant with the Commission
      as
      an Exhibit to a Form 8-K under the Securities Exchange Act; (ii) so long as
      the

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Corporation
      is a reporting company under the Securities Exchange Act, the Corporation will
      include in each annual report filed with the Commission on Form 10-K under
      the
      Securities Exchange Act a description of the covenant set forth in Section
      2 and
      identify the series of long-term indebtedness for borrowed money that is Covered
      Debt as of the date such Form 10-K is filed with the Commission; (iii) if a
      series of the Corporation’s long-term indebtedness for money borrowed (1)
      becomes Covered Debt or (2) ceases to be Covered Debt, give notice of such
      occurrence within 30 days to the holders of such long-term indebtedness for
      money borrowed in the manner provided for in the indenture, fiscal agency
      agreement or other instrument under which such long-term indebtedness for money
      borrowed was issued and report such change in the Corporation’s next quarterly
      report on Form 10-Q or annual report on Form 10-K, as applicable; (iv) if,
      and
      only if, the Corporation ceases to be a reporting company under the Securities
      Exchange Act, post on its website the information otherwise required to be
      included in Securities Exchange Act filings pursuant to clauses (ii) and (iii)
      of this Section 3(c); and (v) promptly upon request by any Holder of Covered
      Debt, provide such Holder with an executed copy of this Replacement Capital
      Covenant.

     

    SECTION
      4.  Termination,
      Amendment and Waiver.
      (a)
      The
      obligations of the Corporation pursuant to this Replacement Capital Covenant
      shall remain in full force and effect until the earliest date (the “Termination
      Date”)
      to
      occur of (i) September 15, 2051, (ii) the date, if any, on which the Holders
      of
      a majority by principal amount of the then effective series of Covered Debt
      consent or agree in writing to the termination of this Replacement Capital
      Covenant and the obligations of the Corporation hereunder and (iii) the date
      on
      which the Corporation ceases to have any series of outstanding Eligible Senior
      Debt or Eligible Subordinated Debt (in each case without giving effect to the
      rating requirement in clause (ii) of the definition of each such term). From
      and
      after the Termination Date, the obligations of the Corporation pursuant to
      this
      Replacement Capital Covenant shall be of no further force and effect.

     

    (b)  This
      Replacement Capital Covenant may be amended or supplemented from time to time
      by
      a written instrument signed by the Corporation with the consent of the Holders
      of at least a majority by principal amount of the then effective series of
      Covered Debt, provided
      that this
      Replacement Capital Covenant may be amended or supplemented from time to time
      by
      a written instrument signed only by the Corporation (and without the consent
      of
      the Holders of the then effective series of Covered Debt) if (i) the effect
      of
      such amendment or supplement is solely to impose additional restrictions on
      the
      ability of the Corporation to repay, redeem or repurchase CENts in any
      circumstance or (ii) such amendment or supplement is not adverse to the holders
      of the then effective series of Covered Debt and an officer of the Corporation
      has delivered to the Holders of the then effective series of Covered Debt in
      the
      manner provided for in the indenture, fiscal agency agreement or other
      instrument with respect to such Covered Debt a written certificate stating
      that,
      in his or her determination, such amendment or supplement is not adverse to
      the
      Holders of any series of Covered Debt. 

     

    (c)  For
      purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement
      is
      required to terminate, amend or supplement the obligations of the Corporation
      under this Replacement Capital Covenant shall be the Holders of the then
      effective Covered Debt as of a record date established by the Corporation that
      is not more than 30 days prior to the date 

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    on
      which
      the Corporation proposes that such termination, amendment or supplement becomes
      effective.

     

    SECTION
      5.  Miscellaneous.
      (a) This
      Replacement Capital Covenant shall be governed by and construed in accordance
      with the laws of the State of New York.

