Document:

Junior Subordinated Indenture

 
Exhibit 4.4 
  
 Execution Copy 
  
 JUNIOR SUBORDINATED INDENTURE 
  
 between 
  
 ANWORTH MORTGAGE ASSET CORPORATION 

  
 and 
  
 JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, 
 as Trustee 
  

  
 Dated as of March 15, 2005 
  

  
  

 TABLE OF CONTENTS 
  

					
	 	  	Page

	ARTICLE I	  	 
	DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION	  	 
			
	Section 1.1.	 	Definitions	  	1
			
	Section 1.2.	 	Compliance Certificate and Opinions	  	9
			
	Section 1.3.	 	Forms of Documents Delivered to Trustee	  	10
			
	Section 1.4.	 	Acts of Holders	  	10
			
	Section 1.5.	 	Notices, Etc	  	12
			
	Section 1.6.	 	Notice to Holders; Waiver	  	13
			
	Section 1.7.	 	Effect of Headings and Table of Contents	  	13
			
	Section 1.8.	 	Successors and Assigns	  	13
			
	Section 1.9.	 	Separability Clause	  	13
			
	Section 1.10.	 	Benefits of Indenture	  	13
			
	Section 1.11.	 	Governing Law	  	14
			
	Section 1.12.	 	Submission to Jurisdiction	  	14
			
	Section 1.13.	 	Non-Business Days	  	14
		
	ARTICLE II	  	 
	SECURITY FORMS	  	 
			
	Section 2.1.	 	Form of Security	  	14
			
	Section 2.2.	 	Restricted Legend	  	19
			
	Section 2.3.	 	Form of Trustee’s Certificate of Authentication	  	21
			
	Section 2.4.	 	Temporary Securities	  	22
			
	Section 2.5.	 	Definitive Securities	  	22
		
	ARTICLE III	  	 
	THE SECURITIES	  	 
			
	Section 3.1.	 	Payment of Principal and Interest	  	22
			
	Section 3.2.	 	Denominations	  	24
			
	Section 3.3.	 	Execution, Authentication, Delivery and Dating	  	24
			
	Section 3.4.	 	Global Securities	  	25
			
	Section 3.5.	 	Registration, Transfer and Exchange Generally	  	27
			
	Section 3.6.	 	Mutilated, Destroyed, Lost and Stolen Securities	  	28
			
	Section 3.7.	 	Persons Deemed Owners	  	29

  

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 TABLE OF CONTENTS 
 (continued) 
  

					
	 	 	 	  	Page

			
	Section 3.8.	 	Cancellation	  	29
			
	Section 3.9.	 	Deferrals of Interest Payment Dates	  	30
			
	Section 3.10.	 	Reserved	  	30
			
	Section 3.11.	 	Agreed Tax Treatment	  	30
			
	Section 3.12.	 	CUSIP Numbers	  	31
		
	ARTICLE IV	  	 
	SATISFACTION AND DISCHARGE	  	 
			
	Section 4.1.	 	Satisfaction and Discharge of Indenture	  	31
			
	Section 4.2.	 	Application of Trust Money	  	32
		
	ARTICLE V	  	 
	REMEDIES	  	 
			
	Section 5.1.	 	Events of Default	  	32
			
	Section 5.2.	 	Acceleration of Maturity; Rescission and Annulment	  	33
			
	Section 5.3.	 	Collection of Indebtedness and Suits for Enforcement by Trustee	  	35
			
	Section 5.4.	 	Trustee May File Proofs of Claim	  	35
			
	Section 5.5.	 	Trustee May Enforce Claim Without Possession of Securities	  	36
			
	Section 5.6.	 	Application of Money Collected	  	36
			
	Section 5.7.	 	Limitation on Suits	  	36
			
	Section 5.8.	 	Unconditional Right of Holders to Receive Principal, Premium, if any, and Interest; Direct Action by Holders of Preferred Securities	  	37
			
	Section 5.9.	 	Restoration of Rights and Remedies	  	37
			
	Section 5.10.	 	Rights and Remedies Cumulative	  	37
			
	Section 5.11.	 	Delay or Omission Not Waiver	  	38
			
	Section 5.12.	 	Control by Holders	  	38
			
	Section 5.13.	 	Waiver of Past Defaults	  	38
			
	Section 5.14.	 	Undertaking for Costs	  	39
			
	Section 5.15.	 	Waiver of Usury, Stay or Extension Laws	  	39
		
	ARTICLE VI	  	 
	THE TRUSTEE	  	 
			
	Section 6.1.	 	Corporate Trustee Required	  	39
			
	Section 6.2.	 	Certain Duties and Responsibilities	  	40

  

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 TABLE OF CONTENTS 
 (continued) 
  

					
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	Section 6.3.	 	Notice of Defaults	  	41
			
	Section 6.4.	 	Certain Rights of Trustee	  	42
			
	Section 6.5.	 	May Hold Securities	  	44
			
	Section 6.6.	 	Compensation; Reimbursement; Indemnity	  	44
			
	Section 6.7.	 	Resignation and Removal; Appointment of Successor	  	45
			
	Section 6.8.	 	Acceptance of Appointment by Successor	  	45
			
	Section 6.9.	 	Merger, Conversion, Consolidation or Succession to Business	  	46
			
	Section 6.10.	 	Not Responsible for Recitals or Issuance of Securities	  	46
			
	Section 6.11.	 	Appointment of Authenticating Agent	  	46
		
	ARTICLE VII	  	 
	HOLDER’S LISTS AND REPORTS BY COMPANY	  	 
			
	Section 7.1.	 	Company to Furnish Trustee Names and Addresses of Holders	  	48
			
	Section 7.2.	 	Preservation of Information, Communications to Holders	  	48
			
	Section 7.3.	 	Reports by Company	  	49
		
	ARTICLE VIII	  	 
	CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE	  	 
			
	Section 8.1.	 	Company May Consolidate, Etc., Only on Certain Terms	  	50
			
	Section 8.2.	 	Successor Company Substituted	  	50
		
	ARTICLE IX	  	 
	SUPPLEMENTAL INDENTURES	  	 
			
	Section 9.1.	 	Supplemental Indentures without Consent of Holders	  	51
			
	Section 9.2.	 	Supplemental Indentures with Consent of Holders	  	51
			
	Section 9.3.	 	Execution of Supplemental Indentures	  	52
			
	Section 9.4.	 	Effect of Supplemental Indentures	  	53
			
	Section 9.5.	 	Reference in Securities to Supplemental Indentures	  	53
		
	ARTICLE X	  	 
	COVENANTS	  	 
			
	Section 10.1.	 	Payment of Principal, Premium, if any, and Interest	  	53
			
	Section 10.2.	 	Money for Security Payments to be Held in Trust	  	53
			
	Section 10.3.	 	Statement as to Compliance	  	54
			
	Section 10.4.	 	Calculation Agent	  	55

  

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 TABLE OF CONTENTS 
 (continued) 
  

					
	 	 	 	  	Page

	Section 10.5.	 	Additional Tax Sums	  	55
			
	Section 10.6.	 	Additional Covenants	  	56
			
	Section 10.7.	 	Waiver of Covenants	  	57
			
	Section 10.8.	 	Treatment of Securities	  	57
		
	ARTICLE XI	  	 
	REDEMPTION OF SECURITIES	  	 
			
	Section 11.1.	 	Optional Redemption	  	57
			
	Section 11.2.	 	Special Event Redemption	  	57
			
	Section 11.3.	 	Election to Redeem; Notice to Trustee	  	58
			
	Section 11.4.	 	Selection of Securities to be Redeemed	  	58
			
	Section 11.5.	 	Notice of Redemption	  	58
			
	Section 11.6.	 	Deposit of Redemption Price	  	59
			
	Section 11.7.	 	Payment of Securities Called for Redemption	  	59
		
	ARTICLE XII	  	 
	SUBORDINATION OF SECURITIES	  	 
			
	Section 12.1.	 	Securities Subordinate to Senior Debt	  	60
			
	Section 12.2.	 	No Payment When Senior Debt in Default; Payment Over of Proceeds Upon Dissolution, Etc	  	60
			
	Section 12.3.	 	Payment Permitted If No Default	  	61
			
	Section 12.4.	 	Subrogation to Rights of Holders of Senior Debt	  	62
			
	Section 12.5.	 	Provisions Solely to Define Relative Rights	  	62
			
	Section 12.6.	 	Trustee to Effectuate Subordination	  	63
			
	Section 12.7.	 	No Waiver of Subordination Provisions	  	63
			
	Section 12.8.	 	Notice to Trustee	  	63
			
	Section 12.9.	 	Reliance on Judicial Order or Certificate of Liquidating Agent	  	64
			
	Section 12.10.	 	Trustee Not Fiduciary for Holders of Senior Debt	  	64
			
	Section 12.11.	 	Rights of Trustee as Holder of Senior Debt; Preservation of Trustee’s Rights	  	64
			
	Section 12.12.	 	Article Applicable to Paying Agents	  	64

  

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	 	  	 	  	 	  	Page

				
	SCHEDULES	  	 	  	 	  	 
				
	Schedule A	  	–	  	Determination of LIBOR	  	A-1
				
	Exhibit A	  	-	  	Form of Officer’s Financial Certificate	  	 

  

 -i- 

 JUNIOR SUBORDINATED INDENTURE, dated as of March 15, 2005,
between Anworth Mortgage Asset Corporation, a Maryland corporation (the “Company”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking
association, as Trustee (in such capacity, the “Trustee”). 
  
 RECITALS OF THE COMPANY 
  
 WHEREAS, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of its unsecured junior
subordinated deferrable interest notes (the “Securities”) issued to evidence loans made to the Company of the proceeds from the issuance by Anworth Capital Trust 1, a Delaware statutory trust (the “Trust”), of
undivided preferred beneficial interests in the assets of the Trust (the “Preferred Securities”) and undivided common beneficial interests in the assets of the Trust (the “Common Securities” and, collectively with
the Preferred Securities, the “Trust Securities”), and to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered; and 
  
 WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its
terms, have been done. 
  
 NOW,
THEREFORE, this Indenture Witnesseth: 
  
 For and
in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: 
  
 ARTICLE I 
  
 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 
  
 Section 1.1. Definitions. 
  

For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: 
  
 (a) the terms defined in this Article I have the
meanings assigned to them in this Article I; 
  
 (b) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; 
  
 (c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with
GAAP; 
  
 (d) unless the context otherwise
requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; 
  
 (e) the words “hereby”, “herein”, “hereof” and “hereunder” and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other subdivision; 
  

 1 

 (f) a reference to the singular includes the plural and vice versa; and 
  
 (g) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders. 
  
 “Act” when used with respect to any Holder, has the meaning specified in Section 1.4. 
  
 “Administrative Trustee” means, with respect to the Trust, each Person identified as an “Administrative Trustee” in the Trust
Agreement, solely in its capacity as Administrative Trustee of the Trust under the Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor Administrative Trustee appointed as therein
provided. 
  
 “Additional Interest” means the
interest, if any, that shall accrue on any amounts payable on the Securities, the payment of which has not been made on the applicable Interest Payment Date and which shall accrue at the rate per annum specified or determined as specified in such
Security, in each case to the extent legally enforceable. 
  
 “Additional Tax Sums” has the meaning specified in Section 10.5. 
  
 “Additional Taxes” means taxes, duties or other governmental charges imposed on the Trust as a result of a Tax Event (which, for the sake
of clarity, does not include amounts required to be deducted or withheld by the Trust from payments made by the Trust to or for the benefit of the Holder of, or any Person that acquires a beneficial interest in, the Securities). 
  
 “Affiliate” of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control,” when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to
the foregoing. 
  
 “Applicable Depositary
Procedures” means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Security, in each case to the extent applicable to such
transaction and as in effect from time to time. 
  
 “Authenticating Agent” means any Person authorized by the Trustee pursuant to Section 6.11 to act on behalf of the Trustee to authenticate the Securities. 
  
 “Bankruptcy Code” means Title 11 of the United States Code or any successor statute(s) thereto, or any
similar federal or state law for the relief of debtors, in each case as amended from time to time. 
  
 “Board of Directors” means the board of directors of the Company or any duly authorized committee of that board. 
  
 “Board Resolution” means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification. 
  

 2 

 “Business Day” means any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in the City of New York are authorized or required by law or executive order to remain closed or (iii) a day on which the Corporate Trust Office of the Trustee is closed for business. 
  
 “Calculation Agent” has the meaning specified in Section
10.4. 
  
 “Common Securities” has the meaning
specified in the first recital of this Indenture. 
  
 “Common Stock” means the common stock, par value $.01 per share, of the Company. 
  
 “Company” means the Person named as the “Company” in the first paragraph of this Indenture until a successor corporation
shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor corporation. 
  

“Company Request” and “Company Order” mean, respectively, the written request or order signed in the name of the
Company by its Chairman of the Board of Directors, its Vice Chairman of the Board of Directors, its Chief Executive Officer, President or a Vice President, and by its Chief Financial Officer, its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee. 
  
 “Corporate Trust Office” means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of this Indenture is located at 600 Travis,
50th Floor, Houston, Texas 77019 Attn: Institutional Trust Services—Anworth Capital Trust 1. 
  
 “Debt” means, with respect to any Person, whether recourse
is to all or a portion of the assets of such Person, whether currently existing or hereafter incurred and whether or not contingent and without duplication, (i) every obligation of such Person for money borrowed; (ii) every obligation of such Person
evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; (iii) every reimbursement obligation of such Person with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of such Person; (iv) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or
other accrued liabilities arising in the ordinary course of business); (v) every capital lease obligation of such Person; (vi) all indebtedness of such Person, whether incurred on or prior to the date of this Indenture or thereafter incurred, for
claims in respect of derivative products, including interest rate, foreign exchange rate and commodity forward contracts, options and swaps and similar arrangements; (vii) every obligation of the type referred to in clauses (i) through (vi) of
another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor or otherwise; and (viii) any renewals, extensions, refundings,
amendments or modifications of any obligation of the type referred to in clauses (i) through (vii). 
  
 “Defaulted Interest” has the meaning specified in Section 3.1. 
  
 “Delaware Trustee” means, with respect to the Trust, the Person identified as the “Delaware
Trustee” in the Trust Agreement, solely in its capacity as Delaware Trustee of the Trust under the Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any successor Delaware Trustee appointed as
therein provided. 
  

 3 

 “Depositary” means an organization registered as a clearing agency under the Exchange
Act that is designated as Depositary by the Company or any successor thereto. DTC will be the initial Depositary. 
  
 “Depositary Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time a
Depositary effects book-entry transfers and pledges of securities deposited with the Depositary. 
  
 “Distributions” means amounts payable in respect of the Trust Securities as provided in the Trust Agreement and referred to therein as
“Distributions.” 
  
 “Dollar”
or“$” means the currency of the United States of America that, as at the time of payment, is legal tender for the payment of public and private debts. 
  
 “DTC” means The Depository Trust Company, a New York corporation, or any successor thereto. 
  
 “Event of Default” has the meaning specified in Section
5.1. 
  
 “Exchange Act” means the Securities
Exchange Act of 1934 or any statute successor thereto, in each case as amended from time to time. 
  
 “Expiration Date” has the meaning specified in Section 1.4. 
  
 “Extension Period” has the meaning specified in Section 3.9. 
  
 “GAAP” means United States generally accepted accounting
principles, consistently applied, from time to time in effect. 
  
 “Global Security” means a Security that evidences all or part of the Securities, the ownership and transfers of which shall be made through book entries by a Depositary. 
  
 “Government Obligation” means (a) any security that is (i) a
direct obligation of the United States of America of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America or the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and
(b) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any Government Obligation that is specified in clause (a) above and held by such bank for the account of the holder of
such depositary receipt, or with respect to any specific payment of principal of or interest on any Government Obligation that is so specified and held, provided, that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.

  

 4 

 “Holder” means a Person in whose name a Security is registered in the Securities
Register. 
  
 “Indenture” means this instrument
as originally executed or as it may from time to time be amended or supplemented by one or more amendments or indentures supplemental hereto entered into pursuant to the applicable provisions hereof. 
  
 “Interest Payment Date” means March 30, June 30, September
30, and December 30 of each year, commencing on June 30, 2005, during the term of this Indenture. 
  
 “Investment Company Act” means the Investment Company Act of 1940 or any successor statute thereto, in each case as amended from time to
time. 
  
 “Investment Company Event” means the
receipt by the Company of an Opinion of Counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation (including any announced prospective change) or a written change in interpretation or
application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that the Trust is or, within ninety (90) days of the date of such opinion will be, considered an
“investment company” that is required to be registered under the Investment Company Act, which change or prospective change becomes effective or would become effective, as the case may be, on or after the date of the issuance of the
Securities. 
  
 “LIBOR” has the meaning specified
in Schedule A. 
  
 “LIBOR Business Day”
has the meaning specified in Schedule A. 
  
 “LIBOR
Determination Date” has the meaning specified in Schedule A. 
  
 “Liquidation Amount” has the meaning specified in the Trust Agreement. 
  
 “Maturity,” when used with respect to any Security, means the date on which the principal of such Security or any installment of
principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. 
  
 “Notice of Default” means a written notice of the kind specified in Section 5.1(c). 
  
 “Officers’ Certificate” means a certificate signed by
the Chairman of the Board, a Vice Chairman of the Board, the Chief Executive Officer, the President or a Vice President, and by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Company and delivered to the Trustee. 
  
 “Operative
Documents” means the Trust Agreement, the Indenture, the Purchase Agreement and the Securities. 
  
 “Opinion of Counsel” means a written opinion of counsel, who may be counsel for or an employee of the Company or any Affiliate of the
Company. 
  

 5 

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

  
 “Original Issue Date” means the date of
original issuance of each Security. 
  
 “Outstanding” means, when used in reference to any Securities, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: 
  
 (i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; 
  
 (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities; provided, that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made; and 
  
 (iii)
Securities that have been paid or in substitution for or in lieu of which other Securities have been authenticated and delivered pursuant to the provisions of this Indenture, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Holders in whose hands such Securities are valid, binding and legal obligations of the Company; 
  
 provided, that in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities that a Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Securities so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or such other obligor. Notwithstanding anything herein to the contrary, Securities initially issued to the Trust that are owned by the Trust shall be
deemed to be Outstanding notwithstanding the ownership by the Company or an Affiliate of any beneficial interest in the Trust. 
  
 “Paying Agent” means the Trustee or any Person authorized by the Company to pay the principal of or any premium or interest on, or other
amounts in respect of, any Securities on behalf of the Company. 
  
 “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, government or any
agency or political subdivision thereof, or any other entity of whatever nature. 
  

 6 

 “Place of Payment” means, with respect to the Securities, the Corporate Trust Office of
the Trustee. 
  
 “Preferred Securities” has the
meaning specified in the first recital of this Indenture. 
  
 “Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. 
  
 “Proceeding” has the meaning specified in Section
12.2. 
  
 “Property Trustee” means the Person
identified as the “Property Trustee” in the Trust Agreement, solely in its capacity as Property Trustee of the Trust under the Trust Agreement and not in its individual capacity, or its successor in interest in such capacity, or any
successor Property Trustee appointed as therein provided. 
  
 “Purchase Agreement” means the Purchase Agreement executed and delivered by the Trust, the Depositor and TABERNA Preferred Funding I, Ltd., and Merrill Lynch International, as purchaser, contemporaneously with the execution
and delivery of this Trust Agreement, as amended from time to time. 
  
 “Redemption Date” means, when used with respect to any Security to be redeemed, the date fixed for such redemption by or pursuant to this Indenture. 
  
 “Redemption Price” means, when used with respect to any Security to be redeemed, in whole or in part, the
Special Redemption Price or the Optional Redemption Price, as applicable, at which such Security or portion thereof is to be redeemed as fixed by or pursuant to this Indenture. 
  
 “Reference Banks” has the meaning specified in Schedule A. 
  
 “Regular Record Date” for the interest payable on any
Interest Payment Date with respect to the Securities means the date that is fifteen (15) days preceding such Interest Payment Date (whether or not a Business Day). 
  
 “Responsible Officer” means, when used with respect to the Trustee, the officer in the Institutional Trust
Services department of the Trustee having direct responsibility for the administration of this Indenture. 
  
 “Rights Plan” means a plan of the Company providing for the issuance by the Company to all holders of its Common Stock of rights
entitling the holders thereof to subscribe for or purchase shares of any class or series of capital stock of the Company which rights (i) are deemed to be transferred with such shares of such Common Stock and (ii) are also issued in respect of
future issuances of such Common Stock, in each case until the occurrence of a specified event or events. 
  

 7 

 “Securities” or “Security means any debt securities or debt security, as the
case may be, authenticated and delivered under this Indenture. 
  
 “Securities Act” means the Securities Act of 1933 or any successor statute thereto, in each case as amended from time to time. 
  
 “Securities Register” and “Securities Registrar” have the respective meanings specified in Section 3.5.

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

  
 “Special Event” means the occurrence of an
Investment Company Event or a Tax Event. 
  
 “Special
Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.1. 
  
 “Special Redemption Price” has the meaning set forth in Section 11.2. 
  
 “Stated Maturity” means March 30, 2035. 
  
 “Subsidiary” means a Person more than fifty percent (50%) of
the outstanding voting stock or other voting interests of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For purposes of this definition,
“voting stock” means stock that ordinarily has voting power for the election of directors, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency. 
  
 “Tax Event” means the receipt by the Company of an Opinion
of Counsel experienced in such matters to the effect that, as a result of (a) any amendment to or change (including any announced prospective change) in the laws or any regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein or (b) any judicial decision or any official administrative pronouncement (including any private letter ruling, technical advice memorandum or field service advice) or regulatory procedure, including any notice or
announcement of intent to adopt any such pronouncement or procedure (an “Administrative Action”), regardless of whether such judicial decision or Administrative Action is issued to or in connection with a proceeding involving the
Company or the Trust and whether or not subject to review or appeal, which amendment, change, judicial decision or Administrative Action is 
  

 8 

 enacted, promulgated or announced, in each case, on or after the date of issuance of the Securities, there is more than
an insubstantial risk that (i) the Trust is, or will be within ninety (90) days of the date of such opinion, subject to United States federal income tax with respect to income received or accrued on the Securities, (ii) interest payable by the
Company on the Securities is not, or within ninety (90) days of the date of such opinion, will not be, deductible by the Company, in whole or in part, for United States federal income tax purposes, or (iii) the Trust is, or will be within ninety
(90) days of the date of such opinion, subject to more than a de minimis amount of other taxes, duties or other governmental charges. 
  
 “Trust” has the meaning specified in the first recital of this Indenture. 
  
 “Trust Agreement” means the Amended and Restated Trust Agreement executed and delivered by the Company, the
Property Trustee, the Delaware Trustee and the Administrative Trustees named therein, contemporaneously with the execution and delivery of this Indenture, for the benefit of the holders of the Trust Securities, as amended or supplemented from time
to time. 
  
 “Trustee” means the Person named as
the “Trustee” in the first paragraph of this instrument, solely in its capacity as such and not in its individual capacity, until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture,
and, thereafter, “Trustee” shall mean or include each Person who is then a Trustee hereunder. 
  
 “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended and as in effect on the date as of this Indenture. 
  
 “Trust Securities” has the meaning specified in the first
recital of this Indenture. 
  
 Section 1.2. Compliance
Certificate and Opinions. 
  
 (a) Upon any application or
request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall, if requested by the Trustee, furnish to the Trustee an Officers’ Certificate stating that all conditions precedent (including
covenants compliance with which constitutes a condition precedent), if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent (including covenants compliance with which constitutes a condition precedent), if any, have been complied with. 
  
 (b) Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than the certificate
provided pursuant to Section 10.3) shall include: 
  
 (i) a statement by each individual signing such certificate or opinion that such individual has read such covenant or condition and the definitions herein relating thereto; 
  
 (ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions of such individual contained in such certificate or opinion are based; 
  

 9 

 (iii) a statement that, in the opinion of such individual, he or she has made such
examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and 
  
 (iv) a statement as to whether, in the opinion of such individual, such condition or covenant has been
complied with. 
  
 Section 1.3. Forms of Documents Delivered to
Trustee. 
  
 (a) In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

  
 (b) Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or after reasonable inquiry should know, that the certificate or opinion or representations with
respect to matters upon which his or her certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or after reasonable inquiry should know, that the certificate or opinion or
representations with respect to such matters are erroneous. 
  
 (c) Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one
instrument. 
  
 (d) Whenever, subsequent to the receipt by the
Trustee of any Board Resolution, Officers’ Certificate, Opinion of Counsel or other document or instrument, a clerical, typographical or other inadvertent or unintentional error or omission shall be discovered therein, a new document or
instrument may be substituted therefor in corrected form with the same force and effect as if originally received in the corrected form and, irrespective of the date or dates of the actual execution and/or delivery thereof, such substitute document
or instrument shall be deemed to have been executed and/or delivered as of the date or dates required with respect to the document or instrument for which it is substituted. Without limiting the generality of the foregoing, any Securities issued
under the authority of such defective document or instrument shall nevertheless be the valid obligations of the Company entitled to the benefits of this Indenture equally and ratably with all other Outstanding Securities. 
  
 Section 1.4. Acts of Holders. 
  
 (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent thereof duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments 
  

 10 

 (including any appointment of an agent) is or are delivered to the Trustee, and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section 1.4. 
  
 (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or
writing acknowledged to him or her the execution thereof. Where such execution is by a Person acting in other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his or her authority. The fact
and date of the execution by any Person of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner that the Trustee deems sufficient and in accordance with such reasonable rules as
the Trustee may determine. 
  
 (c) The ownership of Securities
shall be proved by the Securities Register. 
  
 (d) Any request,
demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security. 
  
 (e) Without limiting the foregoing, a Holder entitled to take any action
hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any
part of such principal amount. 
  
 (f) Except as set forth in
paragraph (g) of this Section 1.4, the Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities entitled to give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided, that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date
(as defined in Section 1.4(h)) by Holders of the requisite principal amount of Outstanding Securities on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for
which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be canceled and of no effect). Promptly after any record date is set pursuant to
this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities in the manner set forth
in Section 1.6. 
  

 11 

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

  
 (h) With respect to any record date set pursuant to paragraph
(f) or (g) of this Section 1.4, the party hereto that sets such record date may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided,
that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities in the manner set forth in Section 1.6, on or prior to the existing
Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section 1.4, the party hereto that set such record date shall be deemed to have initially designated the ninetieth (90th) day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the one hundred eightieth (180th) day after the applicable record date. 
  
 Section 1.5. Notices, Etc. to Trustee and Company. 
  
 Any request, demand, authorization, direction, notice, consent, waiver, Act of Holders, or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: 
  
 (a) the Trustee by any Holder, any holder of Preferred Securities or the
Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with and received by the Trustee at its Corporate Trust Office, or 
  
 (b) the Company by the Trustee, any Holder or any holder of Preferred Securities shall be sufficient for every purpose
hereunder if in writing and mailed, first class, postage prepaid, to the Company addressed to it at 1299 Ocean Avenue, Suite 250, Santa Monica, CA 90401 or at any other address previously furnished in writing to the Trustee by the Company.

  

 12 

 Section 1.6. Notice to Holders; Waiver. 
  
 Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first class, postage prepaid, to each Holder affected by such event to the address of such Holder as it appears in the Securities Register, not
later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. If, by reason of the suspension of or irregularities in regular mail service or for any other reason, it shall be impossible or
impracticable to mail notice of any event to Holders when said notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 
  
 Section 1.7. Effect of Headings and Table of Contents. 
  
 The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the
construction of this Indenture. 
  
 Section 1.8. Successors and
Assigns. 
  
