Document:

Exhibit 4.1

 

ASSURED GUARANTY US HOLDINGS INC., as Issuer

 

AND

 

ASSURED GUARANTY LTD., as Guarantor

 

AND

 

THE BANK OF NEW YORK MELLON, as Trustee

 

FIRST SUPPLEMENTAL INDENTURE

 

Dated as of June 24, 2009

 

 

This FIRST SUPPLEMENTAL
INDENTURE (this “Supplemental Indenture”), dated as of June 24, 2009, is
among ASSURED GUARANTY US HOLDINGS, INC., a Delaware corporation (the “Company”),
ASSURED GUARANTY LTD., a Bermuda company (the “Guarantor”) and THE BANK OF NEW
YORK MELLON (formerly known as The Bank of New York), as Trustee (the “Trustee”).

 

R E C I T A L S

 

WHEREAS, the Company and the
Guarantor have heretofore executed and delivered to the Trustee an Indenture,
dated as of May 1, 2004 (the “Base Indenture” and, as further supplemented
by this Supplemental Indenture, the “Indenture”), providing for the issuance
from time to time of Securities (as defined in the Indenture) of the Company
that are fully and unconditionally guaranteed (the “Guarantee”) by the
Guarantor;

 

WHEREAS, Article 9 of
the Base Indenture provides for the Company and the Trustee to enter into an
indenture supplemental to the Base Indenture to establish the form or terms of
Securities of any series as permitted by Sections 2.1 or 3.1 of the Base
Indenture;

 

WHEREAS, pursuant to Section 3.1
of the Base Indenture, the Company wishes to provide for the issuance of a new
series of Securities to be known as its 8.50% Senior Notes due June 1,
2014 (the “Notes”), the form and terms of such Notes and the terms, provisions
and conditions thereof to be set forth as provided in this Supplemental
Indenture;

 

WHEREAS, the Guarantor
wishes to fully and unconditionally guarantee the Notes in accordance with the
terms of the Indenture;

 

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

 

NOW, THEREFORE, in consideration
of the covenants and agreements set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.01           Relation
to Base Indenture.  This Supplemental
Indenture constitutes an integral part of the Base Indenture.

 

 

Section 1.02           Definition
of Terms.  For all purposes of this
Supplemental Indenture:

 

(a)           Capitalized
terms used herein without definition shall have the meanings specified in the
Base Indenture, or, if not defined in the Base Indenture, in the Purchase
Contract and Pledge Agreement;

 

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

 

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

 

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

 

(e)           the
following terms have the meanings given to them in this Article 1:

 

“Accounting Event” means the receipt by the audit committee of
the Guarantor’s Board of Directors of a written report in accordance with
Statement on Auditing Standards (“SAS”) No. 97, “Amendment to SAS No. 50—Reports
on the Application of Accounting Principles,” from the Guarantor’s independent
auditors, provided at the request of management, to the effect that, as a
result of a change in accounting rules after the date of original issuance
of the Notes, the Guarantor must either (a) account for the Purchase
Contracts as derivatives under SFAS 133 (or otherwise mark-to-market or measure
the fair value of all or any portion of the Purchase Contracts with changes
appearing in the Guarantor’s income statement) or (b) account for the
Units using the if-converted method under SFAS 128, and that such accounting
treatment will cease to apply upon redemption of the Notes.

 

“Additional Amounts” shall have the meaning set forth in Section 6.01(b).

 

“Applicable Ownership Interest in Notes” has the meaning set
forth in the Purchase Contract and Pledge Agreement.

 

“Applicable Principal Amount” means the aggregate principal
amount of the Notes that are components of Corporate Units on the Special Event
Redemption Date.

 

“Business Day” means any day other than a Saturday, Sunday or
any other day on which banking institutions and trust companies in the City of
New York are permitted or required by applicable law to close.

 

“Code” shall have the meaning set forth in Section 6.01(a).

 

“Collateral
Account” has the meaning set forth in the Purchase Contract and
Pledge Agreement.

 

“Collateral Agent” has the meaning set forth in the Purchase
Contract and Pledge Agreement.

 

“Collateral Substitution” has the meaning set forth in the
Purchase Contract and Pledge Agreement.

 

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“Contract Settlement Price” shall have the meaning set forth in
Section 7.01(c)(iv)(B).

 

“Corporate Units” shall have the meaning specified in the
Purchase Contract and Pledge Agreement.

 

“Custodial
Agent” shall have the meaning specified in the Purchase Contract and Pledge
Agreement.

 

“Depository” means a clearing agency registered under Section 17A
of the Exchange Act that is designated to act as Depository for the Corporate
Units pursuant to the Purchase Contract and Pledge Agreement.

 

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

 

“Early Remarketing” has the meaning set forth in the Purchase
Contract and Pledge Agreement.

 

“Early Remarketing Period” has the meaning set forth in the
Purchase Contract and Pledge Agreement.

 

“Early Settlement” has the meaning set forth in the Purchase
Contract and Pledge Agreement.

 

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

 

“Failed Remarketing” shall have the meaning specified in the
Purchase Contract and Pledge Agreement.

 

“Fundamental Change Early Settlement” has the meaning set forth
in the Purchase Contract and Pledge Agreement.

 

“Global Notes” shall have the meaning set forth in Section 2.04.

 

“Holder” means (a) with respect to the Corporate Units or
the Treasury Units, such term as defined in the Purchase Contract and Pledge
Agreement, and (b) with respect to the Notes, the Person in whose name at
the time a particular Note is registered on the books of the Trustee kept for
that purpose.

 

“Increased
Principal Amount” shall have the meaning set forth in Section 2.09.

 

“Interest Payment Dates” shall have the meaning set forth in Section 2.05(b).

 

“Interest Rate” shall have the meaning set forth in Section 2.05(a).

 

“Minimum Price” shall have the meaning set forth in Section 7.01(h).

 

“Modification” shall have the meaning set forth in Section 7.02(a)(ii).

 

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

 

“Pledged Note” is a Note held by the Collateral Agent pursuant
to the pledge under the Purchase Contract and Pledge Agreement.

 

“Proceeds”
shall have the meaning specified in the Purchase Contract and Pledge Agreement.

 

“Purchase Contract and Pledge Agreement” means the Purchase
Contract and Pledge Agreement, dated as of June 24, 2009, between the
Guarantor and The Bank of New York Mellon, as Purchase Contract Agent,
collateral agent, custodial agent and securities intermediary, as amended from
time to time.

 

“Purchase Contracts” and “Purchase
Contract” shall have their respective meanings specified in the Purchase
Contract and Pledge Agreement.

 

“Purchase Contract Settlement Date” means June 1, 2012.

 

“Purchase
Price” shall have the meaning specified in the Purchase Contract and
Pledge Agreement.

 

“Put Price” shall have the meaning set forth in Section 7.04(a).

 

“Put Right” shall have the meaning set forth in Section 7.04(a).

 

“Quarterly Interest Payment Date” shall have the meaning set
forth in Section 2.05(b).

 

“Quotation Agent” means any primary U.S.  government securities dealer in New York
selected by the Company.

 

“Record Date” means (a) with respect to any Quarterly
Interest Payment Date for the Notes, the fifteenth day (regardless of whether
such day is a Business Day) of the calendar month next preceding the calendar
month in which such Quarterly Interest Payment Date falls; and (b) with
respect to the Reset Effective Date that is not a Quarterly Interest Payment
Date, any day selected as the Record Date by the Company so long as such Record
Date is more than one Business Day but less than sixty Business Days prior to
such Interest Payment Date.

 

“Redemption Amount” shall mean, for each Note, an amount equal
to the product of the principal amount of that Note and a fraction, the
numerator of which is the Special Event Treasury Portfolio Purchase Price and
the denominator of which is the Applicable Principal Amount; provided that
in no event shall the Redemption Amount for any Note be less than the principal
amount of such Note.

 

4

 

“Redemption Price” shall mean, for each Note, the Redemption
Amount; provided that the
interest due and payable on the Special Event Redemption Date will be paid to
the record Holder of such Note on the immediately preceding Record Date.

 

“Reduced
Principal Amount” shall have the meaning set forth in Section 2.09.

 

“Released
Note” shall have the meaning set forth in Section 2.09.

 

“Remarketed Notes” shall have the meaning set forth in Section 7.01(i).

 

“Remarketing Agent” shall mean the Remarketing Agent designated
by the Company under the Remarketing Agreement.

 

“Remarketing Agreement” means the Remarketing Agreement to be
entered into among the Guarantor, the Company, the Remarketing Agent, and The
Bank of New York Mellon, as Purchase Contract Agent, substantially in the form
attached to the Purchase Contract and Pledge Agreement as an exhibit, as
amended from time to time in accordance with its terms.

 

“Remarketing Announcement” shall have the meaning set forth in Section 7.01(c).

 

“Remarketing Announcement Date” means (i) the sixth
Business Day immediately preceding the first Remarketing Date of any
Three-Business Day Remarketing Period during the Period for Early Remarketing
and (ii) for the Final Three-Business Day Remarketing Period, the third
Business Day immediately preceding the first Remarketing Date of the Final
Three-Business Day Remarketing Period.

 

“Remarketing Price” shall have the meaning set forth in Section 7.01(c)(iv)(A).

 

“Remarketing Treasury Portfolio” shall have the meaning
specified in the Purchase Contract and Pledge Agreement.

 

“Remarketing Treasury Portfolio Purchase Price” shall have the
meaning specified in the Purchase Contract and Pledge Agreement.

 

“Remarketing Date(s)” has the meaning set forth in the Purchase
Contract and Pledge Agreement.

 

“Reset Effective Date” means, (i) in connection with a
Successful Remarketing of the Notes during the Period for Early Remarketing,
the third Business Day immediately following the Remarketing Date on which the
Notes are successfully remarketed unless the Notes are successfully remarketed
within the next succeeding five Business Days of an Interest Payment Date in
which case the Reset Effective Date shall be such Interest Payment Date, and (ii) in
connection with a Successful Remarketing of the Notes on any of the Remarketing
Dates during the Final Three-Business Day Remarketing Period, the Purchase Contract
Settlement Date.

 

“Reset Rate” means the interest rate per annum, calculated in
accordance with Section 7.02(a) below, on the Notes to be in effect
on and after the Reset Effective Date.

 

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“Separate Notes” means Notes that are no longer a component of
Corporate Units.

 

“Separate Notes Purchase Price” shall have the meaning
specified in the Purchase Contract and Pledge Agreement.

 

“Special Event” means either an Accounting Event or a Tax
Event.

 

“Special Event Redemption” means the redemption of the Notes
pursuant to the terms hereof following the occurrence of a Special Event.

 

“Special Event Redemption Date” shall have the meaning set
forth in Section 3.01.

 

“Special Event Treasury Portfolio” shall have the meaning
specified in the Purchase Contract and Pledge Agreement.

 

“Special Event Treasury Portfolio Purchase Price” shall have
the meaning specified in the Purchase Contract and Pledge Agreement.

 

“Stated Maturity” shall have the meaning specified in Section 2.02.

 

“Subjected
Note” shall have the meaning set forth in Section 2.09.

 

“Subsequent Interest Payment Date” means, following the Reset
Effective Date, if the Company elects on the Successful Remarketing Date to
make interest payable on a semi-annual basis, each semi-annual interest payment
date established by the Company on such Successful Remarketing Date.  Otherwise, each reference to “Subsequent
Interest Payment Date” means a Quarterly Interest Payment Date.

 

“Successful Remarketing” shall have the meaning specified in
the Purchase Contract and Pledge Agreement.

 

“Successful Remarketing Date” means the Remarketing Date on
which the Notes are successfully remarketed in accordance with the provisions
of the Remarketing Agreement.

 

“Taxes” shall have the meaning set forth in Section 6.01(a).

 

“Tax Event” means the receipt by the Company of an opinion of
counsel, rendered by a law firm having a recognized national tax practice, to
the effect that, as a result of any amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative decision, pronouncement, judicial
decision or action interpreting or applying such laws or regulations, which
amendment or change is effective or which proposed change, pronouncement,
action or decision is announced on or after the date of original issuance of
the Notes, (a) there is more than an insubstantial increase in the risk
that interest payable by the Company on the Notes is not, or within 90 days of
the date of such opinion, will not be, deductible by the Company, in whole or
in part, for U.S. federal income tax purposes or (b) the Company or the
Guarantor has become or would become obligated to pay, on the next day on which
any amount would be payable with respect to the Notes, any Additional 

 

6

 

Amounts and the Company or
the Guarantor, as applicable, delivers to the Trustee an Officers’ Certificate
to the effect that it cannot avoid its obligation to pay Additional Amounts by
taking reasonable measures available to it.

 

“Taxing Jurisdiction” shall have the meaning set forth in Section 6.01(a).

 

“Treasury Unit” has the meaning set forth in the Purchase
Contract and Pledge Agreement.

 

“Underwriters” means the underwriters identified in Schedule A
to the Underwriting Agreement.

 

“Underwriting Agreement” means the Underwriting Agreement,
dated as of June 18, 2009 among the Guarantor, the Company and the
Underwriters, relating to the issuance of Corporate Units by the Company.

 

The terms “Company,” “Guarantor,”
“Trustee,” “Indenture,” “Base Indenture”, “Notes” and “Guarantee” shall have
the respective meanings set forth in the recitals to this Supplemental
Indenture and the paragraph preceding such recitals.

 

ARTICLE II

GENERAL TERMS AND CONDITIONS OF THE NOTES

 

Section 2.01           Designation
and Principal Amount.  There is
hereby authorized a series of Securities designated as 8.50% Senior Notes due June 1,
2014 limited in aggregate principal amount to $ 150,000,000 (or up to $
172,500,000 if the Underwriters exercise their overallotment option to purchase
additional Corporate Units in full as set forth in the Underwriting Agreement);
provided, however, that the Company, without notice
to or consent of the Holders, may issue additional Securities of this series
and thereby increase such principal amount in the future, on the same terms and
conditions (except for the issue date and, if applicable, the date from which
interest accrues and the first Interest Payment Date) as the Securities of this
series.  The Notes may be issued from
time to time upon written order of the Company for the authentication and
delivery of Notes pursuant to Section 3.3 of the Base Indenture.

 

Section 2.02           Maturity.  Unless a Special Event Redemption has
occurred, the Notes will mature and the principal amount thereof shall be due
and payable together with all accrued and unpaid interest thereon, on the
Stated Maturity.  The “Stated Maturity”
shall mean June 1, 2014 or such other date as determined by
the Company on the Successful Remarketing Date (subject to agreement between
the Company and the Remarketing Agent pursuant to the Remarketing Agreement
with respect to the Remarketing Fee) in accordance with Section 7.02, it
being understood that if there shall have been a Failed Remarketing, the Stated
Maturity shall remain June 1, 2014.

 

Section 2.03           Form,
Payment and Appointment.  Except as
provided in Section 2.04, the Notes shall be issued in fully registered,
certificated form, bearing identical terms and registered in the name of the
Purchase Contract Agent.  Principal of,
and premium, if any, and interest on the Notes will be payable, the transfer of
such Notes will be registrable, and such Notes will be 

 

7

 

exchangeable for Notes of a like aggregate principal amount in
denominations of $1,000 (unless Notes have previously been issued in denominations
of $50 and integral multiples thereof, in which case Notes will be exchangeable
for a like aggregate principal amount in denominations of $50 and integral
multiples of $50) and integral multiples of $1,000 bearing identical terms and
provisions, at the office or agency of the Company and the Guarantor maintained
for such purpose in the Borough of Manhattan, The City of New York, which shall
initially be the Corporate Trust Office of the Trustee; provided,
however, that payment of interest may be made at the option of the Company or
the Guarantor by check mailed to the Holder at such address as shall appear in
the Security Register or by wire transfer to an account with a financial
institution in the United States appropriately designated by the Holder
entitled to payment by notice to the Trustee given at least 15 days prior to
the Interest Payment Date.

 

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

 

The Security Registrar and
Paying Agent for the Notes shall initially be the Trustee.

 

The Notes shall be issuable
in denominations of $1,000 and integral multiples of $1,000 in excess thereof; provided, however, that upon the release
by the Collateral Agent of the Pledged Notes in accordance with Section 3.15
of the Purchase Contract and Pledge Agreement, the Notes shall, if requested by
the Purchase Contract Agent, be issuable in denominations of $50 and integral
multiples of $50.  Each Applicable
Ownership Interest in a Note held as a component of a Corporate Unit represents
an undivided ownership interest of 1/20, or 5%, of $1,000 principal amount of
Notes.

 

Section 2.04           Global
Notes.  Notes corresponding to
Applicable Ownership Interests in Notes that are no longer a component of the
Corporate Units and released from the Collateral Account will be issued in
permanent global form (a “Global Note”), and if issued as one or more Global
Notes, the Depository shall be The Depository Trust Company or such other
depository as any officer of the Company may from time to time designate.  On the date on which the Notes registered in
the name of the Purchase Contract Agent pursuant to Section 2.03 are
issued, the Company shall also issue one or more Global Notes, registered in
the name of the Depository or its nominee, each having a zero principal
balance.  Upon the creation of Treasury
Units or the recreation of Corporate Units, an appropriate annotation shall be
made on the Schedule of Increases and Decreases on the Global Notes held by or
on behalf of the Depository and on the Pledged Note held by the Collateral
Agent.  Notes represented by the Global
Notes will be exchangeable for Notes in certificated form only (a) if the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Global Notes or if at any time the Depository ceases to be a
clearing agency registered under the Exchange Act, and the Company has not
appointed a successor Depository within 90 days of that notice or of its
becoming aware of such cessation or (b) upon recreation of Corporate
Units; provided that, subject to the last paragraph of Section 2.03,
the Notes in certificated form so issued in exchange for the Global Notes shall
be in denominations of $1,000 or any whole multiple of $1,000 above that amount
and be of like aggregate principal amount and tenor as the portion of the
Global Note to be exchanged. Except as provided above, owners of beneficial
interest in a Global Note will not be entitled to receive physical delivery of
Notes in certificated form and will not be considered the 

 

8

 

Holders thereof for any purpose under the Indenture.  Unless and until such Global Note is
exchanged for Notes in certificated form, Global Notes may be transferred, in
whole but not in part, and any payments on the Notes shall be made, only to the
Depository or a nominee of the Depository, or to a successor Depository
selected or approved by the Company or to a nominee of such successor
Depository.  Any Global Note that is
exchangeable pursuant to clause (a) of the fourth sentence of this Section 2.04
shall be exchangeable for Notes in certificated form registered in such names
as the Depository shall direct.

 

Section 2.05           Interest.  (a)  The Notes will bear interest
initially at the rate of 8.50% per year (the “Interest Rate”) from the date of
original issuance to, but excluding, the earlier of (i) the Stated
Maturity and (ii) the Reset Effective Date.  In the event of a Successful Remarketing of
the Notes, the Interest Rate will be reset by the Remarketing Agent, as set
forth under Section 7.02.  If the
Interest Rate is so reset, the Notes will bear interest at the Reset Rate from
the related Reset Effective Date to, but excluding, the Stated Maturity.  The Notes shall bear interest, to the extent
permitted by law, compounded quarterly or semi-annually, as applicable, on any
overdue principal and payment of interest at the Interest Rate through and
including the day immediately preceding the Reset Effective Date and at the
Reset Rate thereafter.

 

(b)           Interest
on the Notes shall be payable initially quarterly in arrears on (i) March 1,
June 1, September 1 and December 1 of each year (each, a “Quarterly
Interest Payment Date”), commencing on September 1, 2009, and (ii) the
Reset Effective Date, but only to the extent such Reset Effective Date is not a
Quarterly Interest Payment Date, in each case, to the Person in whose name such
Note, or any Predecessor Security, is registered at the close of business on
the Record Date for such Interest Payment Date. 
With respect to clause (ii) of the previous sentence, the Company
shall designate a Record Date for such Interest Payment Date no later than 10
Business Days prior to the Record Date selected by the Company.  Following a Successful Remarketing of the
Notes, interest on the Notes, if the Company so elects on the Successful Remarketing
Date, may be payable semi-annually in arrears on the Subsequent Interest
Payment Dates (together with Quarterly Interest Payment Dates and the Reset
Effective Date, if not a Quarterly Interest Payment Date, the “Interest Payment
Dates”).  Interest payments will include
interest accrued from and including the immediately preceding Interest Payment
Date or, in the case of the first Interest Payment Date, from and including June 24,
2009, to but excluding such Interest Payment Date.  If the Reset Effective Date is not a
Quarterly Interest Payment Date, (i) interest paid on the Reset Effective
Date shall be paid to the Collateral Agent and will be released by the
Collateral Agent to the Purchase Contract Agent for distribution to Holders of
Corporate Units subject to the provisions of the Purchase Contract and Pledge
Agreement on the Interest Payment Date for the Corporate Units next following
the Reset Effective Date and at the times provided for in Sections 3.13, 4.01(b) and
5.07 of the Purchase Contract and Pledge Agreement, and (ii) interest on
the Notes will accrue from, and including, the Reset Effective Date at the
Reset Rate and be payable on the Subsequent Interest Payment Dates.

 

(c)           The
amount of interest payable for any full quarterly period or any full
semi-annual period, as the case may be, will be computed on the basis of a
360-day year consisting of twelve 30-day months.  The amount of interest payable for any period
shorter than a full quarterly or semi-annual period, as the case may be, for
which interest is computed will be computed on the basis of a 30-day month and,
for any period less than a month, on the basis of the actual number of days
elapsed per 30-day month.  In the event
that any scheduled Interest 

 

9

 

Payment Date falls on a day that is not a Business Day, then payment of
interest payable on such Interest Payment Date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next calendar year, then such payment will be made on the preceding
Business Day, in each case, with the same force and effect as if made on such
scheduled Interest Payment Date.

 

Section 2.06           No
Defeasance.  The provisions of
Sections 4.2 of the Base Indenture shall not apply to the Notes.

 

Section 2.07           No
Sinking Fund.  The Notes are not
entitled to the benefit of any sinking fund.

 

Section 2.08           Guarantee.  The provisions of Article 16 of the Base
Indenture shall apply to the Notes.

 

Section 2.09           Increase
and Decrease.  In the event that any
Notes underlying Applicable Ownership Interests in Notes are to be released
from the Pledge following a Collateral Substitution, Early Settlement or Fundamental
Change Early Settlement pursuant to the Purchase Contract and Pledge Agreement
(a “Released Note”), such release and delivery shall be evidenced by an
endorsement by the Collateral Agent on the Pledged Note held by the Collateral
Agent reflecting a reduction in the principal amount of such Pledged Note equal
in amount (the “Reduced Principal Amount”) to the principal amount of the
Released Note. The Collateral Agent shall confirm any such Reduced Principal
Amount by telecopying or otherwise delivering a photocopy of such endorsement
made on the Pledged Note evidencing such Reduced Principal Amount to the
Trustee at the telecopier number or address of the Trustee provided for notices
to the Trustee in the Purchase Contract and Pledge Agreement (or at such other
telecopier or address as the Trustee shall provide to the Collateral Agent).
Upon receipt of such confirmation, the Trustee shall, or shall instruct the
Custodial Agent to increase the principal amount of a Global Note held by it or
by the Custodial Agent in an amount equal to the Reduced Principal Amount by an
endorsement made by it or by the Custodial Agent on such Global Note to reflect
such increase. In the event that a Note is transferred to the Collateral Agent
pursuant to Section 3.14 of the Purchase Contract and Pledge Agreement (a “Subjected
Note”) in connection with the recreation of Corporate Units, such transfer
shall be evidenced by an endorsement by the Collateral Agent on the Pledged
Note held by the Collateral Agent reflecting an increase in the principal
amount of such Pledged Note equal in amount (the “Increased Principal Amount”)
to the principal amount of such Subjected Note. The Collateral Agent shall
confirm any such Increased Principal Amount by telecopying or otherwise delivering
a photocopy of such endorsement made on the Pledged Note evidencing such
Increased Principal Amount to the Trustee at the telecopier number or address
of the Trustee provided for notices to the Trustee in the Purchase Contract and
Pledge Agreement (or at such other telecopier or address as the Trustee shall
provide to the Collateral Agent). Upon receipt of such confirmation, the
Trustee shall, or shall instruct the Custodial Agent to decrease the principal
amount of the Global Note held by it or by the Custodial Agent in an amount
equal to the Increased Principal Amount by an endorsement made by it or by the
Custodial Agent on such Global Note to reflect such decrease.

 

10

 

ARTICLE III

REDEMPTION OF THE NOTES

 

Section 3.01           Special
Event Redemption.  If a Special Event
shall occur and be continuing, the Company may, at its option, redeem the Notes
in whole, but not in part, on any Interest Payment Date prior to the earlier of
the Successful Remarketing Date or the Purchase Contract Settlement Date, at a
price per Note equal to the Redemption Price, payable on the date of redemption
(the “Special Event Redemption Date”) in accordance with the redemption
procedures set forth in Section 3.04 below.  The Redemption Price payable in respect of
all Notes included in Corporate Units will be distributed to the Collateral
Agent, which in turn will apply such Redemption Price to purchase the Special
Event Treasury Portfolio on behalf of the Holders of the Corporate Units and
remit the remaining portion (net of fees and expenses, if any), if any, of such
Redemption Price to the Purchase Contract Agent for payment to the Holders of
the Corporate Units. Thereafter, the Applicable Ownership Interests in the
Special Event Treasury Portfolio will be substituted for the Applicable
Ownership Interests in Notes and will be pledged to the Company through the
Collateral Agent to secure the Holders’ obligations to purchase Common Shares
under the related Purchase Contract. Holders of Separate Notes will directly
receive the Redemption Price with respect to their Separate Note.

 

Section 3.02           Notice
of Special Event Redemption.  The
Company shall notify the Collateral Agent in writing that that a Special Event
has occurred and the Company intends to redeem the Notes on the Special Event
Redemption Date.  If the Company elects
to redeem the Notes in connection with a Special Event Redemption, the Company
shall appoint the Quotation Agent to assist the Company in determining the
Treasury Portfolio Purchase Price.

 

Section 3.03           Effect
of Redemption. Notice of Special Event Redemption having been given as
provided for in Section 11.4 of the Base Indenture, the Notes shall become
due and payable on the Special Event Redemption Date at the Redemption
Price.  Unless the Company defaults in
the payment of the Redemption Price, on and after the Special Event Redemption
Date, once notice of Special Event Redemption is so given and funds are
irrevocably deposited, in each case, in accordance with Section 3.04, (a) interest
shall cease to accrue on the Notes immediately prior to the close of business
on the Special Event Redemption Date, (b) the Notes shall no longer be
Outstanding and (c) all rights of the Holders in respect of the Notes
shall terminate and lapse (other than the right to receive the Redemption Price
upon surrender of such Notes but without interest on such amount).  Following the notice of Special Event
Redemption, neither the Company nor the Trustee shall be required to register
the transfer of or exchange the Notes to be redeemed.

 

Section 3.04           Redemption
Procedures.  On or prior to 11:00 a.m.,
New York City time, on the Special Event Redemption Date, the Company or the
Guarantor shall deposit with the Trustee or with a Paying Agent immediately
available funds in an amount sufficient to pay, on the Special Event Redemption
Date, the aggregate Redemption Price for all outstanding Notes.  If the Company has paid to the Trustee a
sufficient amount of cash in connection with the related Special Event
Redemption Date of the Notes, then, if the Notes are Global Notes, on the
Special Event Redemption Date, the Trustee will irrevocably deposit with the
Depository funds sufficient to pay the Redemption Price for the Notes being
redeemed.  The Company will also 

 

11

 

give the Depository irrevocable instructions and authority to pay the
Redemption Price in immediately available funds to the holders of beneficial interests
in the Global Notes.  If any Special
Event Redemption Date is not a Business Day, then the Redemption Amount will be
payable on the next Business Day (and without any interest or other payment in
respect of any such delay).  However, if
payment on the next Business Day causes payment of the Redemption Amount to be
in the next calendar year, then payment will be on the immediately preceding
Business Day, in each case with the same force and effect as if made on that
payment date.  Interest to be paid on or
before the Special Event Redemption Date for any Notes called for Special Event
Redemption shall be payable to the Holders on the Record Dates for the related
Interest Payment Dates.

 

Section 3.05           No
Other Redemption.  Except as set
forth in this Article 3, the Notes shall not be redeemable by the Company
prior to the Maturity Date.  Except for
Sections 11.2 and 11.4, the remaining redemption provisions of Article 11
of the Base Indenture shall not apply to the Notes.