     

    (b)  This
      Replacement Capital Covenant shall be binding upon the Corporation and its
      successors and assigns and shall inure to the benefit of the Covered Debtholders
      as they exist from time to time (it being understood and agreed by the
      Corporation that any Person who is a Covered Debtholder at the time such Person
      acquires, holds or sells Covered Debt shall retain its status as a Covered
      Debtholder for so long as the series of long-term indebtedness for borrowed
      money owned by such Person is Covered Debt and, if such Person initiates a
      claim
      or proceeding to enforce its rights under this Replacement Capital Covenant
      after the Corporation has violated its covenants in Section 2 and before the
      series of long-term indebtedness for money borrowed held by such Person is
      no
      longer Covered Debt, such Person’s rights under this Replacement Capital
      Covenant shall not terminate by reason of such series of long-term indebtedness
      for money borrowed no longer being Covered Debt).

     

    (c)  All
      demands, notices, requests and other communications to the Corporation under
      this Replacement Capital Covenant shall be deemed to have been duly given and
      made if in writing and (i) if served by personal delivery upon the Corporation,
      on the day so delivered (or, if such day is not a Business Day, the next
      succeeding Business Day), (ii) if delivered by registered post or certified
      mail, return receipt requested, or sent to the Corporation by a national or
      international courier service, on the date of receipt by the Corporation (or,
      if
      such date of receipt is not a Business Day, the next succeeding Business Day),
      or (iii) if sent by telecopier, on the day telecopied, or if not a Business
      Day,
      the next succeeding Business Day, provided that the telecopy is promptly
      confirmed by telephone confirmation thereof, and in each case to the Corporation
      at the address set forth below, or at such other address as the Corporation
      may
      thereafter notify to Covered Debtholders or post on its website as the address
      for notices under this Replacement Capital Covenant:

     

    

    
      	
              Nelnet,
                Inc.

              121
                South 13th Street, Suite 201

              Lincoln,
                Nebraska 68508

              Attention:
                Terry J. Heimes, Chief Financial
                Officer

            

    

    

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Corporation has caused this Replacement Capital Covenant to be executed by
      its
      duly authorized officer, as of the day and year first above
      written.

    

    
      	
              Nelnet,
                Inc.

               

              By: 
                

            
	
                     
                Name:

            
	
                     
                Title:

            

    

    

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

     

    Schedule
      I

    
 

    Definitions

    

    “Applicable
      Percentage”
means
      one divided by (a) 75% with respect to any repayment, redemption or repurchase
      on or prior to September 15, 2011, (b) 50% with respect to any repayment,
      redemption or repurchase after September 15, 2011 and on or prior to September
      15, 2031 and (c) 25% with respect to any repayment, redemption or repurchase
      after September 15, 2031 and prior to September 15, 2051. 

     

    “Business
      Day”
means
      each day other than (a) a Saturday or Sunday or (b) a day on which banking
      institutions in The City of New York are authorized or required by law or
      executive order to remain closed or, on or after September 29, 2011, a day
      that
      is not a London business day. A “London
      business day”
is
      any
      day on which dealings in deposits in U.S. dollars are transacted in the
      London interbank market.

     

    “CENts”
has
      the
      meaning specified in Recital A.

     

    “Commission”
means
      the United States Securities and Exchange Commission.

     

    “Common
      Stock”
means
      common stock of the Corporation (including treasury shares of common stock
      and
      shares of common stock sold pursuant to the Corporation’s dividend reinvestment
      plan and employee benefit plans).

     

    “Corporation”
has
      the
      meaning specified in the introduction to this instrument.

     

    “Covered
      Debt”
means
      (a) at the date of this Replacement Capital Covenant and continuing to but
      not
      including the first Redesignation Date, the Initial Covered Debt and (b)
      thereafter, commencing with each Redesignation Date and continuing to but not
      including the next succeeding Redesignation Date, the Eligible Debt identified
      pursuant to Section 3(b) as the Covered Debt for such period. 

     

    “Covered
      Debtholder”
means
      each Person (whether a Holder or a beneficial owner holding through a
      participant in a clearing agency) that buys, holds or sells long-term
      indebtedness for money borrowed of the Corporation during the period that such
      long-term indebtedness for money borrowed is Covered Debt.