 This Indenture shall be binding upon and shall
inure to the benefit of any successor to the Company and the Trustee, including any successor by operation of law. Except in connection with a transaction involving the Company that is permitted under Article VIII and pursuant to which the
assignee agrees in writing to perform the Company’s obligations hereunder, the Company shall not assign its obligations hereunder. 
  
 Section 1.9. Separability Clause. 
  
 If any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue. 
  
 Section 1.10. Benefits of Indenture. 
  
 Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors and assigns, the holders of Senior Debt, the Holders of the Securities and, to the extent expressly provided in Sections 5.2, 5.8, 5.9, 5.11,
5.13, 9.2 and 10.7, the holders of Preferred Securities, any benefit or any legal or equitable right, remedy or claim under this Indenture. 
  

 13 

 Section 1.11. Governing Law. 
  
 This Indenture and the rights and obligations of each of the Holders, the Company and the Trustee shall be construed and
enforced in accordance with and governed by the laws of the State of New York without reference to its conflict of laws provisions (other than Section 5-1401 of the General Obligations Law). 
  
 Section 1.12. Submission to Jurisdiction. 
  
 ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH
RESPECT TO OR ARISING OUT OF THIS INDENTURE MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN THE
BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS INDENTURE, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM) FOR LEGAL
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE. 
  
 Section 1.13. Non-Business Days. 
  
 If any
Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day, then (notwithstanding any other provision of this Indenture or the Securities) payment of interest, premium, if any, or principal or other amounts
in respect of such Security shall not be made on such date, but shall be made on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, until such next succeeding Business Day) except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the Interest Payment Date or Redemption Date or at the Stated Maturity. 
  
 ARTICLE II 
  
 SECURITY FORMS 
  
 Section 2.1. Form of Security. 
  
 Any Security
issued hereunder shall be in substantially the following form: 
  
 ANWORTH MORTGAGE ASSET CORPORATION 
  
 Floating
Rate Junior Subordinated Note due 2035 
  

			
	 No.
                    
	 	$ 37,380,000                

  
 Anworth Mortgage Asset
Corporation, a corporation organized and existing under the laws of Maryland (hereinafter called the “Company,” which term includes any successor Person 
  

 14 

 under the Indenture hereinafter referred to), for value received, hereby promises to pay to
                     or registered assigns, the principal sum of Thirty Seven Million Three Hundred Eighty Thousand Dollars
($37,380,000) or such other principal amount represented hereby as may be set forth in the records of the Securities Registrar hereinafter referred to in accordance with the Indenture on March 30, 2035. The Company further promises to pay interest
on said principal sum from March 15, 2005, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly (subject to deferral as set forth herein) in arrears on March 30, June 30, September 30 and
December 30 of each year, commencing on June 30, 2005, or if any such day is not a Business Day, on the next succeeding Business Day (and no interest shall accrue in respect of the amounts whose payment is so delayed for the period from and after
such Interest Payment Date until such next succeeding Business Day), except that, if such Business Day falls in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case, with the same
force and effect as if made on the Interest Payment Date, at a variable rate equal to LIBOR plus 3.10% per annum, together with Additional Tax Sums, if any, as provided in Section 10.5 of the Indenture, until the principal hereof is paid or
duly provided for or made available for payment; provided, further, that any overdue principal, premium, if any, or Additional Tax Sums and any overdue installment of interest shall bear Additional Interest at a variable rate equal to
LIBOR plus 3.10% per annum (to the extent that the payment of such interest shall be legally enforceable), compounded quarterly, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be
payable on demand. 
  
 The amount of interest payable shall be
computed on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date shall, as provided in the Indenture, be
paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest installment. Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. 
  
 So long as no Event of Default has occurred and is continuing, the Company
shall have the right, at any time and from time to time during the term of this Security, to defer the payment of interest on this Security for a period of up to twenty (20) consecutive quarterly interest payment periods (each such period, an
“Extension Period”), during which Extension Period(s), no interest shall be due and payable (except any Additional Tax Sums that may be due and payable). No Extension Period shall end on a date other than an Interest Payment Date,
and no Extension Period shall extend beyond the Stated Maturity of the principal of this Security. No interest shall be due and payable during an Extension Period (except any Additional Tax Sums that may be due and payable), except at the end
thereof, but each installment of interest that would otherwise have been due and payable during such Extension Period shall bear Additional Interest (to the extent payment of such interest would be legally enforceable) at a variable rate equal to
LIBOR plus 3.10% per annum, compounded quarterly, from the dates on which 
  

 15 

 amounts would have otherwise been due and payable until paid or made available for payment. At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on this Security, together with such Additional Interest. Prior to the termination of any such Extension Period, the Company may further defer the payment of interest;
provided, that (i) all such previous and further extensions comprising such Extension Period do not exceed twenty (20) quarterly interest payment periods, (ii) no Extension Period shall end on a date other than an Interest Payment Date and
(iii) no Extension Period shall extend beyond the Stated Maturity of the principal of this Security. Upon the termination of any such Extension Period and upon the payment of all accrued and unpaid interest and any Additional Interest then due on
any Interest Payment Date, the Company may elect to begin a new Extension Period; provided, that (i) such Extension Period does not exceed twenty (20) quarterly interest payment periods, (ii) no Extension Period shall end on a date other than
an Interest Payment Date and (iii) no Extension Period shall extend beyond the Stated Maturity of the principal of this Security. The Company shall give the Holder of this Security and the Trustee written notice of its election to begin any such
Extension Period at least one Business Day prior to the next succeeding Interest Payment Date on which interest on this Security would be payable but for such deferral or, so long as this Security is held by the Trust, at least one Business Day
prior to the earlier of (i) the next succeeding date on which Distributions on the Preferred Securities of Anworth Capital Trust 1 would be payable but for such deferral and (ii) the date on which the Property Trustee of such Trust is required to
give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Preferred Securities of the record date for the payment of such Distributions. 
  
 During any such Extension Period, the Company shall not (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 or (ii) make any payment of principal of or any interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to this Security (other than (a) repurchases, redemptions or other acquisitions of shares of capital stock of the Company
in connection with (1) any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, (2) a dividend reinvestment or stockholder stock purchase plan and
(3) the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into prior to the applicable Extension Period, (b) as a result of an
exchange or conversion of any class or series of the Company’s capital stock (or any capital stock of a Subsidiary of the Company) for any class or series of the Company’s capital stock or of any class or series of the Company’s
indebtedness for any class or series of the Company’s capital stock, (c) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection with any Rights Plan, the issuance of rights, stock or other property under any Rights Plan, or the redemption or repurchase of rights pursuant thereto or (e) any dividend
in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock). 
  
 Payment of principal of,
premium, if any, and interest on this Security shall be made in such coin or currency of the United States of America as at the time of payment is legal tender 
  

 16 

 for payment of public and private debts. Payments of principal, premium, if any, and interest due at the Maturity of this
Security shall be made at the Place of Payment upon surrender of such Securities to the Paying Agent, and payments of interest shall be made, subject to such surrender where applicable, by wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Paying Agent at least ten (10) Business Days prior to the date for payment by the Person entitled thereto unless proper written transfer instructions have not been received by
the relevant record date, in which case such payments shall be made by check mailed to the address of such Person as such address shall appear in the Security Register. Notwithstanding the foregoing, so long as the Holder of this Security is the
Property Trustee, the payment of the principal of (and premium, if any) and interest (including any overdue installment of interest and Additional Tax Sums, if any) on this Security will be made at such place and to such account as may be designated
by the Property Trustee. 
  
 The indebtedness evidenced by this
Security is, to the extent provided in the Indenture, subordinate and junior in right of payment to the prior payment in full of all Senior Debt, and this Security is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his or her behalf to take such actions as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and all such purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions. 
  
 Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose. 
  
 [FORM OF REVERSE OF SECURITY] 
  
 This Security is
one of a duly authorized issue of securities of the Company (the “Securities”) issued under the Junior Subordinated Indenture, dated as of March 15, 2005 (the “Indenture”), between the Company and JPMorgan Chase
Bank, National Association, a national banking association, as Trustee (in such capacity, the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the holders of Senior Debt, the Holders of the Securities and the holders of the Preferred
Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. 
  
 All terms used in this Security that are defined in the Indenture or in the Amended and Restated Trust Agreement, dated as of March 15, 2005 (as modified,
amended or supplemented from time to time, the “Trust Agreement”), relating to the Anworth Capital Trust 1 (the “Trust”) among the Company, as Depositor, the Trustees named therein and the Holders from time to time
of the Trust Securities issued pursuant thereto, shall have the meanings assigned to them in the Indenture or the Trust Agreement, as the case may be. 
  
 The Company may, on any Interest Payment Date, at its option, upon not less than thirty (30) days’ nor more than sixty (60) days’ written notice
to the Holders of the Securities (unless a 
  

 17 

 shorter notice period shall be satisfactory to the Trustee) on or after March 30, 2010 and subject to the terms and
conditions of Article XI of the Indenture, redeem this Security in whole at any time or in part from time to time at a Redemption Price equal to one hundred percent (100%) of the principal amount hereof, together, in the case of any such
redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed as the Redemption Date. 
  
 In addition, upon the occurrence and during the continuation of a Special Event, the Company may, at its option, upon not less than thirty (30) days’
nor more than sixty (60) days’ written notice to the Holders of the Securities (unless a shorter notice period shall be satisfactory to the Trustee), redeem this Security, in whole but not in part, subject to the terms and conditions of
Article XI of the Indenture at a Redemption Price equal to one hundred seven and one half percent (107.5%) of the principal amount hereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest,
through but excluding the date fixed as the Redemption Date. 
  
 In the event of redemption of this Security in part only, a new Security or Securities for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. If less than all the Securities are to be
redeemed, the particular Securities to be redeemed shall be selected not more than sixty (60) days prior to the Redemption Date by the Trustee from the Outstanding Securities not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption of a portion of the principal amount of any Security. 
  
 The Indenture permits, with certain exceptions as therein provided, the Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations of the Company and of the Holders of the Securities, with the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities. The
Indenture also contains provisions permitting Holders of specified percentages in principal amount of the Securities, on behalf of the Holders of all Securities, to waive compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. 
  
 No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium, if any, and interest, including any Additional Interest (to the extent legally enforceable), on this Security at the times, place and rate, and in the coin or currency, herein
prescribed. 
  
 As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this Security is restricted to transfers to “Qualified Purchasers” (as such term is defined in the Investment Company Act of 1940, as amended), and is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the office or agency of the Company maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and
the Securities Registrar and duly 
  

 18 

 executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new
Securities, of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
  

The Securities are issuable only in registered form without coupons in minimum denominations of $100,000 and any integral multiple of $1,000 in excess
thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate principal amount of Securities and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same. 
  
 No service charge shall be made
for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 
  
 The Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. 
  
 The Company and, by its acceptance of this Security or a beneficial interest
herein, the Holder of, and any Person that acquires a beneficial interest in, this Security agree that, for United States federal, state and local tax purposes, it is intended that this Security constitute indebtedness. 
  
 This Security shall be construed and enforced in accordance with and
governed by the laws of the State of New York, without reference to its conflict of laws provisions (other than Section 5-1401 of the General Obligations Law). 
  
 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed on this      day
of             , 20    . 
  

			
	 ANWORTH MORTGAGE ASSET
 CORPORATION

		
	By:	 	  

	Name:	 	 
	Title:	 	 

  
 Section 2.2.
Restricted Legend. 
  
 (a) Any Security issued hereunder
shall bear a legend in substantially the following form: 
  
 “[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(“DTC”) OR A NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME 
  

 19 

 OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,
AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. 
  
 UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO
THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.] 
  
 THE SECURITIES
REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND SUCH SECURITIES, AND ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. 
  
 THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE COMPANY OR (II) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A “QUALIFIED PURCHASER” (AS DEFINED IN SECTION 2(a)(51) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED), AND (B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE. 
  
 THE SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $100,000. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY ATTEMPTED TRANSFER OF SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS
THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. TO THE FULLEST EXTENT PERMITTED BY LAW, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH SECURITIES FOR
ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR 
  

 20 

 INTEREST ON SUCH SECURITIES, OR ANY INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN SUCH SECURITIES. 
  
 THE HOLDER OF
THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR HOLDER OF THE SECURITIES
OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE
OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.” 
  
 (b) The above legends shall not be removed from any Security unless there is delivered to the Company satisfactory evidence,
which may include an Opinion of Counsel, as may be reasonably required to ensure that any future transfers thereof may be made without restriction under or violation of the provisions of the Securities Act and other applicable law. Upon provision of
such satisfactory evidence, the Company shall execute and deliver to the Trustee, and the Trustee shall deliver, upon receipt of a Company Order directing it to do so, a Security that does not bear the legend. 
  
 Section 2.3. Form of Trustee’s Certificate of Authentication.

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

 

			
	JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but
solely as Trustee
		
	By:	 	  

	 	 	                        Authorized signatory

  

 21 

 Section 2.4. Temporary Securities. 
  
 (a) Pending the preparation of definitive Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities. 
  
 (b) If temporary Securities are issued, the Company will cause definitive Securities to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary Securities shall be exchangeable for definitive Securities upon surrender of the temporary Securities at the office or agency of the Company designated for that purpose without
charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of any authorized
denominations having the same Original Issue Date and Stated Maturity and having the same terms as such temporary Securities. Until so exchanged, the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities. 
  
 Section 2.5. Definitive
Securities. 
  
 The Securities issued on the Original Issue
Date shall be in definitive form. The definitive Securities shall be printed, lithographed or engraved, or produced by any combination of these methods, if required by any securities exchange on which the Securities may be listed, on a steel
engraved border or steel engraved borders or may be produced in any other manner permitted by the rules of any securities exchange on which the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities. 
  
 ARTICLE III 
  
 THE SECURITIES 
  
 Section 3.1. Payment of Principal and Interest. 
  
 (a) The unpaid principal amount of the Securities shall bear interest at a variable rate of LIBOR plus 3.10% per annum until
paid or duly provided for, such interest to accrue from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, and any overdue principal, premium, if any, or Additional Tax Sums
and any overdue installment of interest shall bear Additional Interest at the rate equal to a variable rate of LIBOR plus 3.10% per annum compounded quarterly from the dates such amounts are due until they are paid or funds for the payment thereof
are made available for payment. 
  
 (b) Interest and Additional
Interest on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, except that interest and any Additional Interest 
  

 22 

 payable on the Stated Maturity (or any date of principal repayment upon early maturity) of the principal of a Security or
on a Redemption Date shall be paid to the Person to whom principal is paid. The initial payment of interest on any Security that is issued between a Regular Record Date and the related Interest Payment Date shall be payable as provided in such
Security. 
  
 (c) Any interest on any Security that is due and
payable, but is not timely paid or duly provided for, on any Interest Payment Date for Securities (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in paragraph (i) or (ii) below: 
  
 (i) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest (a “Special Record Date”), which shall be fixed in the following
manner. At least thirty (30) days prior to the date of the proposed payment, the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall
be not more than fifteen (15) days and not less than ten (10) days prior to the date of the proposed payment and not less than ten (10) days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first class, postage prepaid, to
each Holder of a Security at the address of such Holder as it appears in the Securities Register not less than ten (10) days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered on such Special Record Date; or 
  
 (ii) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed and, upon such notice as may be required by such exchange (or by the Trustee if the Securities are not listed), if,
after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such payment shall be deemed practicable by the Trustee. 
  
 (d) Payments of interest on the Securities shall include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for
the Securities shall be computed and paid on the basis of a 360-day year and the actual number of days elapsed in the relevant interest period. 
  

 23 

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

 
 (f) Subject to the foregoing provisions of this Section 3.1, each
Security delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security. 
  
 Section 3.2. Denominations. 
  
 The Securities shall be in registered form without coupons and shall be
issuable in minimum denominations of $100,000 and any integral multiple of $1,000 in excess thereof. 
  
 Section 3.3. Execution, Authentication, Delivery and Dating. 
  
 (a) At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities
in an aggregate principal amount (including all then Outstanding Securities) not in excess of Thirty Seven Million Three Hundred Eighty Thousand Dollars ($37,380,000) executed by the Company to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. In authenticating such Securities, and accepting the additional responsibilities under
this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and shall be fully protected in relying upon: 
  
 (i) a copy of any Board Resolution relating thereto; and 
  
 (ii) an Opinion of Counsel stating that: (1) such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute, and the Indenture constitutes, valid and legally binding obligations of the Company, each enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles; (2) the Securities have
been duly authorized and executed by the Company and have been delivered to the Trustee for 
  

 24 

 authentication in accordance with this Indenture; (3) the Securities are not required to be registered
under the Securities Act; and (4) the Indenture is not required to be qualified under the Trust Indenture Act. 
  
 (b) The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive Officer,
its President or one of its Vice Presidents. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

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

Section 3.4. Global Securities. 
  
 (a) Upon the election of the Holder after the Original Issue Date, which election need not be in writing, the Securities owned by such Holder shall be
issued in the form of one or more Global Securities registered in the name of the Depositary or its nominee. Each Global Security issued under this Indenture shall be registered in the name of the Depositary designated by the Company for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture. 
  
 (b) Notwithstanding any other provision in this Indenture, no Global Security
may be exchanged in whole or in part for registered Securities, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (i)
such Depositary advises the Trustee and the Company in writing that such Depositary is no longer willing or able to properly discharge its responsibilities as Depositary with respect to such Global Security, and no qualified successor is appointed
by the Company within ninety (90) days of receipt by the Company of such notice, (ii) such Depositary ceases to be a clearing agency registered under the Exchange Act and no successor is appointed by the Company within ninety (90) days after
obtaining knowledge of such event, (iii) the Company executes and delivers to the Trustee a Company Order stating that the Company elects to terminate the book-entry system through the Depositary or (iv) an Event of Default shall have occurred and
be continuing. Upon the occurrence of any event specified in clause (i), (ii), (iii) or (iv) above, the Trustee shall notify the Depositary and instruct the 
  

 25 

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

  
 (d) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof. 
  
 (e) Securities distributed to holders of Book-Entry Preferred Securities (as defined in the applicable Trust Agreement) upon the dissolution of the Trust shall be distributed in the form of one or more Global
Securities registered in the name of a Depositary or its nominee, and deposited with the Securities Registrar, as custodian for such Depositary, or with such Depositary, for credit by the Depositary to the respective accounts of the beneficial
owners of the Securities represented thereby (or such other accounts as they may direct). Securities distributed to holders of Preferred Securities other than Book-Entry Preferred Securities upon the dissolution of the Trust shall not be issued in
the form of a Global Security or any other form intended to facilitate book-entry trading in beneficial interests in such Securities. 
  
 (f) The Depositary or its nominee, as the registered owner of a Global Security, shall be the Holder of such Global Security for all purposes under this
Indenture and the Securities, and owners of beneficial interests in a Global Security shall hold such interests pursuant to the Applicable Depositary Procedures. Accordingly, any such owner’s beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through, records maintained by the Depositary or its nominee or its Depositary Participants. The Securities Registrar and the Trustee shall be entitled to deal with the
Depositary for all purposes of this Indenture relating to a Global Security (including the payment of principal and interest 
  

 26 

 thereon and the giving of instructions or directions by owners of beneficial interests therein and the giving of notices)
as the sole Holder of the Security and shall have no obligations to the owners of beneficial interests therein. Neither the Trustee nor the Securities Registrar shall have any liability in respect of any transfers effected by the Depositary.

  
 (g) The rights of owners of beneficial interests in a Global
Security shall be exercised only through the Depositary and shall be limited to those established by law and agreements between such owners and the Depositary and/or its Depositary Participants. 
  
 (h) No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the owner of such Global Security
for all purposes whatsoever. None of the Company, the Trustee nor any agent of the Company or the Trustee will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership
interests of a Global Security or maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other authorization furnished by a Depositary or impair, as between a Depositary and such holders of beneficial interests, the operation of customary practices governing the
exercise of the rights of the Depositary (or its nominee) as Holder of any Security. 
  
 Section 3.5. Registration, Transfer and Exchange Generally. 
  
 (a) The Trustee shall cause to be kept at the Corporate Trust Office a register (the “Securities Register”) in which the registrar and
transfer agent with respect to the Securities (the “Securities Registrar”), subject to such reasonable regulations as it may prescribe, shall provide for the registration of Securities and of transfers and exchanges of Securities.
The Trustee shall at all times also be the Securities Registrar. The provisions of Article VI shall apply to the Trustee in its role as Securities Registrar. 
  
 (b) Subject to compliance with Section 2.2(b), upon surrender for registration of transfer of any Security at the
offices or agencies of the Company designated for that purpose the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized
denominations of like tenor and aggregate principal amount. 
  
 (c) At the option of the Holder, Securities may be exchanged for other Securities of any authorized denominations, of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities that the Holder making the exchange is entitled to receive. 
  
 (d) All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such transfer or exchange. 
  

 27 

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

  
 (f) No service charge shall be made to a Holder for any
transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Securities. 
  
 (g) Neither the Company nor the Trustee shall be required pursuant to the
provisions of this Section 3.5 (g): (i) to issue, register the transfer of or exchange any Security during a period beginning at the opening of business fifteen (15) days before the day of selection for redemption of Securities pursuant to
Article XI and ending at the close of business on the day of mailing of the notice of redemption or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except, in the case of any such
Security to be redeemed in part, any portion thereof not to be redeemed. 
  
 (h) The Company shall designate an office or offices or agency or agencies where Securities may be surrendered for registration or transfer or exchange. The Company initially designates the Corporate Trust Office as
its office and agency for such purposes. The Company shall give prompt written notice to the Trustee and to the Holders of any change in the location of any such office or agency. 
  
 (i) The Securities may only be transferred to a “Qualified Purchaser” as such term is defined in Section 2(a)(51)
of the Investment Company Act. 
  
 (j) Neither the Trustee nor the
Securities Registrar shall be responsible for ascertaining whether any transfer hereunder complies with the registration provisions of or any exemptions from the Securities Act, applicable state securities laws or the applicable laws of any other
jurisdiction, ERISA, the United States Internal Revenue Code of 1986, as amended, or the Investment Company Act; provided, that if a certificate is specifically required by the express terms of this Section 3.5 to be delivered to the Trustee or the
Securities Registrar by a Holder or transferee of a Security, the Trustee and the Securities Registrar shall be under a duty to receive and examine the same to determine whether or not the certificate substantially conforms on its face to the
requirements of this Indenture and shall promptly notify the party delivering the same if such certificate does not comply with such terms. 
  
 Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities. 
  
 (a) If any mutilated Security is surrendered to the Trustee together with such security or indemnity as may be required by
the Trustee to save the Company and the Trustee harmless, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of like tenor and aggregate principal amount and bearing a number not
contemporaneously outstanding. 
  
 (b) If there shall be delivered
to the Trustee (i) evidence to its satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required 
  

 28 

 by it to save each of the Company and the Trustee harmless, then, in the absence of notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company shall execute and upon its written request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and aggregate principal amount as such destroyed, lost or stolen Security, and bearing a number not contemporaneously outstanding. 
  
 (c) If any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security. 
  
 (d) Upon the
issuance of any new Security under this Section 3.6, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. 
  
 (e) Every new
Security issued pursuant to this Section 3.6 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. 
  
 (f) The provisions of this Section 3.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. 
  
 Section 3.7. Persons Deemed Owners. 
  
 The Company, the Trustee and any agent of the Company or the Trustee shall treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any interest on such Security and for all other purposes whatsoever, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to
the contrary. 
  
 Section 3.8. Cancellation. 
  
 All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such Securities and Securities surrendered directly to the Trustee for any such purpose shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 3.8, except as expressly permitted by this Indenture. All canceled Securities shall be retained or disposed of by the Trustee
in accordance with its customary practices and the Trustee shall deliver to the Company a certificate of such disposition. 
  

 29 

 Section 3.9. Deferrals of Interest Payment Dates. 
  
 (a) So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term of the Security, to defer the payment of interest on the Securities for a period of up to twenty (20) consecutive quarterly interest payment periods (each such period,
an “Extension Period”), during which Extension Period(s), the Company shall have the right to make no payments or partial payments of interest on any Interest Payment Date (except any Additional Tax Sums that otherwise may be
due and payable). No Extension Period shall end on a date other than an Interest Payment Date and no Extension Period shall extend beyond the Stated Maturity of the principal of the Securities. No interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest that would otherwise have been due and payable during such Extension Period shall bear Additional Interest (to the extent payment of such interest would be legally
enforceable) at the rate equal to a variable rate equal to LIBOR plus 3.10% per annum compounded quarterly, from the dates on which amounts would have otherwise been due and payable until paid or until funds for the payment thereof have been made
available for payment. At the end of any such Extension Period, the Company shall pay all interest then accrued and unpaid on the Securities together with such Additional Interest. Prior to the termination of any such Extension Period, the Company
may extend such Extension Period and further defer the payment of interest; provided, that (i) all such previous and further extensions comprising such Extension Period do not exceed twenty (20) quarterly interest payment periods, (ii) no
Extension Period shall end on a date other than an Interest Payment Date and (iii) no Extension Period shall extend beyond the Stated Maturity of the principal of the Securities. Upon the termination of any such Extension Period and upon the payment
of all accrued and unpaid interest and any Additional Interest then due on any Interest Payment Date, the Company may elect to begin a new Extension Period; provided, that (i) such Extension Period does not exceed twenty (20) quarterly
interest payment periods, (ii) no Extension Period shall end on a date other than an Interest Payment Date and (iii) no Extension Period shall extend beyond the Stated Maturity of the principal of the Securities. The Company shall give the Holders
of the Securities and the Trustee written notice of its election to begin any such Extension Period at least one Business Day prior to the next succeeding Interest Payment Date on which interest on the Securities would be payable but for such
deferral or, so long as any Securities are held by the Trust, at least one Business Day prior to the earlier of (i) the next succeeding date on which Distributions on the Preferred Securities of such Trust would be payable but for such deferral and
(ii) the date on which the Property Trustee of such Trust is required to give notice to any securities exchange or other applicable self-regulatory organization or to holders of such Preferred Securities of the record date for the payment of such
Distributions. 
  
 (b) In connection with any such Extension
Period, the Company shall be subject to the restrictions set forth in Section 10.6(a). 
  
 Section 3.10. Reserved. 
  
 Section 3.11. Agreed Tax Treatment. 
  
 Each
Security issued hereunder shall provide that the Company and, by its acceptance or acquisition of a Security or a beneficial interest therein, the Holder of, and any Person that acquires a direct or indirect beneficial interest in, such Security,
intend and agree to treat such 
  

 30 

 Security as indebtedness of the Company for United States Federal, state and local tax purposes and to treat the
Preferred Securities (including but not limited to all payments and proceeds with respect to the Preferred Securities) as an undivided beneficial ownership interest in the Securities (and any other Trust property) (and payments and proceeds
therefrom, respectively) for United States Federal, state and local tax purposes. The provisions of this Indenture shall be interpreted to further this intention and agreement of the parties. 
  
 Section 3.12. CUSIP Numbers. 
  
 The Company in issuing the Securities may use “CUSIP” numbers (if
then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption and other similar or related materials as a convenience to Holders; provided, that any such notice or other materials may state that
no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of redemption or other materials and that reliance may be placed only on the other identification numbers printed on
the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. 
  
 ARTICLE IV 
  
 SATISFACTION AND DISCHARGE 
  
 Section 4.1.
Satisfaction and Discharge of Indenture. 
  