 

ARTICLE IV

FORM OF NOTE

 

Section 4.01           Form of
Note.  The Notes and the Trustee’s
Certificate of Authentication to be endorsed thereon are to be substantially in
the form attached as Exhibit A hereto, with such changes to the Notes as
the officers of the Company executing the Notes (by manual or facsimile
signature) may approve, such approval to be conclusively evidenced by their
execution thereof.

 

ARTICLE V

ORIGINAL ISSUE OF NOTES

 

Section 5.01           Original
Issue of Notes. Notes in the aggregate principal amount of $150,000,000 (or
up to $172,500,000 if the Underwriters exercise their overallotment option to
purchase additional Corporate Units in full as set forth in the Underwriting
Agreement) may from time to time, upon execution of this Supplemental Indenture,
be executed by the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and deliver said Notes to or upon the
written order of the Company pursuant to Section 3.3 of the Base Indenture
without any further action by the Company (other than as required by the Base
Indenture).

 

ARTICLE VI

ADDITIONAL AMOUNTS

 

Section 6.01           Additional
Amounts.  (a)  The Company and
the Guarantor will make all payments under or with respect to the Notes and the
Guarantee free and clear of and without withholding or deduction for or on
account of any present or future tax, duty, levy, impost, assessment or other
governmental charge (hereinafter “Taxes”) imposed or levied by or on behalf of
the United States of America or Bermuda, or any political subdivision or any
authority or 

 

12

 

agency therein or thereof having power to tax (a “Taxing Jurisdiction”),
unless the Company or the Guarantor is required to withhold or deduct Taxes by
law or by the interpretation or administration thereof.  As used in this Note, the term “Taxes” shall
not include (i) any estate, inheritance, gift, sale, transfer, personal
property or similar tax, assessment, or governmental charge; (ii) any Tax
payable otherwise than by withholding from payments in respect of the Notes or
the guarantees; and (iii) any Tax imposed by reason of payments on the
Notes being treated as “contingent interest” within the meaning of Section 871(h)(4) of
the Internal Revenue Code of 1986, as amended (the “Code”).

 

(b)           If
the Company or the Guarantor is required to withhold or deduct any amount for
or on account of Taxes imposed by a Taxing Jurisdiction from any payment made
under or with respect to the Notes or the Guarantee, the Company or the
Guarantor shall pay such additional amounts (“Additional Amounts”) as may be
necessary so that the net amount received by Holders of the Notes after such
withholding or deduction (including any withholding or deduction attributable
to Additional Amounts payable hereunder) will not be less than the amount such
Holders would have received if such Taxes had not been withheld or deducted; provided, however, that the foregoing
obligation to pay Additional Amounts does not apply to any Taxes to the extent
such Taxes would not have been so imposed:

 

(1)           but for the relevant Holder (or the
beneficial owner of such Notes) (i) having any present or former
connection with the Taxing Jurisdiction, including, without limitation, being
or having been a citizen or resident thereof, or having been present, having
been incorporated in, having engaged in a trade or business or having (or
having had) a permanent establishment or principal office therein, (ii) being
a controlled foreign corporation within the meaning of Section 957(a) of
the Code related within the meaning of Section 864(d)(4) of the Code
to the Company or the Guarantor, (iii) being an actual or constructive
owner of 10 percent or more of the total combined voting power of all classes
of stock of the Company or the Guarantor entitled to vote, (iv) being a
bank for United States federal income tax purposes whose receipt of interest on
the Note is described in Section 881(c)(3)(A) of the Code or (v) being
subject to backup withholding as of the date of the purchase by the Holder of
the Note;

 

(2)           but for the failure of the relevant
Holder (or the beneficial owner of such Notes) to use its reasonable best
efforts, to the extent such Holder (or beneficial owner) is legally entitled to
do so, to comply upon written notice by the Company or the Guarantor delivered
60 days prior to any payment date with a request to satisfy any certification,
identification or other reporting requirements, which shall include any
applicable forms or instructions, whether imposed by statute, treaty, regulation,
or administrative practice, concerning the nationality or residence of such
Holder or the connection of such Holder with the Taxing Jurisdiction;

 

(3)           but for an election by the Holder of
such Notes, the effect of which is to make one or more payments in respect of
such Notes subject to United States federal income tax or withholding tax
provisions;

 

(4)           if the payment could have been made
without such deduction or withholding if the relevant Holder had presented such
Note for payment within 30 days 

 

13

 

after the date on which such
payment became due and payable or the date on which payment thereof is duly
provided for, whichever is later (except to the extent that the Holder would
have been entitled to Additional Amounts had such Note been presented on the
last day of such 30-day period);

 

(5)           with respect to any payment of
principal of (or premium, if any, on) or interest on such Note to any Holder
who is a fiduciary or partnership or any person other than the sole beneficial
owner of such payment, to the extent that a beneficiary with respect to such
fiduciary, a member of such a partnership or the beneficial owner of such
payment would not have been entitled to the Additional Amounts had such beneficiary,
member or beneficial owner been the actual Holder of such Note (but only if
there is no material cost or expense associated with transferring such Notes to
such beneficiary, partner or beneficial owner and no restriction on such
transfer that is outside the control of such beneficiary, partner or beneficial
owner); and

 

(6)           any combination of items (1), (2),
(3), (4) or (5) above

 

ARTICLE VII

REMARKETING

 

Section 7.01           Remarketing
Procedures.  (a)  Pursuant to
the Remarketing Agreement and as described below, the Company (i) during
the Period for Early Remarketing may, at its option, select one or more
Three-Business Day Remarketing Periods consisting of three successive
Remarketing Dates on each of which it shall cause the Remarketing Agent to
remarket, in whole (but not in part), unless the Notes have previously been
successfully remarketed in accordance with the provisions of the Remarketing
Agreement or a Special Event Redemption shall have occurred or will occur on or
prior to the last possible Remarketing Date related to the applicable
Three-Business Day Remarketing Period, (A) the Pledged Notes of Corporate
Units Holders included in the Corporate Units, and (B) any Separate Notes
of Holders who have elected in the manner set forth in the Purchase Contract
and Pledge Agreement and the Remarketing Agreement to have their Notes so
remarketed, for settlement on the Reset Effective Date, and (ii) shall,
unless the Notes have previously been successfully remarketed in accordance
with the provisions of the Remarketing Agreement or a Special Event Redemption
Date shall have occurred or will occur on or prior to the Purchase Contract
Settlement Date, cause the Remarketing Agent to remarket, in whole (but not in
part), on each Remarketing Date during the Final Three-Business Day Remarketing
Period, (A) the Pledged Notes of Corporate Unit Holders who have not
already settled the Purchase Contracts included in their Corporate Units and
who have failed to notify the Purchase Contract Agent, on or prior to the seventh
Business Day immediately preceding the Purchase Contract Settlement Date, of
their intention to settle such Purchase Contracts in cash, and (B) any
Separate Notes of Holders who have elected in the manner set forth herein to
have their Notes so remarketed, for settlement on the Purchase Contract
Settlement Date.  The Company may select
a Three-Business Day Remarketing Period during the Period for Early Remarketing
by designating each of the three sequential Remarketing Dates to comprise such
Three-Business Day Remarketing Period; provided that no Remarketing Date during
the Period for Early Remarketing shall occur earlier than December 1, 2011
or later than May 1, 2012.

 

14

 

(b)           The
Company will request, not less than 10 Business Days prior to each Remarketing
Announcement Date, that the Depository (or any successor or its nominee) notify
the Depository participants holding Notes, Corporate Units and Treasury Units
of the Remarketing.

 

(c)           On
the Remarketing Announcement Date, the Company shall make an announcement
regarding the proposed Remarketing of the Notes (the “Remarketing Announcement”).  The Remarketing Announcement shall specify
the following:

 

(i)            (A)          if
the Remarketing Announcement relates to a Remarketing to occur during the
Period for Early Remarketing, that the Notes may be remarketed on any or all of
the sixth, seventh and eighth Business Days following such Remarketing
Announcement Date; or

 

(B)         if the Remarketing
Announcement relates to a Remarketing to occur during the Final Three-Business
Day Remarketing Period, that the Notes may be remarketed on any or all of the
third, fourth and fifth Business Days following such Remarketing Announcement
Date;

 

(ii)           (A)          if
the Remarketing Announcement relates to a Remarketing to occur during the
Period for Early Remarketing, that the Reset Effective Date will be the third
Business Day following the Remarketing Date on which the Notes are successfully
remarketed unless there is a Successful Remarketing within five Business Days
of the next succeeding Interest Payment Date, in which case such Interest
Payment Date will be the Reset Effective Date; or

 

(B)         if the Remarketing
Announcement relates to a Remarketing to occur during the Final Three-Business
Day Remarketing Period, that the Reset Effective Date will be the Purchase
Contract Settlement Date if there is a Successful Remarketing;

 

(iii)          that the Reset Rate and Subsequent
Interest Payment Dates for the Notes will be established, and if the Company
elects to make any Modifications to the terms of the Notes as provided in Section 7.02,
that such Modifications will be set on the Successful Remarketing Date and
effective on and after the Reset Effective Date;

 

(iv)          (A)          if
the Remarketing Announcement relates to a Remarketing to occur during the
Period for Early Remarketing, that the Reset Rate will equal the interest rate
on the Notes that will enable the Notes to be remarketed at a price (the “Remarketing
Price”) equal to at least 100% of the sum of the Remarketing Treasury Portfolio
Purchase Price and the Separate Notes Purchase Price, plus the applicable
Remarketing Fee; or

 

(B)         if the Remarketing
Announcement relates to a Remarketing to occur during the Final Three-Business
Day Remarketing Period, that the Reset Rate will equal the interest rate on the
Notes that will enable the Notes to be remarketed at a price (the “Contract
Settlement Price”) equal to at least 100% of their aggregate principal amount,
plus the applicable Remarketing Fee; and

 

15

 

(v)           the possible ranges of the
Remarketing Fee, expressed as a percentage of the Remarketing Treasury Portfolio
Purchase Price and the Separate Notes Purchase Price or as a percentage of the
aggregate principal amount of the Notes to be remarketed, as the case may be.

 

On the Remarketing Announcement Date, the
Company will issue a press release through any appropriate news agency,
including Dow Jones & Company, Inc.  and Bloomberg Business News containing the
Remarketing Announcement.

 

(d)           Each
Holder of Separate Notes may elect to have Separate Notes held by such Holder
remarketed in any Remarketing.  A Holder
making such an election must, pursuant to the Purchase Contract and Pledge
Agreement, notify the Custodial Agent and deliver such Separate Notes to the
Custodial Agent on or prior to 5:00 p.m., New York City time, on the
second Business Day, but no earlier than the fifth Business Day, immediately
preceding the first Remarketing Date of any Three-Business Day Remarketing
Period or the Final Three-Business Day Remarketing Period.  Any such notice and delivery may not be
conditioned upon the level at which the Reset Rate is established in the
Remarketing.  Any such notice and
delivery may be withdrawn on or prior to 5:00 p.m., New York City time, on
the second Business Day immediately preceding the first Remarketing Date of the
applicable Three-Business Day Remarketing Period or the Final Three-Business
Day Remarketing Period in accordance with the provisions set forth in the
Purchase Contract and Pledge Agreement. 
Any such notice and delivery not withdrawn by such time will be irrevocable
with respect to such Remarketing. 
Pursuant to Section 5.02 of the Purchase Contract and Pledge
Agreement, promptly after 11:00 a.m., New York City time, on the Business
Day immediately preceding the first Remarketing Date of the applicable
Three-Business Day Remarketing Period or Final Three-Business Day Remarketing
Period, the Custodial Agent, based on the notices and deliveries received by it
prior to such time, shall notify the Remarketing Agent of the principal amount
of Separate Notes to be tendered for Remarketing and shall cause such Separate
Notes to be presented to the Remarketing Agent. 
Under Section 5.02 of the Purchase Contract and Pledge Agreement,
certain Notes that are components of Corporate Units will be deemed tendered
for Remarketing and will be remarketed in accordance with the terms of the
Remarketing Agreement.

 

(e)           Unless
and until there has been a Successful Remarketing, on each Remarketing Date
during a Three-Business Day Remarketing Period or the Final Three-Business Day
Remarketing Period, the Company shall cause the Remarketing Agent to use its
reasonable efforts to remarket the Notes that the Purchase Contract Agent and
the Custodial Agent shall have notified the Remarketing Agent have been
tendered for, or otherwise are to be included in, the Remarketing, at a price
per $1,000 principal amount of the Notes such that the aggregate price for the
aggregate principal amount of the Notes being Remarketed on that date will be
approximately (i) if the Reset Effective Date is not the Purchase Contract
Settlement Date, the Remarketing Price or (ii) if the Reset Effective Date
is the Purchase Contract Settlement Date, the Contract Settlement Price.

 

(f)            In
the event of a Successful Remarketing, on the Remarketing Date, the Remarketing
Agent shall (i) notify the Collateral Agent, the Custodial Agent, the
Purchase Contract Agent, the Company, the Trustee, the Depository and the
Clearing Agency of the Reset Rate determined in such Remarketing, the
Subsequent Interest Payment Dates and the related 

 

16

 

Regular Record Dates, any Modifications by the Company of the Notes and
the aggregate principal amount of Notes sold in such Remarketing, (ii) notify
each purchaser of the Reset Rate, the Subsequent Interest Payment Dates and the
related Regular Record Dates, the Stated Maturity of the Notes and the
aggregate principal amount such purchaser is to purchase, and (iii) instruct
each purchaser to give instructions to its Depository participant to pay the
purchase price on the Reset Effective Date in same day funds against delivery
of the Notes purchased through the Depository’s normal procedures.  In addition, the Company will request that
the Depository notify its participants, no later than the Business Day next
succeeding the Successful Remarketing Date, of the Reset Rate, the Subsequent Interest
Payment Dates and related Regular Record Dates and any Modifications of the
Notes.

 

(g)           In
accordance with the Depository’s normal procedures, on the Reset Effective
Date, the transactions described above with respect to each Note tendered for
purchase and sold in such Remarketing shall be executed through the Depository,
and the accounts of the respective Depository participants shall be debited and
credited and such Notes delivered by book entry as necessary to effect
purchases and sales of such Notes.  The
Depository shall make payment in accordance with its normal procedures.

 

(h)           In
no event shall the aggregate price for the Notes in a Remarketing be less than
a price (the “Minimum Price”) equal to (i) in the case of a Remarketing
during the Period for Early Remarketing, 100% of the sum of the Remarketing
Treasury Portfolio Purchase Price and the Separate Notes Purchase Price or (ii) in
the case of a Remarketing during the Final Three-Business Day Remarketing
Period, 100% of the aggregate principal amount of the Notes being remarketed.  A remarketing attempt on any Remarketing Date
will be deemed unsuccessful if the (i) Remarketing Agent is unable to
remarket the Notes for an aggregate price that is at least equal to the Minimum
Price; or (ii) if a condition precedent to such Remarketing is not
fulfilled.

 

(i)            The
right of each Holder of Notes that are included in Corporate Units to have such
Notes, and each Holder of Separate Notes to have any Separate Notes (together,
the “Remarketed Notes”), remarketed and sold on any Remarketing Date shall be
limited to the extent that (i) the Remarketing Agent conducts a
Remarketing pursuant to the terms of the Remarketing Agreement, (ii) a
Special Event Redemption has not occurred prior to such Remarketing Date, (iii) the
Remarketing Agent is able to find a purchaser or purchasers for Remarketed
Notes at the Minimum Price, and (iv) the purchaser or purchasers deliver
the purchase price therefore to the Remarketing Agent as and when required.

 

(j)            Neither
the Trustee, the Company nor the Remarketing Agent shall be obligated in any
case to provide funds to make payment upon tender of Notes for Remarketing.

 

Section 7.02           Reset
Rate; Modifications.  (a)  In
connection with each Remarketing, (i) the Remarketing Agent shall
determine the reset interest rate (rounded to the nearest one-thousandth
(0.001) of one percent per annum) that it believes will, when applied to the
Notes (with any Modifications as determined by the Company pursuant to this Section 7.02(a) taken
into account), enable the aggregate principal amount of the Notes being
remarketed on such date to be sold at an aggregate price equal to at least (A) if
the Reset Effective Date is not the Purchase Contract Settlement Date, the
Remarketing Price or (B) if the Reset Effective Date is the Purchase
Contract Settlement Date, the Contract Settlement Price and (ii) if there
is a 

 

17

 

Successful Remarketing, the Company may elect, at its option, to (A) change the
Interest Payment Dates to semi-annually in arrears commencing on the
Subsequent Interest Payment Dates; (B) change the Stated
Maturity to any other date later than June 1, 2014 and earlier than June 1,
2039; (C) add to, modify or remove altogether redemption rights for the
Company; provided that there shall be at least two years between the Reset
Effective Date and any such additional or modified redemption date; and (D) add
interest deferral provisions to the Notes (each, a “Modification”).  Any such election shall be evidenced by an
Officer’s Certificate delivered to the Trustee promptly after any Modification
is determined.  The reset interest rate
established on the Remarketing Date on which a Successful Remarketing occurs
shall be the “Reset Rate,” and the Reset Rate and any Modification the Company
elects shall be effective on the Reset Effective Date.

 

(b)           Anything
herein to the contrary notwithstanding, the Reset Rate shall not exceed the
maximum rate permitted by applicable law and the Remarketing Agent shall have
no obligation to determine whether there is any limitation under applicable law
on the Reset Rate or, if there is any such limitation, the maximum permissible
Reset Rate on the Notes and it shall rely solely upon written notice from the
Company (which the Company agrees to provide prior to the eighth Business Day
before the first Remarketing Date of any Three-Business Day Remarketing Period)
as to whether or not there is any such limitation and, if so, the maximum
permissible Reset Rate.

 

(c)           In
the event of a Failed Remarketing or if no Notes are included in Corporate
Units and none of the Holders of the Separate Notes elect to have their Notes
remarketed in any Remarketing, the applicable interest rate on the Notes will
not be reset and will continue to be the Interest Rate.

 

(d)           In
the event of a Successful Remarketing, the Interest Rate shall be reset at the
Reset Rate as determined by the Remarketing Agent under the Remarketing
Agreement.  The Reset Rate shall be
effective from and after the Reset Effective Date.

 

Section 7.03           Failed
Remarketing.  (a) If, by 4:00 p.m.,
New York City time, on the last Remarketing Date of any Three-Business Day
Remarketing Period, the Remarketing Agent is unable to remarket all of the
Remarketed Notes at the Minimum Price, pursuant to the terms and conditions
hereof, a Failed Remarketing shall be deemed to have occurred, and the
Remarketing Agent shall so advise, by telephone the Depository, the Purchase
Contract Agent and the Company.  Promptly
following any Failed Remarketing, the Remarketing Agent shall return, no later
than the Business Day immediately following the end of such Three-Business Day
Remarketing Period, the Separate Notes submitted for Remarketing, if any, to
the Custodial Agent for distribution to the appropriate Holders pursuant to the
terms of the Purchase Contract and Pledge Agreement.

 

(b)           The
Company shall cause a notice of such Failed Remarketing to be published through
any appropriate news agency, including Dow Jones & Company, Inc.  and Bloomberg Business News no later than 9:00 a.m.,
New York City time, on the Business Day following the last Remarketing Date of
such Three-Business Day Remarketing Period (which notice, if the unsuccessful
Remarketing attempt shall occur during the Final Three-Business Day Remarketing

 

18

 

Period, shall include the procedures that must be followed if a Holder
of Notes wishes to exercise its Put Right, as hereinafter defined).

 

Section 7.04           Put
Right.  (a)  If there has not
been a Successful Remarketing prior to the Purchase Contract Settlement Date,
Holders of Separate Notes and Holders of Notes that are a component of
Corporate Units will, subject to this Section 7.04, have the right (the “Put
Right”) to require the Company to purchase their Notes, on the Purchase
Contract Settlement Date, at a price per Note equal to $1,000 (or $50 per
Applicable Ownership Interest in Notes) plus accrued and unpaid interest to but
excluding the Purchase Contract Settlement Date (the “Put Price”); provided , however, that as of the
Purchase Contract Settlement Date, Holders of Notes that are part of a
Corporate Unit with respect to which a Put Right has been automatically
exercised under clause (b) below shall be deemed to have elected to pay
the Purchase Price for the Common Shares to be issued under the related
Purchase Contract from a portion of the Proceeds of the Put Right of such Notes
equal to the Purchase Price in full satisfaction of such Holder’s obligations
under the Purchase Contracts, and any remaining amount of the Put Price
following satisfaction of the related Purchase Contract will be paid to such
Holder.

 

(b)           The
Put Right of Holders of Notes that are part of Corporate Units will be
automatically exercised unless such Holders (1) prior to 11:00 a.m.,
New York City time, on the second Business Day immediately preceding the
Purchase Contract Settlement Date, provide written notice to the Purchase
Contract Agent of their intention to settle the related Purchase Contract with
separate cash, and (2) on or prior to 11:00 a.m., New York City time,
on the Business Day immediately preceding the Purchase Contract Settlement
Date, deliver to the Collateral Agent $50 in cash per Purchase Contract, in
each case pursuant to the Purchase Contract Agreement.  The Put Price for Holders of Separate Notes
shall be applied in accordance with Section 7.04(c) below.

 

(c)           The
Put Right of a Holder of a Separate Note shall only be exercisable upon
delivery of a notice substantially in the form attached as Exhibit B
hereto, together with such Holder’s Separate Notes, to the Trustee by such
Holder on or prior to the second Business Day prior to the Purchase Contract
Settlement Date.  On or prior to the
Purchase Contract Settlement Date, the Company shall deposit with the Trustee
immediately available funds in an amount sufficient to pay, on the Purchase
Contract Settlement Date, the aggregate Put Price of all Separate Notes with
respect to which a Holder has exercised a Put Right.  In exchange for any Separate Notes
surrendered pursuant to the Put Right, the Trustee shall then distribute such
amount to the Holders of such Separate Notes.

 

(d)           Notes
purchased pursuant to the Put Right shall be cancelled by the Trustee.

 

Section 7.05           Additional Event of Default.  In addition to the events listed as Events of
Default in Section 5.1 of the Base Indenture, it shall be an additional
Event of Default with respect to the Notes if the Company shall not have
satisfied its obligation to pay the Put Price when due with respect to any
Separate Note following exercise of the Put Right in accordance with Section 7.04,
unless such Notes underlie Corporate Units, in which case the obligation of the
Company to pay the Put Price shall be netted against such Holder’s obligation
to pay the Purchase Price (as defined in the Purchase Contract and Pledge
Agreement) in accordance with Section 5.02 (b) under the Purchase
Contract and Pledge Agreement.

 

19

 

ARTICLE VIII

TAX TREATMENT

 

Section 8.01           Tax
Treatment.  The Company agrees, and
by acceptance of a Corporate Unit or a Separate Note, each beneficial owner of
a Corporate Unit or a Separate Note will be deemed to have agreed, as
applicable, for all tax purposes, (i) to treat itself as the owner of the
Notes, (ii) to treat the Notes as indebtedness of the Company that are
subject to the rules applicable to contingent payment debt instruments
under Treas. Reg. Sec. 1.1275-4 and (iii) to treat the Corporate Units as
comprised of the Notes and the Purchase Contracts as separate securities.  A Holder of Notes may obtain the comparable
yield and projected payment schedule for the Notes, determined by the Company
pursuant to Treas. Reg. Sec. 1.1275-4, by submitting a written request for such
information to the Guarantor at the following address: Assured Guaranty Ltd.,
30 Woodbourne Avenue, Hamilton HM08 Bermuda, Attention: Treasurer.

 

ARTICLE IX

MISCELLANEOUS

 

Section 9.01           Ratification
of Indenture.  The Base Indenture, as
supplemented by this Supplemental Indenture, is in all respects ratified and
confirmed, and this Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided.

 

Section 9.02           Responsibility
For Recitals, Etc.  The recitals
herein and in the Notes (except in the Trustee’s certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness thereof. 
The Trustee makes no representations as to the validity or sufficiency
of this Supplemental Indenture or of the Notes. 
The Trustee shall not be accountable for the use or application by the
Company of the Notes or of the proceeds thereof.

 

Section 9.03           Separability.  In case any one or more of the provisions
contained in this Supplemental Indenture or in the Notes shall for any reason
be held to be invalid, illegal or unenforceable in any respect, then, to the
extent permitted by law, such invalidity, illegality or unenforceability shall
not affect any other provisions of this Supplemental Indenture or of the Notes,
but this Supplemental Indenture and the Notes shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein
or therein.

 

Section 9.04           Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company and the Trustee.

 

Section 9.05           Governing
Law.  THIS SUPPLEMENTAL INDENTURE AND
THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW
PROVISIONS THEREOF.  The Company, the
Guarantor and the Trustee hereby submit to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for the 

 

20

 

purposes of all legal proceedings arising out of or relating to this
Supplemental Indenture or the Notes.  The
Company, the Guarantor and the Trustee irrevocably waive to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has been brought in
an inconvenient forum.

 

Section 9.06           Counterparts.  This Supplemental Indenture may be executed
in any number of counterparts by the parties hereto on separate counterparts,
each of which, when so executed and delivered, shall be deemed an original, but
all such counterparts shall together constitute one and the same instrument.

 

21

 

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

 

	
   

  	
  ASSURED
  GUARANTY US HOLDINGS INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ASSURED
  GUARANTY LTD., as Guarantor

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK MELLON, 

  	
   

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  

 

22

 

EXHIBIT A

 

[IF
THIS NOTE IS TO BE A GLOBAL SECURITY, INSERT:]

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY (AS
DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. 
THIS GLOBAL NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS GLOBAL NOTE MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY, OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY
(AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE 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 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.

 

	
  REGISTERED

  	
  REGISTERED

  
	
  No.
      

   

  CUSIP
  No. 04621W AB6 

   

  ISIN
  No. US04621WAB63

  	
  Initially $       

  

 

ASSURED GUARANTY US HOLDINGS INC.

 

8.50% Senior Note due June 1, 2014

 

Assured Guaranty US Holdings Inc., a Delaware
corporation (hereinafter called the “Company,” which term includes any
successor corporation under the Indenture referred to 

 

23

 

below), for value received,
hereby promises to pay to [Cede & Co.]/[The Bank of New York Mellon,
as Purchase Contract Agent], or its registered assigns, the principal sum of
[$            ]* [the
principal amount as set forth in the Schedule of Increases or Decreases in Note
attached hereto, which amount shall not exceed $150,000,000 (or $172,500,000 if
the Underwriters exercise their overallotment option in full)]** on the
Stated Maturity, and to pay interest thereon from June 24, 2009 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, quarterly in arrears on each Interest Payment Date of each year,
commencing on September 1, 2009, at the rate of 8.50% per annum through and
including the day immediately preceding the Reset Effective Date, if any, and
after the Reset Effective Date, semi-annually (if the Company elects such
Modification on the Successful Remarketing Date) in arrears on the Subsequent
Interest Payment Dates at the Reset Rate (from and including the Reset
Effective Date), in each case on the basis of a 360-day year consisting of
twelve 30-day months, until the principal hereof is paid or duly provided for
or made available for payment, and (to the extent that the payment of such
interest shall be legally enforceable) to pay interest, compounded quarterly,
at the rate of 8.50% per annum on any overdue principal and payment of interest
through and including the day immediately preceding the Reset Effective Date, if
any, and thereafter at the Reset Rate, if any, compounded semi-annually (if
such Modification is applicable).  The
amount of interest payable for any period shorter than a full quarterly or
semi-annual period, as the case may be, for which interest is computed will be
computed on the basis of a 30-day month and, for any period less than a month,
on the basis of the actual number of days elapsed per 30-day month.  The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Note (or one or more Predecessor
Notes) is registered at the close of business on the Record Date for such
Interest Payment Date.

 

Payment of the principal of and premium, if
any, and interest on this Note will be made at the office or agency of the
Company and the Guarantor maintained for that purpose in the Borough of
Manhattan, The City of New York, which shall initially be the Corporate Trust
Office of the Trustee, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided , however , that payment of interest may be made at the option
of the Company or the Guarantor by check mailed to the Holder at such address
as shall appear in the Security Register or by wire transfer to an account with
a financial institution in the United States appropriately designated by the
Holder entitled to payment by notice to the Trustee given at least 15 days
prior to the Interest Payment Date.

 

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

 

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

 

*Insert in certificated Note.