     

    “Debt
      Exchangeable for Equity”
means
      a
      security (or combination of securities) that:

     

    (i) gives
      the
      holder a beneficial interest in (a) debt securities of the Corporation that
      are
      Non-Cumulative and that are the most junior subordinated debt of the Corporation
      (or rank pari
      passu
      with the
      most junior subordinated debt of the Corporation) and (b) a fractional interest
      in a stock purchase contract; 

     

    (ii) includes
      a
      remarketing feature pursuant to which the subordinated debt of the Corporation
      is remarketed to new investors commencing within five years from the date of
      issuance of the security or earlier in the event of an early 

     

    
      
        
        

      

      
        I-1

        
          

        

      

      
        
        

      

    

    settlement
      event based on one or more financial tests set forth in the terms of such
      securities or related transaction agreements; 

     

    (iii) provides
      for the proceeds raised in the remarketing to be used to purchase Qualifying
      Non-Cumulative Preferred Stock; 

     

    (iv) includes
      a
      replacement capital covenant substantially similar to this Replacement Capital
      Covenant, provided
      that such
      replacement capital covenant will apply to such security (or combination of
      securities) and to the Qualifying Non-Cumulative Preferred Stock and will not
      include Debt Exchangeable for Equity in the definition of Qualifying Capital
      Securities”; and 

     

    (v) after
      the
      issuance of such Qualifying Non-Cumulative Preferred Stock, provides the holder
      of the security with a beneficial interest in such Qualifying Non-Cumulative
      Preferred Stock.

     

    “Distribution
      Date”
means,
      as to any securities or combination of securities, the dates on which periodic
      Distributions on such securities are scheduled to be made.

     

    “Distribution
      Period”
means,
      as to any securities or combination of securities, each period from and
      including a Distribution Date for such securities to but not including the
      next
      succeeding Distribution Date for such securities.

     

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

     

    “Eligible
      Debt”
means,
      at any time, Eligible Subordinated Debt or, if no Eligible Subordinated Debt
      is
      then outstanding, Eligible Senior Debt.

     

    “Eligible
      Senior Debt”
means,
      at any time in respect of any issuer, each series of outstanding long-term
      indebtedness for money borrowed of such issuer that (a) upon a bankruptcy,
      liquidation, dissolution or winding up of the issuer, ranks most senior among
      the issuer’s then outstanding classes of indebtedness for money borrowed, (b) is
      then assigned a rating by at least one NRSRO (provided that this clause (b)
      shall apply on a Redesignation Date only if on such date the issuer has
      outstanding senior long-term indebtedness for money borrowed that satisfies
      the
      requirements of clauses (a), (c) and (d) that is then assigned a rating by
      at
      least one NRSRO), (c) has an outstanding principal amount of not less than
      $100,000,000, and (d) was issued through or with the assistance of a commercial
      or investment banking firm or firms acting as underwriters, initial purchasers
      or placement or distribution agents. For purposes of this definition as applied
      to securities with a CUSIP number, each issuance of long-term indebtedness
      for
      money borrowed that has (or, if such indebtedness is held by a trust or other
      intermediate entity established directly or indirectly by the issuer, the
      securities of such intermediate entity that have) a separate CUSIP number shall
      be deemed to be a series of the issuer’s long-term indebtedness for money
      borrowed that is separate from each other series of such
      indebtedness.

     

    
      
        
        

      

      
        I-2

        
          

        

      

      
        
        

      

    

    

     

    “Eligible
      Subordinated Debt”
means,
      at any time in respect of any issuer, each series of the issuer’s
      then-outstanding long-term indebtedness for money borrowed that (a) upon a
      bankruptcy, liquidation, dissolution or winding up of the issuer, ranks
      subordinate to the issuer’s then outstanding series of indebtedness for money
      borrowed that ranks most senior, (b) is then assigned a rating by at least
      one
      NRSRO (provided that this clause (b) shall apply on a Redesignation Date only
      if
      on such date the issuer has outstanding subordinated long-term indebtedness
      for
      money borrowed that satisfies the requirements in clauses (a), (c) and (d)
      that
      is then assigned a rating by at least one NRSRO), (c) has an outstanding
      principal amount of not less than $100,000,000, and (d) was issued through
      or
      with the assistance of a commercial or investment banking firm or firms acting
      as underwriters, initial purchasers or placement or distribution agents. For
      purposes of this definition as applied to securities with a CUSIP number, each
      issuance of long-term indebtedness for money borrowed that has (or, if such
      indebtedness is held by a trust or other intermediate entity established
      directly or indirectly by the issuer, the securities of such intermediate entity
      that have) a separate CUSIP number shall be deemed to be a series of the
      issuer’s long-term indebtedness for money borrowed that is separate from each
      other series of such indebtedness.