 This
Indenture shall, upon Company Request, cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for and as otherwise provided in this Section 4.1) and the
Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when 
  
 (a) either 
  
 (i) all Securities theretofore authenticated and delivered (other than (A) Securities that have been mutilated, destroyed, lost or stolen
and that have been replaced or paid as provided in Section 3.6 and (B) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust as provided in Section 10.2) have been delivered to the Trustee for cancellation; or 
  
 (ii) all such Securities not theretofore delivered to the Trustee for cancellation 
  
 (A) have become due and payable, or 
  
 (B) will become due and payable at their Stated Maturity
within one year of the date of deposit, or 
  
 (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, 
  

 31 

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

  
 (b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and 
  
 (c) the Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. 
  
 Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 6.6, the obligations of the Company to any Authenticating Agent under Section 6.11 and, if money shall have been deposited with the Trustee pursuant to subclause (a)(ii) of this Section 4.1,
the obligations of the Trustee under Section 4.2 and Section 10.2(e) shall survive. 
  
 Section 4.2. Application of Trust Money. 
  
 Subject to the provisions of Section 10.2(e), all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Securities and this Indenture, to the payment in accordance with Section 3.1, either directly or through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest (including any Additional Interest) for the payment of which such money or obligations have been deposited with or received by the Trustee.
Moneys held by the Trustee under this Section 4.2 shall not be subject to the claims of holders of Senior Debt under Article XII. 
  
 ARTICLE V 
  
 REMEDIES 
  
 Section 5.1. Events of Default. 
  
 “Event of Default” means, wherever used herein with respect to the Securities, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): 
  
 (a) default in the payment of any interest upon any Security, including any Additional Interest in respect thereof, when it becomes due and payable, and
continuance of such default for a period of thirty (30) days (subject to the deferral of any due date in the case of an Extension Period); or 
  

 32 

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

  
 (c) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture and continuance of such default or breach for a period of thirty (30) days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least twenty five percent (25%) in aggregate principal amount of the Outstanding Securities a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder; 
  
 (d) the entry by a court having
jurisdiction in the premises of a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any
applicable Federal or state bankruptcy, insolvency, reorganization or other similar law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of sixty (60) consecutive days; 
  
 (e) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the Company to the institution of bankruptcy or insolvency proceedings against it, or the filing by the Company of a petition or answer or consent seeking reorganization or relief under any applicable Federal
or state bankruptcy, insolvency, reorganization or other similar law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due and its
willingness to be adjudicated a bankrupt or insolvent, or the taking of corporate action by the Company in furtherance of any such action; or 
  
 (f) the Trust shall have voluntarily or involuntarily liquidated, dissolved, wound-up its business or otherwise terminated its existence, except in
connection with (1) the distribution of the Securities to holders of the Preferred Securities in liquidation of their interests in the Trust, (2) the redemption of all of the outstanding Preferred Securities or (3) certain mergers, consolidations or
amalgamations, each as and to the extent permitted by the Trust Agreement. 
  
 Section 5.2. Acceleration of Maturity; Rescission and Annulment. 
  
 (a) If an Event of Default occurs and is continuing, then and in every such case the Trustee or the Holders of not less than twenty five percent (25%) in
aggregate principal amount 
  

 33 

 of the Outstanding Securities may declare the principal amount of all the Securities to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by Holders), provided, that if, upon an Event of Default, the Trustee or the Holders of not less than twenty five percent (25%) in principal amount of the Outstanding Securities fail
to declare the principal of all the Outstanding Securities to be immediately due and payable, the holders of at least twenty five percent (25%) in aggregate Liquidation Amount of the Preferred Securities then outstanding shall have the right to make
such declaration by a notice in writing to the Property Trustee, the Company and the Trustee; and upon any such declaration the principal amount of and the accrued interest (including any Additional Interest) on all the Securities shall become
immediately due and payable. 
  
 (b) At any time after such a
declaration of acceleration with respect to Securities has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article V, the Holders of a majority in
aggregate principal amount of the Outstanding Securities, by written notice to the Indenture Trustee, or the holders of a majority in aggregate Liquidation Amount of the Preferred Securities, by written notice to the Property Trustee, the Company
and the Trustee, may rescind and annul such declaration and its consequences if: 
  
 (i) the Company has paid or deposited with the Trustee a sum sufficient to pay: 
  
 (A) all overdue installments of interest on all Securities,

  
 (B) any accrued Additional Interest on all
Securities, 
  
 (C) the principal of and any
premium on any Securities that have become due otherwise than by such declaration of acceleration and interest (including any Additional Interest) thereon at the rate borne by the Securities, and 
  
 (D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the Trustee, the Property Trustee and their agents and counsel; and 
  
 (ii) all Events of Default with respect to Securities, other than the non-payment of the principal of Securities that has become due
solely by such acceleration, have been cured or waived as provided in Section 5.13; 
  
 provided, that if the Holders of such Securities fail to annul such declaration and waive such default, the holders of not less than a majority in aggregate Liquidation Amount of the Preferred Securities then
outstanding shall also have the right to rescind and annul such declaration and its consequences by written notice to the Property Trustee, the Company and the Trustee, subject to the satisfaction of the conditions set forth in paragraph (b) of this
Section 5.2. No such rescission shall affect any subsequent default or impair any right consequent thereon. 
  

 34 

 Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee. 
  
 (a) The Company covenants that if: 
  
 (i) default is made in the payment of any installment of
interest (including any Additional Interest) on any Security when such interest becomes due and payable and such default continues for a period of thirty (30) days, or 
  
 (ii) default is made in the payment of the principal of and any premium on any Security at the Maturity
thereof, 
  
 the Company will, upon demand of the Trustee, pay to the Trustee, for
the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest (including any Additional Interest) and, in addition thereto, all amounts owing the Trustee under
Section 6.6. 
  
 (b) If the Company fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, and may prosecute such proceeding to judgment or final decree,
and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the
Securities, wherever situated. 
  
 (c) If an Event of Default with
respect to Securities occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. 
  
 Section 5.4. Trustee May File Proofs of Claim. 
  
 In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or similar judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in
such proceeding or otherwise, to take any and all actions authorized hereunder in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to first pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts owing the Trustee, any predecessor Trustee and other Persons under Section 6.6. 
  

 35 

 Section 5.5. Trustee May Enforce Claim Without Possession of Securities. 
  
 All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of
an express trust, and any recovery of judgment shall, subject to Article XII and after provision for the payment of all the amounts owing the Trustee, any predecessor Trustee and other Persons under Section 6.6, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has been recovered. 
  
 Section 5.6. Application of Money Collected. 
  
 Any money or property collected or to be applied by the Trustee with respect to the Securities pursuant to this Article V shall be applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money or property on account of principal or any premium or interest (including any Additional Interest), upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid: 
  
 FIRST: To the payment of all
amounts due the Trustee, any predecessor Trustee and other Persons under Section 6.6; 
  
 SECOND: To the payment of all Senior Debt of the Company if and to the extent required by Article XII; 
  
 THIRD: Subject to Article XII, to the payment of the amounts then due and unpaid upon the Securities for principal and any premium and interest
(including any Additional Interest) in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for principal and any
premium and interest (including any Additional Interest), respectively; and 
  
 FOURTH: The balance, if any, to the Person or Persons entitled thereto. 
  
 Section 5.7. Limitation on Suits. 
  
 Subject to Section 5.8, no Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a custodian, receiver, assignee, trustee, liquidator, sequestrator (or other similar official) or for any other remedy hereunder, unless: 
  
 (a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the
Securities; 
  
 (b) the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; 
  
 (c) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with such request; 
  

 36 

 (d) the Trustee after its receipt of such notice, request and offer of indemnity has failed to institute
any such proceeding for sixty (60) days; and 
  
 (e) no direction
inconsistent with such written request has been given to the Trustee during such sixty (60)-day period by the Holders of a majority in aggregate principal amount of the Outstanding Securities; 
  
 it being understood and intended that no one or more of such Holders shall have any right in
any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Securities, or to obtain or to seek to obtain priority or preference over any other of
such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders. 
  
 Section 5.8. Unconditional Right of Holders to Receive Principal, Premium, if any, and Interest; Direct Action by Holders of Preferred Securities.

  
 Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium on such Security at its Maturity and payment of interest (including any Additional Interest) on such Security
when due and payable and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. Any registered holder of the Preferred Securities shall have the right, upon the occurrence
of an Event of Default described in Section 5.1(a) or Section 5.1(b), to institute a suit directly against the Company for enforcement of payment to such holder of principal of and any premium and interest (including any Additional
Interest) on the Securities having a principal amount equal to the aggregate Liquidation Amount of the Preferred Securities held by such holder. 
  
 Section 5.9. Restoration of Rights and Remedies. 
  
 If the Trustee, any Holder or any holder of Preferred Securities has instituted any proceeding to enforce any right or remedy under this Indenture and
such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee, such Holder or such holder of Preferred Securities, then and in every such case the Company, the Trustee, such Holders and such
holder of Preferred Securities shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee, such Holder and such holder of
Preferred Securities shall continue as though no such proceeding had been instituted. 
  
 Section 5.10. Rights and Remedies Cumulative. 
  
 Except as otherwise provided in Section 3.6(f), no right or remedy herein conferred upon or reserved to the Trustee or the Holders is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder,
or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. 
  

 37 

 Section 5.11. Delay or Omission Not Waiver. 
  
 No delay or omission of the Trustee, any Holder of any Securities or any
holder of any Preferred Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Trustee or to the Holders and the right and remedy given to the holders of Preferred Securities by Section 5.8 may be exercised from time to time, and as often as may be deemed expedient, by the Trustee,
the Holders or the holders of Preferred Securities, as the case may be. 
  
 Section 5.12. Control by Holders. 
  
 The Holders
of not less than a majority in aggregate principal amount of the Outstanding Securities (or, as the case may be, the holders of a majority in aggregate Liquidation Amount of Preferred Securities) shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided, that: 
  
 (a) such direction shall not be in conflict with any rule of law or with this Indenture, 
  
 (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction, and

  
 (c) subject to the provisions of Section 6.2, the
Trustee shall have the right to decline to follow such direction if a Responsible Officer or Officers of the Trustee shall, in good faith, reasonably determine that the proceeding so directed would be unjustly prejudicial to the Holders not joining
in any such direction or would involve the Trustee in personal liability. 
  
 Section 5.13. Waiver of Past Defaults. 
  
 (a) The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities or the holders of not less than a majority in aggregate Liquidation Amount of the Preferred Securities may waive
any past Event of Default hereunder and its consequences except an Event of Default: 
  
 (i) in the payment of the principal of or any premium or interest (including any Additional Interest) on any Security (unless such Event
of Default has been cured and the Company has paid to or deposited with the Trustee a sum sufficient to pay all installments of interest (including any Additional Interest) due and past due and all principal of and any premium on all Securities due
otherwise than by acceleration), or 
  
 (ii) in
respect of a covenant or provision hereof that under Article IX cannot be modified or amended without the consent of each Holder of any Outstanding Security. 
  
 (b) Any such waiver shall be deemed to be on behalf of the Holders of all the Securities or, in the case of a waiver by
holders of Preferred Securities issued by such Trust, by all holders of Preferred Securities. 
  

 38 

 (c) Upon any such waiver, such Event of Default shall cease to exist and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Event of Default or impair any right consequent thereon. 
  
 Section 5.14. Undertaking for Costs. 
  
 All parties to this Indenture agree, and each Holder of any Security by his
or her acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted
by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any
party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.14 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more than ten percent (10%) in aggregate principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of the payment of the
principal of or any premium on the Security after the Stated Maturity or any interest (including any Additional Interest) on any Security after it is due and payable. 
  
 Section 5.15. Waiver of Usury, Stay or Extension Laws. 
  
 The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted. 
  
 ARTICLE VI 
  
 THE TRUSTEE 
  
 Section 6.1. Corporate Trustee Required. 
  
 There shall at all times be a Trustee hereunder with respect to the
Securities. The Trustee shall be a corporation organized and doing business under the laws of the United States or of any state thereof, authorized to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or state authority and having an office within the United States. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of such supervising or
examining authority, then, for the purposes of this Section 6.1, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.1, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI. 
  

 39 

 Section 6.2. Certain Duties and Responsibilities. 
  
 Except during the continuance of an Event of Default: 
  
 (i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 
  

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; provided, that in the case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they substantially conform on their face to the requirements of this Indenture. 
  
 (b) If an Event of Default known to the Trustee has occurred and is
continuing, the Trustee shall, prior to the receipt of directions, if any, from the Holders of at least a majority in aggregate principal amount of the Outstanding Securities (or, if applicable, from the holders of at least a majority in aggregate
Liquidation Amount of Preferred Securities), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the
conduct of such person’s own affairs. 
  
 (c) Notwithstanding
the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 6.2. To the extent that, at law or in equity, the Trustee has duties and liabilities relating to
the Holders, the Trustee shall not be liable to any Holder or any holder of Preferred Securities for the Trustee’s good faith reliance on the provisions of this Indenture. The provisions of this Indenture, to the extent that they restrict the
duties and liabilities of the Trustee otherwise existing at law or in equity, are agreed by the Company and the Holders and the holders of Preferred Securities to replace such other duties and liabilities of the Trustee. 
  
 (d) No provisions of this Indenture shall be construed to relieve the Trustee
from liability with respect to matters that are within the authority of the Trustee under this Indenture for its own negligent action, negligent failure to act or willful misconduct, except that: 
  
 (i) the Trustee shall not be liable for any error or
judgment made in good faith by an authorized officer of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; 
  

 40 

 (ii) the Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of at least a majority in aggregate principal amount of the Outstanding Securities (or, as the case may be, the holders of a majority in aggregate Liquidation Amount of
Preferred Securities) relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee under this Indenture; and 
  
 (iii) the Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing
with the Company and money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. 
  
 (e) If at any time the Trustee hereunder is not the same Person as the Property Trustee under the Trust Agreement: 
  
 (i) whenever a reference is made herein to the dissolution,
termination or liquidation of the Trust, the Trustee shall be entitled to assume that no such dissolution, termination, or liquidation has occurred so long as the Securities are or continue to be registered in the name of such Property Trustee, and
the Trustee shall be charged with notice or knowledge of such dissolution, termination or liquidation only upon written notice thereof given to the Trustee by the Depositor under the Trust Agreement; and 
  
 (ii) the Trustee shall not be charged with notice or
knowledge that any Person is a holder of Preferred Securities or Common Securities issued by the Trust or whether any group of holders of Preferred Securities constitutes any specified percentage of all outstanding Preferred Securities for any
purpose under this Indenture, unless and until the Trustee is furnished with a list of holders by such Property Trustee and the aggregate Liquidation Amount of the Preferred Securities then outstanding. The Trustee may conclusively rely and shall be
protected in relying on such list. 
  
 (f) Notwithstanding
Section 1.10, the Trustee shall not, and shall not be deemed to, owe any fiduciary duty to the holders of any of the Trust Securities issued by the Trust and shall not be liable to any such holder (other than for the willful misconduct or
negligence of the Trustee) if the Trustee in good faith (i) pays over or distributes to a registered Holder of the Securities or to the Company or to any other Person, cash, property or securities to which such holders of such Trust Securities shall
be entitled or (ii) takes any action or omits to take any action at the request of the Holder of such Securities. Nothing in this paragraph shall affect the obligation of any other such Person to hold such payment for the benefit of, and to pay such
amount over to, such holders of Preferred Securities or Common Securities or their representatives. 
  
 Section 6.3. Notice of Defaults. 
  
 Within ninety (90) days after the occurrence of any default actually known to the Trustee, the Trustee shall give the Holders notice of such default
unless such default shall have been cured or waived; provided, that except in the case of a default in the payment of the principal of or any premium or interest on any Securities, the Trustee shall be fully protected in withholding the
notice if and so long as the board of directors, the executive committee or a trust committee 
  

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 of directors and/or Responsible Officers of the Trustee in good faith determines that withholding the notice is in the
interest of holders of Securities; and provided, further, that in the case of any default of the character specified in Section 5.1(c), no such notice to Holders shall be given until at least thirty (30) days after the
occurrence thereof. For the purpose of this Section 6.3, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default. 
  
 Section 6.4. Certain Rights of Trustee. 
  
 Subject to the provisions of Section 6.2: 
  
 (a) the Trustee may conclusively rely and shall be fully protected in acting
or refraining from acting in good faith and in accordance with the terms hereof upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note or other paper or document
believed by it to be genuine and to have been signed or presented by the proper party or parties; 
  
 (b) if (i) in performing its duties under this Indenture the Trustee is required to decide between alternative courses of action, (ii) in construing any
of the provisions of this Indenture the Trustee finds ambiguous or inconsistent with any other provisions contained herein or (iii) the Trustee is unsure of the application of any provision of this Indenture, then, except as to any matter as to
which the Holders are entitled to decide under the terms of this Indenture, the Trustee shall deliver a notice to the Company requesting the Company’s written instruction as to the course of action to be taken and the Trustee shall take such
action, or refrain from taking such action, as the Trustee shall be instructed in writing to take, or to refrain from taking, by the Company; provided, that if the Trustee does not receive such instructions from the Company within ten
Business Days after it has delivered such notice or such reasonably shorter period of time set forth in such notice the Trustee may, but shall be under no duty to, take such action, or refrain from taking such action, as the Trustee shall deem
advisable and in the best interests of the Holders, in which event the Trustee shall have no liability except for its own negligence, bad faith or willful misconduct; 
  
 (c) any request or direction of the Company shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution; 
  
 (d) the Trustee may consult with counsel (which counsel may be counsel to the Trustee, the Company or any of its Affiliates, and may include any of its employees) and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; 
  
 (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders or any holder of Preferred Securities pursuant to this Indenture, unless such Holders (or such holders of Preferred Securities) shall have offered to the Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction, including reasonable advances as may be requested by
the Trustee; 
  

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 (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, indenture, note or other paper or document, but the Trustee in its discretion may make such inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make such inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney; 
  
 (g) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, attorneys, custodians or nominees and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney, custodian or nominee appointed with
due care by it hereunder; 
  
 (h) whenever in the administration
of this Indenture the Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action with respect to enforcing any remedy or right hereunder, the Trustees (i) may request instructions
from the Holders (which instructions may only be given by the Holders of the same aggregate principal amount of Outstanding Securities as would be entitled to direct the Trustee under this Indenture in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such action until such instructions are received and (iii) shall be protected in acting in accordance with such instructions; 
  
 (i) except as otherwise expressly provided by this Indenture, the Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Indenture; 
  
 (j) without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with any bankruptcy, insolvency or other proceeding referred to in clauses (d) or
(e) of the definition of Event of Default, such expenses (including legal fees and expenses of its agents and counsel) and the compensation for such services are intended to constitute expenses of administration under any bankruptcy laws or law
relating to creditors rights generally; 
  
 (k) whenever in the
administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in
the absence of bad faith on its part, conclusively rely upon an Officers’ Certificate addressing such matter, which, upon receipt of such request, shall be promptly delivered by the Company; 
  
 (l) the Trustee shall not be charged with knowledge of any Event of Default
unless either (i) a Responsible Officer of the Trustee shall have actual knowledge or (ii) the Trustee shall have received written notice thereof from the Company or a Holder; and 
  
 (m) in the event that the Trustee is also acting as Paying Agent, Authenticating Agent or Securities Registrar hereunder,
the rights and protections afforded to the Trustee pursuant to this Article VI shall also be afforded such Paying Agent, Authenticating Agent, or Securities Registrar. 
  

 43 

 Section 6.5. May Hold Securities. 
  
 The Trustee, any Authenticating Agent, any Paying Agent, any Securities Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Securities Registrar or such other
agent. 
  
 Section 6.6. Compensation; Reimbursement;
Indemnity. 
  
 (a) The Company agrees: 
  
 (i) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder in such amounts as the Company and the Trustee shall agree from time to time (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an
express trust); 
  
 (ii) to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be attributable to its negligence, bad faith or willful misconduct; and 
  
 (iii) to the fullest extent permitted by applicable law, to indemnify the Trustee and its Affiliates, and their officers, directors,
shareholders, agents, representatives and employees for, and to hold them harmless against, any loss, damage, liability, tax (other than income, franchise or other taxes imposed on amounts paid pursuant to (i) or (ii) hereof), penalty, expense or
claim of any kind or nature whatsoever incurred without negligence, bad faith or willful misconduct on its part arising out of or in connection with the acceptance or administration of this trust or the performance of the Trustee’s duties
hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. 
  
 (b) To secure the Company’s payment obligations in this Section 6.6, the Company hereby grants and pledges to
the Trustee and the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, other than money or property held in trust to pay principal and interest on particular Securities. Such lien shall
survive the satisfaction and discharge of this Indenture or the resignation or removal of the Trustee. 
  
 (c) The obligations of the Company under this Section 6.6 shall survive the satisfaction and discharge of this Indenture and the earlier
resignation or removal of the Trustee. 
  
 (d) In no event shall
the Trustee be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action. 
  

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 (e) In no event shall the Trustee be liable for any failure or delay in the performance of its
obligations hereunder because of circumstances beyond its control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo, government action, including any laws, ordinances,
regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Indenture. 
  
 Section 6.7. Resignation and Removal; Appointment of Successor. 
  
 (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article VI
shall become effective until the acceptance of appointment by the successor Trustee under Section 6.8. 
  
 (b) The Trustee may resign at any time by giving written notice thereof to the Company. 
  
 (c) Unless an Event of Default shall have occurred and be continuing, the Trustee may be removed at any time by the Company
by a Board Resolution. If an Event of Default shall have occurred and be continuing, the Trustee may be removed by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities, delivered to the Trustee and to the
Company. 
  
 (d) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for any reason, at a time when no Event of Default shall have occurred and be continuing, the Company, by a Board Resolution, shall promptly appoint a successor Trustee, and
such successor Trustee and the retiring Trustee shall comply with the applicable requirements of Section 6.8. If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any
reason, at a time when an Event of Default shall have occurred and be continuing, the Holders, by Act of the Holders of a majority in aggregate principal amount of the Outstanding Securities, shall promptly appoint a successor Trustee, and such
successor Trustee and the retiring Trustee shall comply with the applicable requirements of Section 6.8. If no successor Trustee shall have been so appointed by the Company or the Holders and accepted appointment within sixty (60) days after
the giving of a notice of resignation by the Trustee or the removal of the Trustee in the manner required by Section 6.8, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of such Holder and all
others similarly situated, and any resigning Trustee may, at the expense of the Company, petition any court of competent jurisdiction for the appointment of a successor Trustee. 
  
 (e) The Company shall give notice to all Holders in the manner provided in Section 1.6 of each resignation and each
removal of the Trustee and each appointment of a successor Trustee. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. 
  
 Section 6.8. Acceptance of Appointment by Successor. 
  
 (a) In case of the appointment hereunder of a successor Trustee, each successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of 
  

 45 

 the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. 
  
 (b) Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all rights, powers and trusts referred to in paragraph (a) of this Section 6.8. 
  
 (c) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article VI. 
  
 Section
6.9. Merger, Conversion, Consolidation or Succession to Business. 
  
 Any Person into which the Trustee may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any
Person succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto,
provided, that such Person shall be otherwise qualified and eligible under this Article VI. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation or as otherwise provided above in this Section 6.9 to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated, and in case any Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of any predecessor Trustee or in the name of such successor Trustee, and in all cases the certificate of authentication shall have the full force which it is provided
anywhere in the Securities or in this Indenture that the certificate of the Trustee shall have. 
  
 Section 6.10. Not Responsible for Recitals or Issuance of Securities. 
  
 The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be
taken as the statements of the Company, and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the
Securities. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof. 
  
 Section 6.11. Appointment of Authenticating Agent. 
  
 (a) The Trustee may appoint an Authenticating Agent or Agents with respect to the Securities, which shall be authorized to
act on behalf of the Trustee to authenticate Securities issued upon original issue and upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and 
  

 46 

 delivery of Securities by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the
United States of America, or of any State or Territory thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or state authority. If such Authenticating Agent publishes reports of condition at least annually pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section
6.11 the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.11, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section 6.11. 
  
 (b) Any Person into which an Authenticating Agent may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of
an Authenticating Agent shall be the successor Authenticating Agent hereunder, provided such Person shall be otherwise eligible under this Section 6.11, without the execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent. 
  
 (c) An Authenticating
Agent may resign at any time by giving written notice thereof to the Trustee and to the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.11, the Trustee may appoint a
successor Authenticating Agent eligible under the provisions of this Section 6.11, which shall be acceptable to the Company, and shall give notice of such appointment to all Holders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. 
  
 (d) The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under
this Section 6.11 in such amounts as the Company and the Authenticating Agent shall agree from time to time. 
  
 (e) If an appointment of an Authenticating Agent is made pursuant to this Section 6.11, the Securities may have endorsed thereon, an alternative
certificate of authentication in the following form: 
  
 This is one of the
Securities referred to in the within mentioned Indenture. 
  
 Dated: 

 

			
	JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but
solely as Trustee
		
	By:	 	  

	 	 	Authenticating Agent
		
	By:	 	  

	 	 	Authorizing Signatory

  

 47 

 ARTICLE VII 
  
 HOLDER’S LISTS AND REPORTS BY COMPANY 
  
 Section 7.1. Company to Furnish Trustee Names and Addresses of Holders. 
  
 The Company will furnish or cause to be furnished to the Trustee: 
  
 (a) semiannually, on or before June 30 and December 31 of each year, a list,
in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of a date not more than fifteen (15) days prior to the delivery thereof, and 
  
 (b) at such other times as the Trustee may request in writing, within thirty (30) days after the receipt by the Company of
any such request, a list of similar form and content as of a date not more than fifteen (15) days prior to the time such list is furnished, 
  
 in each case to the extent such information is in the possession or control of the Company and has not otherwise been received by the Trustee in its
capacity as Securities Registrar. 
  
 Section 7.2. Preservation
of Information, Communications to Holders. 
  
 (a) The
Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders
received by the Trustee in its capacity as Securities Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished. 
  
 (b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided in the Trust Indenture Act. 
  

 48 

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

 
 Section 7.3. Reports by Company. 
  
 (a) The Company shall furnish to the Holders and to prospective
purchasers of Securities, upon their request, the information required to be furnished pursuant to Rule 144A(d)(4) under the Securities Act. The delivery requirement set forth in the preceding sentence may be satisfied by compliance with Section
7.3(b) hereof. 
  
 (b) The Company shall furnish to
each of (i) the Trustee, (ii) the Holders and to subsequent holders of Securities, (iii) Cohen Bros. & Company, 450 Park, 23rd Floor, New York, NY 10022, Attn: Mitchell Kahn or such other address as designated by Cohen Bros. & Company) and (iv) any beneficial owner of the Securities reasonably identified to the Company (which identification may be made
either by such beneficial owner or by Cohen Bros. & Company), a duly completed and executed certificate substantially and substantively in the form attached hereto as Exhibit A, including the financial statements referenced in such
Exhibit, which certificate and financial statements shall be so furnished by the Company not later than forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Company and not later than ninety (90)
days after the end of each fiscal year of the Company. The delivery requirements under this Section 7.3(b) may be satisfied by compliance with Section 8.16(b) of the Trust Agreement. 
  
 (c) If the Company intends to file its annual and quarterly information with the Securities and Exchange Commission (the
“Commission”) in electronic form pursuant to Regulation S-T of the Commission using the Commission’s Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) system, the Company shall notify the Trustee in
the manner prescribed herein of each such annual and quarterly filing. The Trustee is hereby authorized and directed to access the EDGAR system for purposes of retrieving the financial information so filed. Compliance with the foregoing shall
constitute delivery by the Company of its financial statements to the Trustee in compliance with the provisions of Section 314(a) of the Trust Indenture Act, if applicable. The Trustee shall have no duty to search for or obtain any electronic or
other filings that the Company makes with the Commission, regardless of whether such filings are periodic, supplemental or otherwise. Delivery of reports, information and documents to the Trustee pursuant to this Section 7.3(c) shall be
solely for purposes of compliance with this Section 7.3(c) and, if applicable, with Section 314(a) of the Trust Indenture Act. The Trustee’s receipt of such reports, information and documents shall not constitute notice to it of the
content thereof or any matter determinable from the content thereof, including the Company’s compliance with any of its covenants hereunder, as to which the Trustee is entitled to rely upon Officers’ Certificates. 
  