**Insert in Global Notes and
Pledged Note

 

24

 

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

 

	
  ATTEST:

  	
   

  	
  ASSURED
  GUARANTY US HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  

 

CERTIFICATE
OF AUTHENTICATION

 

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

 

	
  Dated:

  	
   

  	
  THE
  BANK OF NEW YORK MELLON, as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  

 

25

 

FORM OF REVERSE OF NOTE

 

This Note is one of a duly authorized issue
of securities of the Company (herein called the “Notes”), fully and
unconditionally guaranteed (the “Guarantee”) as to payment of principal,
premium, if any, interest and any Additional Amounts (as defined in Section 6.01(b))
of the First Supplemental Indenture dated as of June 24, 2009 (the “First
Supplemental Indenture”)) by Assured Guaranty Ltd., a Bermuda company (the “Guarantor”)
issued and to be issued in one or more series under a Base Indenture (the “Base
Indenture”, as further supplemented by the First Supplemental Indenture, the “Indenture”),
dated as of May 1, 2004, between the Company and The Bank of New York
Mellon, formerly known as The Bank of New York, as Trustee, to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantor, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered.

 

The Notes are senior unsecured obligations of
the Company.  The Notes will rank without
preference or priority among themselves and equally with all unsecured and
unsubordinated indebtedness of the Company from time to time outstanding.  The Notes will be structurally subordinated
to all obligations of the Company’s subsidiaries from time to time outstanding,
including claims with respect to trade payables.

 

This Note is one of the series designated on
the face hereof, limited in aggregate principal amount to $150,000,000 (up to
$172,500,000 if the Underwriters exercise their overallotment option in full); provided however that the Company, without
notice to or consent of the Holders, may issue additional Notes of this series
and thereby increase such principal amount in the future, on the terms and
conditions (except for issue date, public offering price and, if applicable,
the date from which interest accrues and the first Interest Payment Date) with
the same CUSIP number as the Notes of this series.

 

Unless an earlier Special Event Redemption
has occurred, this Note shall mature and the principal amount thereof shall be
due and payable together with all accrued and unpaid interest thereon on the
Stated Maturity.  The “Stated Maturity”
shall mean June 1, 2014 or, upon the Reset Effective Date, if the Company
elects on the Successful Remarketing Date, any other date later than June 1,
2014 and earlier than June 1, 2039; it being understood that if there
shall have been a Failed Remarketing, the Stated Maturity shall remain June 1,
2014.  Any Modifications the Company
elects, in each case in accordance with the Indenture, shall be effective on
and after the Reset Effective Date.

 

“Subsequent Interest Payment Date” means,
following the Reset Effective Date, if the Company elects on the Successful
Remarketing Date to make interest payable on a semi-annual basis, each
semi-annual interest payment date established by the Company on such Successful
Remarketing Date.  Otherwise, each
reference to “Subsequent Interest Payment Date” means a Quarterly Interest
Payment Date.

 

If a Special Event shall occur and be
continuing, the Company may, at its option, redeem the Notes of this series in
whole, but not in part, on any Interest Payment Date prior to the earlier of
the Successful Remarketing Date or the Purchase Contract Settlement Date, at a
price per Note equal to the Redemption Price as set forth in the Indenture.

 

26

 

If this Note is not a component of Corporate
Units, the Holder of this Note may, on or prior to the second Business Day, but
no earlier than the fifth Business Day, immediately preceding the first Remarketing
Date of any Three-Business Day Remarketing Period, elect to have this Note
remarketed in the same manner as Pledged Notes, by delivering this Note, along
with a notice of such election to The Bank of New York Mellon, as Custodial
Agent, for Remarketing in accordance with the Purchase and Pledge Agreement.

 

If there has not been a Successful
Remarketing prior to the Purchase Contract Settlement Date, the Holders of
Notes of this series will have the right to require the Company to purchase
their Notes on the Purchase Contract Settlement Date, all as more fully
described in the Indenture.

 

The Notes of this series are not entitled to
the benefit of any sinking fund and will not be subject to defeasance.

 

If an Event of Default with respect to Notes
of this series shall occur and be continuing, the principal of the Notes of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.

 

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

 

No reference herein to the Indenture and no
provision of this Note or of the Indenture shall alter or impair the
obligations of the Company and the Guarantor, which are absolute and
unconditional, to pay the principal of and premium, if any, and interest and
any Additional Amounts on this Note at the times, place and rate, and in the
coin or currency, herein prescribed.

 

As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this Note is registrable
in the Security Register, upon surrender of this Note for registration of
transfer at the office or agency of the Company in any place where the
principal of and interest on this Note are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Notes of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

 

27

 

The Notes of this series are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof except as provided for in Section 2.03 of the First
Supplemental Indenture.  As provided in
the Indenture and subject to certain limitations therein set forth, Notes of
this series are exchangeable for a like aggregate principal amount of Notes of
this series of a different authorized denomination, as requested by the Holder
surrendering the same.

 

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.

 

Pursuant to Section 2.04 of the First
Supplemental Indenture, Notes corresponding to Applicable Ownership Interests
in Notes that are no longer a component of the Corporate Units and are released
from the Collateral Account will be issued as Global Notes. Except as otherwise
provided in the Indenture, or except upon recreation of Corporate Units, Notes
represented by Global Notes will not be exchangeable for, and will not
otherwise be issuable as, Notes in certificated form. Unless and until such
Global Notes are exchanged for Notes in certificated form, Global Notes may be
transferred, in whole but not in part, and any payments on the Notes shall be
made, only to the Depository or a nominee of the Depository, or to a successor
Depository selected or approved by the Company or to a nominee of such
successor Depository.

 

Prior to due presentment of this Note for
registration of transfer, the Company, the Guarantor, the Trustee and any agent
of the Company, the Guarantor or the Trustee may treat the Person in whose name
this Note is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Company, the Guarantor the Trustee nor
any such agent shall be affected by notice to the contrary.

 

All terms used in this Note which are defined
in the Indenture shall have the meanings assigned to them in the Indenture.

 

In the case of any conflict between the
provisions of this Note and the Indenture, the provisions of the Indenture
shall control.  This Note and the
Indenture shall be governed by, and construed in accordance with, the laws of
the State of New York, without giving effect to the conflicts of law provisions
thereof.

 

The Company agrees, and by acceptance of a
Corporate Unit or a Separate Note, each beneficial owner of a Corporate Unit or
a Separate Note will be deemed to have agreed, as applicable, for all tax
purposes (i) to treat itself as the owner of the Notes, (ii) to treat
the Notes as indebtedness of the Company that are subject to the rules applicable
to contingent payment debt instruments under Treas. Reg. Sec. 1.1275-4 and (iii) to
treat the Corporate Units as comprised of the Note and the Purchase Contracts
as separate securities.  A Holder of
Notes of this series may obtain the comparable yield and projected payment
schedule for the Notes of this series, determined by the Company pursuant to
Treas. Reg. Sec. 1.1275-4, by submitting a written request for such information
to the Guarantor at the following address: Assured Guaranty Ltd., 30 Woodbourne
Avenue, Hamilton HM08 Bermuda, Attention: Treasurer.

 

28

 

ABBREVIATIONS

 

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:

 

	
  TEN
  COM

  	
  —

  	
  as
  tenants in common

  
	
   

  	
   

  	
   

  
	
  TEN
  ENT

  	
  —

  	
  as
  tenants by the entireties

  
	
   

  	
   

  	
   

  
	
  JT
  TEN

  	
  —

  	
  as
  joint tenants with right of survivorship and not as tenants in common

  
	
   

  	
   

  	
   

  
	
  UNIF
  GIFT MIN ACT

  	
  —

  	
   

  	
   

  
	
   

  	
   

  	
  (Minor)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Custodian

  	
   

  	
   

  
	
   

  	
   

  	
  (Cust)

  	
   

  
	
   

  	
   

  	
   

  
	
  Under
  Uniform Gifts to Minors Act

  	
   

  	
   

  
	
   

  	
  (State)

  	
   

  
	
   

  	
   

  	
   

  
	
  Additional
  abbreviations may also be used though not in the above list.

  
									

 

29

 

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

 

 

[PLEASE
INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

[PLEASE
PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE]

 

the
within Note and all rights thereunder, hereby irrevocably constituting and
appointing                                                       
                                                to
transfer said Note on the books of the Company with full power of substitution
in the premises.

 

 

	
  Dated:

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  

 

	
  Notice:

  	
  The
  signature to this assignment must correspond with the name as it appears upon
  the face of the within Note in every particular, without alteration or
  enlargement or any change whatsoever.

  

 

	
  Signature
  Guaranty:

  	
   

  
	
   

  	
  Signatures
  must be guaranteed by an “eligible guarantor institution” meeting the
  requirements of the Trustee, which requirements include membership or
  participation in the Security Transfer Agent Medallion Program (“STAMP”) or
  such other “signature guarantee program” as may be determined by the Trustee
  in addition to, or in substitution for, STAMP, all in accordance with the
  Securities Exchange Act of 1934, as amended.

  

 

30

 

SCHEDULE OF INCREASES OR DECREASES IN NOTE(1)

 

The initial principal amount of this Note is
$[                                  ].  The following increases or decreases in the
principal amount of this Note have been made:

 

	
  Date

  	
   

  	
  Amount of

  decrease in

  principal

  amount of this

  Note

  	
   

  	
  Amount of

  increase in

  principal

  amount of this

  Note

  	
   

  	
  Principal amount of

  this Note

  following

  such decrease

  (or increase)

  	
   

  	
  Signature of

  authorized

  signatory

  of Trustee,

  Custodial Agent

  or Collateral

  Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(1) Insert
in Global Notes and Pledged Note

 

31

 

EXHIBIT B

 

PUT NOTICE

 

	
  TO:

  	
  ASSURED
  GUARANTY US HOLDINGS INC.

  
	
   

  	
  ASSURED
  GUARANTY LTD.

  
	
   

  	
  THE BANK OF NEW YORK
  MELLON.

  

 

Please refer to the Indenture, dated as of May 1,
2004, between Assured Guaranty US Holdings Inc. (the “Company”),
Assured Guaranty Ltd. (the “Guarantor”)
and The Bank of New York Mellon, formerly known as The Bank of New York, as
Trustee, as amended and supplemented by the First Supplemental Indenture, dated
as of June 24, 2009, among the Company, the Guarantor and the Trustee
(such Indenture as amended and supplemented, the “Indenture”).  Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture.

 

The undersigned registered Holder of the Note
designated below, which is being delivered to the Trustee herewith, hereby
requests and instructs the Company to purchase such Note or the portion thereof
specified below (so long as such portion is in a principal amount of $1,000 or
an integral multiple thereof), in accordance with the terms of the Indenture,
at the price of 100% of the principal amount of such Note (or portion thereof),
plus accrued and unpaid interest thereon, but excluding, the Purchase Contract
Settlement Date.  The Note (or portion
thereof) shall be purchased by the Company as of the Purchase Contract
Settlement Date pursuant to the terms and conditions specified in the
Indenture.

 

Dated:

 

Signature:

 

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

 

Signature Guarantee:

 

Note Certificate Number (if applicable):

 

Principal Amount:

 

Portion to be purchased if other than the
Principal Amount set forth above:

 

Social Security or Other Taxpayer
Identification Number:

 

DTC Account Number (if applicable):

 

32

 

Name of Account Party (if applicable):

 

 

PAYMENT
INSTRUCTIONS: The purchase price of the Note should be paid by check in the
name of the person(s) set forth below and mailed to the address set forth
below.

 

	
  Name(s)

  	
   

  	
   

  
	
  (Please Print)

  	
   

  
	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
  (Please Print)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Zip Code)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Tax
  Identification or Social Security Number

  	
   

  

 

33Exhibit 4.2

	
   

  	
   

  

 

 

ASSURED GUARANTY LTD.

 

 

and

 

THE BANK OF NEW YORK MELLON,

 

as Purchase Contract Agent,

 

and

 

THE BANK OF NEW YORK MELLON,

 

as Collateral Agent, Custodial Agent and Securities Intermediary

 

 

PURCHASE CONTRACT AND PLEDGE AGREEMENT

 

 

Dated as of June 24, 2009

 

	
   

  	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

  	
  1

  
	
  Section 1.01.

  	
  Definitions

  	
  1

  
	
  Section 1.02.

  	
  Compliance Certificates and Opinions

  	
  21

  
	
  Section 1.03.

  	
  Form of Documents Delivered to Purchase Contract Agent

  	
  22

  
	
  Section 1.04.

  	
  Acts of Holders; Record Dates

  	
  22

  
	
  Section 1.05.

  	
  Notices

  	
  24

  
	
  Section 1.06.

  	
  Notice to Holders; Waiver

  	
  24

  
	
  Section 1.07.

  	
  Effect of Headings and Table of Contents

  	
  25

  
	
  Section 1.08.

  	
  Successors and Assigns

  	
  25

  
	
  Section 1.09.

  	
  Separability Clause

  	
  25

  
	
  Section 1.10.

  	
  Benefits of Agreement

  	
  25

  
	
  Section 1.11.

  	
  Governing Law

  	
  25

  
	
  Section 1.12.

  	
  Legal Holidays

  	
  26

  
	
  Section 1.13.

  	
  Counterparts

  	
  27

  
	
  Section 1.14.

  	
  Inspection of Agreement

  	
  27

  
	
  Section 1.15.

  	
  Appointment of Financial Institution as Agent for the
  Company

  	
  27

  
	
  Section 1.16.

  	
  No Waiver

  	
  27

  
	
  Section 1.17.

  	
  Tax Treatment

  	
  27

  
	
  Section 1.18.

  	
  Waiver Of Jury Trial

  	
  27

  
	
  ARTICLE 2

  	
  CERTIFICATE FORMS

  	
  28

  
	
  Section 2.01.

  	
  Forms of Certificates Generally

  	
  28

  
	
  Section 2.02.

  	
  Form of Purchase Contract Agent’s Certificate of
  Authentication

  	
  28

  
	
  ARTICLE 3

  	
  THE UNITS

  	
  28

  
	
  Section 3.01.

  	
  Amount; Form and Denominations

  	
  28

  
	
  Section 3.02.

  	
  Rights and Obligations Evidenced by the Certificates

  	
  28

  
	
  Section 3.03.

  	
  Execution, Authentication, Delivery and Dating

  	
  30

  
	
  Section 3.04.

  	
  Temporary Certificates

  	
  30

  
	
  Section 3.05.

  	
  Registration; Registration of Transfer and Exchange

  	
  31

  
	
  Section 3.06.

  	
  Book-Entry Interests

  	
  32

  
	
  Section 3.07.

  	
  Notices to Holders

  	
  33

  
	
  Section 3.08.

  	
  Appointment of Successor Depository

  	
  33

  
	
  Section 3.09.

  	
  Definitive Certificates

  	
  33

  
	
  Section 3.10.

  	
  Mutilated, Destroyed, Lost and Stolen Certificates

  	
  34

  
	
  Section 3.11.

  	
  Persons Deemed Owners

  	
  35

  
	
  Section 3.12.

  	
  Cancellation

  	
  36

  
	
  Section 3.13.

  	
  Creation of Treasury Units by Substitution of Treasury
  Securities

  	
  36

  
	
  Section 3.14.

  	
  Recreation of Corporate Units

  	
  39

  
	
  Section 3.15.

  	
  Transfer of Collateral upon Occurrence of Termination Event

  	
  41

  
	
  Section 3.16.

  	
  No Consent to Assumption

  	
  43

  
	
  Section 3.17.

  	
  Substitutions

  	
  43

  

 

i

 

	
  ARTICLE 4

  	
  THE NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE
  TREASURY PORTFOLIO

  	
  43

  
	
  Section 4.01.

  	
  Interest Payments; Rights to Interest Payments Preserved

  	
  43

  
	
  Section 4.02.

  	
  Principal Payments Prior to or on Purchase Contract
  Settlement Date

  	
  45

  
	
  Section 4.03.

  	
  Notice and Voting

  	
  46

  
	
  Section 4.04.

  	
  Special Event Redemption

  	
  47

  
	
  Section 4.05.

  	
  Payments to Purchase Contract Agent

  	
  48

  
	
  Section 4.06.

  	
  Payments Held in Trust

  	
  48

  
	
  ARTICLE 5

  	
  THE PURCHASE CONTRACTS

  	
  48

  
	
  Section 5.01.

  	
  Purchase of Common Shares

  	
  48

  
	
  Section 5.02.

  	
  Remarketing; Payment of Purchase Price

  	
  50

  
	
  Section 5.03.

  	
  Issuance of Common Shares

  	
  60

  
	
  Section 5.04.

  	
  Anti-Dilution Adjustments

  	
  61

  
	
  Section 5.05.

  	
  Notice of Adjustments and Certain Other Events

  	
  71

  
	
  Section 5.06.

  	
  Termination Event; Notice

  	
  72

  
	
  Section 5.07.

  	
  Early Settlement

  	
  72

  
	
  Section 5.08.

  	
  No Fractional Shares

  	
  75

  
	
  Section 5.09.

  	
  Charges and Taxes

  	
  76

  
	
  ARTICLE 6

  	
  RIGHTS AND REMEDIES OF HOLDERS

  	
  76

  
	
  Section 6.01.

  	
  Unconditional Right of Holders to Purchase Common Shares

  	
  76

  
	
  Section 6.02.

  	
  Restoration of Rights and Remedies

  	
  76

  
	
  Section 6.03.

  	
  Rights and Remedies Cumulative

  	
  76

  
	
  Section 6.04.

  	
  Delay or Omission Not Waiver

  	
  77

  
	
  Section 6.05.

  	
  Undertaking for Costs

  	
  77

  
	
  Section 6.06.

  	
  Waiver of Stay or Extension Laws

  	
  77

  
	
  ARTICLE 7

  	
  THE PURCHASE CONTRACT AGENT

  	
  77

  
	
  Section 7.01.

  	
  Certain Duties and Responsibilities

  	
  77

  
	
  Section 7.02.

  	
  Notice of Default

  	
  79

  
	
  Section 7.03.

  	
  Certain Rights of Purchase Contract Agent

  	
  79

  
	
  Section 7.04.

  	
  Not Responsible for Recitals or Issuance of Units

  	
  81

  
	
  Section 7.05.

  	
  May Hold Units

  	
  81

  
	
  Section 7.06.

  	
  Money Held in Custody

  	
  81

  
	
  Section 7.07.

  	
  Compensation and Reimbursement

  	
  81

  
	
  Section 7.08.

  	
  Corporate Purchase Contract Agent Required; Eligibility

  	
  82

  
	
  Section 7.09.

  	
  Resignation and Removal; Appointment of Successor

  	
  82

  
	
  Section 7.10.

  	
  Acceptance of Appointment by Successor

  	
  84

  
	
  Section 7.11.

  	
  Merger, Conversion, Consolidation or Succession to Business

  	
  84

  
	
  Section 7.12.

  	
  Preservation of Information; Communications to Holders

  	
  84

  
	
  Section 7.13.

  	
  No Obligations of Purchase Contract Agent

  	
  85

  
	
  Section 7.14.

  	
  Tax Compliance

  	
  85

  
	
  ARTICLE 8

  	
  SUPPLEMENTAL AGREEMENTS

  	
  86

  
	
  Section 8.01.

  	
  Supplemental Agreements without Consent of Holders

  	
  86

  
	
  Section 8.02.

  	
  Supplemental Agreements with Consent of Holders

  	
  87

  
	
  Section 8.03.

  	
  Execution of Supplemental Agreements

  	
  88

  
	
  Section 8.04.

  	
  Effect of Supplemental Agreements

  	
  88

  

 

ii

 

	
  Section 8.05.

  	
  Reference to Supplemental Agreements

  	
  88

  
	
  ARTICLE 9

  	
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
  88

  
	
  Section 9.01.

  	
  Covenant Not to Consolidate, Merge, Convey, Transfer or
  Lease Property Except under Certain Conditions

  	
  88

  
	
  Section 9.02.

  	
  Rights and Duties of Successor Corporation

  	
  89

  
	
  Section 9.03.

  	
  Officers’ Certificate and Opinion of Counsel Given to
  Purchase Contract Agent

  	
  90

  
	
  ARTICLE 10

  	
  COVENANTS

  	
  90

  
	
  Section 10.01.

  	
  Performance under Purchase Contracts

  	
  90

  
	
  Section 10.02.

  	
  Maintenance of Office or Agency

  	
  90

  
	
  Section 10.03.

  	
  Company to Reserve Common Shares

  	
  91

  
	
  Section 10.04.

  	
  Covenants as to Common Shares; Listing

  	
  91

  
	
  Section 10.05.

  	
  Statements of Officers of the Company as to Default

  	
  91

  
	
  Section 10.06.

  	
  ERISA

  	
  91

  
	
  Section 10.07.

  	
  Tax Treatment

  	
  91

  
	
  ARTICLE 11

  	
  PLEDGE

  	
  92

  
	
  Section 11.01.

  	
  Pledge

  	
  92

  
	
  Section 11.02.

  	
  Termination

  	
  92

  
	
  ARTICLE 12

  	
  ADMINISTRATION OF COLLATERAL

  	
  92

  
	
  Section 12.01.

  	
  Initial Deposit of Notes

  	
  92

  
	
  Section 12.02.

  	
  Establishment of Collateral Account

  	
  93

  
	
  Section 12.03.

  	
  Treatment as Financial Assets

  	
  93

  
	
  Section 12.04.

  	
  Sole Control by Collateral Agent

  	
  93

  
	
  Section 12.05.

  	
  Jurisdiction

  	
  94

  
	
  Section 12.06.

  	
  No Other Claims

  	
  94

  
	
  Section 12.07.

  	
  Investment and Release

  	
  94

  
	
  Section 12.08.

  	
  Statements and Confirmations

  	
  94

  
	
  Section 12.09.

  	
  Tax Allocations

  	
  94

  
	
  Section 12.10.

  	
  No Other Agreements

  	
  94

  
	
  Section 12.11.

  	
  Powers Coupled with an Interest

  	
  94

  
	
  Section 12.12.

  	
  Waiver of Lien; Waiver of Set-off

  	
  95

  
	
  ARTICLE 13

  	
  RIGHTS AND REMEDIES OF THE COLLATERAL AGENT

  	
  95

  
	
  Section 13.01.

  	
  Rights and Remedies of the Collateral Agent

  	
  95

  
	
  ARTICLE 14

  	
  REPRESENTATIONS AND WARRANTIES TO COLLATERAL AGENT; HOLDER
  COVENANTS

  	
  96

  
	
  Section 14.01.

  	
  Representations and Warranties

  	
  96

  
	
  Section 14.02.

  	
  Covenants

  	
  97

  
	
  ARTICLE 15

  	
  THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE
  SECURITIES INTERMEDIARY

  	
  97

  
	
  Section 15.01.

  	
  Appointment, Powers and Immunities

  	
  97

  
	
  Section 15.02.

  	
  Instructions of the Company

  	
  98

  
	
  Section 15.03.

  	
  Reliance by Collateral Agent, Custodial Agent and
  Securities Intermediary

  	
  99

  
	
  Section 15.04.

  	
  Certain Rights

  	
  99

  
	
  Section 15.05.

  	
  Merger, Conversion, Consolidation or Succession to Business

  	
  99

  

 

iii

 

	
  Section 15.06.

  	
  Rights in Other Capacities

  	
  100

  
	
  Section 15.07.

  	
  Non-reliance on Collateral Agent, the Custodial Agent and
  Securities Intermediary

  	
  100

  
	
  Section 15.08.

  	
  Compensation and Indemnity

  	
  100

  
	
  Section 15.09.

  	
  Failure to Act

  	
  101

  
	
  Section 15.10.

  	
  Resignation and Removal of Collateral Agent, the Custodial
  Agent and the Securities Intermediary

  	
  102

  
	
  Section 15.11.

  	
  Right to Appoint Agent or Advisor

  	
  103

  
	
  Section 15.12.

  	
  Survival

  	
  104

  
	
  Section 15.13.

  	
  Exculpation

  	
  104

  
	
  Section 15.14.

  	
  Expenses, Etc

  	
  104

  
	
  Section 15.15.

  	
  Force Majeure

  	
  105

  
	
  ARTICLE 16

  	
  MISCELLANEOUS

  	
  105

  
	
  Section 16.01.

  	
  Security Interest Absolute

  	
  105

  
	
  Section 16.02.

  	
  Notice of
  Special Event, Special Event Redemption and Termination Event

  	
  105

  

 

iv

 

EXHIBITS

 

	
  Exhibit A
  —

  	
  Form of
  Corporate Units Certificate

  
	
  Exhibit B
  —

  	
  Form of
  Treasury Units Certificate

  
	
  Exhibit C
  —

  	
  Instruction
  to Purchase Contract Agent From Holder to Create Treasury Units or Corporate
  Units

  
	
  Exhibit D
  —

  	
  Notice
  from Purchase Contract Agent to Holders Upon Termination Event

  
	
  Exhibit E
  —

  	
  Notice
  to Settle by Separate Cash

  
	
  Exhibit F
  —

  	
  Form of
  Remarketing Agreement

  
	
  Exhibit G
  —

  	
  Instruction
  from Purchase Contract Agent to Collateral Agent (Creation of Treasury Units)

  
	
  Exhibit H
  —

  	
  Instruction
  from the Collateral Agent to the Securities Intermediary (Creation of
  Treasury Units)

  
	
  Exhibit I
  —

  	
  Instruction
  from Purchase Contract Agent to Collateral Agent (Recreation of Corporate
  Units)

  
	
  Exhibit J
  —

  	
  Instruction
  from Collateral Agent to Securities Intermediary (Recreation of Corporate
  Units)

  
	
  Exhibit K
  —

  	
  Notice
  of Cash Settlement from the Purchase Contract Agent to the Collateral Agent

  
	
  Exhibit L
  —

  	
  Instruction
  to Custodial Agent Regarding Remarketing

  
	
  Exhibit M
  —

  	
  Instruction
  to Custodial Agent Regarding Withdrawal from Remarketing

  
	
  Exhibit N
  —

  	
  Notice
  of Cash Settlement After Failed Final Remarketing

  
	
  Exhibit O
  —

  	
  Notice
  of Settlement with Separate Cash from Securities Intermediary to Purchase
  Contract Agent (Settlement with Separate Cash)

  
	
  Exhibit P
  —

  	
  Notice
  of Settlement with Separate Cash from Securities Intermediary to Purchase
  Contract Agent (Settlement with Separate Cash)

  

 

v

 

PURCHASE CONTRACT AND PLEDGE
AGREEMENT, dated as of June 24, 2009, among ASSURED GUARANTY LTD., a
Bermuda company (the “Company”), THE BANK OF NEW YORK
MELLON, a New York banking corporation, acting as purchase contract agent for,
and for purposes of the Pledge created hereby as attorney-in-fact of, the
Holders from time to time of the Units (in such capacities, together with its
successors and assigns in such capacities, the “Purchase Contract Agent”),
THE BANK OF NEW YORK MELLON, as collateral agent hereunder for the benefit of
the Company (in such capacity, together with its successors in such capacity,
the “Collateral
Agent”), as custodial agent (in such capacity, together with
its successors in such capacity, the “Custodial Agent”), and as securities
intermediary (as defined in Section 8-102(a)(14) of the UCC) with respect
to the Collateral Account (in such capacity, together with its successors in
such capacity, the “Securities Intermediary”).

 

RECITALS

 

WHEREAS, the Company has
duly authorized the execution and delivery of this Agreement and the
Certificates evidencing the Units;

 

WHEREAS, all things
necessary to make the Purchase Contracts, when the Certificates are executed by
the Company and authenticated, executed on behalf of the Holders and delivered
by the Purchase Contract Agent, as provided in this Agreement, the valid and
legally binding obligations of the Company, and to constitute these presents a
valid and legally binding agreement of the Company, in accordance with its
terms, have been done; and

 

WHEREAS, pursuant to the
terms of this Agreement and the Purchase Contracts, the Holders of the Units
have irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of
such Holders, among other things, to execute and deliver this Agreement on
behalf of such Holders and to grant the Pledge provided herein of the
Collateral to secure the Obligations.

 

NOW, THEREFORE, the parties
hereto agree as follows:

 

ARTICLE
1

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.01.          Definitions.  For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

 

(a)           the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular, and nouns and pronouns of the masculine gender include the feminine
and neuter genders;

 

(b)           all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;

 

 

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

 

(d)           the following terms which are defined in the UCC shall
have the meanings set forth therein: “certificated security,”  “control,”  “financial asset,”  “entitlement order,”  “securities account” and “security entitlement”;

 

(e)           unless the context otherwise requires, any reference to an
“Article” or “Section” or an “Exhibit” refers to an Article, Section or an
Exhibit, as the case may be, to this Agreement; and

 

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

 

“Act” has the meaning, with
respect to any Holder, set forth in Section 1.04.

 

“Address for Notices” has the meaning set forth in Section 1.05.

 

“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.