     

    “Holder”
means,
      as to the Covered Debt then in effect, each holder of such Covered Debt as
      reflected on the securities register maintained by or on behalf of the
      Corporation with respect to such Covered Debt.

     

    “Indenture”
      means the
      Indenture, dated as of September 27, 2006, between the Corporation and Deutsche
      Bank Trust Company Americas, as Trustee, as supplemented by the supplemental
      indenture dated as of September 27, 2006.

     

    “Initial
      Covered Debt”
means
      the Corporation’s 5.125% Senior Notes due 2010.

     

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

     

    “Mandatorily
      Convertible Preferred Stock”
means
      cumulative preferred stock with (a) no prepayment obligation on the part of
      the
      issuer thereof, whether at the election of the holders or otherwise, and (b)
      a
      requirement that the preferred stock convert into Common Stock of the
      Corporation within three years from the date of its issuance at a conversion
      ratio within a range established at the time of issuance of the preferred
      stock.

     

    
      
        
        

      

      
        I-3

        
          

        

      

      
        
        

      

    

    

     

    “Mandatory
      Trigger Provision”
means
      as
      to any security or combination of securities (together in this definition,
      “securities”), provisions in the terms thereof or of the related transaction
      agreements that (A) require, or at its option in the case of Non-Cumulative
      perpetual preferred stock permit, the issuer of such securities to make payment
      of Distributions on such securities only pursuant to the issuance and sale
      of
      Common Stock or rights to purchase Common Stock up to a maximum of 2% of the
      Corporation’s market capitalization or Qualifying Non-Cumulative Preferred Stock
      of the Corporation, within two years of a failure by the Corporation to satisfy
      one or more financial tests set forth in the terms of such securities or related
      transaction agreements, in an amount such that the net proceeds of such sale
      are
      at least equal to the amount of unpaid Distributions on such securities
      (including without limitation all deferred and accumulated amounts) and in
      either case require the application of the net proceeds of such sale to pay
      such
      unpaid Distributions, provided that (i) the amount of Qualifying Non-Cumulative
      Preferred Stock the net proceeds of which the issuer may apply to pay such
      Distributions pursuant to such provision may not exceed 25% of the liquidation
      or principal amount of such securities, and (ii) if the Mandatory Trigger
      Provision requires such issuance and sale within one year of such failure and
      the securities include an Optional Deferral Provision, such Mandatory Trigger
      Provision need not limit the issuance of Common Stock or rights to purchase
      Common Stock to a maximum of 2% of the Corporation’s market capitalization, (B)
      prohibit the Corporation from repurchasing any of its Common Stock prior to
      the
      date six months after the issuer applies the net proceeds of the sales described
      in clause (A) to pay such unpaid Distributions in full and (C) upon any
      liquidation, dissolution, winding up, reorganization or in connection with
      any
      insolvency, receivership or proceeding under any bankruptcy law with respect
      to
      the Corporation, limit the claim of the holders of such securities (other than
      Non-Cumulative perpetual preferred stock) for Distributions that accumulate
      during a period in which the Corporation fails to satisfy one or more financial
      tests set forth in the terms of such securities or related transaction
      agreements to (x) 25% of the principal amount of such securities then
      outstanding in the case of securities not permitting the issuance and sale
      pursuant to the provisions described in clause (A) above of securities other
      than Common Stock or rights to acquire Common Stock or (y) two years of
      accumulated and unpaid Distributions (including compounded amounts thereon)
      in
      all other cases. No remedy other than Permitted Remedies will arise by the
      terms
      of such securities or related transaction agreements in favor of the holders
      of
      such securities as a result of the issuer’s failure to pay Distributions because
      of the Mandatory Trigger Provision or as a result of the issuer’s exercise of
      its right under an Optional Deferral Provision until Distributions have been
      deferred for one or more Distribution Periods that total together at least
      ten
      years.

     

    “Market
      Disruption Events”
means
      one or more events or circumstances substantially similar to those listed as
      “Market Disruption Events” in the Supplemental Indenture.