 49 

 ARTICLE VIII 
  
 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE 
  
 Section 8.1. Company May Consolidate, Etc., Only on Certain Terms. 
  
 The Company shall not consolidate with or merge into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate with or merge into the Company or convey, transfer or lease its properties and assets substantially as an entirety to the Company, unless: 
  
 (a) if the Company shall consolidate with or merge into another Person or
convey, transfer or lease its properties and assets substantially as an entirety to any Person, the entity formed by such consolidation or into which the Company is merged or the Person that acquires by conveyance or transfer, or that leases, the
properties and assets of the Company substantially as an entirety shall be an entity organized and existing under the laws of the United States of America or any State or Territory thereof or the District of Columbia and shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest (including any Additional Interest) on all the
Securities and the performance of every covenant of this Indenture on the part of the Company to be performed or observed; 
  
 (b) immediately after giving effect to such transaction, no Event of Default, and no event that, after notice or lapse of time, or both, would constitute
an Event of Default, shall have happened and be continuing; and 
  
 (c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection
with such transaction, any such supplemental indenture comply with this Article VIII and that all conditions precedent herein provided for relating to such transaction have been complied with; and the Trustee may rely upon such Officers’
Certificate and Opinion of Counsel as conclusive evidence that such transaction complies with this Section 8.1. 
  
 Section 8.2. Successor Company Substituted. 
  
 (a) Upon any consolidation or merger by the Company with or into any other Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section 8.1 and the execution and delivery to the Trustee of the supplemental indenture described in Section 8.1(a), the successor entity formed by such
consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein; and in the event of any such conveyance or transfer, following the execution and delivery of such supplemental indenture, the Company shall be discharged from all obligations and covenants
under the Indenture and the Securities. 
  
 (b) Such successor
Person may cause to be executed, and may issue either in its own name or in the name of the Company, any or all of the Securities issuable hereunder that 
  

 50 

 theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Securities that previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities that such successor Person thereafter shall cause to be executed and delivered to the Trustee on its behalf. All the Securities so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Securities theretofore or thereafter issued in accordance with the terms of this Indenture. 
  
 (c) In case of any such consolidation, merger, sale, conveyance or lease, such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate to reflect such occurrence. 
  
 ARTICLE IX 
  
 SUPPLEMENTAL INDENTURES 
  
 Section 9.1. Supplemental Indentures without Consent of Holders.

  
 Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form reasonably satisfactory to the Trustee, for any of the following purposes: 
  
 (a) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and in the Securities; or 
  
 (b) to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to make
or amend any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the other provisions of this Indenture, provided, that such action pursuant to this clause (b) shall not
adversely affect in any material respect the interests of any Holders or the holders of the Preferred Securities; or 
  
 (c) to add to the covenants, restrictions or obligations of the Company or to add to the Events of Default, provided, that such action pursuant to
this clause (c) shall not adversely affect in any material respect the interests of any Holders or the holders of the Preferred Securities; or 
  
 (d) to modify, eliminate or add to any provisions of the Indenture or the Securities to such extent as shall be necessary to ensure that the Securities
are treated as indebtedness of the Company for United States Federal income tax purposes, provided, that such action pursuant to this clause (d) shall not adversely affect in any material respect the interests of any Holders or the holders of
the Preferred Securities. 
  
 Section 9.2. Supplemental
Indentures with Consent of Holders. 
  
 (a) With the consent
of the Holders of not less than a majority in aggregate principal amount of the Outstanding Securities, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter
into 
  

 51 

 an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities under this Indenture; provided, that no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security, 
  
 (i) change the Stated
Maturity of the principal or any premium of any Security or change the date of payment of any installment of interest (including any Additional Interest) on any Security, or reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof or change the place of payment where, or the coin or currency in which, any Security or interest thereon is payable, or restrict or impair the right to institute suit for the enforcement of any such
payment on or after such date, or 
  
 (ii) reduce
the percentage in aggregate principal amount of the Outstanding Securities, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of compliance with any provision of
this Indenture or of defaults hereunder and their consequences provided for in this Indenture, or 
  
 (iii) modify any of the provisions of this Section 9.2, Section 5.13 or Section 10.7, except to increase any
percentage in aggregate principal amount of the Outstanding Securities, the consent of whose Holders is required for any reason, or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the
Holder of each Security; 
  
 provided, further, that, so long as any
Preferred Securities remain outstanding, no amendment under this Section 9.2 shall be effective until the holders of a majority in Liquidation Amount of the Preferred Securities shall have consented to such amendment; provided,
further, that if the consent of the Holder of each Outstanding Security is required for any amendment under this Indenture, such amendment shall not be effective until the holder of each Outstanding Preferred Security shall have consented to
such amendment. 
  
 (b) It shall not be necessary for any Act of
Holders under this Section 9.2 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. 
  
 Section 9.3. Execution of Supplemental Indentures. 
  
 In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article IX or
the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in conclusively relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this Indenture, and that all conditions precedent herein provided for relating to such action have been complied with. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee’s own rights, duties, indemnities or immunities under this Indenture or otherwise. Copies of the final form of each supplemental indenture shall be delivered by the Trustee at the expense
of the Company to each Holder, and, if the Trustee is the Property Trustee, to each holder of Preferred Securities, promptly after the execution thereof. 
  

 52 

 Section 9.4. Effect of Supplemental Indentures. 
  
 Upon the execution of any supplemental indenture under this Article
IX, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities and every holder of Preferred Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby. 
  
 Section 9.5. Reference in Securities to Supplemental Indentures. 
  
 Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and shall if required by the Company, bear a notation in form approved by the Company as
to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Company, to any such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding Securities. 
  
 ARTICLE X 
  
 COVENANTS 

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

  
 The Company covenants and agrees for the benefit of the
Holders of the Securities that it will duly and punctually pay the principal of and any premium and interest (including any Additional Interest) on the Securities in accordance with the terms of the Securities and this Indenture. As of the date of
this Indenture, the Company represents that it has no present intention to exercise its right under Section 2.11 to defer payments of interest on the Securities. 
  
 Section 10.2. Money for Security Payments to be Held in Trust. 
  
 (a) If the Company shall at any time act as its own Paying Agent with
respect to the Securities, it will, on or before each due date of the principal of and any premium or interest (including any Additional Interest) on the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium or interest (including Additional Interest) so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and will promptly notify the Trustee in writing of
its failure so to act. 
  
 (b) Whenever the Company shall have one
or more Paying Agents, it will, prior to 10:00 a.m., New York City time, on each due date of the principal of or any premium or interest (including any Additional Interest) on any Securities, deposit with a Paying Agent a sum sufficient to pay such
amount, such sum to be held as provided in the Trust Indenture Act and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its failure so to act. 
  

 53 

 (c) The Company will cause each Paying Agent for the Securities other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 10.2, that such Paying Agent will (i) comply with the provisions of this Indenture and the Trust Indenture
Act applicable to it as a Paying Agent and (ii) during the continuance of any default by the Company (or any other obligor upon the Securities) in the making of any payment in respect of the Securities, upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities. 
  
 (d) The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by
Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. 
  
 (e) Any money deposited with the Trustee or any Paying Agent, or then held by the Company in trust for the payment of the principal of and any premium or
interest (including any Additional Interest) on any Security and remaining unclaimed for two years after such principal and any premium or interest has become due and payable shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be paid on Company Request to the Company, or (if then held by the Company) shall (unless otherwise required by mandatory provision of applicable escheat or abandoned or unclaimed property law) be
discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and
all liability of the Company as trustee thereof, shall thereupon cease; provided, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein,
which shall not be less than thirty (30) days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company. 
  
 Section 10.3. Statement as to Compliance. 
  
 The Company shall deliver to the Trustee, within one hundred and twenty (120) days after the end of each fiscal year of the
Company ending after the date hereof, an Officers’ Certificate covering the preceding calendar year, stating whether or not to the knowledge of the signers thereof the Company is in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder), and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may
have knowledge. The delivery requirements of this Section 10.3 may be satisfied by compliance with Section 8.16(a) of the Trust Agreement. 
  

 54 

 Section 10.4. Calculation Agent. 
  
 (a) The Company hereby agrees that for so long as any of the Securities remain Outstanding, there will at all times be an
agent appointed to calculate LIBOR in respect of each Interest Payment Date in accordance with the terms of Schedule A (the “Calculation Agent”). The Company has initially appointed the Property Trustee as Calculation Agent
for purposes of determining LIBOR for each Interest Payment Date. The Calculation Agent may be removed by the Company at any time. So long as the Property Trustee holds any of the Securities, the Calculation Agent shall be the Property Trustee,
except as described in the immediately preceding sentence. If the Calculation Agent is unable or unwilling to act as such or is removed by the Company, the Company will promptly appoint as a replacement Calculation Agent the London office of a
leading bank which is engaged in transactions in Eurodollar deposits in the international Eurodollar market and which does not control or is not controlled by or under common control with the Company or its Affiliates. The Calculation Agent may not
resign its duties without a successor having been duly appointed. 
  
 (b) The Calculation Agent shall be required to agree that, as soon as possible after 11:00 a.m. (London time) on each LIBOR Determination Date (as defined in Schedule A), but in no event later than 11:00 a.m. (London time) on the
Business Day immediately following each LIBOR Determination Date, the Calculation Agent will calculate the interest rate (the Interest Payment shall be rounded to the nearest cent, with half a cent being rounded upwards) for the related Interest
Payment Date, and will communicate such rate and amount to the Company, the Trustee, each Paying Agent and the Depositary. The Calculation Agent will also specify to the Company the quotations upon which the foregoing rates and amounts are based
and, in any event, the Calculation Agent shall notify the Company before 5:00 p.m. (London time) on each LIBOR Determination Date that either: (i) it has determined or is in the process of determining the foregoing rates and amounts or (ii) it has
not determined and is not in the process of determining the foregoing rates and amounts, together with its reasons therefor. The Calculation Agent’s determination of the foregoing rates and amounts for any Interest Payment Date will (in the
absence of manifest error) be final and binding upon all parties. For the sole purpose of calculating the interest rate for the Securities, “Business Day” shall be defined as any day on which dealings in deposits in Dollars are transacted
in the London interbank market. 
  
 Section 10.5. Additional
Tax Sums. 
  
 So long as no Event of Default has occurred and
is continuing, if (a) the Trust is the Holder of all of the Outstanding Securities and (b) a Tax Event described in clause (i) or (iii) in the definition of Tax Event in Section 1.1 hereof has occurred and is continuing, the Company shall pay
to the Trust (and its permitted successors or assigns under the related Trust Agreement) for so long as the Trust (or its permitted successor or assignee) is the registered holder of the Outstanding Securities, such amounts as may be necessary in
order that the amount of Distributions (including any Additional Interest Amount (as defined in the Trust Agreement)) then due and payable by the Trust on the Preferred Securities and Common Securities that at any time remain outstanding in
accordance with the terms thereof shall not be reduced as a result of any Additional Taxes arising from such Tax Event (additional such amounts payable by the Company to the Trust, the “Additional Tax Sums”). Whenever in this
Indenture or the Securities there is a reference in any context to the payment of principal of or interest on the Securities, such mention shall be deemed to include mention of the payments of the Additional Tax Sums 

  

 55 

 
provided for in this Section 10.5 to the extent that, in such context, Additional Tax Sums are, were or would be payable in respect thereof pursuant
to the provisions of this Section 10.5 and express mention of the payment of Additional Tax Sums (if applicable) in any provisions hereof shall not be construed as excluding Additional Tax Sums in those provisions hereof where such express
mention is not made; provided, that the deferral of the payment of interest pursuant to Section 3.9 on the Securities shall not defer the payment of any Additional Tax Sums that may be due and payable. 
  
 Section 10.6. Additional Covenants. 
  
 (a) The Company covenants and agrees with each Holder of Securities that if
an Event of Default shall have occurred and be continuing or the Company shall have given notice of its election to begin an Extension Period with respect to the Securities or such Extension Period, or any extension thereof, shall be continuing, it
shall not (i) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of the Company’s capital stock (for the avoidance of doubt, the term “capital
stock” includes both common stock and preferred stock of the Company), (ii) vote in favor of or permit or otherwise allow any of its subsidiaries to declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to or otherwise retire, any shares of such subsidiaries preferred stock (for the avoidance of doubt, whether such preferred stock is perpetual or otherwise), or (iii) make any payment of principal of or any interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects with or junior in interest to the Securities (other than (A) repurchases, redemptions or other acquisitions of
shares of capital stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants, in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the issuance of capital stock of the Company (or securities convertible into or exercisable for such capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Extension Period, (B) as a result of an exchange or conversion of any class or series of the Company’s capital stock (or any capital stock of a Subsidiary of the Company) for any class or series of the Company’s
capital stock or of any class or series of the Company’s indebtedness for any class or series of the Company’s capital stock, (C) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or exchanged, (D) any declaration of a dividend in connection with any Rights Plan, the issuance of rights, stock or other property under any Rights Plan or the redemption
or repurchase of rights pursuant thereto or (E) any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such stock). 
  
 (b) The Company also covenants with each Holder of Securities (i) to hold, directly or indirectly, one hundred percent (100%) of the Common Securities of the Trust, provided, that any permitted successor of the
Company hereunder may succeed to the Company’s ownership of such Common Securities, (ii) as holder of such Common Securities, not to voluntarily dissolve, wind-up or liquidate the Trust other than (A) in connection with a distribution of the
Securities to the holders of the Preferred Securities in liquidation of the Trust or (B) in connection with certain mergers, consolidations or amalgamations permitted by the Trust Agreement and (iii) to use its 

  

 56 

 
reasonable commercial efforts, consistent with the terms and provisions of the Trust Agreement, to cause the Trust to continue to be taxable as a grantor
trust and not as a corporation for United States Federal income tax purposes. 
  
 (c) The Company also agrees to use its reasonable best efforts to meet the requirements to qualify, effective for the fiscal year ending December 31, 2004 and all future fiscal years, as a real estate investment trust
under the Internal Revenue Code of 1986, as amended. 
  
 Section
10.7. Waiver of Covenants. 
  
 The Company may omit in any
particular instance to comply with any covenant or condition contained in Section 10.6 if, before or after the time for such compliance, the Holders of at least a majority in aggregate principal amount of the Outstanding Securities shall, by
Act of such Holders, and at least a majority of the aggregate Liquidation Amount of the Preferred Securities then outstanding, by consent of such holders, either waive such compliance in such instance or generally waive compliance with such covenant
or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company in respect of any such covenant or
condition shall remain in full force and effect. 
  
 Section 10.8.
Treatment of Securities. 
  
 The Company will treat the
Securities as indebtedness, and the amounts, other than payments of principal, payable in respect of the principal amount of such Securities as interest, for all U.S. federal income tax purposes. All payments in respect of the Securities will be
made free and clear of U.S. withholding tax to any beneficial owner thereof that has provided an Internal Revenue Service Form W-9 or W-8BEN (or any substitute or successor form) establishing its U.S. or non-U.S. status for U.S. federal income tax
purposes, or any other applicable form establishing a complete exemption from U.S. withholding tax. 
  
 ARTICLE XI 
  
 REDEMPTION OF SECURITIES 
  
 Section 11.1. Optional
Redemption. 
  
 The Company may, at its option, on any
Interest Payment Date, on or after March 30, 2010, redeem the Securities in whole at any time or in part from time to time, at a Redemption Price equal to one hundred percent (100%) of the principal amount thereof (or of the redeemed portion
thereof, as applicable), together, in the case of any such redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed as the Redemption Date (the “Optional Redemption Price”).

  
 Section 11.2. Special Event Redemption. 
  
 Prior to March 30, 2010, upon the occurrence and during the continuation of
a Special Event, the Company may, at its option, redeem the Securities, in whole but not in part, at a Redemption Price equal to one hundred seven and one half percent (107.5%) of the principal 

  

 57 

 
amount thereof, together, in the case of any such redemption, with accrued interest, including any Additional Interest, through but excluding the date fixed
as the Redemption Date (the “Special Redemption Price”). 
  
 Section 11.3. Election to Redeem; Notice to Trustee. 
  
 The election of the Company to redeem any Securities, in whole or in part, shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Company, the Company shall, not less
than forty-five (45) days and not more than seventy-five (75) days prior to the Redemption Date (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee and the Property Trustee under the Trust Agreement in writing of such
date and of the principal amount of the Securities to be redeemed and provide the additional information required to be included in the notice or notices contemplated by Section 11.5. In the case of any redemption of Securities, in whole or
in part, (a) prior to the expiration of any restriction on such redemption provided in this Indenture or the Securities or (b) pursuant to an election of the Company which is subject to a condition specified in this Indenture or the Securities, the
Company shall furnish the Trustee with an Officers’ Certificate and an Opinion of Counsel evidencing compliance with such restriction or condition. 
  
 Section 11.4. Selection of Securities to be Redeemed. 
  
 (a) If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected and redeemed on a pro rata basis not
more than sixty (60) days prior to the Redemption Date by the Trustee from the Outstanding Securities not previously called for redemption, provided, that the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. 
  
 (b) The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Security redeemed or
to be redeemed only in part, to the portion of the principal amount of such Security that has been or is to be redeemed. 
  
 (c) The provisions of paragraphs (a) and (b) of this Section 11.4 shall not apply with respect to any redemption affecting only a single Security,
whether such Security is to be redeemed in whole or in part. In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. 
  
 Section 11.5.
Notice of Redemption. 
  
 (a) Notice of redemption shall
be given not later than the thirtieth (30th) day, and not earlier than the sixtieth (60th) day, prior to the Redemption Date to each Holder of Securities to be redeemed, in whole or in part, (unless a shorter notice
shall be satisfactory to the Property Trustee under the related Trust Agreement). 
  

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

 
 (ii) the Redemption Price or, if the Redemption Price
cannot be calculated prior to the time the notice is required to be sent, the estimate of the Redemption Price, as calculated by the Company, together with a statement that it is an estimate and that the actual Redemption Price will be calculated on
the fifth Business Day prior to the Redemption Date (and if an estimate is provided, a further notice shall be sent of the actual Redemption Price on the date that such Redemption Price is calculated); 
  
 (iii) if less than all Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the particular Securities to be redeemed; 
  
 (iv) that on the Redemption Date, the Redemption Price will become due and payable upon each such Security or portion thereof, and that
any interest (including any Additional Interest) on such Security or such portion, as the case may be, shall cease to accrue on and after said date; and 
  
 (v) the place or places where such Securities are to be surrendered for payment of the Redemption Price. 
  
 (c) Notice of redemption of Securities to be redeemed, in whole or in part,
at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company and shall be irrevocable. The notice if mailed in the manner provided above shall be
conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, a failure to give such notice by mail or any defect in the notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any other Security. 
  
 Section 11.6. Deposit of Redemption Price. 
  
 Prior to 10:00 a.m., New York City time, on the Redemption Date specified in the notice of redemption given as provided in Section 11.5, the
Company will deposit with the Trustee or with one or more Paying Agents (or if the Company is acting as its own Paying Agent, the Company will segregate and hold in trust as provided in Section 10.2) an amount of money sufficient to pay the
Redemption Price of, and any accrued interest (including any Additional Interest) on, all the Securities (or portions thereof) that are to be redeemed on that date. 
  
 Section 11.7. Payment of Securities Called for Redemption. 
  
 (a) If any notice of redemption has been given as provided in Section
11.5, the Securities or portion of Securities with respect to which such notice has been given shall become due and payable on the date and at the place or places stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On presentation and surrender of such Securities at a Place of Payment specified in such notice, the Securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable Redemption Price, together with accrued interest (including any Additional Interest) to the Redemption Date. 
  

 59 

 (b) Upon presentation of any Security redeemed in part only, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Security or Securities, of authorized denominations, in aggregate principal amount equal to the unredeemed portion of the Security so presented and having the
same Original Issue Date, Stated Maturity and terms. 
  
 (c) If
any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal of and any premium on such Security shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the
Security. 
  
 ARTICLE XII 
  
 SUBORDINATION OF SECURITIES 
  
 Section 12.1. Securities Subordinate to Senior Debt. 
  
 The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article XII, the payment of the principal of and any premium and interest (including any Additional Interest) on each and
all of the Securities are hereby expressly made subordinate and subject in right of payment to the prior payment in full of all Senior Debt. 
  
 Section 12.2. No Payment When Senior Debt in Default; Payment Over of Proceeds Upon Dissolution, Etc. 
  
 (a) In the event and during the continuation of any default by the Company
in the payment of any principal of or any premium or interest on any Senior Debt (following any grace period, if applicable) when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise, then, upon written notice of such default to the Company by the holders of such Senior Debt or any trustee therefor, unless and until such default shall have been cured or waived or shall have ceased to exist, no direct or
indirect payment (in cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account of the principal of or any premium or interest (including any Additional Interest) on any of the Securities, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the Securities. 
  
 (b) In the event of a bankruptcy, insolvency or other proceeding described in clause (d) or (e) of the definition of Event of Default (each such event, if any, herein sometimes referred to as a
“Proceeding”), all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall first be paid in full before any payment or distribution, whether in cash, securities or other property,
shall be made to any Holder of any of the Securities on account thereof. Any payment or distribution, whether in cash, securities or other property (other than securities of the Company or any other entity provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Debt at the time outstanding and to any
securities issued 

  

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in respect thereof under any such plan of reorganization or readjustment), which would otherwise (but for these subordination provisions) be payable or
deliverable in respect of the Securities shall be paid or delivered directly to the holders of Senior Debt in accordance with the priorities then existing among such holders until all Senior Debt (including any interest thereon accruing after the
commencement of any Proceeding) shall have been paid in full. 
  
 (c) In the event of any Proceeding, after payment in full of all sums owing with respect to Senior Debt, the Holders of the Securities, together with the holders of any obligations of the Company ranking on a parity with the Securities,
shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid principal of and any premium and interest (including any Additional Interest) on the Securities and such other
obligations before any payment or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock or any obligations of the Company ranking junior to the Securities and such other obligations. If,
notwithstanding the foregoing, any payment or distribution of any character or any security, whether in cash, securities or other property (other than securities of the Company or any other entity provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Securities, to the payment of all Senior Debt at the time outstanding and to any
securities issued in respect thereof under any such plan of reorganization or readjustment) shall be received by the Trustee or any Holder in contravention of any of the terms hereof and before all Senior Debt shall have been paid in full, such
payment or distribution or security shall be received in trust for the benefit of, and shall be paid over or delivered and transferred to, the holders of the Senior Debt at the time outstanding in accordance with the priorities then existing among
such holders for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all such Senior Debt (including any interest thereon accruing after the commencement of any Proceeding) in full. In the event of the
failure of the Trustee or any Holder to endorse or assign any such payment, distribution or security, each holder of Senior Debt is hereby irrevocably authorized to endorse or assign the same. 
  
 (d) The Trustee and the Holders, at the expense of the Company, shall take
such reasonable action (including the delivery of this Indenture to an agent for any holders of Senior Debt or consent to the filing of a financing statement with respect hereto) as may, in the opinion of counsel designated by the holders of a
majority in principal amount of the Senior Debt at the time outstanding, be necessary or appropriate to assure the effectiveness of the subordination effected by these provisions. 
  
 (e) The provisions of this Section 12.2 shall not impair any rights, interests, remedies or powers of any secured
creditor of the Company in respect of any security interest the creation of which is not prohibited by the provisions of this Indenture. 
  
 (f) The securing of any obligations of the Company, otherwise ranking on a parity with the Securities or ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations ranking on a parity with the Securities or ranking junior to the Securities. 
  

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 Section 12.3. Payment Permitted If No Default. 
  
 Nothing contained in this Article XII or elsewhere in this Indenture
or in any of the Securities shall prevent (a) the Company, at any time, except during the pendency of the conditions described in paragraph (a) of Section 12.2 or of any Proceeding referred to in Section 12.2, from making payments at
any time of principal of and any premium or interest (including any Additional Interest) on the Securities or (b) the application by the Trustee of any moneys deposited with it hereunder to the payment of or on account of the principal of and any
premium or interest (including any Additional Interest) on the Securities or the retention of such payment by the Holders, if, at the time of such application by the Trustee, it did not have knowledge (in accordance with Section 12.8) that
such payment would have been prohibited by the provisions of this Article XII, except as provided in Section 12.8. 
  
 Section 12.4. Subrogation to Rights of Holders of Senior Debt. 
  
 Subject to the payment in full of all amounts due or to become due on all Senior Debt, or the provision for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders of Senior Debt, the Holders of the Securities shall be subrogated to the extent of the payments or distributions made to the holders of such Senior Debt pursuant to the
provisions of this Article XII (equally and ratably with the holders of all indebtedness of the Company that by its express terms is subordinated to Senior Debt of the Company to substantially the same extent as the Securities are
subordinated to the Senior Debt and is entitled to like rights of subrogation by reason of any payments or distributions made to holders of such Senior Debt) to the rights of the holders of such Senior Debt to receive payments and distributions of
cash, property and securities applicable to the Senior Debt until the principal of and any premium and interest (including any Additional Interest) on the Securities shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions of this Article XII, and no payments made pursuant to the
provisions of this Article XII to the holders of Senior Debt by Holders of the Securities or the Trustee, shall, as among the Company, its creditors other than holders of Senior Debt, and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior Debt. 
  
 Section 12.5. Provisions Solely to Define Relative Rights. 
  
 The provisions of this Article XII are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on
the one hand and the holders of Senior Debt on the other hand. Nothing contained in this Article XII or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and unconditional, to pay to the Holders of the Securities the principal of and any premium and interest (including any Additional Interest) on the Securities as and when the same shall
become due and payable in accordance with their terms, (b) affect the relative rights against the Company of the Holders of the Securities and creditors of the Company other than their rights in relation to the holders of Senior Debt or (c) prevent
the Trustee or the Holder of any Security (or to the extent expressly provided herein, the holder of any Preferred Security) from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, including filing and
voting claims in any 

  

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Proceeding, subject to the rights, if any, under this Article XII of the holders of Senior Debt to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder. 
  
 Section
12.6. Trustee to Effectuate Subordination. 
  
 Each Holder
of a Security by his or her acceptance thereof authorizes and directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination provided in this Article XII and
appoints the Trustee his or her attorney-in-fact for any and all such purposes. 
  
 Section 12.7. No Waiver of Subordination Provisions. 
  
 (a) No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof that any such holder may have or be
otherwise charged with. 
  
 (b) Without in any way limiting the
generality of paragraph (a) of this Section 12.7, the holders of Senior Debt may, at any time and from to time, without the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to such Holders
of the Securities and without impairing or releasing the subordination provided in this Article XII or the obligations hereunder of such Holders of the Securities to the holders of Senior Debt, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt or any instrument evidencing the same or any agreement under which Senior Debt is
outstanding, (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt, (iii) release any Person liable in any manner for the payment of Senior Debt and (iv) exercise or refrain from
exercising any rights against the Company and any other Person. 
  
 Section 12.8. Notice to Trustee. 
  
 (a) The
Company shall give prompt written notice to a Responsible Officer of the Trustee of any fact known to the Company that would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this
Article XII or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and
until a Responsible Officer of the Trustee shall have received written notice thereof from the Company or a holder of Senior Debt or from any trustee, agent or representative therefor; provided, that if the Trustee shall not have received the
notice provided for in this Section 12.8 at least two Business Days prior to the date upon which by the terms hereof any monies may become payable for any purpose (including, the payment of the principal of and any premium on or interest
(including any Additional Interest) on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to such date. 
  