 

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

 

“Applicable Market Value” means the
average of the Closing Price per Common Share on each of the 20 consecutive
Trading Days ending on the third Trading Day immediately preceding the Purchase
Contract Settlement Date; provided, however, that if the Company enters into a
Reorganization Event that causes the Common Shares to be converted into the
right to receive other securities, cash or property, the Applicable Market
Value will mean the value of such other securities, cash or property.

 

“Applicable Ownership Interest in Notes” means, a 1/20,
or a 5%, undivided beneficial ownership interest in $1,000 principal amount of
Notes that is a component of a Corporate Unit and “Applicable Ownership Interests in
Notes” means the aggregate of each Applicable Ownership
Interest in Notes that is a component of each Corporate Unit then Outstanding.

 

“Applicable Ownership Interest in the Remarketing
Treasury Portfolio” means, with respect to a
Corporate Unit and the U.S. Treasury securities in a Treasury Portfolio: (i) a
1/20, or 5%, undivided beneficial ownership interest in $1,000 face amount of
U.S. Treasury securities (or principal or interest strips thereof) included in
the 

 

2

 

Treasury
Portfolio that matures on or prior to June 1, 2012, (ii) if the Reset
Effective Date occurs prior to March 1, 2012, with respect to the
originally scheduled quarterly Interest Payment Date on the Notes that would
have occurred on March 1, 2012, an undivided beneficial ownership interest
in a $1,000 interest or principal strip of a U.S. Treasury security that
matures on or prior to March 1, 2012 in an amount equal to the interest
payment that would be due on March 1, 2012 on a 1/20, or 5%, beneficial
ownership interest in $1,000 principal amount of the Notes, assuming that (1) the
interest rate on the Notes had not been reset to the Reset Rate and (2) interest
on the Notes accrued from the Reset Effective Date to, but excluding, March 1,
2012 and (iii) with respect to the originally scheduled quarterly Interest
Payment Date on the Notes that would have occurred on June 1, 2012, an
undivided beneficial ownership interest in a $1,000 interest or principal strip
of a U.S. Treasury security that matures on or prior to June 1, 2012 in an
amount equal to the interest payment that would be due on June 1, 2012 on
a 1/20, or 5%, beneficial ownership interest in $1,000 principal amount of the
Notes, assuming that (1) the interest rate on the Notes had not been reset
to the Reset Rate and (2) interest on the Notes accrued from the later of
the Reset Effective Date and March 1, 2012 to, but excluding, June 1,
2012.

 

Notwithstanding the
foregoing, if U.S. Treasury securities (or principal or interest strips
thereof) that are to be included in a Remarketing Treasury Portfolio have a
yield that is less than zero, then the Applicable Ownership Interest in the
Remarketing Treasury Portfolio shall instead consist of: (i) a 1/20, or
5%, undivided beneficial ownership interest in $1,000 cash; and (ii) if
the Reset Effective Date occurs prior to March 1, 2012, with respect to
the originally scheduled quarterly Interest Payment Date on the Notes that
would have occurred on March 1, 2012, cash in an amount equal to the
interest payment that would be due on March 1, 2012 on a 1/20, or 5%,
beneficial ownership interest in $1,000 principal amount of the Notes, assuming
that (1) the interest rate on the Notes had not been reset to the Reset
Rate and (2) interest on the Notes accrued from the Reset Effective Date
to, but excluding, March 1, 2012; and (iii) with respect to the
originally scheduled quarterly Interest Payment Date on the Notes that would
have occurred on June 1, 2012, cash in an amount equal to the interest
payment that would be due on June 1, 2012 on a 1/20, or 5%, beneficial
ownership interest in $1,000 principal amount of the Notes, assuming that (1) the
interest rate on the Notes had not been reset to the Reset Rate and (2) interest
on the Notes accrued from the later of the Reset Effective Date and March 1,
2012 to, but excluding, June 1, 2012.

 

“Applicable Ownership Interest in the Special Event
Treasury Portfolio” means, with respect to a
Corporate Unit and the U.S. Treasury securities in a Treasury Portfolio: (i) a
1/20, or 5%, undivided beneficial ownership interest in a $1,000 face amount of
U.S. Treasury securities (or principal or interest strips thereof) included in
the Treasury Portfolio that matures on or prior to June 1, 2012, and (ii) for
each scheduled Interest Payment Date on the Notes that occurs after the Special
Event Redemption Date and on or prior to June 1, 2012, an undivided
beneficial ownership interest in a $1,000 principal or interest strip of a U.S.
Treasury security that matures on or prior to that Interest Payment Date in an
amount equal to the interest payment that would be due on a 1/20, or 5%,
beneficial ownership interest in the principal amount of the Notes.

 

3

 

Notwithstanding the
foregoing, if U.S. Treasury securities (or principal or interest strips
thereof) that are to be included in a Special Event Treasury Portfolio have a
yield that is less than zero, then the Applicable Ownership Interest in the
Special Event Treasury Portfolio shall instead consist of: (i) 1/20, or
5%, undivided beneficial ownership interest in $1,000 cash; and (ii) for
each scheduled Interest Payment Date on the Notes that occurs after the Special
Event Redemption Date and on or prior to June 1, 2012, cash in an amount
equal to the interest payment that would be due on each such scheduled Interest
Payment Date on a 1/20, or 5%, beneficial ownership interest in $1,000
principal amount of the Notes.

 

“Applicable Ownership Interest in the Treasury
Portfolio” means the Applicable Ownership Interest in the
Remarketing Treasury Portfolio or the Applicable Ownership Interest in the
Special Event Treasury Portfolio, collectively or individually, as the case may
be.

 

“Applicable Principal Amount” means the
aggregate principal amount of the Notes underlying the Pledged Applicable
Ownership Interests in Notes.

 

“Applicable Remarketing Period” means (i) any
Three-Business Day Remarketing Period during the Period for Early Remarketing
or (ii) the Final Three-Business Day Remarketing Period, as the context
requires.

 

“Applicants” has the meaning set forth
in Section 7.12(b).

 

“Bankruptcy Code” means Title 11 of the
United States Code, or any other law of the United States that from time to
time provides a uniform system of bankruptcy laws.

 

“Bankruptcy Law” means (i) the Bankruptcy Code or (ii) any
and all relevant provisions of the Bermuda Companies Act (1981), or any
successor thereto, relating to the winding up, dissolution, reconstruction or
reorganization of the Company.

 

“Beneficial Owner” means, with
respect to a Book-Entry Interest, a Person who is the beneficial owner of such
Book-Entry Interest as reflected on the books of the Depository or on the books
of a Person maintaining an account with such Depository (directly as a
Depository Participant or as an indirect participant, in each case in
accordance with the rules of such Depository).

 

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

 

“Board Resolution” means one or
more resolutions of the Board of Directors, a copy of which has been 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 and delivered to the Purchase Contract Agent.

 

“Book-Entry Interest” means a
beneficial interest in a Global Certificate, registered in the name of a
Depository or a nominee thereof, ownership and transfers of 

 

4

 

which
shall be maintained and made through book entries by such Depository as
described in Section 3.06.

 

“Business Day” means any day other than a
Saturday, Sunday or any other day on which banking institutions and trust
companies in the City of New York are authorized or required by law or
executive order to remain closed; provided
that for purposes of the second paragraph of Section 1.12 only, the term “Business
Day” shall also be deemed to exclude any day on which the
Depository is closed.

 

“Cash” means any coin or currency
of the United States as at the time shall be legal tender for payment of public
and private debts.

 

“Cash Settlement” has the meaning set forth
in Section 5.02(b)(i).

 

“Certificate” means a Corporate Units
Certificate or a Treasury Units Certificate, as the case may be.

 

“close of business” means 5:00 p.m.,
New York City time.

 

“Closing Price” of the Common Shares on any
date of determination means the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of a Common Share on the NYSE
on that date or, if the Common Shares are not listed for trading on the NYSE on
any such date, as reported in the composite transactions for the principal
United States securities exchange on which the Common Shares are so
listed.  If the Common Shares are not so
listed on a United States national or regional securities exchange, the “Closing
Price” means the last closing sale price of the Common Shares
as reported by the last quoted bid price for the Common Shares in the
over-the-counter market as reported by Pink OTC Markets Inc. or similar
organization.  If the bid price is not
available, the “Closing Price” means the market
value of the Common Shares on the date of determination as determined by a
nationally recognized independent investment banking firm retained by the
Company for this purpose.

 

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

 

“Collateral” means the collective
reference to:

 

(i)            the Collateral Account and all investment property and
other financial assets from time to time credited to the Collateral Account and
all security entitlements with respect thereto, including, without limitation, (A) the
Applicable Ownership Interests in Notes and security entitlements relating
thereto that are a component of the Corporate Units from time to time, (B) the
Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (i) of each of the definitions of Applicable Ownership Interest in
the Special Event Treasury Portfolio and Applicable Ownership Interest in the
Remarketing Treasury Portfolio) of the Holders with respect to the Treasury
Portfolio which are a component of the Corporate Units from time to time; (C) any
Treasury Securities and security entitlements relating thereto Transferred to
the Securities Intermediary from time to time in connection with the creation
of Treasury Units 

 

5

 

in accordance with Section 3.13 hereof and (D) payments
made by Holders pursuant to Section 5.02 hereof;

 

(ii)           all
Proceeds of any of the foregoing (whether such Proceeds arise before or after
the commencement of any proceeding under any applicable bankruptcy, insolvency
or other similar law, by or against the pledgor or with respect to the
pledgor); and

 

(iii)          all
powers and rights now owned or hereafter acquired under or with respect to the
Collateral.

 

“Collateral Account” means the
securities account of The Bank of New York Mellon, as Collateral Agent, maintained
on the books of the Securities Intermediary and designated “The Bank of New
York Mellon, as Collateral Agent of Assured Guaranty Ltd., as pledgee of The
Bank of New York Mellon, as the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders.”

 

“Collateral Agent” means the
Person named as “Collateral Agent” in the preamble of this Agreement until a
successor Collateral Agent shall have become such pursuant to this Agreement,
and thereafter “Collateral Agent”
shall mean the Person who is then the Collateral Agent hereunder.

 

“collateral event of default” has the
meaning set forth in Section 13.01(b).

 

“Collateral Substitution” means (i) with
respect to the Corporate Units, (x) the substitution of Pledged Applicable
Ownership Interests in Notes that are a component of such Corporate Units (if
the Applicable Ownership Interests in the Treasury Portfolio have not replaced
the Applicable Ownership Interests in Notes as a component of the Corporate
Units) with Treasury Securities in an aggregate principal amount at maturity
equal to the Applicable Principal Amount, or (y) the substitution of
Pledged Applicable Ownership Interests in the Treasury Portfolio that are a
component of such Corporate Unit (if the Applicable Ownership Interests in the
Treasury Portfolio have replaced the Applicable Ownership Interests in Notes as
a component of the Corporate Units) with Treasury Securities in an amount at
maturity equal to the Pledged Applicable Ownership Interests in the Treasury
Portfolio, or (ii) with respect to Treasury Units, (x) the
substitution of Pledged Treasury Securities included in such Treasury Units (if
the Applicable Ownership Interests in the Treasury Portfolio have not replaced
the Applicable Ownership Interests in Notes as a component of the Corporate
Units) with Notes in an aggregate principal amount equal to the aggregate
principal amount at stated maturity of the Pledged Treasury Securities, or (y) the
substitution of Pledged Treasury Securities included in such Treasury Units (if
the Applicable Ownership Interests in the Treasury Portfolio have replaced the
Applicable Ownership Interests in Notes as a component of the Corporate Units)
with the appropriate Applicable Ownership Interests in the Treasury Portfolio
(such that the amount of the Pledged Applicable Ownership Interests in the
Treasury Portfolio equals the aggregate principal amount at maturity of such
Pledged Treasury Securities).

 

6

 

“Commission” means the Securities and
Exchange Commission.

 

“Common Shares” means the common shares,
par value $.01 per share, of the Company.

 

“Company” means the Person named as
the “Company” in the preamble of this Agreement until a successor shall have
become such pursuant to the applicable provision of this Agreement, and
thereafter “Company” shall mean such successor.

 

“Corporate Trust Office” means the
office of the Purchase Contract Agent at 
which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 101
Barclay Street, Floor 8W, New York, New York 10286, Attention: Corporate Trust
Administration, Telephone: (212) 815-5360.

 

“Corporate Unit” means the collective rights
and obligations of a Holder of a Corporate Units Certificate in respect of the
Applicable Ownership Interests in Notes or the Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, subject in each case (except that
the Applicable Ownership Interests in the Treasury Portfolio as specified in
clauses (ii) and (iii) of each paragraph of the definition of
Applicable Ownership Interest in the Remarketing Treasury Portfolio and clause (ii) of
each paragraph of the definition of Applicable Ownership Interest in the
Special Event Treasury Portfolio shall not be subject to the Pledge) to the
Pledge thereof, and the related Purchase Contract.

 

“Corporate Units Certificate” means a
certificate evidencing the rights and obligations of a Holder in respect of the
number of Corporate Units specified on such certificate.

 

“Current Market Price” per Common
Share on any day means the average of the daily Closing Prices on each of the
five consecutive Trading Days ending the earlier of the day in question and the
day before the “ex date” with respect to the issuance or distribution requiring
the computation.  For purposes of this
definition, “ex date,” when used with respect to any issuance or distribution,
means the first date on which the Common Shares trade regular way on the
applicable exchange or in the applicable market without the right to receive
the issuance or distribution.

 

“Custodial Agent” means the Person named as “Custodial
Agent” in the preamble of this Agreement until a successor Custodial Agent
shall have become such pursuant to the applicable provisions of this Agreement,
and thereafter “Custodial Agent”
shall mean the Person who is then the Custodial Agent hereunder.

 

“Depository” means a clearing agency
registered under Section 17A of the Exchange Act that is designated to act
as Depository for the Units as contemplated by Sections 3.06 and 3.08.

 

7

 

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

 

“DTC” means The Depository Trust
Company.

 

“Early Settlement” has the
meaning set forth in Section 5.07(a).

 

“Early Settlement Amount” has the
meaning set forth in Section 5.07(b).

 

“Early Settlement Date” has the
meaning set forth in Section 5.07(b).

 

“Effective Date” has the meaning set forth in Section 5.04(b).

 

“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.

 

“Exchange Act” means the Securities
Exchange Act of 1934 and any statute successor thereto, in each case as amended
from time to time, and the rules and regulations promulgated thereunder.

 

“Expiration Date” has the meaning set forth
in Section 1.04(e).

 

“Expiration Time” has the meaning set forth
in Section 5.04(a)(viii).

 

“Failed Early Remarketing” has the
meaning set forth in Section 5.02(a).

 

“Failed Final Remarketing” has the
meaning set forth in Section 5.02(c)(ii).

 

“Failed Remarketing” shall mean a
Failed Early Remarketing or a Failed Final Remarketing, as the case may be.

 

“Final Three-Business Day Remarketing Period” means the
Three-Business Day Remarketing Period beginning on, and including, the fifth
Business Day, and ending on, and including, the third Business Day, immediately
preceding the Purchase Contract Settlement Date.

 

“First Supplemental Indenture” means the
First Supplemental Indenture, dated as of the date hereof, among Assured
Guaranty US Holdings Inc., the Company, as guarantor, and the Indenture Trustee,
pursuant to which the Notes are issued.

 

“Fixed Settlement Rate” means each of
the Minimum Settlement Rate and the Maximum Settlement Rate, collectively.

 

“Fundamental Change” means the
occurrence of any of the following:

 

(i)            a “person” or “group” within the meaning of Section 13(d) of
the Exchange Act has become the direct or indirect “beneficial owner,” as
defined in Rule 13d-3 under the Exchange Act, of the Company’s common
equity 

 

8

 

representing more than 50% of the voting power of
the Company’s common equity (other than in connection with a consolidation,
merger or other transaction described in clause (ii) below, in which case
clause (ii) shall apply); or

 

(ii)           the
Company is involved in a consolidation with or merger into any other Person, or
any merger of another Person into the Company, or any transaction or series of
related transactions (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding Common
Shares), in each case in which 90% or more of the Common Shares are exchanged
for or converted into securities, cash or other property, 10% or more of which
consists of securities, cash or other property that is not (or will not be immediately
upon the effectiveness of such consolidation, merger or transaction) common
stock listed on the NYSE, the NASDAQ Global Select Market or the NASDAQ Global
Market; or

 

(iii)          the
Common Shares (or other common stock that is then the subject of the Purchase
Contracts) cease to be listed or quoted on the NYSE, the NASDAQ Global Select
Market or the NASDAQ Global Market (other than in connection with a
consolidation, merger or other transaction described in clause (ii) above,
in which case clause (ii) shall apply); or

 

(iv)          the
Company’s shareholders vote for the Company’s liquidation, dissolution or
termination.

 

“Fundamental Change Early Settlement” has the
meaning set forth in Section 5.04(b)(ii).

 

“Fundamental Change Early Settlement Date” has the meaning
set forth in Section 5.04(b)(ii).

 

“Fundamental Change Early Settlement Rate” has the
meaning set forth in Section 5.04(b)(ii).

 

“Global Certificate” means a
Certificate that evidences all or part of the Units and is registered in the
name of the Depository or a nominee thereof.

 

“Holder” means, with respect to a
Unit, the Person in whose name the Unit evidenced by a Certificate is
registered in the Security Register; provided,
however, that solely for the
purpose of determining whether the Holders of the requisite number of Units
have voted on any matter (and not for any other purpose hereunder), if the Unit
remains in the form of one or more Global Certificates and if the Depository
that is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depository Participants to whose accounts
the Units are credited on the record date, the term “Holder” shall mean such Depository Participant acting at the
direction of the Beneficial Owners.

 

“Indemnitees” has the meaning set forth
in Section 7.07(c).

 

9

 

“Indenture” means the Indenture, dated
as of May 1, 2004 among Assured Guaranty US Holdings Inc., the Company, as
guarantor, and the Indenture Trustee (including any provisions of the TIA that
are deemed incorporated therein), as heretofore amended and supplemented and as
amended and supplemented by the First Supplemental Indenture pursuant to which
the Notes will be issued.

 

“Indenture Trustee” means The Bank
of New York Mellon, as trustee under the Indenture, or any successor thereto.

 

“Interest Payment Date” or “Payment Date” means each scheduled interest
payment date on the Notes, initially March 1, June 1, September 1
and December 1 of each year, commencing on September 1, 2009.

 

“Issuer Order” or “Issuer Request”
means a written order or request signed in the name of the Company by (i) either
its Chief Executive Officer, its Chief Financial Officer, its President or a
Vice President, and (ii) either its Corporate Secretary or one of its
Assistant Corporate Secretaries or its Treasurer or one of its Assistant
Treasurers, and delivered to the Purchase Contract Agent.

 

“Loss” or “Losses”
have the meanings set forth in Section 15.08(b).

 

“Maximum Settlement Rate” has the
meaning set forth in Section 5.01(a).

 

“Minimum Settlement Rate” has the
meaning set forth in Section 5.01(a).

 

“Notes” means the series of notes
designated the 8.50% Senior Notes initially due on June 1, 2014 to be
issued by Assured Guaranty US Holdings Inc. and guaranteed by the Company under
the Indenture.

 

“NYSE” means the New York Stock
Exchange.

 

“Obligations” means, with respect to each
Holder, all obligations and liabilities of such Holder under such Holder’s
Purchase Contract and this Agreement or any other document made, delivered or
given in connection herewith or therewith, in each case whether on account of
principal, interest (including, without limitation, interest accruing before
and after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Holder, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent or the Securities Intermediary that are required to be paid by
the Holder pursuant to the terms of any of the foregoing agreements).

 

“Officers’ Certificate” means a
certificate signed by (i) either the Company’s Chief Executive Officer, it
Chief Financial Officer, its President or a Vice President, and (ii) either
the Company’s Corporate Secretary or one of its Assistant Corporate Secretaries
or its Treasurer or one of its Assistant Treasurers, and delivered to the
Purchase Contract Agent.  Any Officers’
Certificate delivered with respect to compliance 

 

10

 

with
a condition or covenant provided for in this Agreement (other than the Officers’
Certificate provided for in Section 10.05) shall include the information
set forth in Section 1.02 of this Agreement.

 

“Opinion of Counsel” means a
written opinion of counsel, who may be counsel to the Company (and who may be
an employee of the Company).  An opinion
of counsel may rely on certificates as to matters of fact.

 

“Outstanding” means, as of any date of
determination, all Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:

 

(i)            if a Termination Event has occurred, (x) Corporate
Units for which the underlying Applicable Ownership Interests in Notes or
Applicable Ownership Interests in the Treasury Portfolio have been theretofore
deposited with the Purchase Contract Agent in trust for the Holders of such
Corporate Units and (y) Treasury Units for which Treasury Securities have
been deposited with the Purchase Contract Agent in trust for the Holders of
such Treasury Units;

 

(ii)           Units
evidenced by Certificates theretofore cancelled by the Purchase Contract Agent
or delivered to the Purchase Contract Agent for cancellation or deemed
cancelled pursuant to the provisions of this Agreement; and

 

(iii)          Units
evidenced by Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and delivered
pursuant to this Agreement, other than any such Certificate in respect of which
there shall have been presented to the Purchase Contract Agent proof
satisfactory to it that such Certificate is held by a protected purchaser in
whose hands the Units evidenced by such Certificate are valid obligations of
the Company;

 

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

 

“Period for Early Remarketing” means the
period beginning on December 1, 2011 and ending on May 1, 2012.

 

11

 

“Permitted Investments” means any one
of the following, in each case maturing on the Business Day following the date
of acquisition:

 

(i)            any evidence of indebtedness with an original maturity of
365 days or less issued, or directly and fully guaranteed or insured, by the
United States of America or any agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support of the timely payment
thereof or such indebtedness constitutes a general obligation of it);

 

(ii)           deposits,
certificates of deposit or acceptances with an original maturity of 365 days or
less of any institution which is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than $500
million at the time of deposit (and which may include the Collateral Agent);

 

(iii)          investments
with an original maturity of 365 days or less of any Person that is fully and
unconditionally guaranteed by a bank referred to in clause (ii) above;

 

(iv)          repurchase
agreements and reverse repurchase agreements relating to marketable direct
obligations issued or unconditionally guaranteed by the United States of
America or issued by any agency thereof and backed as to timely payment by the
full faith and credit of the United States of America;

 

(v)           investments
in commercial paper, other than commercial paper issued by the Company or its
affiliates, of any corporation incorporated under the laws of the United States
or any state thereof, which commercial paper has a rating at the time of
purchase at least equal to “A-1” by Standard &
Poor’s Ratings Services (“S&P”) or at least equal to “P-1” by Moody’s Investors
Service, Inc.  (“Moody’s”); and

 

(vi)          investments
in money market funds (including, but not limited to, money market funds
managed by the Collateral Agent or an affiliate of the Collateral Agent)
registered under the Investment Company Act of 1940, as amended, rated in the
highest applicable rating category by S&P or Moody’s.

 

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

 

“Plan” means an employee benefit
plan that is subject to ERISA, a plan or individual retirement account that is
subject to Section 4975 of the Code or any entity whose assets are
considered assets of any such plan.

 

“Pledge” means the lien and security
interest in the Collateral created by this Agreement.

 

12

 

“Pledge Indemnitees” has the meaning set forth in Section 15.08(b).

 

“Pledged Applicable Ownership Interests in Notes” means the
Applicable Ownership Interests in Notes and security entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.

 

“Pledged Applicable Ownership Interests in the Treasury
Portfolio” means the Applicable Ownership Interests in the
Remarketing Treasury Portfolio (as specified in clause (i) of each
paragraph of the definition of such term) or Applicable Ownership Interests in
the Special Event Treasury Portfolio (as specified in clause (i) of each
paragraph of the definition of such term), as applicable, and, in each case,
security entitlements with respect thereto from time to time credited to the
Collateral Account and not then released from the Pledge.

 

“Pledged Treasury Securities” means Treasury
Securities and security entitlements with respect thereto from time to time
credited to the Collateral Account and not then released from the Pledge.

 

“Predecessor Corporate Units Certificate” of any
particular Corporate Units Certificate means every previous Corporate Units
Certificate evidencing all or a portion of the rights and obligations of the
Company and the Holder under the Corporate Units evidenced thereby; and, for
the purposes of this definition, any Corporate Units Certificate authenticated
and delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Corporate Units Certificate shall be
deemed to evidence the same rights and obligations of the Company and the
Holder as the mutilated, destroyed, lost or stolen Corporate Units Certificate.

 

“Primary Treasury Dealer” shall mean a
primary U.S. government securities dealer.

 

“Proceeds” has the meaning ascribed
thereto in the UCC and includes, without limitation, all interest, dividends,
cash, instruments, securities, financial assets and other property received,
receivable or otherwise distributed upon the sale (including, without
limitation, any Remarketing), exchange, collection or disposition of any
financial assets from time to time credited to the Collateral Account.

 

“Prospectus” means the prospectus relating
to the delivery of shares or any securities in connection with an Early
Settlement pursuant to Section 5.07 or a Fundamental Change Early
Settlement of Purchase Contracts pursuant to Section 5.04(b)(ii), in the
form in which first filed, or transmitted for filing, with the Commission after
the effective date of the Registration Statement pursuant to Rule 424(b) under
the Securities Act, including the documents incorporated by reference therein
as of the date of such Prospectus.

 

“Purchase Contract” means, with
respect to any Unit, the contract forming a part of such Unit and obligating
the Company to sell, and the Holder of such Unit to purchase, not later than
the Purchase Contract Settlement Date, a number of Common Shares equal 

 

13

 

to
the applicable Settlement Rate on the terms and subject to the conditions set
forth in Article 5 hereof.

 

“Purchase Contract Agent” means the
Person named as the “Purchase Contract Agent” in the preamble of this Agreement
until a successor Purchase Contract Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter “Purchase Contract Agent” shall mean such
Person or any subsequent successor who is appointed pursuant to this Agreement.

 

“Purchase Contract Settlement Date” means June 1,
2012.

 

“Purchase Contract Settlement Fund” has the
meaning set forth in Section 5.03.

 

“Purchase Price” has the meaning set forth
in Section 5.01(a).

 

“Purchased Shares” has the
meaning set forth in Section 5.04(a)(viii)(A).

 

“Put Right” has the meaning set forth
in Section 7.04(a) of the First Supplemental Indenture.

 

“Quotation Agent” means any Primary Treasury
Dealer in the City of New York selected by Assured Guaranty US Holdings Inc.

 

“Record Date” for any distribution means,
as to any Global Certificate or any other Certificate, the fifteenth day
(whether or not a Business Day) of the calendar month next preceding the
calendar month in which the relevant Payment Date falls; provided that the Company may, at its
option, select any other day as the Record Date for any Payment Date so long as
(i) such Record Date selected is more than one Business Day but less than
60 Business Days prior to such Payment Date and (ii) at least 10 Business
Days prior to the new Record Date for such Payment Date, and in each case the
Company notifies the Purchase Contract Agent in writing of the new Record Date
and instructs the Purchase Contract Agent to notify the Holders of such Record
Date.

 

“Redemption Amount” has the
meaning set forth in Section 1.02 of the First Supplemental Indenture.

 

“Redemption Price” has the
meaning set forth in Section 1.02 of the First Supplemental Indenture.

 

“Reference Dividend” has the
meaning set forth in Section 5.04(a)(vi).

 

“Reference Price” has the meaning set forth
in Section 5.01(a)(ii).

 

“Registration Statement” means a
registration statement under the Securities Act prepared by the Company
covering, inter alia, the
delivery by the Company of any securities in connection with an Early
Settlement on the Early Settlement Date or a Fundamental Change Early
Settlement of Purchase Contracts on the Fundamental Change

 

14

 

Early
Settlement Date under Section 5.04(b)(ii), including all exhibits thereto
and the documents incorporated by reference in the prospectus contained in such
registration statement, and any post-effective amendments thereto.

 

“Relevant Period” has the meaning set forth
in Section 5.04(a)(v).

 

“Remarketing” means the remarketing of
the Notes by the Remarketing Agent pursuant to the Remarketing Agreement.

 

“Remarketing Agent” has the
meaning set forth in Section 1.02 of the First Supplemental Indenture.

 

“Remarketing Agreement” means the
Remarketing Agreement, in substantially the form set forth in Exhibit F
hereto, to be entered into among the Company, Assured Guaranty US Holdings
Inc., the Purchase Contract Agent and the Remarketing Agent(s), as the same may
be amended, amended and restated, supplemented or otherwise modified or
replaced from time to time.

 

“Remarketing Announcement” has the
meaning set forth in Section 7.01(c) of the First Supplemental
Indenture.

 

“Remarketing Announcement Date” has the meaning
set forth in Section 1.02 of the First Supplemental Indenture.