     

    “Measurement
      Date”
means,
      with respect to any repayment, redemption or repurchase of CENts, the later
      of
      (a) the date 180 days prior to delivery of notice of such repayment or
      redemption or the date of such repurchase and (b) to the extent the CENts

     

    
      
        
        

      

      
        I-4

        
          

        

      

      
        
        

      

    

    remain
      outstanding after September 15, 2036, the most recent date, if any, on which
      a
      notice of repayment or redemption was delivered in respect of, or on which
      the
      Corporation repurchased, any CENts.

     

    “Non-Cumulative” means,
      with respect to any securities, that the issuer may elect not to make any number
      of periodic Distributions or interest payments without any remedy arising under
      the terms of the securities or related agreements in favor of the
      holders,
      other
      than one or more Permitted Remedies. Securities that include either
      (i) provisions requiring the Corporation to issue Non-Cumulative perpetual
      preferred stock and Common Stock or rights to purchase Common Stock and apply
      the proceeds to pay unpaid Distributions on terms substantially similar to
      the
      terms of the alternative payment mechanism described in Section 2.1(j) of the
      Supplemental Indenture or (ii) a Mandatory Trigger Provision shall also be
      deemed to be “Non-Cumulative” for all purposes of this Replacement Capital
      Covenant other than the definition of “Qualifying Non-Cumulative Preferred
      Stock”.

     

    “NRSRO”
means
      a
      nationally recognized statistical rating organization within the meaning of
      Rule
      15c3-1(c)(2)(vi)(F) under the Securities Exchange Act.

     

    “Optional
      Deferral Provision”
means,
      as to any securities, a provision in the terms thereof or of the related
      transaction agreements to the following effect:

     

    (a) the
      issuer
      of such securities may, in its sole discretion, defer in whole or in part
      payment of Distributions on such securities for one or more consecutive
      Distribution Periods of up to 5 years or, if an event substantially similar
      to a
      Market Disruption Event is continuing, ten years, without any remedy other
      than
      Permitted Remedies and the obligation described in clause (b) below;
      and

     

    (b) if
      the
      issuer of such securities has exhausted its right to defer Distributions and
      no
      event substantially similar to a Market Disruption Event is continuing, the
      issuer will be obligated to issue rights to purchase common stock and/or
      Non-Cumulative perpetual preferred stock in an amount such that the net proceeds
      of such sale equal or exceed the amount of unpaid Distributions on such
      securities (including without limitation all deferred and accumulated amounts)
      and to apply the net proceeds of such sale to pay such unpaid Distributions
      in
      full.

     

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

     

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

     

    (b) complete
      or partial prohibitions on the issuer paying Distributions on or repurchasing
      common stock or other securities that rank pari
      passu
      with or

     

    
      
        
        

      

      
        I-5

        
          

        

      

      
        
        

      

    

    junior
      as
      to Distributions to such securities for so long as Distributions on such
      securities, including unpaid Distributions, remain unpaid.

     

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

     

    “Prospectus
      Supplement”
has
      the
      meaning specified in Recital C.

     

    “Qualifying
      Capital Securities”
means
      securities (other than Common Stock, rights to acquire Common Stock and
      securities convertible into Common Stock, such as Mandatorily Convertible
      Preferred Stock and Debt Exchangeable for Equity) that, in the determination
      of
      the Corporation’s Board of Directors, reasonably construing the definitions and
      other terms of this Replacement Capital Covenant, meet one of the following
      criteria:

     

    (i) in
      connection with any redemption or repurchase of CENts on or prior to September
      15, 2011:

     

    (A)
      securities issued by the Corporation or its Subsidiaries that (a) rank
pari
      passu
      with or
      junior to the CENts upon the liquidation, dissolution or winding-up of the
      Corporation, (b) have terms that are substantially similar to the terms of
      the
      CENts and guarantees described in this Prospectus Supplement and the attached
      prospectus and (c) are subject to a replacement capital covenant substantially
      similar to this Replacement Capital Covenant or have a Mandatory Trigger
      Provision and are subject to Intent-Based Replacement Disclosure;

     