 63 

 (b) The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself or herself to be a holder of Senior Debt (or a trustee, agent, representative or attorney-in-fact therefor) to establish that such notice has been given by a holder of Senior Debt (or a trustee, agent, representative or
attorney-in-fact therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to this
Article XII, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment
or distribution and any other facts pertinent to the rights of such Person under this Article XII, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such
Person to receive such payment. 
  
 Section 12.9. Reliance on
Judicial Order or Certificate of Liquidating Agent. 
  
 Upon
any payment or distribution of assets of the Company referred to in this Article XII, the Trustee and the Holders of the Securities shall be entitled to conclusively rely upon any order or decree entered by any court of competent jurisdiction
in which such Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee
or to the Holders of Securities, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XII. 
  
 Section 12.10. Trustee Not Fiduciary for Holders of Senior Debt. 
  
 The Trustee, in its capacity as trustee under this Indenture, shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders of Securities or to the Company or to any other Person cash, property or securities to which any holders of Senior Debt
shall be entitled by virtue of this Article XII or otherwise. 
  
 Section 12.11. Rights of Trustee as Holder of Senior Debt; Preservation of Trustee’s Rights. 
  
 The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article XII with respect to any Senior Debt that may
at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. 
  
 Section 12.12. Article Applicable to Paying Agents. 
  
 If at any time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting
hereunder, the term “Trustee” as used in this Article XII shall in such case (unless the context otherwise requires) be construed as extending to and including such 

  

 64 

 
Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article XII in addition to or in
place of the Trustee; provided, that Sections12.8 and 12.11 shall not apply to the Company or any Affiliate of the Company if the Company or such Affiliate acts as Paying Agent. 
  
 * * * * 
  
 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. 
  
 * * * * 
  

 65 

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

			
	 ANWORTH MORTGAGE ASSET
 CORPORATION

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 
	
	 JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION,
 as Trustee

		
	 By:
	 	  

	 Name:
	 	 Maria D. Calzado

	 Title:
	 	 Vice President

  
  

 66 

 Schedule A 
  

DETERMINATION OF LIBOR 
  
 With respect to the Securities, the London interbank offered rate (“LIBOR”) shall be determined by the Calculation Agent in accordance
with the following provisions (in each case rounded to the nearest .000001%): 
  
 (1) On the second LIBOR Business Day (as defined below) prior to an Interest Payment Date (except with respect to the first interest payment period, such date shall be March 11, 2005) (each such day, a “LIBOR Determination
Date”), LIBOR for any given security shall for the following interest payment period equal the rate, as obtained by the Calculation Agent from Bloomberg Financial Markets Commodities News, for three-month Eurodollar deposits that appears on
Dow Jones Telerate Page 3750 (as defined in the International Swaps and Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange Definitions), or such other page as may replace such Page 3750, as of 11:00 a.m. (London time) on such
LIBOR Determination Date. 
  
 (2) If, on any LIBOR Determination Date, such rate
does not appear on Dow Jones Telerate Page 3750 or such other page as may replace such Page 3750, the Calculation Agent shall determine the arithmetic mean of the offered quotations of the Reference Banks (as defined below) to leading banks in the
London interbank market for three-month Eurodollar deposits in an amount determined by the Calculation Agent by reference to requests for quotations as of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by the Calculation
Agent to the Reference Banks. If, on any LIBOR Determination Date, at least two of the Reference Banks provide such quotations, LIBOR shall equal such arithmetic mean of such quotations. If, on any LIBOR Determination Date, only one or none of the
Reference Banks provide such quotations, LIBOR shall be deemed to be the arithmetic mean of the offered quotations that leading banks in the City of New York selected by the Calculation Agent are quoting on the relevant LIBOR Determination Date for
three-month Eurodollar deposits in an amount determined by the Calculation Agent by reference to the principal London offices of leading banks in the London interbank market; provided that, if the Calculation Agent is required but is unable
to determine a rate in accordance with at least one of the procedures provided above, LIBOR shall be LIBOR as determined on the previous LIBOR Determination Date. 
  
 (3) As used herein: “Reference Banks” means four major banks in the London interbank market selected by the Calculation
Agent; and “LIBOR Business Day” means a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London. 
  

 Schedule A-1 

 Form of Officer’s Financial Certificate 
  
 The undersigned, the [Chief Financial Officer/Treasurer/Assistant Treasurer/
Secretary/ Assistant Secretary, Chairman/ViceChairman/Chief Executive Officer/President/Vice President] hereby certifies, pursuant to Section 7.3(b) of the Junior Subordinated Indenture, dated as of March 15, 2005 (the “Indenture”), among
Anworth Mortgage Asset Corporation (the “Company”) and JPMorgan Chase Bank, National Association, a national banking association, as trustee, that, as of [date], [20    ], the Company, if applicable, and its
Subsidiary had the following ratios and balances: 
  
 As of [Quarterly/Annual
Financial Date], 20     
  

				
	 Senior secured indebtedness for borrowed money (“Debt”)
	  	$	            
		
	 Senior unsecured Debt
	  	$	            
		
	 Subordinated Debt
	  	$	            
		
	 Total Debt
	  	$	            
		
	 Ratio of (x) senior secured and unsecured Debt to (y) total Debt
	  	 	             %

	·	A table describing the quarterly report calculation procedures is provided on page 3 hereof 

  
 [FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial statements (including the balance sheet, income statement and
statement of cash flows, and notes thereto, together with the report of the independent accountants thereon) of the Company and its consolidated subsidiaries for the three years ended [date], 20    .] 
  
 [FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and consolidating
financial statements (including the balance sheet and income statement) of the Company and its consolidated subsidiaries for the fiscal quarter ended [date], 20    .] 
  
 The financial statements fairly present in all material respects, in
accordance with U.S. generally accepted accounting principles (“GAAP”), the financial position of the Company and its consolidated subsidiaries, and the results of operations and changes in financial condition as of the date, and for the
[quarter] [annual] period ended [date], 20    , and such financial statements have been prepared in accordance with GAAP consistently applied throughout the period involved (expect as otherwise noted therein). 

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

			
	 By:
	 	  

	 Name:
	 	 
		
	 	 	 Anworth Mortgage Asset Corporation

	 	 	 1299 Ocean Avenue, Suite 250

	 	 	 Santa Monica, CA 90401

	 	 	 (310) 255-4493

 Financial DefinitionsPurchase Agreement

 Exhibit 10.1 
  
 EXECUTION COPY 
  

  
 PURCHASE AGREEMENT 

 
 among 
  
 ANWORTH MORTGAGE ASSET CORPORATION, 
  
 ANWORTH CAPITAL TRUST 1 
  
 MERRILL LYNCH INTERNATIONAL 
  
 and 
  
 TABERNA PREFERRED FUNDING I, LTD 
  

  
 Dated as of March 15, 2005 
  

  

  
  

 PURCHASE AGREEMENT 
 ($36,250,000 Trust Preferred Securities) 
  
 THIS PURCHASE AGREEMENT, dated as of March 15, 2005 (this “Purchase Agreement”), is entered into among Anworth Mortgage Asset Corporation, a Maryland corporation (the “Company”), and
Anworth Capital Trust 1, a Delaware statutory trust (the “Trust”, and together with the Company, the “Sellers”), on the one hand, and TABERNA Preferred Funding I, Ltd. or its assignee (“Taberna”)
and Merrill Lynch International (“MLI” and, collectively with Taberna, the “Purchaser”), on the other hand. 
  
 WITNESSETH: 
  
 WHEREAS, the Sellers propose to issue and sell 36,250 Floating Rate Preferred Securities of the Trust, having a stated liquidation amount of $1,000 per
security, bearing a variable rate, reset quarterly, equal to LIBOR (as defined in the Indenture (as defined below)) plus 3.10% (the “Preferred Securities”); 
  
 WHEREAS, the entire proceeds from the sale of the Preferred Securities will be combined with the entire proceeds from the
sale by the Trust to the Company of its common securities (the “Common Securities”), and will be used by the Trust to purchase Thirty Seven Million Three Hundred Eighty Thousand Dollars ($37,380,000) in principal amount of the
unsecured junior subordinated deferrable interest notes of the Company (the “Junior Subordinated Notes”); 
  
 WHEREAS, the Preferred Securities and the Common Securities for the Trust will be issued pursuant to the Amended and Restated Trust Agreement (the
“Trust Agreement”), dated as of the Closing Date, among the Company, as depositor, JPMorgan Chase Bank, National Association, a national banking association, as property trustee (in such capacity, the “Property
Trustee”), Chase Bank USA, National Association, a national banking association, as Delaware trustee (in such capacity, the “Delaware Trustee”), the Administrative Trustees named therein (in such capacities, the
“Administrative Trustees”) and the holders from time to time of undivided beneficial interests in the assets of the Trust; and 
  
 WHEREAS, the Junior Subordinated Notes will be issued pursuant to a Junior Subordinated Indenture, dated as of the Closing Date (the
“Indenture”), between the Company and JPMorgan Chase Bank, National Association, a national banking association, as indenture trustee (in such capacity, the “Indenture Trustee”). 
  
 NOW, THEREFORE, in consideration of the mutual agreements and subject to the
terms and conditions herein set forth, the parties hereto agree as follows: 
  
 1. Definitions. The Preferred Securities, the Common Securities and the Junior Subordinated Notes are collectively referred to herein as the “Securities.” This Purchase Agreement, the
Indenture, the Trust Agreement and the Securities are collectively referred to herein as the “Operative Documents.” All other capitalized terms used but not defined in this Purchase Agreement shall have the respective meanings
ascribed thereto in the Indenture. 

 2. Purchase and Sale of the Preferred Securities. 
  
 (a) The Sellers agree to sell to the Purchaser, and the Purchaser agrees to
purchase in the respective amounts set forth by their respective names on the signature page hereto from the Sellers the Preferred Securities for an amount (the “Purchase Price”) equal to Thirty Six Million Two Hundred Fifty Thousand
Dollars ($36,250,000). The Purchaser shall be responsible for the rating agency costs and expenses. The Sellers shall use the Purchase Price, together with the proceeds from the sale of the Common Securities, to purchase the Junior Subordinated
Notes. 
  
 (b) Delivery or transfer of, and payment for, the
Preferred Securities shall be made at 10:00 A.M. Chicago time (11:00 A.M. New York time), on March 15, 2005 or such later date (not later than April 14, 2005) as the parties may designate (such date and time of delivery and payment for the Preferred
Securities being herein called the “Closing Date”). The Preferred Securities shall be transferred and delivered to the Purchaser against the payment of the Purchase Price to the Sellers made by wire transfer in immediately available
funds on the Closing Date to a U.S. account designated in writing by the Company at least two business days prior to the Closing Date. 
  
 (c) Delivery of the Preferred Securities shall be made at such location, and in such names and denominations, as the Purchaser shall designate at least
two business days in advance of the Closing Date. The Company and the Trust agree to have the Preferred Securities available for inspection and checking by the Purchaser in Chicago, Illinois, not later than 1:00 P.M., Chicago time (2:00 P.M. New
York time), on the business day prior to the Closing Date. The closing for the purchase and sale of the Preferred Securities shall occur at the offices of Mayer, Brown, Rowe & Maw LLP, 190 South LaSalle Street, Chicago, Illinois 60603, or such
other place as the parties hereto shall agree. 
  
 3.
Conditions. The obligations of the parties under this Purchase Agreement are subject to the following conditions: 
  
 (a) The representations and warranties contained herein shall be accurate as of the date of delivery of the Preferred Securities. 
  
 (b) [Reserved.] 
  
 (c) Manatt, Phelps & Phillips, LLP, counsel for the Company and the Trust (the “Company Counsel”) shall
have delivered an opinion, dated the Closing Date, addressed to the Purchaser and JPMorgan Chase Bank, National Association, in substantially the form set out in Annex A-I hereto (ii) DLA Piper Rudnick Gray Cary LLP (the “Special Company
Counsel’) shall have delivered an opinion, dated the Closing Date, addressed to the Purchaser and JPMorgan Chase Bank, National Association, in substantially the form set out in Annex A-II hereto and (iii) the Company shall have furnished to
the Purchaser the opinion of the Company’s General Counsel or a certificate signed by the Company’s Chief Executive Officer, President, an Executive Vice 

  

 A-I-3 

 
President, Chief Financial Officer, Treasurer or Assistant Treasurer, dated the Closing Date, addressed to the Purchaser, in substantially the form set out
in Annex A-III hereto. In rendering their opinion, the Company Counsel and the Special Company Counsel may rely as to factual matters upon certificates or other documents furnished by officers, directors and trustees of the Company and the Trust and
by government officials (provided, however, that copies of any such certificates or documents are delivered to the Purchaser) and by and upon such other documents as such counsel may, in their reasonable opinion, deem appropriate as a basis for the
Company Counsel’s opinion or the Special Company Counsel’s opinion. The Company Counsel or the Special Company Counsel may specify the jurisdictions in which they are admitted to practice and that they are not admitted to practice in any
other jurisdiction and are not experts in the law of any other jurisdiction. If the Company Counsel and the Special Company Counsel is not admitted to practice in the State of New York, the opinion of the Company Counsel and the Special Company
Counsel may assume, for purposes of such opinions, that the laws of the State of New York are substantively identical, in all respects material to the opinions, to the internal laws of the state in which such counsel is admitted to practice. Such
Company Counsel Opinion and the Special Company Counsel Opinion shall not state that they are to be governed or qualified by, or that they are otherwise subject to, any treatise, written policy or other document relating to legal opinions,
including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). 
  
 (d) The Purchaser shall have been furnished the opinion of Mayer, Brown, Rowe & Maw LLP, special tax counsel for the Purchaser, dated the Closing
Date, addressed to the Purchaser and JPMorgan Chase Bank, National Association, in substantially the form set out in Annex B hereto. 
  
 (e) The Purchaser shall have received the opinion of Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware Trustee, dated
the Closing Date, addressed to the Purchaser, JPMorgan Chase Bank, National Association, the Delaware Trustee and the Company, in substantially the form set out in Annex C hereto. 
  
 (f) The Purchaser shall have received the opinion of Gardere Wynne Sewell LLP, special counsel for the Property Trustee and
the Indenture Trustee, dated the Closing Date, addressed to the Purchaser, in substantially the form set out in Annex D hereto. 
  
 (g) The Purchaser shall have received the opinion of Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware Trustee, dated the
Closing Date, addressed to the Purchaser and JPMorgan Chase Bank, National Association, in substantially the form set out in Annex E hereto. 
  
 (h) The Company shall have furnished to the Purchaser a certificate of the Company, signed by the Chief Executive Officer, President or an Executive Vice
President, and Chief Financial Officer, Treasurer or Assistant Treasurer of the Company, and the Trust shall have furnished to the Purchaser a certificate of the Trust, signed by an Administrative Trustee of the Trust, in each case dated the Closing
Date, and, in the case of the Company, as to (i) and (ii) below and, in the case of the Trust, as to (i) below. 
  

 A-I-4 

 (i) the representations and warranties in this Purchase Agreement are true and correct on
and as of the Closing Date with the same effect as if made on the Closing Date, and the Company and the Trust have complied with all the agreements and satisfied all the conditions on either of their part to be performed or satisfied at or prior to
the Closing Date; and 
  
 (ii) since the date of
the Financial Statements (as defined below), there has been no material adverse change in the condition (financial or other), earnings, business or assets of the Company and its Significant Subsidiaries (as defined below), whether or not arising
from transactions occurring in the ordinary course of business (a “Material Adverse Change”). 
  
 (i) Subsequent to the execution of this Purchase Agreement, there shall not have been any change, or any development involving a prospective change, in or
affecting the condition (financial or other), earnings, business or assets of the Company and its Significant Subsidiaries (as defined below), whether or not occurring in the ordinary course of business, the effect of which is, in the
Purchaser’s reasonable judgment, so material and adverse as to make it impractical or inadvisable to proceed with the purchase of the Preferred Securities. 
  

(j) Prior to the Closing Date, the Company and the Trust shall have furnished to the Purchaser and its counsel such further information, certificates
and documents as the Purchaser or its counsel may reasonably request. 
  
 If any of the conditions specified in this Section 3 shall not have been fulfilled when and as provided in this Purchase Agreement, or if any of the opinions, certificates and documents mentioned above or elsewhere in this Purchase
Agreement shall not be reasonably satisfactory in form and substance to the Purchaser or its counsel, this Purchase Agreement and all the Purchaser’s obligations hereunder may be canceled at, or at any time prior to, the Closing Date by the
Purchaser. Notice of such cancellation shall be given to the Company and the Trust in writing or by telephone or facsimile confirmed in writing. 
  
 Each certificate signed by any trustee of the Trust or any officer of the Company and delivered to the Purchaser or the Purchaser’s counsel in
connection with the Operative Documents and the transactions contemplated hereby and thereby shall be deemed to be a representation and warranty of the Trust and/or the Company, as the case may be, and not by such trustee or officer in any
individual capacity. 
  
 4. Representations and Warranties
of the Company and the Trust. The Company and the Trust jointly and severally represent and warrant to, and agree with the Purchaser, as follows: 
  
 (a) Neither the Company nor the Trust, nor any of their “Affiliates” (as defined in Rule 501(b) of Regulation D
(“Regulation D”) under the Securities Act (as defined below)), nor any person acting on its or their behalf, has, directly or indirectly, made offers or sales of any security, or solicited offers to buy any security, under circumstances
that would require the registration of any of the Securities under the Securities Act of 1933, as amended (the “Securities Act”). 
  

 A-I-5 

 (b) Neither the Company nor the Trust, nor any of their Affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of any of the Securities. 
  
 (c) The Securities (i) are not and have not been listed on a national securities exchange registered under section 6 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or quoted on a U.S. automated inter-dealer quotation system and (ii), assuming (X) that the Purchaser was not formed for the purpose or with the sole intent of investing in
the Preferred Securities; and (Y) that the Preferred Securities will be no more than 9.9% of the total securities beneficially owned (as defined under the Investment Company Act of 1940, as amended (the “Investment Company Act”)) by
the Purchaser, are not of an open-end investment company, unit investment trust or face-amount certificate company that are, or are required to be, registered under section 8 of the Investment Company Act, and the Securities otherwise satisfy the
eligibility requirements of Rule 144A(d)(3) promulgated pursuant to the Securities Act (“Rule 144A(d)(3)”). 
  
 (d) Neither the Company nor the Trust, nor any of their Affiliates, nor any person acting on its or their behalf, has engaged, or will engage, in any
“directed selling efforts” within the meaning of Regulation S under the Securities Act with respect to the Securities. 
  
 (e) Assuming (i) that the Purchaser was not formed for the purpose or with the sole intent of investing in the Preferred Securities; and (ii) that the
Preferred Securities will be no more than 9.9% of the total securities beneficially owned (as defined under the Investment Company Act) by the Purchaser, neither the Company nor the Trust is, and, immediately following consummation of the
transactions contemplated hereby and the application of the net proceeds therefrom, will not be, an “investment company” or an entity “controlled” by an “investment company,” in each case within the meaning of section
3(a) of the Investment Company Act. 
  
 (f) Neither the Company
nor the Trust has paid or agreed to pay to any person any compensation for soliciting another to purchase any of the Securities, except for the Preferred Securities Commission and/or the sales commission the Company has agreed to pay to Cohen Bros.
& Company (or to the Company’s introducing agent on behalf of Cohen Bros. & Company) pursuant to the letter agreement between the Company and Cohen Bros. & Company, dated December 6, 2005. 
  
 (g) The Trust has been duly created and is validly existing in good standing
as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C. §3801, et seq. (the “Statutory Trust Act”)with all requisite power and authority to own property and to conduct the business it transacts and
proposes to transact and to enter into and perform its obligations under the Operative Documents to which it is a party. The Trust is duly qualified to transact business as a foreign entity and is in good standing in each jurisdiction in which such
qualification is necessary, except where the failure to so qualify or be in good standing would not have a material adverse effect on 

  

 A-I-6 

 
the condition (financial or otherwise), earnings, business or assets of the Trust, whether or not occurring in the ordinary course of business. The Trust is
not a party to or otherwise bound by any agreement other than the Operative Documents. The Trust is and will be, under current law, classified for federal income tax purposes as a grantor trust and not as an association or publicly traded
partnership taxable as a corporation. 
  
 (h) The Trust Agreement
has been duly authorized by the Company and, on the Closing Date specified in Section 2(b), will have been duly executed and delivered by the Company and the Administrative Trustees of the Trust, and, assuming due authorization, execution and
delivery by the Property Trustee and the Delaware Trustee, will be a legal, valid and binding obligation of the Company and the Administrative Trustees, enforceable against them in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights generally and to general principles of equity, and except to the extent that the indemnification provisions of Section 8 hereof may be
limited by federal or state securities laws and public policy considerations in respect thereof. Each of the Administrative Trustees of the Trust is an employee of the Company and has been duly authorized by the Company to execute and deliver the
Trust Agreement. 
  
 (i) The Indenture has been duly authorized by
the Company and, on the Closing Date, will have been duly executed and delivered by the Company, and, assuming due authorization, execution and delivery by the Indenture Trustee, will be a legal, valid and binding obligation of the Company
enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights generally and to general principles of equity.

  
 (j) The Preferred Securities and the Common Securities have
been duly authorized by the Trust and, when issued and delivered against payment therefor on the Closing Date in accordance with this Purchase Agreement, in the case of the Preferred Securities, and in accordance with the Common Securities
Subscription Agreement, in the case of the Common Securities, will be validly issued, fully paid and non-assessable and will represent undivided beneficial interests in the assets of the Trust entitled to the benefits of the Trust Agreement,
enforceable against the Trust in accordance with their respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights generally and to general
principles of equity. To the Company’s knowledge, the issuance of the Securities is not subject to any preemptive or other similar rights. On the Closing Date, all of the issued and outstanding Common Securities will be directly owned by the
Company free and clear of any pledge, security interest, claim, lien or other encumbrance of any kind (each, a “Lien”). 
  
 (k) The Junior Subordinated Notes have been duly authorized by the Company and, on the Closing Date, will have been duly executed and delivered to the
Indenture Trustee for authentication in accordance with the Indenture and, when authenticated in the manner provided for in the Indenture and delivered to the Trust against payment therefor in accordance with the Junior Subordinated Note Purchase
Agreement, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’ rights generally and to general principles of equity. 
  

 A-I-7 

 (l) This Purchase Agreement has been duly authorized, executed and delivered by the Company and the
Trust. 
  
 (m) Neither the issue and sale of the Common
Securities, the Preferred Securities or the Junior Subordinated Notes, nor the purchase of the Junior Subordinated Notes by the Trust, nor the execution and delivery of and compliance with the Operative Documents by the Company or the Trust, nor the
consummation of the transactions contemplated herein or therein, (i) will conflict with or constitute a violation or breach of the Trust Agreement or the charter or bylaws of the Company or any subsidiary of the Company or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any government, governmental authority, agency or instrumentality or court, domestic or foreign, having jurisdiction over the Trust or the Company or any of its Significant Subsidiaries
(as defined below) or their respective properties or assets (collectively, the “Governmental Entities”) or (ii) will conflict with or constitute a violation or breach of, or a default or Repayment Event (as defined below) under, or result
in the creation or imposition of any Lien upon any property or assets of the Trust, the Company or any of the Company’s Significant Subsidiaries (as defined below) pursuant to, any contract, indenture, mortgage, loan agreement, note, lease or
other agreement or instrument to which (A) the Trust, the Company or any of its Significant Subsidiaries (as defined below) is a party or by which it or any of them may be bound, or (B) to which any of the property or assets of any of them is
subject, or any judgment, order or decree of any court, Governmental Entity or arbitrator, except, in the case of clause (i) and this clause (ii), for such conflicts, breaches, violations, defaults, Repayment Events (as defined below) or Liens which
(X) would not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents and (Y) would not, singly or in the aggregate, have a material adverse effect on the condition (financial or
otherwise), earnings, business, liabilities and assets (taken as a whole) or business prospects of the Company and its subsidiaries taken as a whole, whether or not occurring in the ordinary course of business (a “Material Adverse
Effect”). As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness by the Trust or the Company or any of its subsidiaries prior to its scheduled maturity. 
  
 (n) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of
Maryland, with all requisite corporate power and authority to own, lease and operate its properties and conduct the business it transacts and proposes to transact, and is duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its activities requires such qualification, except where the failure of the Company to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect. 
  
 (o) The Company has no subsidiaries that are material to its business,
financial condition or earnings other than the subsidiaries listed in Schedule 1 attached hereto (collectively, the “Significant Subsidiaries”). Each Significant Subsidiary has been duly formed and is validly 

  

 A-I-8 

 
existing in good standing under the laws of the jurisdiction in which it is chartered, with all requisite corporate power and authority to own, lease and
operate its properties and conduct the business it transacts and proposes to transact. Each Significant Subsidiary is duly qualified to transact business and is in good standing in each jurisdiction where the nature of its activities requires such
qualification, except where the failure to be so qualified would not, singly or in the aggregate, have a Material Adverse Effect. 
  
 (p) Each of the Trust, the Company and each of the Company’s Significant Subsidiaries hold all necessary approvals, authorizations, orders, licenses,
consents, registrations, qualifications, certificates and permits (collectively, the “Governmental Licenses”) of and from Governmental Entities necessary to conduct their respective businesses as now being conducted, and neither the Trust,
the Company nor any of the Company’s Significant Subsidiaries have received any notice of proceedings relating to the revocation or modification of any such Government License, except where the failure to be so licensed or approved or the
receipt of an unfavorable decision, ruling or finding, would not, singly or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity or the failure of such
Governmental Licenses to be in full force and effect, would not, singly or in the aggregate, have a Material Adverse Effect; and the Company and its subsidiaries are in compliance with all applicable laws, rules, regulations, judgments, orders,
decrees and consents necessary to conduct the business now operated by it, except where the failure to be in compliance would not, singly or in the aggregate, have a Material Adverse Effect. 
  
 (q) All of the issued and outstanding shares of capital stock of the Company
and each of its subsidiaries are validly issued, fully paid and non-assessable; all of the issued and outstanding capital stock of each subsidiary of the Company is owned by the Company, directly or through subsidiaries, free and clear of any Lien,
claim or equitable right; and none of the issued and outstanding capital stock of the Company or any subsidiary was issued in violation of any preemptive or similar rights arising by operation of law, under the charter, organizational documents or
by-laws of such entity or under any agreement to which the Company or any of its subsidiaries is a party. 
  
 (r) Neither the Company nor any of its Significant Subsidiaries is (i) in violation of its respective charter or by-laws or similar organizational
documents or (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company or
any such Significant Subsidiary is a party or by which it or any of them may be bound or to which any of the property or assets of any of them is subject, except, in the case of clause (ii), where such violation or default would not, singly or in
the aggregate, have a Material Adverse Effect. 
  
 (s) There is no
action, suit or proceeding before or by any Governmental Entity, arbitrator or court, domestic or foreign, now pending or, to the knowledge of the Company or the Trust after due inquiry, threatened against the Trust or the Company or the Significant
Subsidiaries, except for such actions, suits or proceedings that, if adversely determined, would not, singly or in the aggregate, adversely affect the consummation of the transactions contemplated by the Operative Documents or have a Material
Adverse Effect; and the aggregate 

  

 A-I-9 

 
of all pending legal or governmental proceedings to which the Trust or the Company or any of its subsidiaries is a party or of which any of their respective
properties or assets is subject, including ordinary routine litigation incidental to the business, are not expected to result in a Material Adverse Effect. 
  