 

“Remarketing Date(s)” means one or
more Business Days in a Three-Business Day Remarketing Period or the Final
Three-Business Day Remarketing Period, in each case selected by the Company as
a date on which the Remarketing Agent shall, in accordance with the terms of
the Remarketing Agreement, remarket the Notes.

 

“Remarketing Fee” means the fee determined by
mutual agreement among the Company, Assured Guaranty US Holdings Inc. and the
Remarketing Agent.

 

“Remarketing Per Note Price” means an
amount equal to the Remarketing Treasury Portfolio Purchase Price divided by the Applicable Principal Amount
on any Successful Remarketing Date during the Period for Early Remarketing.

 

“Remarketing Treasury Portfolio” means (i) interest
or principal strips of U.S. Treasury securities that mature on or prior to June 1,
2012 in an aggregate amount equal to the principal amount of the Notes
underlying the Corporate Units; (ii) if the Reset Effective Date occurs
prior to March 1, 2012, with respect to the scheduled quarterly Interest
Payment Date on the Notes that would have occurred on March 1, 2012,
interest or principal strips of U.S. Treasury securities that mature on or
prior to March 1, 2012 in an aggregate amount equal to the aggregate
interest payment that would be due on March 1, 2012 on the principal
amount of the Notes that would have been components of the Corporate Units
assuming that (A) there was no Remarketing, (B) the interest rate on
the Notes had not been reset to the Reset Rate and (C) interest on the
Notes accrued from the Reset Effective Date to, but excluding, March 1,
2012 and (iii) with respect to the scheduled quarterly Interest Payment
Date on the Notes that would have occurred on 

 

15

 

June 1,
2012, interest or principal strips of U.S. Treasury securities that mature on
or prior to June 1, 2012 in an aggregate amount equal to the aggregate
interest payment that would be due on June 1, 2012 on the principal amount
of the Notes that would have been components of the Corporate Units assuming
that (A) there was no Remarketing, (B) the interest rate on the Notes
had not been reset to the Reset Rate and (C) interest on the Notes accrued
from the later of the Reset Effective Date and March 1, 2012 to, but
excluding, June 1, 2012.

 

Notwithstanding the
foregoing, if on the date the Quotation Agent is to determine the Remarketing
Treasury Portfolio Purchase Price, U.S. Treasury securities (or principal or
interest strips thereof) that are to be included in a Remarketing Treasury
Portfolio have a yield that is less than zero, then “Remarketing Treasury Portfolio” shall mean:

 

(i)            cash
in an aggregate amount equal to the principal amount of the Notes underlying
the Corporate Units;

 

(ii)           if
the Reset Effective Date occurs on or prior to March 1, 2012, cash in an
aggregate amount equal to the aggregate interest payments that would be due on March 1,
2012 on the principal amount of the Notes that would have been components of
the Corporate Units assuming that (A) there was no Remarketing, (B) the
interest rate on the Notes had not been reset to the Reset Rate and (C) interest
on the Notes accrued from the Reset Effective Date to, but excluding, March 1,
2012; and

 

(iii)          cash
in an aggregate amount equal to the aggregate interest payment that would be
due on June 1, 2012 on the principal amount of the Notes that would have
been components of the Corporate Units assuming that (A) there was no
Remarketing, (B) the interest rate on the Notes had not been reset to the
Reset Rate and (C) interest on the Notes accrued from the later of the
Reset Effective Date and March 1, 2012 to, but excluding, June 1,
2012.

 

“Remarketing Treasury Portfolio Purchase Price” means the
lowest aggregate ask-side price quoted by a Primary Treasury Dealer in the City
of New York to the Quotation Agent on the third Business Day immediately
preceding the Reset Effective Date (or the Remarketing Date, if not the third
Business Day immediately preceding the Reset Effective Date) for the purchase
of the Remarketing Treasury Portfolio for settlement on the Reset Effective
Date; provided that if the
Remarketing Treasury Portfolio is comprised solely of cash described in the
second paragraph of the definition thereof, the “Remarketing Treasury Portfolio Purchase Price” will be the
aggregate amount of cash comprising the Remarketing Treasury Portfolio.

 

“Reorganization Event” means any one
or a combination of the following:

 

(i)            any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company is
the surviving Person and in which the Common Shares outstanding immediately
prior to the merger or consolidation are not exchanged for cash, securities or
other property of the Company or another Person);

 

16

 

(ii)           any sale, transfer, lease or conveyance to another Person
of the property of the Company as an entirety or substantially as an entirety;

 

(iii)          any statutory share exchange of the Company with another
Person (other than in connection with a merger or acquisition); or

 

(iv)          any liquidation, dissolution or termination of the Company
other than as a result of or after the occurrence of a Termination Event;

 

in
each case, that cause the Common Shares to be converted into the right to
receive other securities, cash or property.

 

“Reset Effective Date” has the
meaning set forth in Section 1.02 of the First Supplemental Indenture.

 

“Reset Rate” has the meaning set forth
in Section 1.02 of the First Supplemental Indenture.

 

“Responsible Officer” means, when
used with respect to the Purchase Contract Agent, any officer of the Purchase
Contract Agent within Corporate Trust Administration (or any successor unit,
department or division of the Purchase Contract Agent) located at the Corporate
Trust Office of the Purchase Contract Agent who has direct responsibility for
the administration of the Agreement and, for the purposes of Section 7.01(b)(ii),
also means, with respect to a particular corporate trust matter, any other
officer, trust officer or person performing similar functions to whom such
matter is referred because of his or her knowledge of and familiarity of the
particular subject and who shall have direct responsibility for the
administration of this Agreement.

 

“Restricted Period” means the
period commencing on, and including, the Business Day preceding any
Three-Business Day Remarketing Period and ending on, and including, the later
of the Reset Effective Date and the Business Day following the last Remarketing
Date during that Three-Business Day Remarketing Period.

 

“Rights” has the meaning set forth
in Section 5.04(a)(xii).

 

“Securities Act” means the Securities Act of
1933 and any statute successor thereto, in each case as amended from time to
time, and the rules and regulations promulgated thereunder.

 

“Securities Intermediary” means the
Person named as Securities Intermediary in the preamble of this Agreement until
a successor Securities Intermediary shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter “Securities Intermediary” shall mean such
successor or any subsequent successor.

 

“Security Register” and “Security
Registrar” have the respective meanings set forth in Section 3.05.

 

17

 

“Separate Notes” means Notes that have been
released from the Pledge following Collateral Substitution and are therefore no
longer a component of Corporate Units.

 

“Separate Notes Purchase Price” means the
amount in cash equal to the product of (i) the Remarketing Per Note Price
and (ii) the number of $1,000 principal amount of Separate Notes
remarketed in a Remarketing during the Period for Early Remarketing.

 

“Settlement Rate” has the meaning set forth
in Section 5.01(a).

 

“Share Price” has the meaning set forth in Section 5.04(b).

 

“Special Event” has the meaning set forth
in Section 1.02 of the First Supplemental Indenture.

 

“Special Event Redemption” means the redemption
of the Notes pursuant to the Indenture following the occurrence of a Special
Event.

 

“Special Event Redemption Date” means the date
upon which a Special Event Redemption is scheduled to occur pursuant to the
Indenture.

 

“Special Event Treasury Portfolio” means a
portfolio of U.S. Treasury securities (or principal or interest strips thereof)
that mature on or prior to June 1, 2012 in an aggregate amount at maturity
equal to the Applicable Principal Amount and with respect to each scheduled
Interest Payment Date on the Notes that occurs after the Special Event
Redemption Date to, and including the Purchase Contract Settlement Date, U.S.
Treasury securities (or principal or interest strips thereof) that mature on or
prior to the Business Day immediately preceding such scheduled Interest Payment
Date in an aggregate amount at maturity equal to the aggregate interest payment
(assuming no reset of the interest rate) that would be due on the Applicable
Principal Amount on such date.

 

Notwithstanding the foregoing, if on the date the
Quotation Agent is to determine the Special Event Treasury Portfolio Purchase
Price, U.S. Treasury securities (or principal or interest strips thereof) that
are to be included in a Special Event Treasury Portfolio have a yield that is
less than zero, then “Special Event Treasury
Portfolio” shall mean:

 

(i)            Cash
in an aggregate amount at maturity equal to the Applicable Principal Amount of
Notes included in the Corporate Units; and

 

(ii)           with respect to each scheduled Interest Payment Date on
the Notes that occurs after the Special Event Redemption Date to, and including
the Purchase Contract Settlement Date, cash in an aggregate amount at maturity
equal to the aggregate interest payment (assuming no reset of the interest
rate) that would be due on the Applicable Principal Amount of Notes included in
the Corporate Units on such date.

 

“Special Event Treasury Portfolio Purchase Price” means the
lowest aggregate price quoted by a Primary Treasury Dealer in the City of New
York to the Quotation 

 

18

 

Agent
on the third Business Day immediately preceding the Special Event Redemption
Date for the purchase of the Special Event Treasury Portfolio for settlement on
the Special Event Redemption Date; provided
that if the Special Event Treasury Portfolio is comprised solely of cash
described in the second paragraph of the definition thereof, the “Special Event Treasury Portfolio Purchase Price”
will be the aggregate amount of cash comprising the Special Event Treasury
Portfolio.

 

“Spin-Off” has the meaning set forth
in Section 5.04(a)(v).

 

“Stated Amount” means $50.

 

“Successful Early Remarketing” has the
meaning set forth in Section 5.02(a)(i).

 

“Successful Final Remarketing” has the
meaning set forth in Section 5.02.

 

“Successful Remarketing” means a
Successful Early Remarketing or a Successful Final Remarketing.

 

“Termination Date” means the
date, if any, on which a Termination Event occurs.

 

“Termination Event” means the
occurrence of any of the following events:

 

(i)            at any time on or prior to the Purchase Contract
Settlement Date, a judgment, decree or order of a court having jurisdiction
over the Company shall have been entered adjudging the Company to be bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization
or liquidation of the Company under the Bankruptcy Law or any other similar
applicable Federal or state law and if such judgment, decree or order shall
have been entered more than 60 days prior to the Purchase Contract Settlement
Date, such decree or order shall have continued undischarged and unstayed for a
period of 60 days;

 

(ii)           at any time on or prior to the Purchase Contract
Settlement Date, a judgment, decree or order of a court having jurisdiction over
the Company for the appointment of a receiver or liquidator or trustee or
assignee (or other similar official) in bankruptcy or insolvency of the Company
or all or substantially all of its property, or for the winding-up or
liquidation of its affairs, shall have been entered and if such decree or order
shall have been entered more than 60 days prior to the Purchase Contract
Settlement Date, such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or

 

(iii)          at any time on or prior to the Purchase Contract Settlement
Date, the Company shall file a petition for relief under the Bankruptcy Code,
or shall consent to the filing of a bankruptcy proceeding against it, or shall
file a petition or answer or consent seeking reorganization or liquidation
under the Bankruptcy Law or any other similar applicable federal or state law,
or shall consent to the filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee (or other similar
official) in bankruptcy or 

 

19

 

insolvency of it or all or substantially all of its property, or shall
make an assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due.

 

For
the avoidance of doubt, a “Termination Event” shall not include any event
described in clauses (i) — (iii) above with respect to any subsidiary
of the Company.

 

“Three-Business Day Remarketing Period” means a period
occurring during the Period for Early Remarketing, beginning on, and including,
the first of three sequential Remarketing Dates and ending on and including the
third of such sequential Remarketing Dates during which period the Notes will
be remarketed in accordance with the provisions of the Remarketing Agreement.

 

“Threshold Appreciation Price” has the
meaning set forth in Section 5.01.

 

“TIA” means the Trust Indenture
Act of 1939, as amended from time to time, or any successor legislation.

 

“TRADES” means the Treasury/Reserve
Automated Debt Entry System maintained by the Federal Reserve Bank of New York
pursuant to the TRADES Regulations.

 

“TRADES Regulations” means the
regulations of the United States Department of the Treasury, published at 31
C.F.R.  Part 357, as amended from
time to time.  Unless otherwise defined
herein, all terms defined in the TRADES Regulations are used herein as therein
defined.

 

“Trading Day” means a day on which the
Common Shares (i) are not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (ii) have traded at least once on the national or
regional securities exchange or association or over-the-counter market that is
the primary market for the trading of the Common Shares.  If the Common Shares are not traded on a
securities exchange or quoted in the over-the-counter market, then “Trading
Day” shall mean Business Day.

 

“Transfer” means (i) in the case
of certificated securities in registered form, delivery as provided in Section 8-301(a) of
the UCC, indorsed to the transferee or in blank by an effective endorsement; (ii) in
the case of Treasury Securities, registration of the transferee as the owner of
such Treasury Securities on TRADES; and (iii) in the case of security
entitlements, including, without limitation, security entitlements with respect
to Treasury Securities, a securities intermediary indicating by book-entry that
such security entitlement has been credited to the transferee’s securities
account.

 

“Treasury Portfolio” means, as
applicable, the Remarketing Treasury Portfolio or the Special Event Treasury
Portfolio.

 

“Treasury Portfolio Purchase Price” means, as
applicable, the Remarketing Treasury Portfolio Purchase Price or the Special
Event Treasury Portfolio Purchase Price.

 

20

 

“Treasury Securities” means
zero-coupon U.S. treasury securities that mature on May 31, 2012 (CUSIP No. 912820PR2).

 

Notwithstanding the
foregoing, if Treasury Securities have a yield that is less than zero, then “Treasury Securities” shall mean cash.

 

“Treasury Unit” means, following the
substitution of Treasury Securities for Pledged Applicable Ownership Interests
in Notes or Pledged Applicable Ownership Interests in the Treasury Portfolio,
as the case may be, as collateral to secure a Holder’s obligations under the
Purchase Contract, the collective rights and obligations of a Holder of a
Treasury Units Certificate in respect of such Treasury Securities, subject to
the Pledge thereof, and the related Purchase Contract.

 

“Treasury Units Certificate” means a
certificate evidencing the rights and obligations of a Holder in respect of the
number of Treasury Units specified on such certificate.

 

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

 

“Underwriters” means the underwriters
identified in Schedule A to the Underwriting Agreement.

 

“Underwriting Agreement” means the
Underwriting Agreement, dated June 18, 2009, among the Company, Assured
Guaranty US Holdings Inc. and the Underwriters, relating to the issuance of
Corporate Units by the Company.

 

“Unit” means a Corporate Unit or a
Treasury Unit, as the case may be.

 

“Value” means, with respect to any
item of Collateral on any date, as to (1) cash, the amount thereof, (2) Treasury
Securities, the aggregate principal amount thereof at maturity and (3) Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (i) of
each first paragraph of the definition of each of Applicable Ownership Interest
in the Remarketing Treasury Portfolio and Applicable Ownership Interest in the
Special Event Treasury Portfolio), the appropriate aggregate percentage of the
aggregate principal amount at maturity of the Treasury Portfolio.

 

“Vice President” means any vice president,
whether or not designated by a number or a word or words added before or after
the title “vice president.”

 

Section 1.02.          Compliance Certificates and
Opinions.  Except as otherwise
expressly provided by this Agreement, upon any application or request by the
Company to the Purchase Contract Agent to take any action in accordance with
any provision of this Agreement, the Company shall furnish to the Purchase
Contract Agent an Officers’ Certificate stating that all conditions precedent,
if any, provided for in this Agreement relating to the proposed action have
been complied with and, if requested by the Purchase Contract Agent, an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any 

 

21

 

such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Agreement relating to such particular application or request,
no additional certificate or opinion need be furnished.

 

Every certificate or opinion
with respect to compliance with a condition or covenant provided for in this
Agreement (other than the Officers’ Certificate provided for in Section 10.05)
shall include:

 

(i)            a statement that each individual signing such certificate
or opinion 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 contained in
such certificate or opinion are based;

 

(iii)          a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as is necessary to enable
such individual 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 each such
individual, such condition or covenant has been complied with.

 

Section 1.03.          Form of Documents Delivered to
Purchase Contract Agent.  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.  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 in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which its
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 unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.

 

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

 

Section 1.04.          Acts of Holders; Record Dates.   (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Agreement
to be given 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 

 

22

 

agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Purchase
Contract Agent 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 Agreement and (subject
to Section 7.01) conclusive in favor of the Purchase Contract Agent and
the Company, if made in the manner provided in this Section.

 

(b)           The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner that the Purchase
Contract Agent deems sufficient.

 

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

 

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

 

(e)           The Company may set any date as a record date for the
purpose of determining the Holders of Outstanding Units entitled to give, make
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Agreement to be given, made or
taken by Holders.  If any record date is
set pursuant to this paragraph, the Holders of the Outstanding Corporate Units
and the Outstanding Treasury Units, as the case may be, on such record date,
and no other Holders, shall be entitled to take the relevant action with
respect to the Corporate Units or the Treasury Units, as the case may be,
whether or not such Holders remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken prior to or on the applicable Expiration Date
by Holders of the requisite number of Outstanding Units on such record
date.  Nothing contained 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 cancelled and be of no effect), and nothing
contained in this paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding Units on the date such
action is taken.  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 Purchase Contract Agent in
writing and to each Holder of Units in the manner set forth in Section 1.06.

 

23

 

With respect to any record
date set pursuant to this Section 1.04(d), the Company may designate any
date 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 Purchase Contract Agent in writing, and to each
Holder of Units in the manner set forth in Section 1.06, prior to or on
the existing Expiration Date.  If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section 1.04, the Company shall be deemed to have initially
designated the 180th 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 180th day after the
applicable record date.

 

Section 1.05.          Notices.  All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to
the intended recipient at the “Address for Notices” specified below its name on
the signature pages hereof or, as to any party, at such other address as
shall be designated by such party in a notice to the other parties.  Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.

 

The Purchase Contract Agent
(if other than the Indenture Trustee) shall send to the Indenture Trustee at
the following address a copy of any notices in the form of Exhibits C, D, E, G,
I, K, O and P it sends or receives:

 

The
Bank of New York Mellon

101
Barclay Street, Floor 8W

New
York, New York  10286

Attention:  Corporate Trust Administration

Telephone:  (212) 815-5360

Facsimile:  (212) 815-5704

 

Section 1.06.          Notice to Holders; Waiver.  Where this Agreement 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, at its address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.  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 Agreement 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 Purchase Contract Agent, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

 

24

 

In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Purchase Contract Agent shall constitute a
sufficient notification for every purpose hereunder.

 

Section 1.07.          Effect of Headings and Table of
Contents.  The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

 

Section 1.08.          Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Company,
the Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the
Securities Intermediary, and the Holders from time to time of the Units, by
their acceptance of the same, shall be deemed to have agreed to be bound by the
provisions hereof and to have ratified the agreements of, and the grant of the
Pledge hereunder by, the Purchase Contract Agent.

 

Section 1.09.          Separability Clause.  In case any provision in this Agreement or in
the Units shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof and thereof shall not in
any way be affected or impaired thereby.

 

Section 1.10.          Benefits of Agreement.  Nothing contained in this Agreement or in the
Units, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and, to the extent provided hereby, the
Holders, any benefits or any legal or equitable right, remedy or claim under
this Agreement.  The Holders from time to
time shall be beneficiaries of this Agreement and shall be bound by all of the
terms and conditions hereof and of the Units evidenced by their Certificates by
their acceptance of delivery of such Certificates.

 

Section 1.11.          Governing Law.  THIS AGREEMENT AND THE UNITS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF TO THE
EXTENT THAT THE APPLICATION OF A LAW OF A DIFFERENT JURISDICTION WOULD GOVERN
AS A RESULT.  The Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Holders from
time to time of the Units, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby.  The Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Holders from
time to time of the Units, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.

 

25

 

The Company
hereby irrevocably designates and appoints for the benefit of the Purchase
Contract Agent, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Holders from time to time of the Units, acting through the
Purchase Contract Agent as their attorney-in-fact, Assured Guaranty Corp., 1325
Avenue of the Americas, New York, New York 10019, as its agent to receive on
its behalf service of all process (with a copy of all such service of process
to be delivered to James M. Michener, General Counsel and Secretary, Assured
Guaranty Ltd., 30 Woodbourne Avenue, Hamilton, HM 08, Bermuda) brought against
it with respect to any such proceeding in any such court in The City of New
York, such service being hereby acknowledged by the Company to be effective and
binding service on it in every respect whether or not the Company shall then be
doing or shall have at any time done business in New York.  Such appointment shall be irrevocable so long
as any of the Units or the obligation of the Company hereunder remains
outstanding, or until the appointment of a successor by the Company and such
successor’s acceptance of such appointment. 
Upon such acceptance, the Company shall notify the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent of
the name and address of such successor. 
The Company further agrees for the benefit of the Purchase Contract
Agent, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Holders from time to time of the Units, acting through the Purchase
Contract Agent as their attorney-in-fact, to take any and all action, including
the execution and filing of any and all such documents and instruments, as may
be necessary to continue such designation and appointment of said Assured
Guaranty Corp. in full force and effect so long as any of the Units or the
obligations of the Company hereunder shall be outstanding.  None of the Collateral Agent, the Custodial
Agent, the Securities Intermediary or the Purchase Contract Agent shall be
obligated nor shall have any responsibility with respect to any failure by the
Company to take any such action.  Nothing
herein shall affect the right to serve process in any other manner permitted by
any law or limit the right of the Purchase Contract Agent, the Collateral
Agent, the Custodial Agent, the Securities Intermediary or the Holders from
time to time of the Units, acting through the Purchase Contract Agent as their
attorney-in-fact, to institute proceedings against the Company in the courts of
any other jurisdiction or jurisdictions.

 

Section 1.12.          Legal Holidays.  In any case where any Payment Date shall not
be a Business Day (notwithstanding any other provision of this Agreement or the
Units), the interest payment on the Notes or other distributions shall not be
paid on such date, but the interest payment on the Notes or such other
distributions shall be paid on the next succeeding Business Day, unless such
Business Day is in the next succeeding calendar year, in which case such
payment shall be paid on the immediately preceding Business Day, in each case
with the same force and effect as if made on such scheduled Payment Date; provided that no interest shall accrue or be payable by the
Company or to any Holder in respect of such delay.

 

In any case
where the Purchase Contract Settlement Date or any Early Settlement Date or
Fundamental Change Early Settlement Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Units), Purchase
Contracts shall not be performed and Early Settlement and Fundamental Change
Early Settlement shall not be effected on such date, but Purchase Contracts
shall be performed or Early 

 

26

 

Settlement or Fundamental Change Early Settlement shall be effected, as
applicable, on the next succeeding Business Day with the same force and effect
as if made on such Purchase Contract Settlement Date, Early Settlement Date or
Fundamental Change Early Settlement Date, as applicable.

 

Section 1.13.          Counterparts.  This Agreement may be executed in any number
of counterparts by the parties hereto, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.

 

Section 1.14.          Inspection of
Agreement.  A copy of this Agreement
shall be available upon prior written request at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any
Holder or Beneficial Owner.

 

Section 1.15.          Appointment of
Financial Institution as Agent for the Company.  The Company may appoint a financial
institution (which may be the Collateral Agent) to act as its agent in
performing its obligations and in accepting and enforcing performance of the
obligations of the Purchase Contract Agent and the Holders, under this
Agreement and the Purchase Contracts, by giving notice of such appointment in
the manner provided in Section 1.05 hereof.  Any such appointment shall not relieve the Company
in any way from its obligations hereunder.

 

Section 1.16.          No Waiver.  No failure on the part of the Company, the
Purchase Contract Agent, the Collateral Agent, the Custodial Agent, the
Securities Intermediary or any of their respective agents to exercise, and no
course of dealing with respect to, and no delay in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise by the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary or any of their respective agents of any right, power
or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. 
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

 

Section 1.17.          Tax Treatment.  By acceptance of a beneficial ownership of a
Unit, each Beneficial Owner of a Unit will be deemed to have agreed, for all
tax purposes (i) to treat itself as the owner of the related Notes underlying
the Corporate Units, the Applicable Ownership Interests in the Treasury
Portfolio or the Treasury Securities, as the case may be, (ii) to treat
the Notes as indebtedness of Assured Guaranty US Holdings Inc. that are subject
to the rules applicable to contingent payment debt instruments under
Treas. Reg. Sec. 1.1275-4 for U.S. federal, state and local income and
franchise tax purposes and (iii) to treat the Corporate Units as comprised
of the Notes and the Purchase Contracts as separate securities.

 

Section 1.18.          Waiver Of Jury Trial.  EACH OF THE COMPANY, THE PURCHASE CONTRACT
AGENT, THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING 

 

27

 

OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES, THE UNITS OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

ARTICLE 2

CERTIFICATE FORMS

 

Section 2.01.          Forms of Certificates
Generally.  The Certificates
(including the form of Purchase Contract forming part of each Unit evidenced
thereby) shall be in substantially the form set forth in Exhibit A hereto
(in the case of Corporate Units Certificates) or Exhibit B hereto (in the
case of Treasury Units Certificates), with such letters, numbers or other marks
of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Units are listed or any Depository therefor,
or as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.

 

The definitive
Certificates shall be produced in any manner as determined by the officers of
the Company executing the Units evidenced by such Certificates, consistent with
the provisions of this Agreement, as evidenced by their execution thereof.

 

Every Global
Certificate authenticated, executed on behalf of the Holders and delivered
hereunder shall bear a legend substantially in the form set forth in Exhibit A
and Exhibit B for a Global Certificate.

 

Section 2.02.          Form of Purchase
Contract Agent’s Certificate of Authentication.  The form of the Purchase Contract Agent’s
certificate of authentication of the Units shall be substantially in the form
set forth on the form of the applicable Certificates.

 

ARTICLE 3

THE UNITS

 

Section 3.01.          Amount; Form and
Denominations.  The aggregate number of
Units evidenced by Certificates authenticated, executed on behalf of the
Holders and delivered hereunder is limited to 3,000,000 (or 3,450,000 if the
Underwriters exercise their overallotment option to purchase additional Units
in full as set forth in the Underwriting Agreement), except for Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Certificates pursuant to Section 3.04, Section 3.05,
Section 3.10, Section 3.13, Section 3.14 or Section 8.05.

 

The
Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.

 

Section 3.02.          Rights and
Obligations Evidenced by the Certificates. 
Each Corporate Units Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing (i) the
ownership by the Holder 

 

28

 

thereof of an Applicable
Ownership Interest in Notes or an Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, subject to the Pledge of such Applicable
Ownership Interest in Notes or Applicable Ownership Interest in the Treasury
Portfolio (as specified in clause (i) of each paragraph of the definitions
of each of Applicable Ownership Interest in the Remarketing Treasury Portfolio
or the Applicable Ownership Interest in the Special Event Treasury Portfolio,
as the case may be), as the case may be, by such Holder pursuant to this
Agreement, and (ii) the rights and obligations of the Holder thereof and
the Company under one Purchase Contract. 
The Purchase Contract Agent is hereby authorized, as attorney-in-fact
for, and on behalf of, the Holder of each Corporate Unit, to pledge, pursuant
to Article 11 hereof, the Applicable Ownership Interests in Notes or the
Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (i) of each paragraph of the definitions of each of Applicable
Ownership Interest in the Remarketing Treasury Portfolio or Applicable
Ownership Interest in the Special Event Treasury Portfolio, as the case may be)
forming a part of such Corporate Unit, to the Collateral Agent for the benefit
of the Company, and to grant to the Collateral Agent, for the benefit of the
Company, a security interest in the right, title and interest of such Holder in
such Applicable Ownership Interests in the Notes and or Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (i) of each
paragraph of the definitions of each of Applicable Ownership Interest in the
Remarketing Treasury Portfolio or Applicable Ownership Interest in the Special
Event Treasury Portfolio, as the case may be) to secure the obligation of the
Holder under each Purchase Contract to purchase Common Shares.  To effect such Pledge and grant such security
interest, the Purchase Contract Agent, on behalf of the Holders of Corporate
Units has, on the date hereof, delivered to the Collateral Agent the Notes
underlying the Applicable Ownership Interests in Notes.

 

Upon the
formation of a Treasury Unit pursuant to Section 3.13, each Treasury Unit
Certificate shall evidence the number of Treasury Units specified therein, with
each such Treasury Unit representing (i) the ownership by the Holder
thereof of a 1/20, or 5%, undivided beneficial interest in a Treasury Security
with a principal amount equal to $1,000, subject to the Pledge of such interest
by such Holder pursuant to this Agreement, and (ii) the rights and
obligations of the Holder thereof and the Company under one Purchase
Contract.  The Purchase Contract Agent is
hereby authorized, as attorney-in-fact for, and on behalf of, the Holder of
each Treasury Unit, to pledge, pursuant to Article 11 hereof, such Holder’s
interest in the Treasury Security forming a part of such Treasury Unit to the
Collateral Agent, for the benefit of the Company, and to grant to the
Collateral Agent, for the benefit of the Company, a security interest in the
right, title and interest of such Holder in such Treasury Security to secure
the obligation of the Holder under each Purchase Contract to purchase Common
Shares.