    (B)
      securities issued by the Corporation or its Subsidiaries that (1) rank
pari
      passu
      with or
      junior to the CENts upon the liquidation, dissolution or winding up of the
      Corporation, (2) are Non-Cumulative, (3) have no maturity or a maturity of
      at least 55 years and (4) are subject to a replacement capital covenant
      substantially similar to this Replacement Capital Covenant or have a Mandatory
      Trigger Provision and are subject to Intent-Based Replacement Disclosure;
      or

     

    (C)
      securities issued by the Corporation or its Subsidiaries that (1) rank
pari
      passu
      or junior
      to other preferred stock of the issuer, (2) have no maturity or a maturity
      of at
      least 40 years, (3) are subject to a replacement capital covenant substantially
      similar to this Replacement Capital Covenant and (4) have a Mandatory Trigger
      Provision; or

     

    (ii) in
      connection with any repayment, redemption or repurchase of CENts after September
      15, 2011 and on or prior to September 15, 2031:

     

    (A)
      all
      securities described under clause (i) of this definition; 

     

    
      
        
        

      

      
        I-6

        
          

        

      

      
        
        

      

    

    

     

    (B)
      securities issued by the Corporation or its Subsidiaries that (1) rank
pari
      passu
      with or
      junior to the CENts upon a liquidation, dissolution or winding up of the
      Corporation, (2) have an Optional Deferral Provision or a Ten-Year Optional
      Deferral Provision, (3) have no maturity or a maturity of at least 55 years
      and
      (4) are subject to a replacement capital covenant substantially similar to
      this Replacement Capital Covenant;

     

    (C)
      securities issued by the Corporation or its Subsidiaries that (1) rank
pari
      passu
      with or
      junior to the CENts upon a liquidation, dissolution or winding up of the
      Corporation, (2) are Non-Cumulative and (3) have no maturity or a maturity
      of at
      least 55 years and are subject to Intent-Based Replacement
      Disclosure;

     

    (D)
      securities issued by the Corporation or its Subsidiaries that (1) rank
pari
      passu
      with or
      junior to the CENts upon a liquidation, dissolution or winding up of the
      Corporation, (2) are Non-Cumulative, (3) have no maturity or a maturity of
      at
      least 40 years and (4) are subject to a replacement capital covenant
      substantially similar to this Replacement Capital Covenant or have a Mandatory
      Trigger Provision and are subject to Intent-Based Replacement
      Disclosure;

     

    (E)
      securities issued by the Corporation or its Subsidiaries that (1) would rank
      junior to all of the senior and subordinated debt of the Corporation other
      than
      the CENts, (2) have a Mandatory Trigger Provision and (3) have no maturity
      or a
      maturity of at least 55 years and are subject to Intent-Based Replacement
      Disclosure; 

     

    (F)
      cumulative preferred stock issued by the Corporation or its Subsidiaries that
      (A) has no prepayment obligation on the part of the issuer thereof, whether
      at
      the election of the holders or otherwise, and (B) (1) has no maturity or a
      maturity of at least 55 years and (2) is subject to a replacement capital
      covenant substantially similar to this Replacement Capital Covenant;
      or

     

    (G)
      other
      securities issued by the Corporation or its Subsidiaries that (A) rank upon
      a
      liquidation, dissolution or winding-up of the Corporation either (1)
pari
      passu
      with or
      junior to the CENts or (2) pari
      passu
      with the
      claims of the Corporation’s trade creditors and junior to all of the
      Corporation’s long-term indebtedness for money borrowed (other than the
      Corporation’s long-term indebtedness for money borrowed from time to time
      outstanding that by its terms ranks pari
      passu with
      such
      securities on a liquidation, dissolution or winding-up of the Corporation);
      and
      (B) either (x) have no maturity or a maturity of at least 40 years, are subject
      to Intent-Based Replacement Disclosure and have a Mandatory Trigger Provision
      and or (y) have no maturity or a maturity of at least 25 

     

    
      
        
        

      

      
        I-7

        
          

        

      

      
        
        

      

    

    years
      and
      are subject to a replacement capital covenant substantially similar to this
      Replacement Capital Covenant and have a Mandatory Trigger Provision; or

     