 (t) To the Company’s knowledge, the accountants of the Company who certified the Financial Statements (as defined below) are and were during the
periods covered by such Financial Statements, independent public accountants of the Company within the meaning of the Securities Act, and the rules and regulations of the Securities and Exchange Commission (the “Commission”) thereunder.

  
 (u) The audited consolidated financial statements (including
the notes thereto) and schedules of the Company and its consolidated subsidiaries for the fiscal year ended December 31, 2004 (the “Financial Statements”) provided to the Purchaser are the most recent available audited consolidated
financial statements of the Company and its consolidated subsidiaries, respectively, and fairly present in all material respects, in accordance with U.S. generally accepted accounting principles, the financial position of the Company and its
consolidated subsidiaries, and the results of operations and changes in financial condition as of the dates and for the periods therein specified. Such consolidated financial statements and schedules have been prepared in accordance with U.S.
generally accepted accounting principles (“GAAP”) consistently applied throughout the periods involved (except as otherwise noted therein). 
  
 (v) Since the date of the Financial Statements there has not been (A) any Material Adverse Change or (B) any dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock other than regular quarterly dividends on the Company’s common stock and preferred stock. 
  
 (w) The documents of the Company filed with the Commission in accordance with the Exchange Act, from and including the
commencement of the fiscal year covered by the Company’s most recent Annual Report on Form 10-K, at the time they were or hereafter are filed by the Company with the Commission (collectively, the “1934 Act Reports”), complied and will
comply in all material respects with the requirements of the Exchange Act and the rules and regulations of the Commission thereunder (the “1934 Act Regulations”), and, at the date of this Purchase Agreement and on the Closing Date, do not
and will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and
other than such instruments, agreements, contracts and other documents as are filed as exhibits to the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, there are no instruments, agreements,
contracts or documents of a character described in Item 601 of Regulation S-K promulgated by the Commission to which the Company or any of its Significant Subsidiaries is a party. There has been no failure on the part of the Company or any of the
Company’s directors or officers in their capacities as such, to comply with any effective applicable provision of the Sarbanes-Oxley Act of 2002. 
  

 A-I-10 

 (x) No labor dispute with the key employees of the Trust, the Company or any of its Significant
Subsidiaries exists or, to the knowledge of the executive officers of the Trust or the Company, is imminent, except those which would not, singly or in the aggregate, have a Material Adverse Effect. 
  
 (y) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Governmental Entity, other than those that have been made or obtained, is necessary or required for the performance by the Trust or the Company of their respective obligations under the Operative
Documents, as applicable, or the consummation by the Trust and the Company of the transactions contemplated by the Operative Documents. 
  
 (z) Except as disclosed in the Company’s 1934 Act Reports and for liens for (a) taxes and other governmental charges and assessments which are not
yet delinquent or the amount of which is being contested in good faith by appropriate proceedings; (b) encumbrances in the nature of zoning restrictions, easements, rights or restrictions of record on the use of real property; (c) statutory or
common law liens to secure landlords, lessors or renters under leases or rental agreements confined to the premises rented; (d) liens created under or in connection with asset securitizations, repurchase agreements, warehouse credit facilities or
other loan facilities; and (e) other liens incurred in the ordinary course of business not material in amount, each of the Trust, the Company and the Significant Subsidiary has good and marketable title to all of its respective real and personal
properties, in each case free and clear of all Liens and defects, except for those that would not, singly or in the aggregate, have a Material Adverse Effect; and all of the leases and subleases under which the Trust, the Company or any subsidiary
of the Company holds properties are in full force and effect, except where the failure of such leases and subleases to be in full force and effect would not, singly or in the aggregate, have a Material Adverse Effect, and none of the Trust, the
Company or any subsidiary of the Company has any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Trust, the Company or any subsidiary of the Company under any such leases or subleases, or affecting or
questioning the rights of such entity to the continued possession of the leased or subleased premises under any such lease or sublease, except for such claims that would not, singly or in the aggregate, have a Material Adverse Effect. 
  
 (aa) The Company has no present intention to exercise its option to defer
payments of interest on the Junior Subordinated Notes as provided in the Indenture. The Company believes that the likelihood that it would exercise its rights to defer payments of interest on the Junior Subordinated Notes as provided in the
Indenture at any time during which the Junior Subordinated Notes are outstanding is remote because of the restrictions that would be imposed on the Company’s ability to declare or pay dividends or distributions on, or to redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company’s capital stock and on the Company’s ability to make any payments of principal, interest or premium, if any, on, or repay, repurchase or redeem, any of its debt
securities that rank pari passu in all respects with or junior in interest to the Junior Subordinated Notes. 
  
 (bb) Commencing with its taxable year ended December 31, 2004, the Company has been, and upon the completion of the transactions contemplated hereby, the
Company will continue to be, organized and operated in conformity with the requirements for qualification and 

  

 A-I-11 

 
taxation as a real estate investment trust (a “REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the
“Code”), and the Company’s proposed method of operation would reasonably be expected to enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code presently in effect, and to the
Company’s knowledge no actions have been taken (or not taken which are required to be taken) which would cause such qualification to be lost. The Company expects to continue to be organized and to operate in a manner so as to qualify as a REIT
in the taxable year ending December 31, 2005 and succeeding taxable years unless the Company’s Board of Directors determined that it was not in the best interests of the Company’s shareholders. 
  
 (cc) The Company and each of the Significant Subsidiaries have timely and
duly filed all Tax Returns required to be filed by them, and all such Tax Returns are true, correct and complete in all material respects; provided, however, that the foregoing representation shall not be deemed to be breached by or incorrect in any
manner if and to the extent any federal, state or local taxing authority takes a position with respect to a Tax Return that is different from any position taken by the Company or any Significant Subsidiary on such Tax Return with the advice of the
Company’s or such Significant Subsidiary’s accountants. The Company and each of the Significant Subsidiaries have timely and duly paid in full all material Taxes required to be paid by them as shown on their Tax Returns. There are no
federal, state, or other Tax audits or deficiency assessments proposed or pending with respect to the Company or any of the Significant Subsidiaries, and no such audits or assessments are threatened. As used herein, the terms “Tax”
or “Taxes” mean (i) all federal, state, local, and foreign taxes, and other assessments of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax, or penalties applicable
thereto, imposed by any Governmental Entity, and (ii) all liabilities in respect of such amounts arising as a result of being a member of any affiliated, consolidated, combined, unitary or similar group, as a successor to another person or by
contract. As used herein, the term “Tax Returns” means all federal, state, local, and foreign Tax returns, declarations, statements, reports, schedules, forms, and information returns and any amendments thereto filed or required to
be filed with any Governmental Entity. 
  
 (dd) There are no
rulemaking or similar proceedings before the United States Internal Revenue Service or comparable federal, state, local or foreign government bodies in which the Company or any subsidiary is participating directly, which, if the subject of an action
unfavorable to the Company or any subsidiary, could result in a material adverse effect on the Company and the Significant Subsidiaries, taken as a whole. 
  
 (ee) The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. 
  

 A-I-12 

 (ff) The Company and its Significant Subsidiaries or any person acting on behalf of the Company and its
Significant Subsidiaries including, without limitation, any director, officer, agent or employee of the Company or its Significant Subsidiaries has not, directly or indirectly, while acting on behalf of the Company and its Significant Subsidiaries
(i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; or (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended. 
  
 (gg) The information provided by the Company and the Trust pursuant to this Purchase Agreement and the transactions contemplated hereby does not, as of
the date hereof, and will not as of the Closing Date, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not
misleading. 
  
 (hh) Neither the Company nor any of its
Significant Subsidiaries have violated, or received written notice of any violation with respect to any applicable Environmental Law (as defined below), the violation of which would result in a Material Adverse Change. “Environmental
Law” means any federal, state or local environmental law, statute, ordinance, rule or regulation, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
§§ 9601-9675 (“CERCLA”), the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §§ 5101-5127, the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §§ 6901-6992k, the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001-11050, the Toxic Substances Control Act, 15 U.S.C. §§ 2601-2692, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y, the
Clean Air Act, 42 U.S.C. §§ 7401-7642, the Clean Water Act (Federal Water Pollution Control Act), 33 U.S.C. §§ 1251-1387, the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-26, and the Occupational Safety and Health
Act, 29 U.S.C. §§ 651-678, and any analogous state laws, as any of the above may be amended from time to time and in the regulations promulgated pursuant to each of the foregoing (including environmental statutes and laws not specifically
defined herein). 
  
 (ii) Neither the Company nor any of its
subsidiaries currently owns nor previously owned or operated any real property, other than the lease of commercial office space in commercial office buildings located at 1299 Ocean Avenue, Suite 250, Santa Monica, California 90401 and 235 Pine
Street, Suite 1800, San Francisco, CA 94104. 
  
 5.
Representations and Warranties of the Purchaser. Each of Taberna and MLI, severally and not jointly, represents and warrants to, and agrees with, the Company and the Trust as follows: 
  
 (a) The Purchaser is aware that the Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the United States or to “U.S. persons” (as defined in Regulation S under the Securities Act) except in accordance with Rule 903 of Regulation S under the Securities
Act or pursuant to an exemption from the registration requirements of the Securities Act. 
  

 A-I-13 

 (b) The Purchaser is an “accredited investor,” as such term is defined in Rule 501(a) of
Regulation D under the Securities Act. 
  
 (c) Neither the
Purchaser, nor any of the Purchaser’s affiliates, nor any person acting on the Purchaser’s or the Purchaser’s Affiliate’s behalf has engaged, or will engage, in any form of “general solicitation or general advertising”
(within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Preferred Securities. 
  
 (d) The Purchaser understands and acknowledges that (i) no public market exists for any of the Securities and that it is unlikely that a public market
will ever exist for the Securities, (ii) the Purchaser is purchasing the Securities for its own account, for investment and not with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act or
other applicable securities laws, subject to any requirement of law that the disposition of its property be at all times within its control and subject to its ability to resell such Securities pursuant to an effective registration statement under
the Securities Act or pursuant to an exemption therefrom or in a transaction not subject thereto, and the Purchaser agrees to the legends and transfer restrictions applicable to the Securities contained in the Indenture, and (iii) the Purchaser has
had the opportunity to ask questions of, and receive answers and request additional information from, the Company and is aware that it may be required to bear the economic risk of an investment in the Securities. 
  
 (e) The Purchaser is a company with limited liability duly incorporated,
validly existing and in good standing under the laws of the jurisdiction in which it is organized with all requisite (i) power and authority to execute, deliver and perform the Operative Documents to which it is a party, to make the representations
and warranties specified herein and therein and to consummate the transactions contemplated herein and (ii) right and power to purchase the Securities. 
  
 (f) This Purchase Agreement has been duly authorized, executed and delivered by the Purchaser and no filing with, or authorization, approval, consent,
license, order registration, qualification or decree of, any governmental body, agency or court having jurisdiction over the Purchaser, other than those that have been made or obtained, is necessary or required for the performance by the Purchaser
of its obligations under this Purchase Agreement or to consummate the transactions contemplated herein. 
  
 (g) The Purchaser is a “Qualified Purchaser” as such term is defined in Section 2(a)(51) of the Investment Company Act. 
  
 6. Covenants and Agreements of the Company and the
Trust. The Company and the Trust jointly and severally agree with the Purchaser as follows: 
  
 (a) During the period from the date of this Agreement to the Closing Date, the Company and the Trust shall use their best efforts and take all action
necessary or appropriate to cause their representations and warranties contained in Section 4 hereof to be true as of the Closing Date, after giving effect to the transactions contemplated by this Purchase Agreement, as if made on and as of the
Closing Date. 
  

 A-I-14 

 (b) Based on information provided by the Purchaser as to the Jurisdiction I which the Preferred
Securities will be sold, the Company and the Trust will arrange for the qualification of the Preferred Securities for sale under the laws of such jurisdictions as the Purchaser may designate and will maintain such qualifications in effect so long as
required for the sale of the Preferred Securities. The Company or the Trust, as the case may be, will promptly advise the Purchaser of the receipt by the Company or the Trust, as the case may be, of any notification with respect to the suspension of
the qualification of the Preferred Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. 
  
 (c) Neither the Company nor the Trust will, nor will either of them permit any of its Affiliates to, nor will either of them permit any person acting on
its or their behalf (other than the Purchaser) to, resell any Preferred Securities that have been acquired by any of them. 
  
 (d) Neither the Company nor the Trust will, nor will either of them permit any of their Affiliates or any person acting on their behalf to, engage in any
“directed selling efforts” within the meaning of Regulation S under the Securities Act with respect to the Securities. 
  
 (e) Neither the Company nor the Trust will, nor will either of them permit any of their Affiliates or any person acting on their behalf to, directly or
indirectly, make offers or sales of any security, or solicit offers to buy any security, under circumstances that would require the registration of any of the Securities under the Securities Act. 
  
 (f) Neither the Company nor the Trust will, nor will either of them permit
any of its Affiliates or any person acting on their behalf to, engage in any form of “general solicitation or general advertising” (within the meaning of Regulation D) in connection with any offer or sale of the any of the Securities.

  
 (g) So long as any of the Securities are outstanding, (i) the
Securities shall not be listed on a national securities exchange registered under section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system and (ii) neither the Company nor the Trust shall be an open-end investment
company, unit investment trust or face-amount certificate company that is, or is required to be, registered under section 8 of the Investment Company Act, and, the Securities shall otherwise satisfy the eligibility requirements of Rule 144A(d)(3).

  
 (h) Each of the Company and the Trust shall furnish to (i) the
holders, and subsequent holders of the Preferred Securities, (ii) Cohen Bros. & Company (at 450 Park, 23rd
Floor, New York, NY 10022, or such other address as designated by Cohen Bros. & Company) and (iii) any beneficial owner of the Securities reasonably identified to the Company and the Trust (which identification may be made by either such
beneficial owner or by Cohen Bros. & Company), a duly completed and executed certificate in the form attached hereto as Annex F, including the financial statements referenced in such Annex, which certificate and financial statements shall be so
furnished by the Company and the Trust not later than forty five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Company and not later than ninety (90) days after the end of each fiscal year of the
Company. 
  
 (i) Each of the Company and the Trust will, during
any period in which it is not subject to and in compliance with section 13 or 15(d) of the Exchange Act, or it is not exempt 

  

 A-I-15 

 
from such reporting requirements pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act, shall provide to each holder of the Securities and
to each prospective purchaser (as designated by such holder) of the Securities, upon the request of such holder or prospective purchaser, any information required to be provided by Rule 144A(d)(4) under the Securities Act. If the Company and the
Trust are required to register under the Exchange Act, such reports filed in compliance with Rule 12g3-2(b) shall be sufficient information as required above. This covenant is intended to be for the benefit of the Purchaser, the holders of the
Securities, and the prospective purchasers designated by the Purchaser and such holders, from time to time, of the Securities. 
  
 (j) Neither the Company nor the Trust will, until one hundred eighty (180) days following the Closing Date, without the Purchaser’s prior written
consent, offer, sell, contract to sell, grant any option to purchase or otherwise dispose of, directly or indirectly, (i) any Preferred Securities or other securities substantially similar to the Preferred Securities other than as contemplated by
this Purchase Agreement or (ii) any other securities convertible into, or exercisable or exchangeable for, any Preferred Securities or other securities substantially similar to the Preferred Securities. 
  
 (k) Unless and until the Company’s Board of Directors determines that it
is not in the best interests of the Company’s shareholders, the Company will use its reasonable commercial efforts to meet the requirements to qualify as a REIT under Sections 856 through 860 of the Code, effective for the taxable year ending
December 31, 2004 (and each fiscal quarter of such year) and succeeding taxable years. 
  
 (l) Neither the Company nor the Trust will identify any of the Indemnified Parties (as defined below) in a press release or any other public statement without the consent of such Indemnified Party. 
  
 7. Payment of Expenses. The Company, as depositor of the
Trust, agrees to pay all costs and expenses incident to the performance of the obligations of the Company and the Trust under this Purchase Agreement, whether or not the transactions contemplated herein are consummated or this Purchase Agreement is
terminated, including all costs and expenses incident to (i) the authorization, issuance, sale and delivery of the Preferred Securities and any taxes payable in connection therewith; (ii) the fees and expenses of qualifying the Preferred Securities
under the securities laws of the several jurisdictions as provided in Section 6(b); (iii) the fees and expenses of the counsel, the accountants and any other experts or advisors retained by the Company or the Trust; (iv) the fees and all
reasonable expenses of the Property Trustee, the Delaware Trustee, the Indenture Trustee and any other trustee or paying agent appointed under the Operative Documents, including the fees and disbursements of counsel for such trustees, which fees
shall not exceed a $2,000 acceptance fee, $3,500 for the fees and expenses of Richards, Layton & Finger, P.A., special Delaware counsel retained by the Delaware Trustee in connection with the Closing, and $4,000 in administrative fees annually;
and (v) a due diligence fee in an amount equal to $12,500 payable to Cohen Bros. & Company. 
  
 If the sale of the Preferred Securities provided for in this Purchase Agreement is not consummated because any condition set forth in Section 3
hereof to be satisfied by either the Company or the Trust is not satisfied, because this Purchase Agreement is terminated pursuant to 

  

 A-I-16 

 
Section 9 or because of any failure, refusal or inability on the part of the Company or the Trust to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder other than by reason of a default by the Purchaser, the Company will reimburse the Purchaser upon demand for all reasonable out-of-pocket expenses (including the fees and expenses of each
of the Purchaser’s counsel specified in subparagraphs (v) and (vi) of the immediately preceding paragraph) that shall have been incurred by the Purchaser in connection with the proposed purchase and sale of the Preferred Securities. The Company
shall not in any event be liable to the Purchaser for the loss of anticipated profits from the transactions contemplated by this Purchase Agreement. 
  
 8. Indemnification. (a) The Company and the Trust agree jointly and severally to indemnify and hold harmless the Purchaser, the
Purchaser’s affiliates, Cohen Bros. Company and Merrill Lynch & Co. (collectively, the “Purchaser Indemnified Parties”), each person, if any, who controls any of the Indemnified Parties within the meaning of the Securities
Act, or the Exchange Act, and the Indemnified Parties’ respective directors, officers, employees and agents and each person who “controls” the Indemnified Parties within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any information or documents
furnished or made available to the Purchaser by or on behalf of the Company, (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii)
the breach or alleged breach of any representation, warranty or agreement of either Seller contained herein, and agrees to reimburse each such Indemnified Party, as incurred, for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which the Company or the Trust may otherwise have. The obligations of the Company and the Trust set
forth in Section 8(a)(iii) shall terminate eighteen (18) months after the Closing Date. 
  
 (b) The Company agrees to indemnify the Trust against all loss, liability, claim, damage and expense whatsoever due from the Trust under paragraph (a) above. 
  
 (c) Purchaser agrees to indemnify and hold harmless the Company and the
Trust, their respective affiliates (collectively, the “Company Indemnified Parties”), and together with the Purchaser Indemnified Parties, the “Indemnified Parties”), each person, if any, who controls any of the Company
Indemnified Parties within the meaning of the Securities Act, or the Exchange Act, and the Company Indemnified Parties’ respective directors, officers, employees and agents and each person who “controls” the Company Indemnified
Parties within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon the offer, sale or other distribution of the
Securities contemplated by the Operative Documents. This indemnity agreement will be in addition to any liability which the Purchaser may otherwise have. 
  

 A-I-17 

 (d) Promptly after receipt by an Indemnified Party under this Section 8 of notice of the commencement of
any action, such Indemnified Party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, promptly notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve the indemnifying party from liability under paragraph (a) or (c) above, as the case may be, unless and to the extent that such failure results in the forfeiture by the indemnifying party of material rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any Indemnified Party other than the indemnification obligation provided in paragraphs (a) or (c) above, as the case may be. If any such action is
brought against any Indemnified Party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the Indemnified Party
promptly after receiving notice of the commencement of the action from the Indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the Indemnified
Party, and after notice from the indemnifying party to the Indemnified Party of its election to assume the defense, the indemnifying party will not be liable to the Indemnified Party for any legal or other expenses incurred by the indemnified party
in connection with the defense. The Indemnified Party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such Indemnified Party unless (1) the
employment of counsel by the Indemnified Party has been authorized in writing by the indemnifying party or (2) there is an actual and material conflict of interests between the Indemnified Party and the indemnifying party in connection with such
action (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the Indemnified Party), in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all Indemnified Parties in
connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. An indemnifying party will not, without the prior written consent of the Indemnified
Parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the Indemnified Parties are
actual or potential parties to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of each Indemnified Party from all liability arising out of such claim, action, suit or
proceeding. 
  
 9. Termination; Representations and
Indemnities to Survive. This Purchase Agreement shall be subject to termination in the absolute discretion of the Purchaser, by notice given to the Company and the Trust prior to delivery of and payment for the Preferred Securities,
if prior to such time (i) a downgrading shall have occurred in the rating accorded the Company’s debt securities or preferred stock by any “nationally recognized statistical rating organization,” as that term is used by the Commission
in Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, or such organization shall have publicly announced that it has under surveillance 

  

 A-I-18 

 
or review, with possible negative implications, its rating of the Company’s debt securities or preferred stock, (ii) the Trust shall be unable to sell
and deliver to the Purchaser at least $36,250,000 stated liquidation value of Preferred Securities, (iii) a suspension or material limitation in trading in securities generally shall have occurred on the New York Stock Exchange, (iv) a suspension or
material limitation in trading in any of the Company’s securities shall have occurred on the exchange or quotation system upon which the Company’ securities are traded, if any, (v) a general moratorium on commercial business activities
shall have been declared either by federal or Maryland authorities or (vi) there shall have occurred any outbreak or escalation of hostilities, or declaration by the United States of a national emergency or war or other calamity or crisis the effect
of which on financial markets is such as to make it, in the Purchaser’s judgment, impracticable or inadvisable to proceed with the offering or delivery of the Preferred Securities. The respective agreements, representations, warranties,
indemnities and other statements of the Company and the Trust or their respective officers or trustees and of the Purchaser set forth in or made pursuant to this Purchase Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Purchaser, the Company or the Trust or any of the their respective officers, directors, trustees or controlling persons, and will survive delivery of and payment for the Preferred Securities. The provisions
of Sections 7 and 8 shall survive the termination or cancellation of this Purchase Agreement. 
  
 10. Amendments. This Purchase Agreement may not be modified, amended, altered or supplemented, except upon the execution and delivery of a
written agreement by each of the parties hereto. 
  
 11.
Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Purchaser, will be mailed, delivered by hand or courier or sent by facsimile and confirmed to the Purchaser c/o Cohen
Bros. & Company, 450 Park, 23rd Floor, New York, NY 10022, Attention: Mitchell Kahn, Facsimile: (212) 735-1499;
with a copy to Mayer, Brown, Rowe & Maw LLP, 190 South LaSalle Street, Chicago, Illinois 60603, Attention: J. Paul Forrester, Facsimile: (312) 701-7711 or other address as the Purchaser shall designate for such purpose in a notice to the Company
and the Trust; and if sent to the Company or the Trust, will be mailed, delivered by hand or courier or sent by facsimile and confirmed to it at Anworth Mortgage Asset Corporation, 1299 Ocean Avenue, Suite 250, Santa Monica, California 90401, fax
no. (310) 434-0070, attn: Chief Financial Officer, with a copy to Manatt, Phelps & Phillips, LLP, 11355 West Olympic Boulevard, Los Angeles, California 90064, fax no. (310) 914-5712, attn: Mark J. Kelson, Esq. 
  
 12. Successors and Assigns. This Purchase Agreement will
inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Nothing expressed or mentioned in this Purchase Agreement is intended or shall be construed to give any person other than the
parties hereto and the affiliates, directors, officers, employees, agents and controlling persons referred to in Section 8 hereof and their successors, assigns, heirs and legal representatives, any right or obligation hereunder. None of the
rights or obligations of the Company or the Trust under this Purchase Agreement may be assigned, whether by operation of law or otherwise, without the Purchaser’s prior written consent. The rights and obligations of the Purchaser under this
Purchase Agreement may be assigned by the Purchaser without the Company’s or the Trust’s consent; provided that the assignee assumes the obligations of the Purchaser under this Purchase Agreement. 
  

 A-I-19 

 13. Applicable Law. THIS PURCHASE AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW). 
  
 14. Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT
TO OR ARISING OUT OF THIS PURCHASE AGREEMENT MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK (IN EACH CASE SITTING IN
THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY OF THIS PURCHASE AGREEMENT, EACH PARTY ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS (AND COURTS OF APPEALS THEREFROM)
FOR LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS PURCHASE AGREEMENT. 
  
 15. Counterparts and Facsimile. This Purchase Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument. This Purchase Agreement may be executed by any one or more of the parties hereto by facsimile. 
  

 A-I-20 

 IN WITNESS WHEREOF, this Purchase Agreement has been entered into as of the date first written above.

  

							
	 	 	ANWORTH MORTGAGE ASSET CORPORATION
			
	 	 	 By:
	 	  

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 
		
	 	 	 ANWORTH CAPITAL TRUST 1

			
	 	 	 By:
	 	 ANWORTH MORTGAGE ASSET CORPORATION, as
Depositor

				
	 	 	 	 	 By:
	 	  

	 	 	 	 	 Name:
	 	 
	 	 	 	 	 Title:
	 	 
		
	 Amount of Preferred Securities being purchased by:
	 	 TABERNA PREFERRED FUNDING I, LTD.

				
	 $15,000,000
	 	 	 	 	 	 
	 	 	 By:
	 	  

	 	 	 	 	 J. Paul Forrester, as attorney in fact

		
	 Amount of Preferred Securities being purchased by:
	 	 MERRILL LYNCH INTERNATIONAL

				
	 $21,250,000
	 	 	 	 	 	 
	 	 	 By:
	 	  

  
  

 A-I-21 

 SCHEDULE 1 
  

List of Significant Subsidiaries 
  

			
	 Subsidiary

	  	Jurisdiction of
Incorporation

	 Belvedere Trust Mortgage Corporation
	  	Maryland
	 Belvedere Trust Secured Assets Corporation
	  	Delaware

  
  

 22 

 ANNEX A-I 
  

Pursuant to Section 3(c)(i) of the Purchase Agreement, Manatt, Phelps & Phillips, LLP, counsel for the Company, shall deliver an opinion to the
effect that: 
  
 1. Belvedere Secured Assets is a
validly existing corporation in good standing under the laws of the State of Delaware with corporate power and authority to own or lease its properties and to conduct its business as such business is currently conducted in all material respects; all
outstanding shares of capital stock of Belvedere Secured Assets have been duly authorized and validly issued, and are fully paid and nonassessable and owned of record and beneficially, directly or indirectly, by the Company. 
  
 2. Neither the issue and sale of the Common Securities, the
Preferred Securities or the Junior Subordinated Notes, nor the purchase by the Trust of the Junior Subordinated Notes, nor the execution and delivery of and performance of its obligations on or prior to the date of this opinion under the Operative
Documents by the Company or the Trust nor the consummation of the transactions contemplated thereby will constitute a breach or violation of the Trust Agreement. 
  
 3. The Trust Agreement has been duly executed and delivered by the Administrative Trustees. 
  
 4. The Trust is not, and, following the issuance of the
Preferred Securities and the consummation of the transactions contemplated by the Operative Documents and the application of the proceeds therefrom, the Trust will not be, an “investment company” or an entity “controlled” by an
“investment company,” in each case within the meaning of Section 3(a) of the Investment Company Act. 
  
 5. Assuming the truth and accuracy of the representations and warranties of the Purchaser in the Purchase Agreement, it is not necessary
in connection with the offer, sale and delivery of the Common Securities, the Preferred Securities and the Junior Subordinated Notes to register the same under the Securities Act of 1933, as amended, under the circumstances contemplated in the
Purchase Agreement and the Trust Agreement. 
  