 

Prior to the
purchase of Common Shares under each Purchase Contract, such Purchase Contract
shall not entitle the Holder of a Unit to any of the rights of a holder of
Common Shares, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as a shareholder
in respect of the meetings of shareholders or for the election of directors of
the Company or for any other matter, or any other rights whatsoever as a
shareholder of the Company.

 

29

 

Section 3.03.          Execution,
Authentication, Delivery and Dating. 
Subject to the provisions of Section 3.13 and Section 3.14
hereof, upon the execution and delivery of this Agreement, and at any time and
from time to time thereafter, the Company may deliver Certificates executed by
the Company to the Purchase Contract Agent for authentication, execution on
behalf of the Holders and delivery, together with its Issuer Order for
authentication of such Certificates, and the Purchase Contract Agent in
accordance with such Issuer Order shall authenticate, execute on behalf of the
Holders and deliver such Certificates.

 

The
Certificates shall be executed on behalf of the Company by its Chairman of the
Board of Directors, a Vice Chairman, its Chief Executive Officer, its Chief
Financial Officer, its President, its Treasurer or a Vice President.  The signature of any of these officers on the
Certificates may be manual or facsimile.

 

Certificates
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 Certificates or did not hold such offices
at the date of such Certificates.

 

No Purchase
Contract evidenced by a Certificate shall be valid until such Certificate has
been executed on behalf of the Holder by the manual or facsimile signature of
an authorized signatory of the Purchase Contract Agent, as such Holder’s
attorney-in-fact.  Such signature by an
authorized signatory of the Purchase Contract Agent shall be conclusive
evidence that the Holder of such Certificate has entered into the Purchase
Contract or Purchase Contracts evidenced by such Certificate.

 

Each
Certificate shall be dated the date of its authentication.

 

No Certificate
shall be entitled to any benefit under this Agreement or be valid or obligatory
for any purpose unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by an
authorized signatory of the Purchase Contract Agent by manual signature, and
such certificate of authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.

 

Section 3.04.          Temporary
Certificates.  Pending the
preparation of definitive Certificates, the Company may execute and deliver to
the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu of such
definitive Certificates, temporary Certificates which are in substantially the
form set forth in Exhibit A or Exhibit B hereto, as the case may be,
with such letters, numbers or other marks of identification or designation and
such legends or endorsements printed, lithographed or engraved thereon as may
be required by the rules of any securities exchange on which the Corporate
Units or Treasury Units, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.

 

30

 

If temporary
Certificates are issued, the Company shall cause definitive Certificates to be
prepared without unreasonable delay. 
After the preparation of definitive Certificates, the temporary
Certificates shall be exchangeable for definitive Certificates upon surrender
of the temporary Certificates at the Corporate Trust Office, at the expense of
the Company and without charge to the Holder. 
Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Units as the temporary Certificate or Certificates so surrendered.  Until so exchanged, the temporary
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the Units evidenced thereby as definitive
Certificates.

 

Section 3.05.          Registration;
Registration of Transfer and Exchange. 
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the “Security
Register”) in which, subject to such reasonable regulations
as it may prescribe, the Purchase Contract Agent shall provide for the
registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the “Security Registrar”). 
The Security Registrar shall record separately the registration and
transfer of the Certificates evidencing Corporate Units and Treasury Units.

 

Upon surrender
for registration of transfer of any Certificate at the Corporate Trust Office,
the Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall authenticate, execute on behalf of the designated
transferee or transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any authorized
denominations, of like tenor, and evidencing a like number of Corporate Units
or Treasury Units, as the case may be.

 

At the option
of the Holder, Certificates may be exchanged for other Certificates, of any
authorized denominations and evidencing a like number of Corporate Units or
Treasury Units, as the case may be, upon surrender of the Certificates to be
exchanged at the Corporate Trust Office. 
Whenever any Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Purchase Contract Agent, and the Purchase
Contract Agent shall authenticate, execute on behalf of the Holder, and deliver
the Certificates which the Holder making the exchange is entitled to receive.

 

All
Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of Corporate Units
or Treasury Units, as the case may be, and be entitled to the same benefits and
subject to the same obligations under this Agreement as the Corporate Units or
Treasury Units, as the case may be, evidenced by the Certificate surrendered
upon such registration of transfer or exchange.

 

Every
Certificate presented or surrendered for registration of transfer or exchange
shall (if so required by the Purchase Contract Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and 

 

31

 

the Purchase Contract Agent duly executed, by the Holder thereof or its
attorney duly authorized in writing.

 

No service
charge shall be made for any registration of transfer or exchange of a
Certificate, but the Company and the Purchase Contract Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to Section 3.04,
Section 3.06 and Section 8.05 not involving any transfer.

 

Notwithstanding
the foregoing, the Company shall not be obligated to execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall not be obligated
to authenticate, execute on behalf of the Holder and deliver any Certificate in
exchange for any other Certificate presented or surrendered for registration of
transfer or for exchange on or after the Business Day immediately preceding the
earliest to occur of any Early Settlement Date with respect to such
Certificate, any Fundamental Change Early Settlement Date with respect to such
Certificate, the Purchase Contract Settlement Date or the Termination
Date.  In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer
instructions from such Holder, the Purchase Contract Agent shall:

 

(i)            if the Purchase
Contract Settlement Date, an Early Settlement Date or a Fundamental Change
Early Settlement Date with respect to such other Certificate has occurred,
deliver the Common Shares issuable in respect of the Purchase Contracts forming
a part of the Units evidenced by such other Certificate; or

 

(ii)           if a Termination Event,
Early Settlement or Fundamental Change Early Settlement shall have occurred
prior to the Purchase Contract Settlement Date, or a Cash Settlement shall have
occurred, transfer the Notes, the Treasury Securities, or the appropriate
Applicable Ownership Interests in the Treasury Portfolio, as the case may be,
underlying such Certificate, in each case subject to the applicable conditions
and in accordance with the applicable provisions of Section 3.15 and Article 5
hereof.

 

Section 3.06.          Book-Entry Interests.  The Certificates will be issued in the form
of one or more fully registered Global Certificates, to be delivered to the
Depository or its custodian by, or on behalf of, the Company.  The Company hereby designates DTC as the initial
Depository.  Such Global Certificates
shall initially be registered on the Security Register in the name of Cede &
Co., the nominee of the Depository, and no Beneficial Owner will receive a
definitive Certificate representing such Beneficial Owner’s interest in such
Global Certificate, except as provided in Section 3.09.  The Purchase Contract Agent shall enter into
an agreement with the Depository if so requested by the Company.  Following the issuance of such Global
Certificates and unless and until definitive, and fully registered Certificates
have been issued to Beneficial Owners pursuant to Section 3.09:

 

32

 

(i)            the provisions of this
Section 3.06 shall be in full force and effect;

 

(ii)           the Company shall be
entitled to deal with the Depository for all purposes of this Agreement
(including, without limitation, receiving approvals, votes or consents
hereunder) as the Holder of the Units and the sole holder of the Global
Certificates and shall have no obligation to the Beneficial Owners; provided that a Beneficial Owner may
directly enforce against the Company, without any consent, proxy, waiver or
involvement of the Depository of any kind, such Beneficial Owner’s right to
receive a definitive Certificate representing the Units beneficially owned by
such Beneficial Owner, as set forth in Section 3.09;

 

(iii)          to the extent that the
provisions of this Section 3.06 conflict with any other provisions of this
Agreement, the provisions of this Section 3.06 shall control; and

 

(iv)          except as set forth in
the proviso of clause (ii) of this Section 3.06, the rights of the
Beneficial Owners shall be exercised only through the Depository and shall be
limited to those established by law and agreements between such Beneficial
Owners and the Depository or the Depository Participants.  The Depository will make book-entry transfers
among Depository Participants.

 

Transfers of
securities evidenced by Global Certificates shall be made through the
facilities of the Depository, and any cancellation of, or increase or decrease
in the number of, such securities (including the creation of Treasury Units and
the recreation of Corporate Units pursuant to Section 3.13 and Section 3.14
respectively) shall be accomplished by making appropriate annotations on the
Schedule of Increases and Decreases set forth in such Global Certificate.

 

Section 3.07.          Notices to Holders.  Whenever a notice or other communication to
the Holders is required to be given under this Agreement, the Company or the
Company’s agent shall give such notices and communications to the Holders and,
with respect to any Units registered in the name of the Depository or the
nominee of the Depository, the Company or the Company’s agent shall, except as
set forth herein, have no obligations to the Beneficial Owners.

 

Section 3.08.          Appointment of
Successor Depository.  If the
Depository elects to discontinue its services as securities depository with
respect to the Units, the Company may, in its sole discretion, appoint a
successor Depository with respect to the Units.

 

Section 3.09.          Definitive
Certificates.  If:

 

(i)            the Depository
notifies the Company that it is unwilling or unable to continue its services as
securities depository with respect to the Units and no successor Depository has
been appointed pursuant to Section 3.08 within 90 days after such notice;
or

 

(ii)           the Depository ceases
to be a “clearing agency” registered under Section 17A of the Exchange Act
when the Depository is required to be so 

 

33

 

registered to act as the Depository and so
notifies the Company, and no successor Depository has been appointed pursuant
to Section 3.08 within 90 days after such notice; or

 

(iii)          to the extent permitted
by the Depository, the Company determines at any time that the Units shall no
longer be represented by Global Certificates and shall inform such Depository
of such determination and participants in such Depository elect to withdraw
their beneficial interests in the Units from such Depository, following
notification by the Depository of their right to do so;

 

then (x) definitive
Certificates shall be prepared by the Company with respect to such Units and
delivered to the Purchase Contract Agent and (y) upon surrender of the
Global Certificates representing the Units by the Depository, accompanied by
registration instructions, the Company shall cause definitive Certificates to
be delivered to Beneficial Owners in accordance with instructions provided by
the Depository.  The Company and the
Purchase Contract Agent shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be authorized and protected
in relying on, such instructions.  Each
definitive Certificate so delivered shall evidence Units of the same kind and
tenor as the Global Certificate so surrendered in respect thereof.

 

Section 3.10.          Mutilated, Destroyed,
Lost and Stolen Certificates.  If any
mutilated Certificate is surrendered to the Purchase Contract Agent, the
Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate, evidencing the same number
of Corporate Units or Treasury Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.

 

If there shall
be delivered to the Company and the Purchase Contract Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity as may be required by them to hold each of
them and any agent of any of them harmless, then, in the absence of notice to
the Company or the Purchase Contract Agent that such Certificate has been
acquired by a protected purchaser, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing the same
number of Corporate Units or Treasury Units, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.

 

Notwithstanding
the foregoing, the Company shall not be obligated to execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall not be obligated
to authenticate, execute on behalf of the Holder, and deliver to the Holder,
with respect to such lost, stolen, destroyed or mutilated Certificate, a new
Certificate, on or after the Business Day immediately preceding the earliest of
any Early Settlement Date, any Fundamental Change Early Settlement Date, the
Purchase Contract Settlement Date or the Termination Date.  In lieu of delivery of a new Certificate,
upon satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration of transfer instructions from such Holder,
the Purchase Contract Agent shall:

 

34

 

(i)            if the Purchase
Contract Settlement Date (including upon any Cash Settlement), an Early
Settlement Date or a Fundamental Change Early Settlement Date with respect to
such lost, stolen, destroyed or mutilated Certificate has occurred, deliver the
Common Shares issuable in respect of the Purchase Contracts forming a part of
the Units evidenced by such Certificate; or

 

(ii)           if a Fundamental Change
Early Settlement or an Early Settlement with respect to such lost, stolen,
destroyed or mutilated Certificate or if a Termination Event shall have
occurred prior to the Purchase Contract Settlement Date or a Fundamental Change
Settlement shall have occurred, transfer the Notes, the Treasury Securities or
the Applicable Ownership Interests in the Treasury Portfolio, as the case may
be, underlying such Certificate, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Section 3.15
and Article 5 hereof.

 

Upon the
issuance of any new Certificate under this Section, the Company and the
Purchase Contract Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other fees and expenses (including, without
limitation, the fees and expenses of the Purchase Contract Agent) connected therewith.

 

Every new
Certificate issued pursuant to this Section in lieu of any lost, stolen,
destroyed or mutilated Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the Units
evidenced thereby, whether or not the lost, stolen, destroyed or mutilated
Certificate (and the Units evidenced thereby) shall be at any time enforceable
by anyone, and shall be entitled to all the benefits and be subject to all the
obligations of this Agreement equally and proportionately with any and all
other Certificates delivered hereunder.

 

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

 

Section 3.11.          Persons Deemed Owners.  Prior to due presentment of a Certificate for
registration of transfer, the Company and the Purchase Contract Agent, and any
agent of the Company or the Purchase Contract Agent, may treat the Person in
whose name such Certificate is registered as the owner of the Units evidenced
thereby for purposes of (subject to any applicable record date) any payment or
distribution with respect to the Applicable Ownership Interests in Notes or of
the Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (ii) of each paragraph of the definitions of each of Applicable
Ownership Interests in the Remarketing Treasury Portfolio and Applicable
Ownership Interests in the Special Event Treasury Portfolio) (if any), as
applicable, and performance of the Purchase Contracts and for all other
purposes whatsoever in connection with such Units, whether or not such payment,
distribution, or performance shall be overdue and notwithstanding any notice to
the contrary, and neither the Company nor the Purchase Contract Agent, nor any
agent of the Company or the Purchase Contract Agent, shall be affected by
notice to the contrary.

 

35

 

Notwithstanding the
foregoing, with respect to any Global Certificate, nothing contained herein
shall prevent the Company, the Purchase Contract Agent or any agent of the
Company or the Purchase Contract Agent, from giving effect to any written
certification, proxy or other authorization furnished by the Depository (or its
nominee), as a Holder, with respect to such Global Certificate, or impair, as
between such Depository and the related Beneficial Owner, the operation of
customary practices governing the exercise of rights of the Depository (or its
nominee) as Holder of such Global Certificate. 
None of the Company, the Purchase Contract Agent or any agent of the
Company or the Purchase Contract Agent 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 Certificate or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.

 

Section 3.12.          Cancellation.  All Certificates surrendered for delivery of
Common Shares on or after the Purchase Contract Settlement Date or in
connection with an Early Settlement or a Fundamental Change Early Settlement or
for delivery of the Notes underlying the appropriate Applicable Ownership
Interests in Notes, the Applicable Ownership Interests in the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to a Cash Settlement, an Early Settlement or a
Fundamental Change Early Settlement, or upon the registration of transfer or
exchange of a Unit, or a Collateral Substitution or the recreation of Corporate
Units shall, if surrendered to any Person other than the Purchase Contract
Agent, be delivered to the Purchase Contract Agent along with appropriate
written instructions regarding the cancellation thereof and, if not already
cancelled, shall be promptly cancelled by it. 
The Company may at any time deliver to the Purchase Contract Agent for
cancellation any Certificates previously authenticated, executed and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon an Issuer Order, be promptly cancelled by
the Purchase Contract Agent.  No
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as provided
in this Section 3.12, except as expressly permitted by this
Agreement.  All cancelled Certificates
held by the Purchase Contract Agent shall be disposed of in accordance with its
customary practices.

 

If the Company or any
Affiliate of the Company shall acquire any Certificate, such acquisition shall
not operate as a cancellation of such Certificate unless and until such Certificate
is delivered to the Purchase Contract Agent cancelled or for cancellation.

 

Section 3.13.          Creation of Treasury Units
by Substitution of Treasury Securities.  (a) Unless Applicable Ownership
Interests in the Treasury Portfolio have replaced Applicable Ownership
Interests in Notes as a component of the Corporate Units, and subject to the
conditions set forth in this Agreement, a Holder of Corporate Units may, at any
time from and after the date of this Agreement and on or prior to the close of
business on the seventh Business Day immediately preceding the Purchase
Contract Settlement Date, effect a Collateral Substitution and separate the
Notes underlying the Applicable Ownership Interests in Notes in respect of such
Holder’s Corporate Units by substituting for such Applicable Ownership
Interests in Notes, Treasury Securities in an 

 

36

 

aggregate principal amount at maturity equal
to the aggregate principal amount of such Notes underlying the Applicable
Ownership Interests in Notes; provided that (i) Holders may
make Collateral Substitutions only in integral multiples of 20 Corporate Units
and (ii) no Collateral Substitution shall be effected during a Restricted
Period.  To effect such substitution, the
Holder must:

 

(1)           Transfer to the Securities Intermediary, for credit
to the Collateral Account, Treasury Securities or security entitlements with
respect thereto having a Value equal to the aggregate principal amount of Notes
underlying the Pledged Applicable Ownership Interests in Notes for which such
Collateral Substitution is made; and

 

(2)           Transfer the related Corporate Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, whereupon the Purchase
Contract Agent shall promptly provide an instruction to such effect to the
Collateral Agent, substantially in the form of Exhibit G hereto.

 

Upon confirmation that the
Treasury Securities described in clause (1) above or security entitlements
with respect thereto have been credited to the Collateral Account and receipt
of the instruction to the Collateral Agent described in clause (2) above,
the Collateral Agent shall release such Applicable Ownership Interest in Notes
from the Pledge and instruct the Securities Intermediary by a notice,
substantially in the form of Exhibit H hereto, to Transfer such Notes
underlying the Applicable Ownership Interests in Notes to the Purchase Contract
Agent for distribution to such Holder, free and clear of the Pledge created
hereby.

 

Upon credit to the
Collateral Account of Treasury Securities or security entitlements with respect
thereto delivered by a Holder of Corporate Units and receipt of the related
instruction from the Collateral Agent, the Securities Intermediary shall
promptly Transfer the appropriate Notes underlying the appropriate Pledged
Applicable Ownership Interest in Notes to the Purchase Contract Agent for
distribution to such Holder, free and clear of the Pledge created hereby.

 

Upon receipt of the Notes
underlying such Applicable Ownership Interest in Notes, the Purchase Contract
Agent shall promptly:

 

(i)            cancel the related Corporate
Units;

 

(ii)           Transfer the Notes to the Holder; and

 

(iii)          deliver Treasury Units in book-entry form, or if
applicable, authenticate, execute on behalf of such Holder and deliver Treasury
Units in the form of a Treasury Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Corporate Units.

 

37

 

Holders who elect to
separate the Notes from the related Purchase Contracts by substituting Treasury
Securities for such Applicable Ownership Interest in Notes shall be responsible
for any fees or expenses, (including, without limitation, fees and expenses
payable to the Collateral Agent), in respect of the substitution, and neither
the Company nor the Purchase Contract Agent shall be responsible for any such fees
or expenses.

 

(b)           Notwithstanding clause (a) of
this Section 3.13, if Applicable Ownership Interests in the Treasury
Portfolio have replaced the Notes underlying Applicable Ownership Interests in
Notes as a component of Corporate Units and subject to the conditions set forth
in this Agreement, a Holder may, at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date, substitute
Treasury Securities for the Pledged Applicable Ownership Interests in the Treasury
Portfolio underlying such Corporate Units, but only in integral multiples of
16,000 Corporate Units or such other number of Corporate Units as may be
determined by the Remarketing Agent upon a Successful Remarketing of the Notes
if the Reset Effective Date is not an Interest Payment Date.  In such instance, the Holder shall Transfer
Treasury Securities having a Value equal to aggregate Value of the Pledged
Applicable Ownership Interests in the Treasury Portfolio for which substitution
is being made to the Securities Intermediary, for credit to the Collateral
Account, and (i) the Purchase Contract Agent, Collateral Agent and
Securities Intermediary shall effect a Collateral Substitution for the
appropriate Pledged Applicable Ownership Interests in the Treasury Portfolio in
the manner set forth in clause (a) above (except that the relevant request
by the Holder and instruction by the Purchase Contract Agent shall relate to
the release of the relevant Pledged Applicable Ownership Interests in the
Treasury Portfolio) and (ii) the Collateral Agent shall release any
applicable portion of the interest payment the Company made on a Reset
Effective Date (if not a quarterly Interest Payment Date) under the First
Supplemental Indenture for distribution to such Holder, if such cash payment
has not already been paid to Holders of the Corporate Units.

 

(c)           In the event a Holder making
a Collateral Substitution pursuant to this Section 3.13 fails to effect a
book-entry transfer of the Corporate Units or fails to deliver Corporate Units
Certificates to the Purchase Contract Agent after depositing Treasury
Securities with the Securities Intermediary, any distributions on the Notes
underlying the Applicable Ownership Interests in Notes, or with respect to the
Applicable Ownership Interests in the Treasury Portfolio, in each case
constituting a part of such Corporate Units, shall be held in the name of the
Purchase Contract Agent or its nominee in trust for the benefit of such Holder,
until such Corporate Units are so transferred or the Corporate Units
Certificate is so delivered, as the case may be, or such Holder provides
evidence satisfactory to the Company and the Purchase Contract Agent that such
Corporate Units Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Purchase Contract Agent and the
Company.

 

(d)           Except as described in Section 5.02
or in this Section 3.13 or in connection with a Cash Settlement, an Early
Settlement, a Fundamental Change Early Settlement or a Termination Event, for
so long as the Purchase Contract underlying a Corporate Unit remains in effect,
such Corporate Units shall not be separable into its constituent parts, and the
rights and obligations of the Holder in respect of the Applicable 

 

38

 

Ownership Interests in Notes or Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, and the
Purchase Contract comprising such Corporate Units may be acquired, and may be
transferred and exchanged, only as a Corporate Unit.

 

Section 3.14.          Recreation of Corporate
Units.  (a) Unless Applicable
Ownership Interests in the Treasury Portfolio have replaced Applicable
Ownership Interests in Notes as a component of the Corporate Units, and subject
to the conditions set forth in this Agreement, each Holder of Treasury Units
may recreate Corporate Units at any time on or prior to the close of business
on the seventh Business Day immediately preceding the Purchase Contract
Settlement Date; provided that (i) Holders of
Treasury Units may only recreate Corporate Units in integral multiples of 20
Treasury Units and (ii) no Collateral Substitution shall be effected
during a Restricted Period.  To recreate
Corporate Units, the Holder must:

 

(1)           Transfer to the Collateral Agent for credit to the
Collateral Account Notes or security entitlements with respect thereto having
an aggregate principal amount equal to the Value of the Treasury Securities to
be released; and

 

(2)           Transfer the related Treasury Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, whereupon the Purchase
Contract Agent shall promptly provide an instruction to such effect to the
Collateral Agent, substantially in the form of Exhibit I hereto.

 

Upon confirmation that the
Notes described in clause (1) above or security entitlements with respect
thereto have been credited to the Collateral Account and receipt of the
instruction from the Purchase Contract Agent described in clause (2) above,
the Collateral Agent shall promptly release such Pledged Treasury Securities
from the Pledge and shall promptly instruct the Securities Intermediary by a
notice substantially in the form of Exhibit J hereto to Transfer such
Pledged Treasury Securities to the Purchase Contract Agent for distribution to
such Holder, free and clear of the Pledge created hereby.

 

The substituted Notes will
be pledged to the Company through the Collateral Agent to secure such Holder’s
obligation to purchase Common Shares under the related Purchase Contract.

 

Upon credit to the
Collateral Account of Notes or security entitlements with respect thereto
delivered by a Holder of Treasury Units and receipt of the related instruction
from the Collateral Agent, the Securities Intermediary shall promptly Transfer
the Treasury Securities to the Purchase Contract Agent for distribution to such
Holder, free and clear of the Pledge created hereby.

 

Upon receipt of such
Treasury Securities, the Purchase Contract Agent shall promptly:

 

39

 

(i)            cancel the related Treasury
Units;

 

(ii)           Transfer the Treasury Securities to the Holder; and

 

(iii)          deliver Corporate Units in book-entry form, or if
applicable, authenticate, execute on behalf of such Holder and deliver
Corporate Units in the form of a Corporate Units Certificate executed by the
Company in accordance with Section 3.03 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Treasury Units.

 

Holders who elect to
recreate Corporate Units shall be responsible for any fees or expenses,
(including, without limitation, fees and expenses payable to the Collateral
Agent), in respect of the recreation, and neither the Company nor the Purchase Contract
Agent shall be responsible for any such fees or expenses.

 

(b)           Notwithstanding clause (a) of
this Section 3.14, if Applicable Ownership Interests in the Treasury
Portfolio have replaced Applicable Ownership Interests in Notes as a component
the Corporate Units and subject to the conditions set forth in this Agreement,
a Holder of Treasury Units may at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date substitute
Applicable Ownership Interests in the Treasury Portfolio for Treasury
Securities included in such Treasury Units, but only in integral multiples of
16,000 Treasury Units or such other number of Treasury Units as may be
determined by the Remarketing Agent following a Successful Remarketing of the
Notes if the Reset Effective Date is not an Interest Payment Date.  In addition, if the Corporate Units are
reestablished following a Reset Effective Date which is not also an Interest
Payment Date but prior to the close of business on the Record Date related to
the Interest Payment Date next succeeding such Reset Effective Date, the Holder
shall deposit with the Securities Intermediary for credit to the Collateral
Account cash in an amount equal to the interest accrued on the Notes that would
have been a component of the Corporate Units to be created from the Interest
Payment Date next preceding the Reset Effective Date to, but excluding, the
Reset Effective Date (except that the relevant request by the Holder and
instruction by the Purchase Contract Agent shall relate to the release of the
relevant Pledged Applicable Ownership Interests in the Treasury
Portfolio).  In such an event, the Holder
shall Transfer the Applicable Ownership Interests in the Treasury Portfolio
having a Value equal to the aggregate Value of the Treasury Securities for
which substitution is being made to the Securities Intermediary, for credit to
the Collateral Account, and the Purchase Contract Agent, Collateral Agent and
Securities Intermediary shall effect a Collateral Substitution and release the
Treasury Securities from the Pledge in the manner set forth in clause (c) above.

 

(c)           Except as provided in Section 5.02
or in this Section 3.14 or in connection with a Cash Settlement, an Early
Settlement, a Fundamental Change Early Settlement or a Termination Event, for
so long as the Purchase Contract underlying a Treasury Unit remains in effect,
such Treasury Unit shall not be separable into its constituent parts and the
rights and obligations of the Holder of such Treasury Unit in respect of the
interest in the Treasury Security and the Purchase Contract comprising 

 

40

 

such Treasury Unit may be acquired, and may
be transferred and exchanged, only as a Treasury Unit.

 

Section 3.15.          Transfer of Collateral upon
Occurrence of Termination Event.  (a) Upon receipt by the Collateral Agent
of written notice pursuant to Section 5.06 hereof from the Company or the
Purchase Contract Agent that a Termination Event has occurred, the Collateral
Agent shall release all Collateral from the Pledge and shall promptly instruct
the Securities Intermediary to Transfer:

 

(i)            any Notes underlying Pledged
Applicable Ownership Interests in Notes or security entitlements with respect
thereto or Pledged Applicable Ownership Interests in the Treasury Portfolio;

 

(ii)           any Pledged Treasury Securities;

 

(iii)          any payments made by Holders (or the Permitted
Investments of such payments) pursuant to Section 5.02 hereof; and

 

(iv)          any Proceeds and all other payments the Collateral
Agent receives in respect of the foregoing;

 

to the Purchase Contract
Agent for the benefit of the Holders for distribution to such Holders, in
accordance with their respective interests, free and clear of the Pledge
created hereby; provided, however, that if any Holder shall be
entitled to receive Notes in an aggregate principal amount of less than $1,000,
or greater than $1,000 but not in an integral multiple of $1,000, the Purchase
Contract Agent shall request, on behalf of such Holder, pursuant to Section 2.03
of the First Supplemental Indenture that the Company issue Notes in
denominations of $50, or integral multiples thereof, in exchange for Notes in
denominations of $1,000 or integral multiples thereof; provided,  further,
that if any Holder shall be entitled to receive less than $1,000 with respect
to its Pledged Applicable Ownership Interests in the Treasury Portfolio or its
Pledged Treasury Securities, the Purchase Contract Agent shall have the right
(but not the obligation) to dispose of such Pledged Applicable Ownership
Interests in the Treasury Portfolio or Pledged Treasury Securities for cash and
deliver to such Holder cash in lieu of delivering the Pledged Applicable
Ownership Interests in the Treasury Portfolio or Pledged Treasury Securities,
as the case may be.