    (iii) in
      connection with any repayment, redemption or repurchase of CENts at any time
      after September 15, 2031:

     

    (A)
      all
      securities described under clauses (i) or (ii) of this definition; 

     

    (B)
      preferred stock issued by the Corporation that (1) has no maturity or a maturity
      of at least 55 years and is subject to Intent-Based Replacement Disclosure
      and
      (2) has an Optional Deferral Provision or a Ten-Year Optional Deferral
      Provision; 

     

    (C)
      securities issued by the Corporation or its Subsidiaries that (1) rank
pari
      passu
      with or
      junior to the CENts upon a liquidation, dissolution or winding up of the
      Corporation, (2) either (A) have no maturity or a maturity of at least 55 years
      and are subject to Intent-Based Replacement Disclosure or (B) have no maturity
      or a maturity of at least 30 years and are subject to a replacement capital
      covenant substantially similar to this Replacement Capital Covenant and (3)
      have
      an Optional Deferral Provision or a Ten-Year Optional Deferral Provision;

     

    (D)
      securities issued by the Corporation or its Subsidiaries that (1) would rank
      junior to all of the senior and subordinated debt of the Corporation other
      than
      the CENts, (2) have a Mandatory Trigger Provision and (3) have no maturity
      or a
      maturity of at least 30 years and are subject to Intent-Based Replacement
      Disclosure; or

     

    (E)
      cumulative preferred stock issued by the Corporation or its Subsidiaries that
      either (1) has no maturity or a maturity of at least 55 years and is subject
      to
      Intent-Based Replacement Disclosure or (2) has a maturity of at least 40 years
      and is subject to a replacement capital covenant substantially similar to this
      Replacement Capital Covenant.

     

    “Qualifying
      Non-Cumulative Preferred Stock”
means
      Non-Cumulative perpetual preferred stock of the Corporation or its Subsidiaries
      that ranks pari
      passu
      with or
      junior to other preferred stock of the issuer, and, for purposes of clause
      (a)
      of the definition of Mandatory Trigger Provision, contains no remedies other
      than Permitted Remedies and is either subject to a replacement capital covenant
      substantially similar to this Replacement Capital Covenant or has a Mandatory
      Trigger Provision and is subject to Intent-Based Replacement
      Disclosure.

     

    “Redesignation
      Date”
means,
      as to the Covered Debt in effect at any time, the earliest of (a) the date
      that
      is two years prior to the final maturity date of such Covered Debt, (b) if
      the
      Corporation elects to redeem, or the Corporation or a Subsidiary of the

     

    
      
        
        

      

      
        I-8

        
          

        

      

      
        
        

      

    

    Corporation
      elects to repurchase, such Covered Debt either in whole or in part with the
      consequence that after giving effect to such redemption or repurchase the
      outstanding principal amount of such Covered Debt is less than $100,000,000,
      the
      applicable redemption or repurchase date and (c) if such Covered Debt is not
      Eligible Subordinated Debt, the date on which the Corporation issues long-term
      indebtedness for money borrowed that is Eligible Subordinated Debt.

     

    “Replacement
      Capital Covenant”
has
      the
      meaning specified in the introduction to this instrument.

     

    “Supplemental
      Indenture”
means
      the Supplemental Indenture, dated as of September 27, 2006, between the
      Corporation and Deutsche Bank Trust Company Americas, as Trustee.

     

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

     

    “Subsidiary”
means,
      at any time, any Person the shares of stock or other ownership interests of
      which having ordinary voting power to elect a majority of the board of directors
      or other managers of such Person are at the time owned, or the management or
      policies of which are otherwise at the time controlled, directly or indirectly
      through one or more intermediaries (including other Subsidiaries) or both,
      by
      another Person.

     

    “Ten-Year
      Optional Deferral Provision”
means,
      as to any securities, a provision in the terms thereof or of the related
      transaction agreements to the effect that the issuer of such securities thereof
      may, in its sole discretion, defer in whole or in part payment of Distributions
      on such securities for one or more consecutive Distribution Periods of up to
      ten
      years without any remedy other than Permitted Remedies.

     

    “Termination
      Date”
has
      the
      meaning specified in Section 4(a).

     

     

     

    I-9

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