 6. The Purchase Agreement has been duly authorized, executed and delivered by the Trust and constitutes a legal, valid and binding obligation of the Trust enforceable against the Trust in accordance with its terms. 
  
 7. Assuming the Purchase Agreement has been duly authorized,
executed and delivered by the Company, the Purchase Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 
  
 8. Assuming the Indenture has been duly authorized, executed
and delivered by the Company and the Indenture Trustee, the Indenture constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms. 
  
  

 A-I-1 

 9. Assuming the Junior Subordinated Notes have been duly authorized and executed by the
Company and delivered to the Indenture Trustee for authentication in accordance with the Indenture and, when authenticated in accordance with the provisions of the Indenture and delivered to the Trust against payment therefor, will constitute legal,
valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. 
  
 10. The execution, delivery and performance by the Company and the Trust of the Operative Documents and the consummation of the
transactions contemplated by the Purchase Agreement and the Operative Documents do not (a) violate, breach or result in a default under the Certificate of Incorporation or By-Laws of Belvedere Secured Assets, (b) to the best of our knowledge, breach
or otherwise violate any existing obligation of the Company or any Significant Subsidiary under any agreement or contract listed on Annex A, (c) breach or otherwise violate any existing obligation of the Company or any Significant Subsidiary under
any order, judgment or decree of any California, New York or federal court or governmental entity binding on the Company or any of the Significant Subsidiaries and known to us, (d) result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or assets of the Company or any Significant Subsidiary, except in each case under subsections (b), (c) and (d) above, for breaches, violations, defaults, liens, charges, claims or encumbrances that would not reasonably
be expected to have a material adverse effect on the assets, business, operations, earnings, properties of the Company and the Significant Subsidiaries, taken as a whole. 
  
 11. To the best of our knowledge, the Trust is not in breach or violation of, or default under, with or
without notice or lapse of time or both, its Certificate of Trust or the Trust Agreement. 
  
 12. The Company has been organized and operated in conformity with the requirements for qualification as a REIT under the Code for its
taxable years ended December 31, 1998 through December 31, 2004, and the Company’s contemplated method of operations will enable it to satisfy the requirements for such qualification for its taxable year ending December 31, 2005, and each
taxable year thereafter. The Company’s qualification as a REIT under the Code will depend upon the Company’s ability to meet, through actual operating results, distribution levels, diversity of stock ownership and the various income and
asset qualification tests imposed under the Code. Such operating results will not be reviewed by us and, accordingly no assurance can be given that the actual results of the Company’s operations for any one taxable year will satisfy the
requirements for REIT qualification. Moreover, certain aspects of the Company’s methods of operations have not been considered by the courts or the Internal Revenue Service. There can be no assurance that the courts or the Internal Revenue
Service will agree with this opinion. 
  

 A-I-2 

 ANWORTH MORTGAGE ASSET CORPORATION 
 1299 OCEAN AVENUE, SUITE 250 
 SANTA MONICA, CALIFORNIA 90401 

 
 OFFICERS’ CERTIFICATE 
  
 To:        Manatt, Phelps & Phillips, LLP

  
 Each of the undersigned officers of ANWORTH MORTGAGE ASSET CORPORATION, a
Maryland corporation, which has been organized to operate as a real estate investment trust for federal income tax purposes (a “REIT” and which is herein called, except as otherwise expressly provided herein, the “Company”)
hereby certifies, on behalf of the Company, that, after due inquiry, he or she has made the representations set forth below and hereby reaffirms as of the date hereof the accuracy of such representations on which Manatt, Phelps & Phillips, LLP,
is relying in rendering its opinion that, beginning with the Company’s initial taxable year ending December 31, 1998, the Company has been organized in conformity with the requirements for qualification as a REIT under the Internal Revenue Code
of 1986, as amended (the “Code”), and that the Company’s actual method of operation has enabled, and its proposed method of operation will enable (as represented in this certificate), the Company to satisfy the requirements for
qualification and taxation as a REIT. The Company filed a prospectus (the “Base Prospectus”) with the Securities and Exchange Commission (the “SEC”) on May 11, 2004 as part of a Registration Statement on Form S-3 (File No.
333-115392) as amended and including all exhibits and schedules thereto, and filed prospectus supplements (the “Prospectus Supplements”) with the SEC on November 12, 2004, and January 21, 2005 (the Base Prospectus together with the
Prospectus Supplements collectively referred to as the “Prospectus”).1 
  
 The Company proposes to issue to Anworth Capital Trust 1 (the “Trust”) $37,380,000
in Junior Subordinated Notes. The Trust proposes to issue and sell 36,250 Floating Rate Preferred Securities of the Trust to Taberna Preferred Funding I, Ltd., or its assignee (the “Purchaser”). The tax opinion of Manatt, Phelps &
Phillips, LLP, referred to above is being issued to the Purchaser, and JPMorgan Chase Bank, National Association, in connection with the aforementioned transactions. 
  
 Each of the undersigned officers of the Company hereby certifies that he or she is authorized to execute this Officers’ Certificate in
the name and on behalf of the Company, and further certifies as follows: 
  
 1. The Company and its subsidiaries have at all times been and will continue to be operated in accordance with (a) the statements and representations made in the Prospectus and the Registration Statement, (b)
the terms of each of their respective organizational documents as of the date of this Officers’ Certificate, (c) the laws of the jurisdiction under which it is organized, and (d) the facts and representations set forth in this Officers’
Certificate. 

	1	Unless otherwise specifically defined herein, all terms used herein have the meanings ascribed to them in the Prospectus and the Registration Statement.

  

 A-I-3 

 2. As of the date of this Officers’ Certificate, the Company (a) has not created, acquired or
invested in any subsidiary corporation, other than its direct stock ownership in its wholly-owned subsidiaries, Belvedere Trust and BT Management Holding Corporation, and its indirect ownership in (i) Belvedere Trust Finance Corporation, BellaVista
Finance Corporation, and Belvedere Trust Secured Assets Corporation, each of which is a direct wholly-owned subsidiary of Belvedere Mortgage and (ii) BT Residential Funding Corporation and BellaVista Funding Corporation, each of which is a direct
wholly-owned subsidiary of Belvedere Finance, and (b) has not been, and is not now, a partner or member in any partnership or limited liability company, respectively, other than with respect to BT Management Holding Corporation’s membership
interest in BT Management Company, L.L.C. 
  
 3. The
factual statements and representations set forth in the Registration Statement and the Prospectus were all true at the time they were made and continue to be true as of the date hereof. 
  
 4. For each calendar quarter ended March 31, 1998 through December 31, 2004, the Company’s financial statements
and the footnotes thereto as set forth in the Company’s 10-Q filings with the SEC present accurately, in all material respects, the financial position of the Company and its results of operations and cash flows for such period. For each
calendar year ended December 31, 1998 through December 31, 2004, the Company’s financial statements and the footnotes thereto as set forth in the Company’s 10-K filings with the SEC present accurately, in all material respects, the
financial position of the Company and its results of operations and cash flows for such period. 
  

 A-I-4 

 5. At all times commencing with its taxable year ending December 31, 1997, the Company has adopted
December 31 as its taxable year-end for federal income tax purposes. 
  
 6. The Company made a timely election on the Company’s federal income tax return to be taxed as a real estate investment trust commencing with the taxable year ending December 31, 1998, and such election has not been and will
not be terminated and has not been revoked. No event, transaction or other thing that would adversely affect such election is anticipated to occur in the foreseeable future. 
  
 7. The Company had no current or accumulated “earnings and profits” for federal income tax purposes as a C
corporation for any of its taxable years prior to the year that it first qualified for tax purposes as a REIT. 
  
 8. The Company has at all times been and will continue to be managed by one or more directors and officers of the Company as required by Section
856(a)(1) of the Code. The directors have maintained and will maintain continuing, exclusive authority over the management of the Company, the conduct of its affairs, and the management and disposition of Company property. 
  
 9. The officers and directors of the Company have at all times acted
and will continue to act independently in the fulfillment of their duties and obligations as the officers and directors of the Company and not as the agent or nominee of any shareholder of the Company. Notwithstanding that the Company and the
Company affiliates listed in Item 2, above (or any future Company affiliates) may have certain officers and directors in common, any person who is an officer or director of more than one of the Company and such affiliates has at all times satisfied
and will continue to satisfy the fiduciary duty that such person owes to each of such entities while serving in his or her capacity as an officer or director of such entity. 
  

 A-I-5 

 10. The shares of Stock of the Company have had and will have only the rights and restrictions set
forth in the Prospectus. 
  
 11. The beneficial ownership
of the Company has at all times been and will continue to be evidenced by transferable shares. With the exception of the Restricted Stock (as described below) the Company has not and will not impose, and is not aware of, any transfer restrictions on
the Company’s shares of beneficial interest, other than those restrictions contained in the Company’s Amended Articles of Incorporation, dated October 20, 1997, as amended and supplemented (the “Articles”), the Bylaws of the
Company and the two sets of Articles Supplementary filed with the Maryland Department of Assessments and Taxation on November 3, 2004, and on January 20, 2005 (the “Articles Supplementary”) which are intended to enable the Company to
comply with certain REIT qualification requirements as set forth in the Code. The term “Restricted Stock” means Company stock issued to certain officers, employees or directors of the Company or its subsidiaries (a) which is subject to a
“substantial risk of forfeiture” as defined in Section 83 of the Code and (b) the value of which does not exceed, in the aggregate, two percent (2%) in value of the Company’s outstanding stock. Since the Company’s inception,
there have been no outstanding options or warrants to purchase the Company’s capital stock (other than options granted under the Company’s 1997 Stock Option and Awards Plan, as amended) and no outstanding securities which are convertible
into shares of the Company’s capital stock. Since the Company’s inception, the Company has not held any warrants to purchase the capital stock or other ownership interests of any other person or entity or any securities that are
convertible into the capital stock or other ownership interests in any other person or entity. 
  
 12. At all times the Company has used (and will continue to use) diligent efforts to enforce the transfer and ownership restrictions on its capital stock as set forth in the Company’s Articles, its Bylaws,
and the Articles Supplementary. 
  

 A-I-6 

 13. At no time during any taxable year after 1997 did or will more than 50 percent in value of the
Company’s outstanding shares (including, without limitation, the Company’s Common Shares) be owned, directly or indirectly, by five or fewer individuals as determined by applying Sections 542(a)(2), 544 and 856(h) of the Code. 

 
 14. At all times on and after January 1, 1998, the beneficial
ownership of the Company’s outstanding shares has and will continue to be held by 100 or more persons during at least 335 days of each taxable year (and a proportionate part of any such taxable year of less than 12 months). 
  
 15. The Company is organized as a Maryland corporation and has taken
and will take no action inconsistent with its status as a corporation. 
  
 16. The Company is not (and has never been) a bank, financial institution, a mutual savings bank, a domestic building and loan association, a small business investment company, a business development corporation, or a savings
institution chartered and supervised as a savings and loan or similar association under federal or state law. The Company is not (and has never been) an insurance company of any kind. 
  
 17. For the Company’s taxable year ending December 31, 1998, and for each of the Company’s taxable years
thereafter, at least 75% of the gross income derived by the Company2 has consisted of and will continue to consist
of (a) amounts derived from rental of the real properties owned by it or similar real properties acquired in the future, including rents attributable to personal property as described in paragraph 21 below, and including charges for 
  

	2	For purposes of the representations with respect to gross income as contained in paragraphs 17, 18 and 19 hereof, the Company is treated as receiving a pro rata
share of all items of gross income received or accrued by any partnership in which the Company may hold a partnership interest, directly or indirectly, and as receiving all income received or accrued by any “qualified REIT subsidiary” of
the Company (herein, a “QRS”). The term “qualified REIT subsidiary” means any corporation if 100 percent of the stock of such corporation is held by the Company, but shall not include a taxable REIT subsidiary.

  

 A-I-7 

 services usually or customarily rendered in connection with the rental of real property space for occupancy only, whether
or not such charges are separately stated, (b) interest on obligations secured by mortgages on real property or on interests in real property, (c) gain realized from the sale or other disposition of real property which is not stock in trade of the
Company or other property of a kind which would be properly included in inventory of the Company if on hand at the close of the taxable year and not property held by the Company primarily for sale to customers in the ordinary course of the
Company’s trade or business, (d) dividends or other distributions on, and gain (other than gain from prohibited transactions3) from the sale or other disposition of, transferable shares (or transferable certificates of beneficial interest) in other tax-qualified REITs, (e) abatements and refunds of taxes on real property, (f) income and gain from
foreclosure property,4 (g) amounts (other than amounts the determination of which depends in whole or in part on the
income or profits of any person) received or accrued as consideration for entering into agreements (i) to make loans secured by mortgages on real property or on interests in real property or (ii) to purchase or lease real property (including
interests in real property and interests in mortgages on real property), (h) gain from the sale or other disposition of a real estate asset which is not a prohibited transaction, and (i) qualified temporary investment income.5 The Company will continue to monitor its gross income at least as frequently as quarterly to maintain the Company’s status
as a REIT for federal income tax purposes, in part by meeting the foregoing income test (the “75% income test”). For all taxable years of the Company beginning after December 31, 2004, the Company reasonably expects that it will satisfy
the 75% income test. 
  

	3	The term “prohibited transaction” means a sale or other disposition of property which is stock in trade of the Company or other property of a kind which
would properly be included in the inventory of the Company if on hand at the close of the taxable year, or property held by the Company primarily for sale to customers in the ordinary course of the Company’s trade or business, other than
foreclosure property. 

	4	The term “foreclosure property” means any real property (including interests in real property) and any personal property incident to such real property,
acquired by the Company as the result of the Company having bid in such property at foreclosure, or otherwise having reduced such property to ownership or possession by agreement or process of law, after there was default (or default was imminent)
on a lease of such property or on an indebtedness which such property secured. Such term does not include property acquired by the Company as a result of indebtedness arising from the sale or other disposition of property described in footnote 3
above which was not originally acquired as foreclosure property. 

	5	The term “temporary investment income” means any income which is attributable to a stock or debt instrument, is attributable to temporary investment of new
capital of the Company, and is received or accrued during the one year period beginning on the date on which the Company receives such capital. 

  

 A-I-8 

 18. For the Company’s taxable year ending December 31, 1998, and for each of the
Company’s taxable years thereafter, at least 95% of the gross income derived by the Company has consisted of and will continue to consist of (a) the items of income described in paragraph 18 above (other than qualified temporary investment
income), (b) gain realized from the sale or other disposition of stock or securities which are not property described in footnote 3, (c) interest and (d) dividends. For these purposes, any payment to the Company or a QRS or a partnership in which
the Company or such QRS directly or indirectly owns an interest under an interest rate swap or cap agreement, option, futures contract, forward rate agreement, or any similar financial instrument, entered into by the Company or a QRS or a
partnership in which the Company or such QRS directly or indirectly owns an interest in a transaction to reduce the interest rate risks with respect to any indebtedness incurred or to be incurred by the Company or such QRS or a partnership in which
the Company or such QRS directly or indirectly owns an interest to acquire or carry real estate assets, and gain from the sale or other disposition of any such investment, shall also be treated as income qualifying under the foregoing income test.
The Company understands that income derived from payments to the Company under any hedging instruments that are not described in Section 856(c)(5)(G) of the Code (“Qualified Hedges”) do not qualify for the numerator for either the 75%
income test or the foregoing income test and will so treat payments other than Qualified Hedges. The Company will continue to monitor the Company’s compliance with the foregoing income test at least as frequently as quarterly to maintain the
Company’s status as a REIT for federal income tax purposes, in part by meeting the foregoing income test (the “95% income test”). For all taxable years of the Company beginning after December 31, 2004, the Company reasonably expects
that it will satisfy the 95% income test. 
  

 A-I-9 

 19. For the Company’s taxable year ending December 31, 1998, and for each of the
Company’s taxable years thereafter, neither the Company nor any Company QRS, nor any partnership in which the Company or such QRS is or was directly or indirectly a partner has received or accrued or will receive or accrue any amount (herein
“service consideration”), directly or indirectly, with respect to any real or personal property in any case in which the Company or such QRS or any such partnership (or any agent of the Company or such partnership or QRS) furnishes or
renders services to tenants of such property, or manages or operates such property (a) other than through a taxable REIT subsidiary6 or through an independent contractor7 with respect to the Company from which the Company or such
partnership or QRS does not derive or receive any income or (b) other than services usually or customarily rendered in connection with the rental of space in real property for occupancy only, or not rendered primarily for the convenience of the
occupant of the real property, except that the Company may receive or accrue a de minimis amount of service consideration which does not (i) cause any amount received or accrued by the Company, other than such service consideration, not to qualify
as 
  

	6	The term “taxable REIT subsidiary” means, with respect to the Company, a corporation (other than a REIT) if the Company directly or indirectly owns stock
in such corporation and the Company and such corporation jointly elect that such corporation shall be treated as a taxable REIT subsidiary for purposes of the REIT provisions of the Code. The term “taxable REIT subsidiary” also includes,
with respect to the Company, any corporation (other than a REIT) with respect to which a taxable REIT subsidiary of the Company owns directly or indirectly securities possessing more than 35% of the total voting power of the outstanding securities
of such corporation or securities having a value of more than 35% of the total value of the outstanding securities of such corporation. The term does not apply to a QRS. The term does not include any corporation which directly or indirectly operates
or manages a lodging facility or health care facility or any corporation which directly or indirectly provides to any other person (under a franchise, license or otherwise) rights to any brand name under which any lodging facility or health care
facility is operated. 

	7	The term “independent contractor” means any person (a) who does not own, directly or indirectly, more than 35% of the shares, or certificates of beneficial
interest, in the Company and (b) if such person is a corporation, not more than 35% of the total combined voting power of whose stock (or 35% of the total shares of all classes of whose stock), or, if such person is not a corporation, not more than
35% of the interest in whose assets or net profits is owned, directly or indirectly, by one or more persons owning 35% or more of the shares or certificates of beneficial interest in the Company. In the event that any class of stock of either the
Company or such person is regularly traded on an established securities market, only persons who own directly or indirectly more than 5% of such class of stock shall be taken into account as owning any of the stock of such class for purposes of
applying the 35% limitation set forth in (b) above (but all of the outstanding stock of such class shall be considered outstanding in order to compute the denominator for purposes of determining the applicable percentage of ownership).

  

 A-I-10 

 rents from real property8 and (ii) materially adversely affect the Company’s ability to satisfy the standards relating to 75% and 95% income tests, respectively, as set forth in paragraphs 17 and 18, respectively, of this
Officers’ Certificate. To the extent that any independent contractor provides services to tenants of any property, other than services which are usual and customary in the relevant geographic market: (i) the cost of such services will be borne
by the independent contractor; (ii) a separate charge will be made for the services; (iii) the amount of the separate charge will be received and retained by the independent contractor; (iv) the independent contractor will be adequately compensated
for such services; (v) the Company will derive no income from the independent contractor, including, without limitation, any income in the form of (a) dividends, (b) interest, (c) rents, (d) fees, (e) commissions, or (f) income from an equity
interest in, or as a partner or joint venturer with, such independent contractor. The Company understands that fees and charges paid to the Company for services, including the collection and servicing of mortgage loans, is not income qualifying for
the numerator for either the 75% income test or the 95% income test. 
  

	8	The term “rents from real property” means rents from interests in real property, charges for services customarily furnished or rendered in connection with
the rental of real property, whether or not such charges are separately stated, and rent attributable to personal property which is leased under, or in connection with, a lease of real property, but only if the rent attributable to such personal
property for the taxable year does not exceed 15% of the total rent for the taxable year attributable to both the real and personal property leased under, or in connection with, such lease. With respect to each lease of real property, rent
attributable to personal property for the taxable year is that amount which bears the same ratio to total rent for the taxable year as the average of the fair market values of the personal property at the beginning and at the end of the taxable year
bears to the aggregate of the fair market values of both the real property and the personal property at the beginning and at the end of such taxable year. The term “rents from real property” does not include any amount received or accrued,
directly or indirectly, with respect to any real or personal property, if the determination of such amount depends in whole or in part on the income or profits derived by any person from such property (other than by reason of being based on a fixed
percentage or percentages of receipts or sales); any amount received or accrued, directly or indirectly, from any person if the Company owns, directly or indirectly, 10% or more of the total combined voting power of all classes of stock entitled to
vote, or 10% or more of the total value of all classes of stock of such person, or, in the case of any person which is not a corporation, an interest of 10% or more in the assets or net profits of such person; or any amount received or accrued
directly or indirectly by the Company for services furnished or rendered by the Company to the tenants of such property or for managing or operating such property. The term “value” means, with respect to securities for which market
quotations are readily available, the market value of such securities; and with respect to other securities and assets, fair value as determined in good faith by the directors of the Company, except that in the case of securities of REITs such fair
value shall not exceed market value or asset value, whichever is higher. 

	

  

 A-I-11 

 20. Pursuant to a management agreement, BT Management Company, L.L.C., a Delaware limited
liability company (the “Advisor”) performs management services on behalf of Belvedere Trust Mortgage Corporation (“Belvedere Trust”), which is a QRS with respect to the Company. The Advisor has been and will at all times be
adequately compensated (on terms comparable to arm’s length arrangements) for the management and related services that it provides. The terms and provisions of the management agreement are and will be on fair market terms and are and will be
provisions that are typical of those that would be found in an arm’s length agreement under similar circumstances. Any contracts for goods, services or cost sharing entered into by the Company or any of QRS or TRS of the Company (including, but
not limited to, the Services Agreement effective as of October 14, 2002, by and between Pacific Income Advisors, Inc., and the Company, the Administrative Services and Premises Agreement dated as of July 31, 2004, by and between Pacific Income
Advisors, Inc., and BellaVista Finance Corporation, and the Administrative Services and Premises Agreement dated as of July 31, 2004, by and between Pacific Income Advisors, Inc., and BellaVista Funding Corporation) have been and will be on terms
comparable to arm’s length arrangements. 
  
 21. For
the Company’s taxable year ending December 31, 1998, and for each of the Company’s taxable years thereafter, the Company (including for this purpose any Company QRS and any partnership in which the Company or such QRS directly or
indirectly holds an interest) has not and will not receive or accrue rent attributable to personal property except in situations where the rent is attributable to personal property which is leased under, or in connection with, a lease of real
property but only if the rent attributable to such personal property for the taxable year does not exceed 15% of the total rent for the taxable year attributable to both the real and personal property lease under, or in connection with, such lease.
For these purposes, with respect to each lease of real property, rent attributable to personal property for the taxable year is that amount which bears the same ratio to total rent for the taxable year as (i) the average of the 
  

 A-I-12 

 adjusted bases of the personal property bears to the average of the adjusted bases of both the real property and the
personal property at the beginning and at the end of such taxable year, in the case of taxable years through and including the taxable year ending December 31, 2000, or (ii) the average of the fair market values of the personal property bears to the
average of the fair market values of both the real property and the personal property at the beginning and at the end of such taxable year, in the case of taxable years beginning on or after January 1, 2001. 
  
 22. For the Company’s taxable year ending December 31, 1998, and
for each of the Company’s taxable years thereafter, the Company (including for this purpose any Company QRS and any partnership in which the Company or such QRS directly or indirectly holds an interest has not and will not receive or accrue,
directly or indirectly, any rent or interest with respect to real or personal property, where the determination of the amount of rent or interest depends in whole or in part on the income or profits derived by any person from the property, except
where rent or interest is based on a fixed percentage or percentages of receipts or sales, and except that the Company may receive or accrue a de minimis amount of such rent or interest which does not materially adversely affect its ability to
satisfy the standards relating to the 75% income test and the 95% income test, respectively, as set forth in paragraphs 17 and 18, respectively, of this Officers’ Certificate. 
  
 23. For the Company’s taxable year ending December 31, 1998, and for each of the Company’s taxable years
thereafter, the Company (including for this purpose any Company QRS and any partnership in which the Company or such QRS directly or indirectly holds an interest has not and will not receive or accrue, directly or indirectly, rent or any other
consideration under a lease from any person in which the Company owns (a) in the case of a corporation, 10% or more of the total combined voting power of all classes of stock entitled to vote, or 10% or more of the total number of shares of all
classes of stock, or (b) in the case of an entity other than a corporation, an interest of 10% or more in the assets or net profits of such entity other than a 
  

 A-I-13 

 corporation, except that the Company may receive or accrue a de minimis amount of such rent which does not materially
adversely affect its ability to satisfy the standards relating to the 75% income test and the 95% income test, respectively, as set forth in paragraphs 17 and 18, respectively, of this Officers’ Certificate. For purposes of this paragraph,
ownership will be determined by taking into account the attribution rules of Section 318 of the Code (as modified by Section 856(d)(5) of the Code). 
  
 24. At the close of each calendar quarter of the Company’s taxable year ending December 31, 1998, and of each calendar quarter of each of the
Company’s taxable years thereafter, as least 75% of the total value of the assets of the Company9 has consisted
of and will continue to consist of real estate assets,10 cash and cash items (including receivables which arise in
the ordinary course of operations, but not including receivables purchased from another person), and Government securities. At the close of each quarter of the Company’s taxable year ending December 31, 1998, and of each calendar quarter of
each of the Company’s taxable years through December 31, 2000, thereafter, (except in each case for securities qualifying as real estate assets, cash and cash items (including receivables) and Government securities), (i) not more than 25% of
the value of the Company’s total assets has been represented by securities, (ii) not more than 5% of the value of the Company’s total assets has been represented by securities of one issuer, and (iii) the Company has not held securities
possessing more than 10% of the total voting power of the outstanding securities of any one issuer. At the close of each quarter of each taxable year of the Company starting at January 1, 2001, not more than 25% of the value of the 
  

	9	For purposes of the representations with respect to assets (including securities) as contained in paragraph 24 hereof, the Company is treated as holding a pro rata
share of all assets held by any partnership in which the Company may hold a partnership interest, directly or indirectly and as holding all assets held by any QRS. 

	10	The term “real estate assets” means real property (including interests in real property and interests in mortgages on real property) and shares (or
transferable certificates of beneficial interest) in other tax-qualified real estate investment trusts. Such term also includes any property (not otherwise a real estate asset) attributable to the temporary investment of new capital, but only if
such property is stock or a debt instrument, and only for the one year period beginning on the date the Company receives such capital. The term “interests in real property” includes fee ownership and co ownership of land or improvements
thereon, options to acquire land or improvements thereon, leaseholds of land or improvements thereon, and options to acquire leaseholds of land or improvements thereon, but does not include mineral, oil or gas royalty interests.

  

 A-I-14 

 Company’s total assets has been or will be represented by securities (other than securities qualifying as real
estate assets, cash and cash items (including receivables) and Government securities), not more than 20% of the value of its total assets has been or will be represented by securities of one or more taxable REIT subsidiaries, and (except with
respect to securities qualifying as real estate assets, cash and cash items (including receivables) and Government securities, and except with respect to a taxable REIT subsidiary) not more than 5% of the value of the Company’s total assets has
been or will be represented by the securities of one issuer, the Company does not and will not hold securities possessing more than 10% of the total voting power of the outstanding securities of any one issuer, and the Company does not and will not
hold securities having a value of more than 10% of the total value of the outstanding securities of any one issuer. For each of the Company’s calendar quarters beginning after September 30, 2004, the Company reasonably expects that it will
satisfy each of the foregoing percentage tests. The Company will monitor its compliance with the foregoing test at least quarterly and will take such steps as are necessary to keep the Company in compliance therewith. The Company (or a subtier
partnership or limited liability company in which the Company or a QRS holds an interest, directly or indirectly) has and will at all times beneficially own all of its assets for investment purposes and not as (i) stock in trade or other property of
a kind which would properly be includible in inventory if on hand at the close of the taxable year or (ii) property held primarily for sale to customers in the ordinary course of a trade or business of the Company or QRS. Any REMIC interest that the
Company or a Company QRS acquires will be a “regular interest” (within the meaning of Code Section 860G(a)(1)) issued by a REMIC, at least 95% of the assets of which constitute real estate assets. All of the REMIC interests that the
Company or a Company QRS owns or has owned, if any, are regular interests issued by REMICs (or were regular interests during the period of such ownership) at least 95% of whose assets constitute real estate assets (or which met such percentage test
during the period of such ownership). 
  