 

(b)           Notwithstanding anything to
the contrary in clause (a) of this Section 3.15, if such Termination
Event shall result from the Company’s becoming a debtor under the Bankruptcy
Code, and if the Collateral Agent shall for any reason fail promptly to
effectuate the release and Transfer of all Notes underlying Pledged Applicable
Ownership Interests in Notes, Pledged Applicable Ownership Interests in the
Treasury Portfolio, Pledged Treasury Securities and payments by Holders (or the
Permitted Investments of such payments) pursuant to Section 5.02 and
Proceeds and all other payments received by the Collateral Agent in respect of
the foregoing, as the case may be, as provided by this Section 3.15, the
Purchase Contract Agent shall use its best efforts to obtain an opinion of a
nationally recognized law firm to the effect that, 

 

41

 

notwithstanding the Company’s being the
debtor in such a bankruptcy case, the Collateral Agent shall not be prohibited
from releasing or Transferring the Collateral as provided in this Section 3.15,
and shall deliver or cause to be delivered such opinion to the Collateral Agent
within 10 days after the occurrence of such Termination Event, and if (A) the
Purchase Contract Agent shall be unable to obtain such opinion within 10 days
after the occurrence of such Termination Event or (B) the Collateral Agent
shall continue, after delivery of such opinion, to refuse to effectuate the
release and Transfer of all Notes underlying Pledged Applicable Ownership
Interests in Notes, Pledged Applicable Ownership Interests in the Treasury
Portfolio, Pledged Treasury Securities and the payments by Holders (or the
Permitted Investments of such payments) pursuant to Section 5.02 hereof
and Proceeds and all other payments received by the Collateral Agent in respect
of the foregoing, as the case may be, as provided in this Section 3.15,
then the Purchase Contract Agent shall within 15 days after the occurrence of
such Termination Event commence an action or proceeding in the court having
jurisdiction of the Company’s case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Notes underlying Pledged Applicable Ownership Interests in Notes, Pledged
Applicable Ownership Interests in the Treasury Portfolio, Pledged Treasury
Securities and the payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.02 hereof and Proceeds and all other
payments received by the Collateral Agent in respect of the foregoing, or as
the case may be, as provided by this Section 3.15.

 

(c)           Upon the occurrence of a
Termination Event and the Transfer to the Purchase Contract Agent of the Notes
underlying Pledged Applicable Ownership Interests in Notes, the appropriate
Pledged Applicable Ownership Interests in the Treasury Portfolio or the Pledged
Treasury Securities, as the case may be, pursuant to Section 3.15(a), the
Purchase Contract Agent shall request transfer instructions with respect to
such Notes, Applicable Ownership Interests in the Treasury Portfolio or Pledged
Treasury Securities, as the case may be, from each Holder by written request,
substantially in the form of Exhibit D hereto, mailed to such Holder at
its address as it appears in the Security Register.

 

(d)           Upon book-entry transfer of
the Corporate Units or the Treasury Units or delivery of a Corporate Units
Certificate or Treasury Units Certificate to the Purchase Contract Agent with
such transfer instructions, the Purchase Contract Agent shall transfer the
Notes underlying Pledged Applicable Ownership Interests in Notes, Pledged
Applicable Ownership Interests in the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, that are a component of such Corporate Units or
Treasury Units, as the case may be, to such Holder by book-entry transfer, or
other appropriate procedures, in accordance with such instructions and, in the
case of the Notes underlying Pledged Applicable Ownership Interests in Notes,
in accordance with the terms of the First Supplemental Indenture.  In the event a Holder of Corporate Units or
Treasury Units fails to effect such transfer or delivery, the Notes underlying
Pledged Applicable Ownership Interests in Notes, Pledged Applicable Ownership
Interests in the Treasury Portfolio or Pledged Treasury Securities, as the case
may be, and any distributions thereon, shall be held in the name of the
Purchase Contract Agent or its nominee in trust for the benefit of such Holder,
until the earlier to occur of:

 

42

 

(i)            the transfer of such
Corporate Units or Treasury Units or surrender of the Corporate Units
Certificate or Treasury Units Certificate or the receipt by the Company and the
Purchase Contract Agent from such Holder of satisfactory evidence that such
Corporate Units Certificate or Treasury Units Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the
Purchase Contract Agent and the Company; and

 

(ii)           the expiration of the time period specified by the
applicable law governing abandoned property in the state in which the Purchase
Contract Agent holds such property.

 

Section 3.16.          No Consent to Assumption.  Each Holder of a Unit, by acceptance thereof,
shall be deemed expressly to have withheld any consent to the assumption under Section 365
of the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or
its trustee, receiver, liquidator or a person or entity performing similar
functions in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation.

 

Section 3.17.          Substitutions.  Whenever a Holder has the right to substitute
Treasury Securities, Notes underlying Applicable Ownership Interests in Notes
or Applicable Ownership Interests in the Treasury Portfolio, as the case may
be, or security entitlements for any of them, for financial assets held in the
Collateral Account, such substitution shall not constitute a novation of the
security interest created hereby.

 

ARTICLE 4

THE NOTES AND APPLICABLE OWNERSHIP

INTERESTS IN THE TREASURY PORTFOLIO

 

Section 4.01.          Interest Payments; Rights to
Interest Payments Preserved.  (a)  The Collateral Agent (if the Notes
underlying Pledged Applicable Ownership Interests in Notes are in the name of
the Collateral Agent) shall transfer all income and distributions received by
it on account of the Notes underlying Pledged Applicable Ownership Interests in
Notes, Pledged Applicable Ownership Interests in the Treasury Portfolio or
Permitted Investments from time to time held in the Collateral Account (ABA No. 021000018,
Attn: Corporate Trust/GLA 111-565, Account No. 142307, Re: Assured
Guaranty Ltd. Collateral Account) to the Purchase Contract Agent for
distribution to the applicable Holders as provided in this Agreement and the
Purchase Contracts.

 

(b)           Any payment on any Note
underlying Pledged Applicable Ownership Interests in Notes or any distribution
on any Applicable Ownership Interests in the Treasury Portfolio (as specified
in clause (ii) of each paragraph of the definition of Applicable Ownership
Interest in the Special Event Treasury Portfolio and clauses (ii) or (iii) of
each paragraph of the definition of Applicable Ownership Interest in the
Remarketing Treasury Portfolio), as the case may be, which is paid on any
Interest Payment Date shall, subject to receipt thereof by the Purchase
Contract Agent from the Company or from the Collateral Agent as provided in Section 4.01(a) above
be paid to 

 

43

 

the Person in whose name the Corporate Units
Certificate (or one or more Predecessor Corporate Units Certificates) of which
such Applicable Ownership Interest in Notes or Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, forms a part is registered at the
close of business on the Record Date for such Interest Payment Date.  Interest payable on the Notes underlying the
Applicable Ownership Interests in Notes on a Reset Effective Date that falls on
a day that is not an Interest Payment Date, as well as any cash deposited with
the Collateral Agent in accordance with the provisions of Section 3.14(b),
shall, in accordance with the provisions of this Agreement, be released by the
Collateral Agent to the Purchase Contract Agent on the next succeeding Payment
Date or on such earlier date falling prior to the Record Date for such next
succeeding Payment Date on which (i) Corporate Units are transformed into
Treasury Units pursuant to Section 3.13 by the Holder establishing
Treasury Units, or (ii) Corporate Units are settled early in accordance
with the provisions of Section 5.07 by the Holders exercising rights
pursuant to such Section.  Amounts
payable in accordance with the preceding sentence shall be payable by the
Purchase Contract Agent to the Persons in whose names the Corporate Units
Certificate is registered at the close of business on the Record Date for the
applicable Payment Date or to the Holder of Corporate Units transforming
Corporate Units into Treasury Units or exercising an Early Settlement in
accordance with Section 5.07.

 

(c)           Each Corporate Units
Certificate evidencing Applicable Ownership Interests in Notes or Applicable
Ownership Interests in the Treasury Portfolio delivered under this Agreement
upon registration of transfer of or in exchange for or in lieu of any other
Corporate Units Certificate shall carry the right to accrued and unpaid
interest or distributions, and to accrue interest or distributions, which were
carried by the Applicable Ownership Interests in Notes or Applicable Ownership
Interests in the Treasury Portfolio underlying such other Corporate Units
Certificate.

 

(d)           In the case of any Corporate
Unit with respect to which (i) Cash Settlement of the underlying Purchase
Contract is properly effected pursuant to Section 5.02(b) or hereof, (ii) Early
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.07 hereof, (iii) Fundamental Change Early Settlement of the
underlying Purchase Contract is properly effected pursuant to Section 5.04(b)(ii) hereof,
(iv) a Collateral Substitution is properly effected pursuant to Section 3.13,
or (v) a Successful Early Remarketing occurs with respect to the Note
underlying Applicable Ownership Interest in Notes as a component of a Corporate
Unit, in each case on a date that is after any Record Date and prior to or on
the next succeeding Interest Payment Date, interest on the Notes underlying
Applicable Ownership Interests in Notes or distributions on Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, as a
component of such Corporate Unit otherwise payable on such Interest Payment
Date shall be payable on such Interest Payment Date notwithstanding such Cash
Settlement, Early Settlement, Fundamental Change Early Settlement, Collateral
Substitution or Successful Early Remarketing, and such payment or distributions
shall, subject to receipt thereof by the Purchase Contract Agent, be payable to
the Person in whose name the Corporate Units Certificate (or one or more
Predecessor Corporate Units Certificates) was registered at the close of
business on the Record Date.

 

44

 

(e)           Except as otherwise
expressly provided in Section 4.01(d) hereof, in the case of any
Corporate Units with respect to which Cash Settlement, Early Settlement or
Fundamental Change Early Settlement of the underlying Purchase Contract is properly
effected, or with respect to which a Collateral Substitution has been effected,
payments attributable to the Notes underlying the Applicable Ownership
Interests in the Notes or distributions on Applicable Ownership Interests in
the Treasury Portfolio, as the case may be, that would otherwise be payable or
made after the Purchase Contract Settlement Date, Early Settlement Date,
Fundamental Change Early Settlement Date or the date of the Collateral
Substitution, as the case may be, shall not be payable hereunder to the Holder
of such Corporate Units; provided, however,
that to the extent that such Holder continues to hold Separate Notes or
Applicable Ownership Interests in the Treasury Portfolio that formerly
comprised a part of such Holder’s Corporate Units, such Holder shall be
entitled to receive interest on such Separate Notes or distributions on such
Applicable Ownership Interests in the Treasury Portfolio.

 

Section 4.02.          Principal Payments Prior to
or on Purchase Contract Settlement Date.  (a) Subject to the provisions of Section 5.02(a),
Section 5.04(b)(ii) and Section 5.07, and except as provided in Section 4.02(b) below,
if no Termination Event shall have occurred, all principal payments received by
the Securities Intermediary in respect of (1) the principal amount of
Notes underlying Pledged Applicable Ownership Interests in Notes, (2) the
Pledged Applicable Ownership Interests in the Treasury Portfolio and (3) the
Pledged Treasury Securities, shall be credited to the Collateral Account, to be
invested in Permitted Investments until the Purchase Contract Settlement Date,
and transferred to the Company on the Purchase Contract Settlement Date as
provided in Section 5.02 hereof. 
Any balance remaining in the Collateral Account shall be released from
the Pledge and transferred to the Purchase Contract Agent for the benefit of
the Holders of record on the Purchase Contract Settlement Date for distribution
to such Holders in accordance with their respective interests, free and clear
of the Pledge created hereby.  The
Company shall instruct the Collateral Agent in writing as to the specific
Permitted Investments in which any payments made under this Section 4.02
shall be invested; provided, however,
that if the Company fails to deliver such instructions by 10:30 a.m., New
York City time, on the day such payments are received by the Securities
Intermediary, the Collateral Agent shall instruct the Securities Intermediary
to invest such payments in Permitted Investments of the type described in
clause (vi) of the definition of Permitted Investments which have been
designated by the Company in writing from time to time in a standing
instruction to the Securities Intermediary which shall be effective until
revoked or superseded.  In no event shall
the Collateral Agent be liable for the selection of Permitted Investments or
for investment losses incurred thereon. 
Neither the Collateral Agent nor the Securities Intermediary shall have
any liability in respect of losses incurred as a result of the failure of the
Company to provide timely written investment direction.

 

(b)           All payments received by the
Securities Intermediary in respect of (1) the Notes, (2) the
Applicable Ownership Interests in the Treasury Portfolio and (3) the
Treasury Securities or security entitlements with respect thereto, that, in
each case, have been released from the Pledge hereunder shall be transferred to
the Purchase Contract 

 

45

 

Agent for the benefit of the applicable
Holders for distribution to such Holders in accordance with their respective
interests.

 

Section 4.03.          Notice and Voting.  (a) Subject to Section 4.03(b) hereof,
the Purchase Contract Agent may exercise, or refrain from exercising, any and
all voting and other consensual rights pertaining to the Notes underlying
Pledged Applicable Ownership Interests in Notes or any part thereof for any
purpose not inconsistent with the terms of this Agreement; provided that the
Purchase Contract Agent shall not exercise or shall not refrain from exercising
such right, as the case may be, if, in the judgment of the Purchase Contract
Agent, such action would impair or otherwise have a material adverse effect on
the value of all or any of the Notes underlying Pledged Applicable Ownership
Interests in Notes; and provided, further, that the Purchase Contract
Agent shall give the Company and the Collateral Agent at least four Business
Days’ prior written notice of the manner in which it intends to exercise, or
its reasons for refraining from exercising, any such right.  Upon receipt of any notices and other
communications in respect of any Notes underlying Pledged Applicable Ownership
Interests in Notes, including either notice of any meeting at which holders of
the Notes are entitled to vote or the solicitation of consents, waivers or
proxies of holders of the Notes, the Collateral Agent shall use reasonable
efforts to send promptly to the Purchase Contract Agent such notice or
communication, and as soon as reasonably practicable after receipt of a written
request therefor from the Purchase Contract Agent, to execute and deliver to
the Purchase Contract Agent such proxies and other instruments in respect of
such Notes underlying Pledged Applicable Ownership Interests in Notes (in form
and substance satisfactory to the Collateral Agent) as are prepared by the
Company and delivered to the Purchase Contract Agent with respect to the Notes
underlying Pledged Applicable Ownership Interests in Notes.

 

(b)           Upon receipt of notice of
any meeting at which holders of Notes are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Notes, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of Corporate Units a notice:

 

(i)            containing such information
as is contained in the notice or solicitation;

 

(ii)           stating that each Holder on the record date set by
the Purchase Contract Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Notes, as the
case may be, entitled to vote) shall be entitled to instruct the Purchase
Contract Agent as to the exercise of the voting rights pertaining to such Notes
underlying the Applicable Ownership Interests in Notes that are a component of
their Corporate Units; and

 

(iii)          stating the manner in which such instructions may be
given.

 

Upon the written request of
the Holders of Corporate Units on such record date received by the Purchase
Contract Agent at least six days prior to such meeting, the Purchase Contract
Agent shall endeavor insofar as practicable to vote or cause to be voted, in

 

46

 

accordance with the
instructions set forth in such requests, the maximum aggregate principal amount
of Notes (rounded down to the nearest integral multiple of $1,000) as to which
any particular voting instructions are received.  In the absence of specific instructions from
the Holder of Corporate Units, the Purchase Contract Agent shall abstain from
voting the Notes underlying Pledged Applicable Ownership Interests in Notes
that are a component of such Corporate Units. 
The Company hereby agrees, if applicable, to solicit Holders of
Corporate Units to timely instruct the Purchase Contract Agent as to the
exercise of such voting rights in order to enable the Purchase Contract Agent
to vote such Notes.

 

(c)                                  The Holders of
Corporate Units and the Holders of Treasury Units shall have no voting or other
rights in respect of Common Shares.

 

Section 4.04.                             Special Event
Redemption.  (a) If
the Company elects to redeem the Notes following the occurrence of a Special
Event as permitted by the Indenture, it shall notify the Collateral Agent in
writing that a Special Event has occurred and that it intends to redeem the
Notes on the Special Event Redemption Date. 
Upon the occurrence of such Special Event Redemption while Notes are still
credited to the Collateral Account, the Collateral Agent shall, and is hereby
authorized to, instruct the Securities Intermediary to present the Notes
underlying Pledged Applicable Ownership Interests in Notes for payment as may
be required by their respective terms and to direct the Indenture Trustee to
remit the Redemption Price to the Securities Intermediary for credit to the
Collateral Account, on or prior to 11:00 a.m., New York City time, on such
Special Event Redemption Date, by wire transfer of immediately available
funds.  Upon receipt of such funds by the
Securities Intermediary and the credit thereof to the Collateral Account, the
Notes underlying Pledged Applicable Ownership Interests in Notes shall be
released from the Collateral Account and promptly transferred to the Company.  Upon the crediting of such funds to the
Collateral Account, the Collateral Agent, at the written direction of the
Company, shall instruct the Securities Intermediary to (i) apply an amount
equal to the Redemption Amount of such funds to purchase the Special Event
Treasury Portfolio from the Quotation Agent, (ii) credit to the Collateral
Account the Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (i) of each paragraph of the definition of Applicable
Ownership Interest in the Special Event Treasury Portfolio) and (iii) promptly
remit the remaining portion of such funds to the Purchase Contract Agent for
payment to the Holders of Corporate Units, in accordance with their respective
interests.

 

(b)                                 Upon the
occurrence of a Special Event Redemption, (i) the Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (i) of each
paragraph of the definition of Applicable Ownership Interest in the Special
Event Treasury Portfolio) will be substituted as Collateral for the Notes
underlying Pledged Applicable Ownership Interests in Notes and will be held by
the Collateral Agent in accordance with the terms hereof to secure the
Obligation of each Holder of Corporate Units, (ii) the Holders of
Corporate Units and the Collateral Agent shall have such rights and
obligations, and the Collateral Agent shall have such security interest, with
respect to such Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (i) of each paragraph of the definition of Applicable
Ownership Interest in the Special Event 

 

47

 

Treasury Portfolio) as the Holders of
Corporate Units and the Collateral Agent had in respect of the Notes underlying
Pledged Applicable Ownership Interests in Notes, subject to the Pledge thereof,
and (iii) any reference herein to Applicable Ownership Interests in Notes
shall be deemed to be a reference to such Applicable Ownership Interests in the
Treasury Portfolio.  The Company may
cause to be made in any Corporate Units Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of the Applicable Ownership Interests
in the Treasury Portfolio (as specified in clause (i) of each paragraph of
the definition of Applicable Ownership Interest in the Special Event Treasury
Portfolio) for Applicable Ownership Interests in Notes as Collateral.

 

Section 4.05.                             Payments to
Purchase Contract Agent.  The
Securities Intermediary shall use commercially reasonable efforts to deliver
any payments required to be made by it to the Purchase Contract Agent hereunder
to the account designated by the Purchase Contract Agent for such purpose not
later than 12:00 p.m., New York City time, on the Business Day such
payment is received by the Securities Intermediary; provided, however, that if such
payment is received on a day that is not a Business Day or after 11:00 a.m.,
New York City time, on a Business Day, then the Securities Intermediary shall
use commercially reasonable efforts to deliver such payment to the Purchase
Contract Agent no later than 10:30 a.m., New York City time, on the next
succeeding Business Day.

 

Section 4.06.                             Payments Held
in Trust.  If the
Purchase Contract Agent or any Holder shall receive any principal payments on
account of financial assets credited to the Collateral Account (other than
interest on the Notes or distributions on the Applicable Ownership Interests in
the Treasury Portfolio (as specified in clause (ii) of each paragraph of
the definition of Applicable Ownership Interest in the Special Event Treasury
Portfolio)) and not released therefrom in accordance with this Agreement, the
Purchase Contract Agent or such Holder shall hold such payments as trustee of
an express trust for the benefit of the Company and, upon receipt of an
Officers’ Certificate of the Company so directing, promptly deliver such
payments to the Securities Intermediary for credit to the Collateral Account or
to the Company for application to the Obligations of the applicable Holder or
Holders, and the Purchase Contract Agent and Holders shall acquire no right,
title or interest in any such payments of principal amounts so received.  The Purchase Contract Agent shall have no
liability under this Section 4.06 unless and until it has been notified in
writing that such payment was delivered to it erroneously and shall have no
liability for any action taken, suffered or omitted to be taken prior to its
receipt of such notice.

 

ARTICLE 5

THE PURCHASE CONTRACTS

 

Section 5.01.                             Purchase of
Common Shares.  (a) Each
Purchase Contract shall obligate the Holder of the related Units to purchase,
and the Company to sell, on the Purchase Contract Settlement Date at a price in
cash equal to the Stated Amount (the “Purchase Price”), a number of newly issued
Common Shares (subject to Section 5.08) 

 

48

 

equal to the Settlement Rate unless an Early
Settlement, a Fundamental Change Early Settlement or a Termination Event with
respect to the Units of which such Purchase Contract is a part shall have
occurred.  The “Settlement Rate” is equal to:

 

(i)                                     if the
Applicable Market Value is greater than or equal to $12.93 (the “Threshold Appreciation Price”), the Settlement
Rate shall be 3.8685 Common Shares (such Settlement Rate being referred to
herein as the “Minimum Settlement Rate”);

 

(ii)                                  if the
Applicable Market Value is less than the Threshold Appreciation Price but
greater than $11.00 (the “Reference Price”), the
Settlement Rate shall be a number of Common Shares per Purchase Contact equal
to the Stated Amount divided by
the Applicable Market Value; and

 

(iii)                               if the
Applicable Market Value is less than or equal to the Reference Price, the
Settlement Rate shall be 4.5455 Common Shares, which is equal to the Stated
Amount divided  by the Reference Price (such Settlement
Rate being referred to herein as the “Maximum Settlement Rate”);

 

in each case subject to
adjustment as provided in Section 5.04 (and in each case rounded
upward or downward to the nearest 1/10,000th of a share).

 

(b)                                 Each Holder of
a Corporate Unit or a Treasury Unit, by its acceptance of such Unit will be
deemed to have:

 

(i)                                     duly appointed
the Purchase Contract Agent to enter into and perform the related Purchase
Contract on its behalf and in its name as its attorney-in-fact (including,
without limitation, the execution of Certificates on behalf of such Holder);

 

(ii)                                  irrevocably
agreed to be bound by the terms and provisions of such Unit, including but not
limited to, the terms and provisions of the Purchase Contract;

 

(iii)                               covenanted and
agreed to perform its obligations under this Agreement and such Purchase
Contract for so long as such Holder remains a Holder of a Corporate Unit or a
Treasury Unit;

 

(iv)                              consented to
the provisions hereof;

 

(v)                                 duly appointed
the Purchase Contract Agent to enter into and perform this Agreement on its
behalf and in its name as its attorney-in-fact; and

 

(vi)                              consented to,
and agreed to be bound by, the Pledge of such Holder’s right, title and
interest in and to the Collateral Account, including the Pledged Applicable
Ownership Interests in Notes and the Applicable Ownership Interests in the
Treasury Portfolio or the Treasury Securities pursuant to this 

 

49

 

Agreement and the delivery of the Notes underlying such Applicable
Ownership Interests in Notes by the Purchase Contract Agent to the Collateral
Agent;

 

provided that upon a
Termination Event, the rights of the Holder of such Units under the Purchase
Contract may be enforced without regard to any other rights or obligations.

 

(c)                                  Each Holder of
a Corporate Unit or a Treasury Unit, by its acceptance thereof, will be deemed
to have further covenanted and agreed that to the extent and in the manner
provided in Section 5.02 hereof, but subject to the terms thereof, on the
Purchase Contract Settlement Date, Proceeds of the Pledged Applicable Ownership
Interests in Notes, the Pledged Treasury Securities or the Pledged Applicable
Ownership Interests in the Treasury Portfolio, as applicable, equal to the
Purchase Price, shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder’s obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such Proceeds.

 

(d)                                 Upon
registration of transfer of a Certificate, the transferee shall be bound
(without the necessity of any other action on the part of such transferee) by
the terms of this Agreement and the Purchase Contracts underlying such
Certificate and the transferor shall be released from the obligations under
this Agreement and the Purchase Contracts underlying the Certificate so
transferred.  The Company covenants and
agrees, and each Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.

 

(e)                                  Promptly after
the calculation of the Settlement Rate and the Applicable Market Value, the
Company shall give the Purchase Contract Agent notice thereof.  All calculations and determinations of the
Settlement Rate and the Applicable Market Value shall be made by the Company or
its agent based on their good faith calculations, and the Purchase Contract
Agent shall have no responsibility with respect thereto.

 

Section 5.02.                             Remarketing;
Payment of Purchase Price.  (a)(i) Unless
a Special Event Redemption has occurred or will occur or a Successful
Remarketing has already occurred, the Company may, at its option and in its
sole discretion, conduct a Remarketing during the Period for Early Remarketing
consisting of three successive Remarketing Dates on each of which it shall
cause the Remarketing Agent to remarket, in whole (but not in part), (1) the
Notes underlying Pledged Applicable Ownership Interests in Notes that are a
component of the Corporate Units and (2) any Separate Notes of Holders who
have elected to in the manner set forth in clause (ii) below to have their
Notes so remarketed.  Promptly after
11:00 a.m., New York City time, on the Business Day immediately preceding
the first Remarketing Date of the applicable Three-Business Day Remarketing
Period, the Purchase Contract Agent shall notify the Remarketing Agent of the
aggregate principal amount of Notes underlying Pledged Applicable Ownership Interests
in Notes and the Custodial Agent shall notify the Remarketing Agent of the
aggregate principal amount of Separate Notes, if any, that are to be remarketed
pursuant to clause (ii) below. 
Concurrently, the Custodial Agent will present the Separate Notes for
Remarketing to the Remarketing Agent. 
Upon receipt of such notices 

 

50

 

from the Purchase Contract Agent and
Custodial Agent, and the Separate Notes for Remarketing from the Custodial
Agent, the Remarketing Agent shall, during the Three-Business Day Remarketing
Period, use its reasonable efforts to remarket (based on the Reset Rate) such
Notes underlying Pledged Applicable Ownership Interests in Notes and Separate
Notes at a price equal to the sum of (x) approximately 100.00% of the sum
of the Remarketing Treasury Portfolio Purchase Price plus the Separate Notes
Purchase Price and (y) the Remarketing Fee.  If the Remarketing Agent is able to remarket
the Notes underlying Pledged Applicable Ownership Interests in Notes and the
Separate Notes at a price equal to or greater than 100.00% of the Remarketing
Treasury Portfolio Purchase Price plus the Separate Notes Purchase Price (a “Successful Early Remarketing”), the
Collateral Agent shall instruct the Securities Intermediary to:

 

(A)                              Transfer the
Notes underlying Pledged Applicable Ownership Interests in Notes to the
Remarketing Agent upon confirmation of deposit by the Remarketing Agent of the
Proceeds of such Successful Remarketing attributable to such Notes underlying
Pledged Applicable Ownership Interests in Notes (after deducting any
Remarketing Fee) in the Collateral Account;

 

(B)                                apply an amount
equal to the Remarketing Treasury Portfolio Purchase Price to purchase from the
Quotation Agent the Remarketing Treasury Portfolio;

 

(C)                                credit the
Applicable Ownership Interests in the Remarketing Treasury Portfolio (as
specified in clause (i) of each paragraph of the definition of such term)
to the Collateral Account; and

 

(D)                               promptly remit
the remaining portion of such Proceeds to the Purchase Contract Agent for
payment to the Holders of Corporate Units, in accordance with their respective
interests.

 

The Remarketing Agent may
deduct the Remarketing Fee from any amount of Proceeds therefrom in excess of
sum of the Remarketing Treasury Portfolio Purchase Price plus the Separate
Notes Purchase Price.  With respect to
Notes underlying Pledged Applicable Ownership Interests in Notes, any Proceeds
of the Remarketing attributable to such Notes underlying Pledged Applicable
Ownership Interests in Notes in excess of the sum of the Remarketing Treasury
Portfolio Purchase Price plus the Remarketing Fee with respect to such Notes
underlying Pledged Applicable Ownership Interests in Notes will be remitted to
the Purchase Contract Agent for payment to the Holders of the related Corporate
Units.  The Applicable Ownership
Interests in the Remarketing Treasury Portfolio will be substituted for the
Notes underlying Pledged Applicable Ownership Interests in Notes and the appropriate
Applicable Ownership Interests in the Remarketing Treasury Portfolio (as
specified in clause (i) of each paragraph of the definition of such term)
shall be held as Collateral to secure the Obligations of the Holders of
Corporate Units.  With respect to
Separate Notes upon a Successful Early Remarketing, any 

 

51

 

Proceeds
of the Remarketing attributable to such Separate Notes in excess of the
Remarketing Fee with respect to the Separate Notes will be remitted to the
Custodial Agent for payment to the holders of such Separate Notes on the Reset
Effective Date.  None of the Company, the
Purchase Contract Agent, or any Holders of Corporate Units or Holders of
Separate Notes whose Notes or Separate Notes are so remarketed shall otherwise
be responsible for the payment of any Remarketing Fee in connection therewith.