 A-I-15 

 25. The Company and any Company QRS will not enter into any interest rate cap or swap agreement,
option contract, futures contract, forward rate agreement, or any similar financial instrument, other than Qualified Hedges. 
  
 26. The Company will not receive dividends from any independent contractor. 
  
 27. From and after the formation of any QRS (including, but not limited to, Belvedere Trust, Belvedere Trust Secured
Assets Corporation, and Bellavista Finance Corporation), the Company has held and will at all times hold 100% of the stock of such QRS, until the sale or other disposition by the Company of 100% of the stock of such QRS. 
  
 28. The Company made proper filings with the Internal Revenue Service
in order to make each Company TRS a TRS for tax purposes. 
  
 29. For the period beginning with the Company’s taxable year ending December 31, 1998, and for each of the Company’s taxable years thereafter, the Company has complied and will continue to comply with the record-keeping
requirements prescribed by the Declaration of Trust dated October 20, 1997. 
  
 30. The Company has distributed to its shareholders with respect to the Company’s taxable year ending December 31, 1998, and will distribute for each of the Company’s taxable years thereafter, amounts
equal in the aggregate to at least 95% of its “real estate investment trust taxable income” (determined without regard to the deduction for dividends paid (as defined in Section 561 of the Code)) and by excluding any net capital gain
(within the meaning of Section 857(a)(1)(A) of the Code), plus at least 95% of the excess of any “net income from foreclosure property” over the tax imposed by Section 857(b)(4)(A) of the Code on such net income, if any, as such terms in
quotations are defined in Sections 857(b)(2) and 857(b)(4)(B), respectively, of the Code, minus any “excess noncash income” (as defined in Code Section 857(e)), during the 
  

 A-I-16 

 taxable year involved or during the period thereafter as prescribed by Section 858 of the Code. For tax years beginning
after December 31, 2000, 90% shall be substituted for 95% in the foregoing sentence. For all taxable years of the Company beginning after December 31, 2003, the Company reasonably expects that it will continue to make distributions as described
above in this paragraph. The Company will distribute dividends in an amount equal to at least 90% of its taxable income to its shareholders on a pro rata basis with respect to each tax year and will endeavor to distribute dividends to its
shareholders equal to substantially all of its taxable income. 
  
 31. The Company understands that the Company must distribute 85% of its “ordinary income,” plus 95% of its capital gain net income, within the taxable year, or by the end of January of the following year for dividends
declared in October, November, and December, in order to avoid imposition of a special 4% excise tax under Code Section 4981. The Company will distribute any dividend declared during the fourth calendar quarter in any tax year no later than the
following January 31, and will endeavor to distribute at least 85% of its taxable income and 95% of its capital gain net income during each calendar year (or no later than the following January 31 for dividends declared during the fourth calendar
quarter). 
  
 32. The Company understands that the Company
may be required to recognize taxable income from market discount, from accrued but unpaid interest or from certain other forms of taxable income that may be included in gross income prior to the receipt of the corresponding cash receipts. The
Company understands that such income must be included in the computation of the Company’s taxable income for purposes of satisfying the Code’s annual REIT distribution test. If the Company derives more than 10% of its taxable income from
such non-cash income, the Company will, at its option, borrow, sell assets or distribute excess cash flow in order to satisfy such REIT distribution test. 
  

 A-I-17 

 33. The Company has not made and shall not make any distribution that constitutes a preferential
dividend.11 
  
 34. The Company understands that the IRS has ruled in Revenue Ruling 83-117 that if a REIT’s dividend reinvestment plan (“DRP”)
allows stockholders of the REIT to have cash distributions reinvested in shares of the REIT at a purchase price not less than 95% of the shares’ fair market value on the distribution date, such cash distributions qualify as pro rata and
eligible for a deduction for dividends paid. The terms of the Company’s DRP comply with the requirements of Revenue Ruling 83-117 by limiting to 5% of the fair market value of the capital stock as of the distribution date the sum of (a) the
discount available to stockholders participating in the DRP with respect to stock that the DRP acquires from the Company, and (b) the total sum of commissions and charges that the Company will pay with respect to capital stock that the DRP acquires
on the open market. The Company and the plan administrator have administered and will continue to administer the DRP in accordance with the terms of the DRP throughout the DRP’s existence. 
  
 35. The Company and any Company QRS (or a partnership in which the
Company and one or more Company QRSs directly or indirectly hold interests) has beneficially held and will at all times beneficially hold the properties owned by the Company, QRS or partnership and all other assets for investment purposes and not as
(a) stock in trade or other property of a kind which would properly be includible in inventory if on hand at the close of the taxable year or (b) property held primarily for sale to customers in the ordinary course of the trade or business of the
Company. 
  

	11	For these purposes, a “preferential dividend” means a dividend other than a distribution which is pro rata, with no preference to any share of stock as
compared with other shares of the same class, and with no preference to one class of stock as compared with another class, except to the extent that the former is entitled (without reference to waivers of their rights as shareholders) to such
preference. 

  

 A-I-18 

 36. Title to each of the properties beneficially owned by the Company is and at all times has been
held, and will continue to be held, either directly by the Company or a QRS (or a partnership in which the Company and one or more QRSs directly or indirectly hold interests), or indirectly through either a nominee title holding company or a land
trust (a “Nominee”). 
  
 37. With respect to
properties (if any) for which title is or will be held by a Nominee, (a) such nominee arrangement is set forth in a written agreement pursuant to which (i) the Nominee holds title to the property exclusively for the use and benefit of the Company or
a QRS (or a partnership in which the Company and one or more Company QRSs hold interests) as principal of the Nominee, (ii) the Nominee agrees to convey title to such property at the direction of the principal, and (iii) the Nominee is adequately
compensated for its services, and (b) neither the Company or a QRS directly or indirectly owns stock in such Nominee. Such nominee relationship also is and will be disclosed to all third parties. 
  
 38. As required under Treasury Regulations Section 1.857-8, if, as of
any dividend record date, the Company has 2,000 or more stockholders of record, the Company will demand a written statement of actual beneficial stock ownership of any owner of record of 5% or more of the Company’s capital stock. If, as of any
dividend record date, the Company has more than 200 but fewer than 2,000 shareholders of record, the Company will demand a written statement of any owner of record of 1% or more of the Company’s capital stock. If, as of any dividend record
date, the Company has fewer than 200 shareholders of record, the Company will demand a written statement of any owner of record of 0.5% or more of the Company’s capital stock. In addition to maintaining a record of those stockholders responding
to such demands as required under Treasury Regulations Section 1.857-8(a), the Company will maintain a record of the persons failing or refusing to comply with the Company’s demand for a statement of actual beneficial stock ownership and notify
such person of their duty to submit such information directly to the IRS at the time they file their income tax return, as required under Treasury Regulations Section 1.857-9. 
  

 A-I-19 

 39. None of the Company nor any QRS has held or will hold a partnership interest directly (or
through one or more subtier partnerships or limited liability companies) in any partnership unless such partnership (a)(i) at all times is treated for federal income tax purposes as a partnership and not as an association taxable as a corporation
and (ii) has not elected and will not elect to be classified as an association taxable as a corporation for federal income tax purposes under Treasury Regulations Section 301.7701-3 (herein a “qualified partnership”), or (b) with respect
to each of the Company’s taxable years beginning after December 31, 2000, such partnership is treated at all times as a TRS of the Company. 
  
 40. Neither the Company nor any QRS has held or will hold a membership interest directly (or through one or more subtier partnerships or limited
liability companies) in any limited liability company unless such limited liability company (a)(i) at all times is treated for federal income tax purposes as a partnership (or a QRS) and not as an association taxable as a corporation and (ii) has
not elected and will not elect to be classified as an association taxable as a corporation for federal income tax purposes pursuant to Treasury Regulations Section 301.7701-3 (herein a “qualified limited liability company”), or (b) with
respect to each of the Company’s taxable years beginning after December 31, 2000, such limited liability company is treated at all times as a TRS of the Company. 
  
 41. Except in the case of any qualified partnerships or qualified limited liability companies, neither the Company
nor any QRS has held or will hold directly (or through one or more subtier partnerships or limited liability companies) an interest in any person, entity, investment or arrangement other than in or through a general partnership that satisfies the
immediately-following sentence. Any general partnership in which the Company or any QRS 
  

 A-I-20 

 has held or holds directly (or through one or more subtier partnerships or limited liability companies) a partnership
interest (a) will be subject to and comply in all respects with the statute of a state of the United States corresponding to the Uniform Partnership Act and (b) has not elected and will not elect to be taxable as a corporation for federal income tax
purposes pursuant to Treasury Regulations Section 301.7701.3. 
  
 I understand
that Manatt, Phelps & Phillips, LLP, will be relying on the representations of fact contained in this Officers’ Certificate as the basis for the aforementioned tax opinion. The representations of fact contained herein are, to the best of my
knowledge after due inquiry, true, correct and complete. I have reviewed this Officers’ Certificate with a representative of Manatt, Phelps & Phillips, LLP, and acknowledge that I understand the defined terms and statutory references
contained herein. 
  
 Manatt, Phelps & Phillips, LLP, may rely on the
representations of fact contained in this Officers’ Certificate. The representations of fact set forth in this Officers’ Certificate are solely for the use of Manatt, Phelps & Phillips, LLP, in connection with the aforementioned tax
opinion and may not be relied upon by any other party. 
  

 A-I-21 

 IN WITNESS WHEREOF, I have, on behalf of the Company, signed this Officers’ Certificate as of this
     day of March, 2005. 
  

			
	 ANWORTH MORTGAGE ASSET CORPORATION,

	 a Maryland corporation

		
	 By:
	 	  

	 	 	 Lloyd McAdams, Chairman of the Board,
 President and Chief Executive Officer

		
	 By:
	 	  

	 	 	 Thad M. Brown, Chief Financial Officer and
 Secretary

		
	 By:
	 	  

	 	 	 Joseph E. McAdams, Chief Investment Officer

		
	 By:
	 	  

	 	 	 Heather U. Baines, Executive Vice President

  
  
  

 A-I-22 

 ANNEX A-II 
  

Pursuant to Section 3(c)(ii) of the Purchase Agreement, DLA Piper Rudnick Gray Cary LLP, special counsel for the Company, shall deliver an opinion to
the effect that: 
  
 1. Each of the Company and
BTMC is validly existing as a corporation in good standing under the laws of the State of Maryland. Each of the Company and BTMC has full corporate power and authority to own or lease its properties and to conduct its business as such business is
currently conducted in all material respects. All outstanding shares of capital stock of BTMC have been duly authorized and validly issued, and are fully paid and nonassessable. The Company has corporate power and authority to (A) execute and
deliver, and to perform its obligations under, the Operative Documents to which it is a party and (B) issue and perform its obligations under the Junior Subordinated Notes. 
  
 2. Neither the issue and sale of the Common Securities, the Preferred Securities or the Junior Subordinated
Notes, nor the Company’s execution and delivery of and compliance with the Operative Documents and the consummation of the transactions contemplated thereby, will constitute a breach or violation of the Company Charter or the Company By-Laws.

  
 3. The Trust Agreement has been duly
authorized, executed and delivered by the Company. 
  
 4. The Indenture has been duly authorized, executed and delivered by the Company. 
  
 5. The Junior Subordinated Notes have been duly authorized and executed by the Company and delivered to the Indenture Trustee for
authentication in accordance with the Indenture. 
  
 6. The Purchase Agreement has been duly authorized, executed and delivered by the Company. 
  
 7. The execution, delivery and performance of the Operative Documents and the consummation of the transactions contemplated by the
Purchase Agreement and the Operative Documents do not and will not conflict with, constitute a material breach or violation of, or constitute a material default under, with or without notice or lapse of time or both, any of the terms, provisions or
conditions of the Company Charter or the Company By-Laws. 
  
 8. The execution, delivery and performance of the Operative Documents and the consummation of the transactions contemplated by the Purchase Agreement and the Operative Documents do not and will not conflict with,
constitute a material breach or violation of, or constitute a material default under, with or without notice or lapse of time or both, any of the terms, provisions or conditions of the BTMC Charter or the BTMC By-Laws. 
  

 A-II-1 

 9. No authorization, approval, consent or order of, or filing, registration or
qualification with, any person (including, without limitation, any court, governmental body or authority) is required under the laws of the State of Maryland in connection with the transactions contemplated by the Operative Documents in connection
with the offer and sale of the Common Securities as contemplated by the Operative Documents. 
  
  

 A-II-2 

 ANNEX A-III 
  

Pursuant to Section 3(c)(iii) of the Purchase Agreement, the Company shall provide an Officers’ Certificate, to the effect that: 
  
 (i) all of the issued and outstanding shares of capital
stock of each Significant Subsidiary are owned of record by the Company, and the issuance of the Preferred Securities and the Common Securities is not subject to any contractual preemptive rights known to such officer; 
  
 (ii) no consent, approval, authorization or order of any
court or Governmental Entity is required for the issue and sale of the Common Securities, the Preferred Securities or the Junior Subordinated Notes, the purchase by the Trust of the Junior Subordinated Notes, the execution and delivery of and
compliance with the Operative Documents by the Company or the Trust or the consummation of the transactions contemplated in the Operative Documents, except such approvals (specified in such certificate) as have been obtained; 
  
 (iii) to the knowledge of such officer, there is no action,
suit or proceeding before or by any government, governmental instrumentality, arbitrator or court, domestic or foreign, now pending or threatened against or affecting the Trust or the Company or any Significant Subsidiary that could adversely affect
the consummation of the transactions contemplated by the Operative Documents or could have a Material Adverse Effect. 
  
 (iv) The execution, delivery and performance of the Operative Documents, as applicable, by the Company and the Trust and the consummation
by the Company and the Trust of the transactions contemplated by the Operative Documents, as applicable, (i) will not result in any violation of the charter or bylaws of the Company, the charter or bylaws of the Company’s subsidiaries, the
Trust Agreement or the Certificate of Trust of the Trust, and (ii) will not conflict with, or result in a breach of any of the terms or provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute
a default) under, or result in the creation or imposition of any lien, charge and encumbrance upon any assets or properties of the Company or any Significant Subsidiary under, (a) any agreement, indenture, mortgage or instrument that the Company or
any Significant Subsidiary of the Company is a party to or by which it may be bound or to which any of its assets or properties may be subject, or (b) any existing applicable law, rule or administrative regulation except that I express no opinion
with respect to the securities laws of the State of Delaware of any court or governmental agency or authority having jurisdiction over the Company or any Significant Subsidiary of the Company or any of their respective assets or properties, except
in case of (ii), where any such violation, conflict, breach, default, lien, charge or encumbrance, would not have a material adverse effect on the assets, properties, business, results of operations or financial condition of the Company and its
subsidiaries, taken as whole. 
  
  

 A-III-1 

 ANNEX B 
  
 Pursuant to Section 3(d) of the Purchase Agreement, Mayer, Brown, Rowe & Maw LLP, special tax counsel for the Purchaser, shall deliver an opinion to
the effect that: 
  
 (v) the Trust will be
classified for United States federal income tax purposes as a grantor trust and not as an association or a publicly traded partnership taxable as a corporation; and 
  
 (vi) for United States federal income tax purposes, the Junior Subordinated Notes will constitute
indebtedness of the Company. 
  
 In rendering such opinions, such
counsel may (A) state that its opinion is limited to the federal laws of the United States and (B) rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials. 
  
  

 B-1 

 ANNEX C 
  
 Pursuant to Section 3(e) of the Purchase Agreement, Richards, Layton & Finger, P.A., special Delaware counsel for the Delaware Trustee, shall
deliver an opinion to the effect that: 
  
 (i)
the Trust has been duly created and is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act, and all filings required under the laws of the State of Delaware with respect to the creation and valid existence
of the Trust as a statutory trust have been made; 
  
 (ii) under the Delaware Statutory Trust Act and the Trust Agreement, the Trust has the trust power and authority (A) to own property and conduct its business, all as described in the Trust Agreement, (B) to execute and deliver, and to
perform its obligations under, each of the Purchase Agreement, the Common Securities Subscription Agreement, the Junior Subordinated Note Purchase Agreement and the Preferred Securities and the Common Securities and (C) to purchase and hold the
Junior Subordinated Notes; 
  
 (iii) under the
Delaware Statutory Trust Act, the certificate attached to the Trust Agreement as Exhibit C is an appropriate form of certificate to evidence ownership of the Preferred Securities; the Preferred Securities have been duly authorized by the
Trust Agreement and, when issued and delivered against payment of the consideration as set forth in the Purchase Agreement, the Preferred Securities will be validly issued and (subject to the qualifications set forth in this paragraph) fully paid
and nonassessable and will represent undivided beneficial interests in the assets of the Trust; the holders of the Preferred Securities will be entitled to the benefits of the Trust Agreement and, as beneficial owners of the Trust, will be entitled
to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the General Corporation Law of the State of Delaware; and such counsel may note that the holders of the Preferred Securities may
be obligated, pursuant to the Trust Agreement, to (A) provide indemnity and/or security in connection with and pay taxes or governmental charges arising from transfers or exchanges of Preferred Securities certificates and the issuance of replacement
Preferred Securities certificates and (B) provide security or indemnity in connection with requests of or directions to the Property Trustee to exercise its rights and remedies under the Trust Agreement; 
  
 (iv) the Common Securities have been duly authorized by the
Trust Agreement and, when issued and delivered by the Trust to the Company against payment therefor as described in the Trust Agreement and the Common Securities Subscription Agreement, will be validly issued and fully paid and will represent
undivided beneficial interests in the assets of the Trust entitled to the benefits of the Trust Agreement; 
  
 (v) under the Delaware Statutory Trust Act and the Trust Agreement, the issuance of the Preferred Securities and the Common Securities is
not subject to preemptive or other similar rights; 
  

 C-1 

 (vi) under the Delaware Statutory Trust Act and the Trust Agreement, the execution and
delivery by the Trust of the Purchase Agreement, the Common Securities Subscription Agreement and the Junior Subordinated Note Purchase Agreement, and the performance by the Trust of its obligations thereunder, have been duly authorized by all
necessary trust action on the part of the Trust; 
  
 (vii) the Trust Agreement constitutes a legal, valid and binding obligation of the Company and the Trustees, and is enforceable against the Company and the Trustees, in accordance with its terms subject, as to enforcement, to the effect
upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium, receivership, reorganization, liquidation, fraudulent conveyance or transfer and other similar laws relating to or affecting the rights and remedies of creditors generally, (ii)
principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution; 
  
 (viii) the issuance and sale by the Trust of the Preferred Securities and the Common Securities, the purchase by the Trust of the Junior Subordinated Notes, the execution, delivery and performance by the Trust of the Purchase Agreement, the
Common Securities Subscription Agreement and the Junior Subordinated Note Purchase Agreement, the consummation by the Trust of the transactions contemplated by the Purchase Agreement and compliance by the Trust with its obligations thereunder do not
violate (i) any of the provisions of the Certificate of Trust or the Amended and Restated Trust Agreement or (ii) any applicable Delaware law, rule or regulation; 
  
 (ix) no filing with, or authorization, approval, consent, license, order, registration, qualification or
decree of, any Delaware court or Delaware Governmental Entity or Delaware agency is necessary or required solely in connection with the issuance and sale by the Trust of the Common Securities or the Preferred Securities, the purchase by the Trust of
the Junior Subordinated Notes, the execution, delivery and performance by the Trust of the Purchase Agreement, the Common Securities Subscription Agreement and the Junior Subordinated Note Purchase Agreement, the consummation by the Trust of the
transactions contemplated by the Purchase Agreement and compliance by the Trust with its obligations thereunder; and 
  
 (x) the holders of the Preferred Securities (other than those holders who reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as a result of their participation in the Trust and the Trust will not be liable for any income tax imposed by the State of Delaware. 
  
 In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of Delaware, (B) rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials and (C) take customary assumptions and exceptions as to
enforceability and other matters. 
  
  

 C-2 

 ANNEX D 
  
 Pursuant to Section 3(f) of the Purchase Agreement, Gardere Wynne Sewell LLP, special counsel for the Property Trustee and the Indenture Trustee, shall
deliver an opinion to the effect that: 
  
 (i) JPMorgan Chase
Bank, National Association (the “Bank”) is a national banking association with trust powers, duly and validly existing under the laws of the United States of America, with corporate power and authority to execute, deliver and perform its
obligations under the Indenture and to authenticate and deliver the Securities, and is duly eligible and qualified to act as Trustee under the Indenture pursuant to Section 6.1 thereof and as Property Trustee under the Trust Agreement pursuant to
Section 8.2 thereof. 
  
 (ii) Each Agreement has been duly
authorized, executed and delivered by the Bank and constitutes the valid and binding obligation of the Bank, enforceable against it in accordance with its terms except (A) as may be limited by bankruptcy, fraudulent conveyance, fraudulent transfer,
insolvency, reorganization, liquidation, receivership, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and by general equitable principles, regardless of whether considered in a proceeding in
equity or at law and (B) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

  
 (iii) Neither the execution or delivery by the Bank of the
Agreements, the authentication and delivery of the Securities by the Trustee pursuant to the terms of the Agreements, nor the performance by the Bank of its obligations under the Agreements (A) requires the consent or approval of, the giving of
notice to or the registration or filing with, any governmental authority or agency under any existing law of the United States of America governing the banking or trust powers of the Bank or (B) violates or conflicts with the Articles of Association
or By-laws of the Bank or any law or regulation of the State of New York or the United States of America governing the banking or trust powers of the Bank. 
  
 (iv) The Securities have been authenticated and delivered by a duly authorized officer of the Bank. 
  
 In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of the State of New York and the laws of the United States of America, (B) rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of JPMorgan Chase Bank, National Association, the Company
and public officials, and (C) make customary assumptions and exceptions as to enforceability and other matters. 
  
  

 D-1 

 ANNEX E 
  
 Pursuant to Section 3(g) of the Purchase Agreement, Richards, Layton & Finger, P.A., counsel for the Delaware Trustee, shall deliver an opinion to the
effect that: 
  
 (i) Chase Bank USA, National
Association is duly formed and validly existing as a national banking association under the federal laws of the United States of America with trust powers and with its principal place of business in the State of Delaware; 
  
 (ii) Chase Bank USA, National Association has the corporate
power and authority to execute, deliver and perform its obligations under, and has taken all necessary corporate action to authorize the execution, delivery and performance of, the Trust Agreement and to consummate the transactions contemplated
thereby; 
  
 (iii) The Trust Agreement has been
duly authorized, executed and delivered by Chase Bank USA, National Association and constitutes a legal, valid and binding obligation of Chase Bank USA, National Association, and is enforceable against Chase Bank USA, National Association, in
accordance with its terms subject as to enforcement, to the effect upon the Trust Agreement of (i) applicable bankruptcy, insolvency, reorganization, moratorium, receivership, fraudulent conveyance or transfer and similar laws relating to or
affecting the rights and remedies of creditors generally, (ii) principles of equity, including applicable law relating to fiduciary duties (regardless of whether considered and applied in a proceeding in equity or at law), and (iii) the effect of
applicable public policy on the enforceability of provisions relating to indemnification or contribution; 
  
 (iv) The execution, delivery and performance by Chase Bank USA, National Association of the Trust Agreement do not conflict with or result
in a violation of (A) articles of association or by-laws of Chase Bank USA, National Association or (B) any law or regulation of the State of Delaware or the United States of America governing the trust powers of Chase Bank USA, National Association
or, to our knowledge, without independent investigation, of any indenture, mortgage, bank credit agreement, note or bond purchase agreement, long-term lease, license or other agreement or instrument to which Chase Bank USA, National Association is a
party or by which it is bound or, to our knowledge, without independent investigation, of any judgment or order applicable to Chase Bank USA, National Association; and 
  
 (v) No approval, authorization or other action by, or filing with, any Governmental Entity of the State of
Delaware or the United States of America governing the trust powers of Chase Bank USA, National Association is required in connection with the execution and delivery by Chase Bank USA, National Association of the Trust Agreement or the performance
by Chase Bank USA, 
  

 E-1 

 National Association of its obligations thereunder, except for the filing of the Certificate of Trust
with the Secretary of State of the State of Delaware, which Certificate of Trust has been filed with the Secretary of State of the State of Delaware. 
  
 In rendering such opinions, such counsel may (A) state that its opinion is limited to the laws of the State of Delaware and the federal laws of the United
States governing the trust powers of Chase Bank USA, National Association, (B) rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials and (C) take customary assumptions
and exceptions. 
  
  

 E-2 

 ANNEX F 
  
 Officer’s Financial Certificate 
  
 The undersigned, the [Chairman/Vice Chairman/Chief Executive Officer/President/ Vice President/Chief Financial Officer/Treasurer/Assistant Treasurer],
hereby certifies, pursuant to Section 6(h) of the Purchase Agreement, dated as of March 15, 2005, among Anworth Mortgage Asset Corporation (the “Company”), Anworth Capital Trust 1 (the “Trust”) and TABERNA Preferred Funding I,
Ltd, that, as of [date], [20    ], the Company, if applicable, and its Subsidiary had the following ratios and balances: 
  
 As of [Quarterly/Annual Financial Date], 20     
  

					
	 Senior secured indebtedness for borrowed money (“Debt”)
	  	$	            	 
	 Senior unsecured Debt
	  	$	            	 
	 Subordinated Debt
	  	$	            	 
	 Total Debt
	  	$	            	 
	 Ratio of (x) senior secured and unsecured Debt to (y) total Debt
	  	 	            	%

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

  
 [FOR FISCAL YEAR END: Attached hereto are the audited consolidated financial
statements (including the balance sheet, income statement and statement of cash flows, and notes thereto, together with the report of the independent accountants thereon) of the Company and its consolidated subsidiaries for the three years ended
[date], 20     and all required Statutory Financial Statements (as defined in the Purchase Agreement) for the year ended [date], 20    ] 
  
 [FOR FISCAL QUARTER END: Attached hereto are the unaudited consolidated and
consolidating financial statements (including the balance sheet and income statement) of the Company and its consolidated subsidiaries and all required Statutory Financial Statements (as defined in the Purchase Agreement) for the year ended [date],
20    ] for the fiscal quarter ended [date], 20    .] 
  
 The financial statements fairly present in all material respects, in accordance with U.S. generally accepted accounting principles (“GAAP”), the financial position of the Company and its consolidated
subsidiaries, and the results of operations and changes in financial condition as of the date, and for the [         quarter interim] [annual] period ended [date], 20    , and
such financial statements have been prepared in accordance with GAAP consistently applied throughout the period involved (expect as otherwise noted therein). 
  

 F-1 

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

			
	ANWORTH MORTGAGE ASSET CORPORATION
		
	 By:
	 	  

	 Name:
	 	 

  

			
	 Anworth Mortgage Asset Corporation
 1299 Ocean Avenue, Suite 250
 Santa Monica, California 90401
 (310) 255-4493

  
  

 F-2 

 ANNEX F 
  
 Definitions for quarterly Officer’s Financial Certificate 
  

			
	ITEM	 	Definition/Formula

  

 F-3

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