 

Following the occurrence of
a Successful Early Remarketing, the Holders of Corporate Units and the
Collateral Agent shall have such rights and obligations, and the Collateral
Agent shall have such security interest, with respect to the Pledged Applicable
Ownership Interests in the Remarketing Treasury Portfolio (as specified in
clause (i) of each paragraph of the definition of such term) as the Holder
of Corporate Units and the Collateral Agent had in respect of the Notes
underlying Pledged Applicable Ownership Interests in Notes, subject to the
Pledge thereof, and any reference herein or in the Certificates to the
Applicable Ownership Interests in Notes shall be deemed to be a reference to
such Applicable Ownership Interests in the Remarketing Treasury Portfolio (as
specified in clause (i) of each paragraph of the definition of such term)
and any reference herein or in the Certificates to interest in the Applicable
Ownership Interests in Notes shall be deemed to be a reference to corresponding
distributions on such Applicable Ownership Interests in the Remarketing
Treasury Portfolio (as specified in clause (i) of each paragraph of the
definition of such term).  The Company
may cause to be made in any Corporate Units Certificates thereafter to be
issued such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of such Applicable Ownership Interests
in the Remarketing Treasury Portfolio for Applicable Ownership Interests in
Notes.

 

If a Remarketing attempt on
the first Remarketing Date during the applicable Three-Business Day Remarketing
Period is not successful, the Remarketing Agent shall (unless impracticable),
in accordance with the Remarketing Agreement, remarket the Notes underlying
Pledged Applicable Ownership Interests in Notes on each of the next two
succeeding Remarketing Dates during such Three-Business Day Remarketing Period
until a Successful Remarketing occurs. 
If, despite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Notes underlying Pledged Applicable Ownership Interests in
Notes and the Separate Notes, if any, during such Three-Business Day
Remarketing Period (other than to the Company) at a price not less than 100% of
the sum of the Remarketing Treasury Portfolio Purchase Price plus the Separate
Note Purchase Price or a condition precedent set forth in the Remarketing
Agreement is not fulfilled, the Remarketing will be deemed to have failed (a “Failed Early Remarketing”).  Promptly following a Failed Early
Remarketing, the Remarketing Agent shall return, no later than the Business Day
immediately following the end of such Three-Business Day Remarketing Period, the
Separate Notes delivered for Remarketing to the Custodial Agent for delivery to
the appropriate Holders of the Separate Notes.

 

(ii)                                  On or prior to
the close of business on the second Business Day immediately preceding the
first Remarketing Date of the applicable Three-Business Day Remarketing Period
or Final Three-Business Day Remarketing 

 

52

 

Period, but no earlier than the close of business on
the fifth Business Day immediately preceding such first Remarketing Date of the
Applicable Remarketing Period, Holders of Separate Notes may elect to have
their Separate Notes remarketed under the Remarketing Agreement by delivering
their Separate Notes, along with a notice of such election, substantially in
the form of Exhibit L hereto, to the Custodial Agent.  The Custodial Agent shall hold the Separate
Notes in an account separate from the Collateral Account in which the Notes
underlying Pledged Applicable Ownership Interests in Notes shall be held.  Holders of Separate Notes electing to have
their Separate Notes remarketed will also have the right to withdraw that
election by written notice to the Custodial Agent, substantially in the form of
Exhibit M hereto, on or prior to the close of business on the second Business
Day immediately preceding the first Remarketing Date of the relevant
Three-Business Day Remarketing Period or Final Three-Business Day Remarketing
Period, upon which notice the Custodial Agent shall return such Separate Notes
to such Holder.  After such time, such
election to remarket shall become an irrevocable election to have such Separate
Notes remarketed in such Remarketing. 
Promptly after 11:00 a.m., New York City time, on the Business Day
immediately preceding the first Remarketing Date of the relevant Three-Business
Day Remarketing Period or Final Three-Business Day Remarketing Period, the
Custodial Agent shall notify the Remarketing Agent of the aggregate principal
amount of the Separate Notes to be remarketed and shall deliver to the Remarketing
Agent for Remarketing all Separate Notes delivered to the Custodial Agent
pursuant to this Section 5.02(a)(ii) and not withdrawn pursuant to
the terms hereof prior to such date.

 

(iii)                               The Company
shall request, not less than 10 Business Days prior to each Remarketing
Announcement Date, that the Depository (or any successor or its nominee) notify
the Depository Participants holding Notes underlying Pledged Applicable
Ownership Interests in Notes of such Remarketing and procedures to be followed
in such Remarketing.  On the Remarketing
Announcement Date, the Company shall make a Remarketing Announcement regarding
such proposed Remarketing of the Notes underlying Pledged Applicable Ownership
Interests in Notes.

 

(iv)                              The Company
agrees to use its commercially reasonable efforts to ensure that, if required
by applicable law, a registration statement with regard to the full amount of
the Notes to be remarketed in the Remarketing during the Period for Early
Remarketing or the Final Three-Business Day Remarketing Period, as the case may
be, shall be effective with the Commission in a form that will enable the
Remarketing Agent to rely on it in connection with such Remarketing.

 

(v)                                 The Company
shall cause a notice of a Failed Remarketing to be published (with a copy of
such notice to be provided to the Purchase Contract Agent) on the Business Day
immediately following the final Remarketing Date of the Applicable Remarketing
Period (which notice, in the event of a Failed Final Remarketing (as defined
below), shall be published not later than 9:00 a.m.  New 

 

53

 

York City time, and shall include the procedures that must be followed
if a Holder of Notes underlying Pledged Applicable Ownership Interests in Notes
wishes to exercise its Put Right) in each case, by making a timely release to
any appropriate news agency, including Dow Jones News Service and Bloomberg
Business News.

 

(b)                                 (i) 
Unless a Special Event Redemption has occurred or will occur prior to the Final
Three-Business Day Remarketing Period, if no Successful Remarketing has
occurred prior to the Final Three-Business Day Remarketing Period, each Holder
shall have the right to satisfy such Holder’s Obligations on the Purchase
Contract Settlement Date in separate cash by notifying the Purchase Contract
Agent by use of a notice in substantially the form of Exhibit E hereto of
its intention to pay in cash (“Cash Settlement”) prior to the close of
business on the seventh Business Day immediately preceding the Purchase
Contract Settlement Date.  Promptly
following the close of business on the seventh Business Day immediately
preceding the Purchase Contract Settlement Date, the Purchase Contract Agent
shall notify the Collateral Agent and the Indenture Trustee of the receipt of
such notices from Holders intending to make a Cash Settlement.

 

(ii)                                  A Holder of a
Corporate Unit (if the Treasury Portfolio has not replaced the Notes underlying
Pledged Applicable Ownership Interests in Notes) who has so notified the
Purchase Contract Agent of its intention to effect a Cash Settlement shall pay
the Purchase Price to the Securities Intermediary for credit to the Collateral
Account on or prior to 11:00 a.m., New York City time, on the sixth
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by wire transfer, in each case in immediately
available funds payable to or upon the order of the Securities Intermediary.

 

(iii)                               If a Holder of
a Corporate Unit does not notify the Purchase Contract Agent of its intention
to make a Cash Settlement in accordance with Section 5.02(b)(i) above,
or does notify the Purchase Contract Agent in accordance with Section 5.02(b)(i) above
but fails to make such payment as required by Section 5.02(b)(ii) above,
such Holder shall be deemed to have consented to the disposition of the Notes
underlying Pledged Applicable Ownership Interests in Notes pursuant to the
Remarketing during the Final Three-Business Day Remarketing Period as described
in Section 5.02(c) below.

 

(iv)                              Promptly after
11:00 a.m., New York City time, on the sixth Business Day preceding the
Purchase Contract Settlement Date, the Purchase Contract Agent, based on cash
payments received by the Securities Intermediary pursuant to Section 5.02(b)(ii) hereof,
shall promptly notify the Collateral Agent and the Indenture Trustee of the
aggregate principal amount of Notes underlying Pledged Applicable Ownership
Interests in Notes to be tendered for purchase in the Remarketing in a notice
in the form of Exhibit K hereto.

 

(v)                                 Upon (1) receipt
by the Collateral Agent of a notice from the Purchase Contract Agent promptly
after the receipt by the Purchase Contract Agent of a notice from a Holder of
Corporate Units that such Holder has elected, 

 

54

 

in accordance with Section 5.02(b)(i) to effect a Cash
Settlement and (2) the payment by such Holder of the Purchase Price in
accordance with Section 5.02(b)(ii) above then the Collateral Agent
shall:

 

(A)                              instruct the
Securities Intermediary promptly to invest any such Cash in Permitted
Investments maturing on the Purchase Contract Settlement Date;

 

(B)                                release from
the Pledge such Holder’s Notes underlying Pledged Applicable Ownership
Interests in Notes that are a component of the Corporate Units as to which such
Holder has effected a Cash Settlement; and

 

(C)                                instruct the
Securities Intermediary to Transfer all such Notes to the Purchase Contract
Agent for distribution to such Holder, in each case free and clear of the
Pledge created hereby.

 

The Company shall instruct
the Collateral Agent in writing as to the type of Permitted Investments in
which any such Cash shall be invested; provided,
however, that if the Company
fails to deliver such instructions by 10:30 a.m., New York City time, on
the day such payments are received by the Securities Intermediary, the
Collateral Agent shall instruct the Securities Intermediary to invest such
payments in Permitted Investments of the type described in clause (vi) of
the definition of Permitted Investments which have been designated by the
Company in writing from time to time in a standing instruction to the
Securities Intermediary which shall be effective until revoked or
superseded.  In no event shall the
Collateral Agent be liable for the selection of Permitted Investments or for
investment losses incurred thereon. 
Neither the Collateral Agent nor the Securities Intermediary shall have
any liability in respect of losses incurred as a result of the failure of the
Company to provide timely written investment direction.

 

Upon maturity of the
Permitted Investments on the Purchase Contract Settlement Date, the Collateral
Agent shall, and is hereby authorized to, (A) instruct the Securities
Intermediary to remit to the Company on the Purchase Contract Settlement Date
such portion of the proceeds of such Permitted Investments as is equal to the
aggregate Purchase Price under all Purchase Contracts in respect of which Cash
Settlement has been affected as provided above to the Company on the Purchase
Contract Settlement Date, and (B) release any amounts in excess of such
aggregate Purchase Price earned from such Permitted Investments to the Purchase
Contract Agent for distribution to the Holders who have effected Cash
Settlement pro-rata in proportion to the amount paid by such Holders under Section 5.02(b)(ii) above.

 

(c)                                  (i) 
Unless a Special Event Redemption has occurred or will occur prior to the Final
Three-Business Day Remarketing Period, if a Successful Remarketing has not
occurred during the Period for Early Remarketing, the Notes underlying Pledged
Applicable Ownership Interests in Notes that are a component of Corporate Units
of Holders who have not notified the Purchase Contract Agent of their intention
to effect a Cash Settlement as provided in Section 5.02(b)(i) above,
or who have so notified the 

 

55

 

Purchase Contract Agent in accordance with Section 5.02(b)(i) above
but have failed to make such payment as required by Section 5.02(b)(ii) above,
and the Separate Notes of any Holder who has elected for its Separate Notes to
be remarketed pursuant to Section 5.02(a)(ii) will be remarketed by
the Remarketing Agent during the Final Three-Business Day Remarketing
Period.  In order to facilitate the
Remarketing during the Final Three-Business Day Remarketing Period, the
Purchase Contract Agent, based on the notices and cash payments specified in Section 5.02(b)(iii),
and the Custodial Agent, based on the notice specified in Section 5.02(a)(ii),
shall notify the Remarketing Agent, promptly after 11:00 a.m., New York
City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date, of the aggregate principal amount of Notes underlying
Pledged Applicable Ownership Interests in Notes and aggregate principal amount
of Separate Notes that are to be remarketed pursuant to Section 5.02(a)(ii),
if any, to be remarketed.  Concurrently,
the Custodial Agent will present for Remarketing the Separate Notes to the
Remarketing Agent.

 

(ii)                                  Upon receipt of
such notices from the Purchase Contract Agent and the Custodial Agent and the
Separate Notes (if any) from the Custodial Agent, as set forth in clause (i) above,
the Remarketing Agent shall, during the Final Three-Business Day Remarketing
Period, use its reasonable efforts to remarket (based on the Reset Rate) such
Notes underlying Pledged Applicable Ownership Interests in Notes and Separate
Notes on such date at a price equal to the sum of (x) approximately
100.00% of the aggregate principal amount of such Notes underlying Pledged
Applicable Ownership Interests in Notes and Separate Notes and (y) the
Remarketing Fee.  If the Remarketing
Agent is able to remarket the Notes underlying Pledged Applicable Ownership
Interests in Notes and the Separate Notes at a price equal to or greater than
100.00% of the aggregate principal amount of the Notes underlying Pledged
Applicable Ownership Interests in Notes and the Separate Notes (a “Successful Final Remarketing”), the Collateral
Agent shall:

 

(A)                              instruct the
Securities Intermediary to Transfer the related Notes underlying Pledged
Applicable Ownership Interest in Notes to the Remarketing Agent upon
confirmation of deposit by the Remarketing Agent of the Proceeds of such Remarketing
attributable to such Notes underlying Pledged Applicable Ownership Interests in
Notes (after deducting the Remarketing Fee) in the Collateral Account;

 

(B)                                instruct the
Securities Intermediary to invest such Proceeds of the Remarketing in one or more
of the Permitted Investments maturing on or prior to the Purchase Contract
Settlement Date; and

 

(C)                                on the Purchase
Contract Settlement Date, in consultation with the Purchase Contract Agent,
instruct the Securities Intermediary to remit a portion of the Proceeds from
such Remarketing attributable to such Notes underlying Pledged

 

56

 

Applicable Ownership Interests in Notes equal to the aggregate
principal amount of such Notes underlying Pledged Applicable Ownership
Interests in Notes to satisfy in full such Holder’s Obligations to pay the
Purchase Price to purchase the Common Shares under the related Purchase
Contracts, and to remit the balance of the Proceeds from such Remarketing, if
any, to the Purchase Contract Agent for distribution to such Holder.

 

The Company shall instruct
the Collateral Agent in writing as to the type of Permitted Investments in
which any such Proceeds shall be invested; provided,
however, that if the Company
fails to deliver such instructions by 10:30 a.m., New York City time, on
the day such payments are received by the Securities Intermediary, the
Collateral Agent shall instruct the Securities Intermediary to invest such
payments in Permitted Investments of the type described in clause (vi) of
the definition of Permitted Investments which have been designated by the
Company in writing from time to time in a standing instruction to the
Securities Intermediary which shall be effective until revoked or
superseded.  In no event shall the
Collateral Agent be liable for the selection of Permitted Investments or for
investment losses incurred thereon. 
Neither the Collateral Agent nor the Securities Intermediary shall have
any liability in respect of losses incurred as a result of the failure of the
Company to provide timely written investment direction.

 

The Remarketing Agent may
deduct the Remarketing Fee from Proceeds in excess of the aggregate principal
amount of the remarketed Notes underlying Pledged Applicable Ownership
Interests in Notes.  With respect to
Separate Notes, upon a Successful Final Remarketing, any proceeds of the
Remarketing of the Separate Notes in excess of the Remarketing Fee attributable
to the Separate Notes will be remitted to the Custodial Agent for payment to
the Holders of Separate Notes on the Reset Effective Date.

 

If a Remarketing attempt on
the first Remarketing Date during the Final Three-Business Day Remarketing
Period is not successful, the Remarketing Agent shall, in accordance with the
Remarketing Agreement, remarket the Notes on each of the next two succeeding
Remarketing Dates during the Final Three-Business Day Remarketing Period until
a Successful Remarketing occurs.  If,
despite of using its reasonable efforts, the Remarketing Agent cannot remarket
the Notes underlying Pledged Applicable Ownership Interests in Notes and the
Separate Notes (if any) at a price not less than 100.00% of the aggregate
principal amount of the Notes underlying Pledged Applicable Ownership Interests
in Notes and the Separate Notes to be remarketed during the Final
Three-Business Day Remarketing Period (other than to the Company) or a
condition precedent in the Remarketing Agreement is not fulfilled, the
Remarketing shall be deemed to have failed (a “Failed Final Remarketing”).  Following a Failed Final Remarketing, as of
the Purchase Contract Settlement Date, each Holder of any Notes underlying
Pledged Applicable Ownership Interests in Notes that are subject to a Failed
Final Remarketing, unless such Holder has (A) provided written notice in
substantially the form of Exhibit N hereto of its intention to settle the
related Purchase Contract with separate cash and (B) surrendered the
Certificate evidencing the Corporate Units (if they are in certificated form)
or the related Book-Entry Interests, to the Purchase Contract Agent prior to
11:00

 

57

 

a.m.,
New York City time, on the second Business Day immediately preceding the
Purchase Contract Settlement Date and on or prior to 11:00 a.m., New York
City time, on the Business Day immediately preceding the Purchase Contract
Settlement Date delivered the Purchase Price to the Securities Intermediary for
deposit in the Collateral Account in lawful money of the United States by
certified or cashiers check or wire transfer in immediately available funds
payable to or upon the order of the Securities Intermediary (which settlement
may only be effected in integral multiples of 20 Corporate Units), shall be
deemed to have exercised such Holder’s Put Right with respect to the Notes
underlying such Pledged Applicable Interest in Notes and to have elected to
apply a portion of the Proceeds of the Put Right price as a set-off against
such Holder’s Obligations, thereby satisfying such Obligations in full, and the
Collateral Agent shall cause the Securities Intermediary to release the Notes
underlying Pledged Applicable Ownership Interests in Notes from the Collateral
Account and shall promptly transfer the Notes underlying Pledged Applicable
Ownership Interests in Notes to the Company. 
Thereafter, the Collateral Agent shall promptly remit the remaining
portion of the Proceeds of the Holder’s exercise of the Put Right in excess of
the aggregate Purchase Price for the Common Shares to be issued under such
Purchase Contracts to the Purchase Contract Agent for payment to the Holder of
the Corporate Units to which such Notes relate. 
Upon (x) receipt by the Collateral Agent of a notice from the
Purchase Contract Agent in substantially the form of Exhibit O hereto
promptly after the receipt by the Purchase Contract Agent of a notice from a
Holder of Corporate Units that such Holder has elected, in accordance with this
Section 5.02(c)(ii), to settle the related Purchase Contract with separate
cash and (y) payment by such Holder to the Securities Intermediary of the
Purchase Price in accordance with this Section 5.02(c)(ii), in lieu of exercise
of such Holder’s Put Right, the Securities Intermediary shall give the Purchase
Contract Agent notice of the receipt of such payment in substantially the form
of Exhibit P hereto and shall (A) promptly invest the separate cash
received in Permitted Investments consistent with the instructions of the
Company as provided in Section 5.02(b)(v) with respect to Cash
Settlement, (B) promptly release from the Pledge the Notes underlying the
Applicable Ownership Interest in Notes related to the Corporate Units as to
which such Holder has paid such separate cash and (C) promptly Transfer
all such Notes to the Purchase Contract Agent for distribution to such Holder,
in each case free and clear of the Pledge created hereby, whereupon the
Purchase Contract Agent shall Transfer such Notes, in accordance with written
instructions provided by the Holder thereof or, if no such instructions are
given to the Purchase Contract Agent by the Holder, the Purchase Contract Agent
shall hold such Notes, and any interest payment thereon, in the name of the
Purchase Contract Agent or its nominee in trust for the benefit of such Holder
until the expiration of the time period specified in the relevant abandoned
property laws of the state where such Notes and interest payments thereon, if
any, are held.  Upon maturity of the
Permitted Investments on the Purchase Contract Settlement Date, the Collateral
Agent shall, and is hereby authorized to, (A) instruct the Securities
Depository to remit to the Company on the Purchase Contract Settlement Date
such portion of the proceeds of such Permitted Investments as is equal to the
aggregate Purchase Price under all Purchase Contracts in respect of which
separate cash has been paid as provided in this Section 5.02(c)(ii) to
the Company on the Purchase Contract Settlement Date, and (B) release any
amounts in excess of such amount earned from such 

 

58

 

Permitted
Investments to the Purchase Contract Agent for distribution to the Holders who
have paid such separate cash pro rata in proportion to the amount paid by such
Holders under this Section 5.02(c)(ii).

 

(d)                                 In the case of
a Treasury Unit or a Corporate Unit (if the Treasury Portfolio has replaced the
Applicable Ownership Interests in Notes as a component of such Corporate Unit),
upon the maturity of the Pledged Treasury Securities or the appropriate Pledged
Applicable Ownership Interests in the Treasury Portfolio held by the Securities
Intermediary on or prior to the Business Day immediately preceding the Purchase
Contract Settlement Date, the principal amount of the Pledged Treasury
Securities or the appropriate Pledged Applicable Ownership Interests in the
Treasury Portfolio received by the Securities Intermediary shall be invested
promptly in Permitted Investments of the type described in clause (vi) of
the definition of Permitted Investments which have been designated by the
Company in writing from time to time in a standing instruction to the
Securities Intermediary which shall be effective until revoked or
superseded.  On the Purchase Contract
Settlement Date, an amount equal to the Purchase Price shall be remitted to the
Company as payment of such Holder’s Obligations under the related Purchase
Contracts without receiving any instructions from the Holder.  In the event the sum of the Proceeds from the
related Pledged Treasury Securities or related Pledged Applicable Ownership
Interests in the Treasury Portfolio and the Proceeds from such Permitted Investments
is in excess of the aggregate Purchase Price, the Collateral Agent shall cause
the Securities Intermediary to distribute such excess to the Purchase Contract
Agent for the benefit of the Holder of the related Treasury Units or Corporate
Units.  In the event the sum of the
Proceeds from the related Pledged Treasury Securities or related Pledged
Applicable Ownership Interests in the Treasury Portfolio and the Proceeds from
such Permitted Investments is less than the aggregate Purchase Price, the
Collateral Agent promptly after receipt of such Proceeds shall notify in
writing the Company and the Purchase Contract Agent of the existence and amount
of such deficiency.  Upon receipt of any
such notice, the Purchase Contract Agent promptly shall notify the Holder of
the related Treasury Units or Corporate Units (or, if applicable, request that
the Depository notify the Depository Participants holding the related Treasury
Units or Corporate Units) of the existence and amount of any such deficiency.

 

(e)                                  With respect to
the Notes to be distributed to Holders upon a Cash Settlement, subject to the
receipt thereof, the Purchase Contract Agent shall transfer such Notes by
book-entry transfer or other appropriate procedures in accordance with written
instructions provided by the Holder thereof or, if no such instructions are
given to the Purchase Contract Agent by the Holder, the Purchase Contract
Agent, subject to the applicable laws governing abandoned property, shall hold
such Notes, and any interest payment thereon, in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder until the
expiration of the time period specified in the applicable laws governing
abandoned property of the state in which the Purchase Contract Agent holds such
property.  Distributions to Holders of
any other payments described above shall be payable at the office of the
Purchase Contract Agent in the City of New York maintained for that purpose or,
at the option of the Holder, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Security Register.

 

59

 

(f)                                    Unless the
Treasury Portfolio has replaced the Notes underlying the Applicable Ownership
Interests in Notes, the obligations of the Holders of Corporate Units to pay
the Purchase Price in respect of Common Shares to be issued pursuant to the
related Purchase Contracts are non-recourse obligations and, except to the
extent satisfied by Early Settlement, Fundamental Change Early Settlement or
Cash Settlement or terminated upon a Termination Event, are payable solely out
of the proceeds of any Collateral pledged to secure the obligations of the
Holders, and in no event will such Holders be liable for any amount by which
the Purchase Price exceeds the proceeds of the disposition of Collateral.  If the Treasury Portfolio has replaced the
Notes underlying the Applicable Ownership Interests in Notes and the proceeds
at maturity of the U.S. Treasury securities underlying the Applicable Ownership
Interest in the Treasury Portfolio are less than the Purchase Price, each
Holder of Corporate Units will be obligated to pay such Holder’s pro rata share
of the amount of such deficiency.  If the
proceeds at maturity of the Treasury Securities underlying Treasury Units are
less than the Purchase Price, each Holder of Treasury Units will be obligated
to pay the amount of the deficiency.

 

(g)                                 The Company
shall not be obligated to issue any Common Shares in respect of a Purchase
Contract or deliver any certificates thereof to the Holder of the related Units
unless the Company shall have received payment for the Common Shares to be
purchased thereunder in the manner herein set forth.

 

Section 5.03.                             Issuance of
Common Shares.  (a) Unless
a Termination Event, an Early Settlement or a Fundamental Change Early
Settlement shall have occurred, subject to Section 5.04(b), on the
Purchase Contract Settlement Date upon receipt of the aggregate Purchase Price
payable on all Outstanding Units in accordance with Section 5.02 above,
the Company shall issue and deposit with the Purchase Contract Agent, for the
benefit of the Holders of the Outstanding Units, one or more certificates
representing newly issued Common Shares registered in the name of the Purchase
Contract Agent (or its nominee) as custodian for the Holders (such certificates
for Common Shares, together with any dividends or distributions for which a
record date and payment date for such dividend or distribution has occurred
after the Purchase Contract Settlement Date, being hereinafter referred to as
the “Purchase Contract
Settlement Fund”) to which the Holders are entitled
hereunder.

 

(b)                                 Subject to the
foregoing, upon surrender of a Certificate to the Purchase Contract Agent on or
after the Purchase Contract Settlement Date, Early Settlement Date or
Fundamental Change Early Settlement Date, as the case may be, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive forthwith in exchange therefor a certificate
representing that number of newly issued whole Common Shares which such Holder
is entitled to receive pursuant to the provisions of this Article 5 (after
taking into account all Units then held by such Holder), together with cash in
lieu of fractional shares as provided in Section 5.08 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Certificate
so surrendered shall forthwith be cancelled. 
Such shares shall be registered in the name of the Holder or the Holder’s
designee as specified in the 

 

60

 

settlement instructions provided by the
Holder to the Purchase Contract Agent. 
If any Common Shares issued in respect of a Purchase Contract are to be
registered in the name of a Person other than the Person in whose name the
Certificate evidencing such Purchase Contract is registered (but excluding any
Depository or nominee thereof), no such registration shall be made unless the
Person requesting such registration has paid any transfer and other taxes
(including any applicable stamp taxes) required by reason of such registration
in a name other than that of the registered Holder of the Certificate
evidencing such Purchase Contract or has established to the satisfaction of the
Company that such tax either has been paid or is not payable.

 

Section 5.04.                             Anti-Dilution
Adjustments.  (a) Each
Fixed Settlement Rate will be subject to adjustment, without duplication, as
follows:

 

(i)                                     In case the
Company shall pay a dividend or make any other distribution of Common Shares on
the outstanding Common Shares, each Fixed Settlement Rate in effect at the
close of business on the record date for the determination of shareholders
entitled to receive such dividend or other distribution shall be increased by
multiplying each Fixed Settlement Rate by a fraction of which:

 

(A)                              the numerator
shall be the sum of the number of Common Shares outstanding at the close of business
on the record date for such determination plus
the total number of shares constituting such dividend or other distribution,
and

 

(B)                                the denominator
shall be the number of Common Shares outstanding at the close of business on
the record date for such determination;

 

such increase to become effective immediately
at the opening of business on the Business Day following the record date for
such determination.

 

For the purposes of this
clause (i), the number of Common Shares at any time outstanding shall not
include shares held in the treasury of the Company but shall include any shares
issuable in respect of any scrip certificates issued in lieu of fractions of
Common Shares.  The Company agrees that
it shall not pay any dividend or make any distribution on Common Shares held in
the treasury of the Company.

 

(ii)                                  In case the
Company shall issue rights, warrants or options, other than pursuant to any
dividend reinvestment plans or share purchase plans, to all holders of its
Common Shares entitling them, for a period expiring within 45 days after the
record date for the determination of shareholders entitled to receive such
rights, warrants or options, to subscribe for or purchase Common Shares at a
price per share less than the Current Market Price per Common Share on the date
of announcement of such issuance, each Fixed Settlement Rate in effect at the
close of business on the date of such announcement shall be increased by
multiplying such Fixed Settlement Rate by a fraction of which:

 

61

 

(A)                              the numerator
shall be the number of Common Shares outstanding at the close of business on
the record date for such determination plus
the number of Common Shares so offered for subscription or purchase, and

 

(B)                                the denominator
shall be the number of Common Shares outstanding at the close of business on
the record date for such determination plus
the number of Common Shares which the aggregate of the offering price of the
total number of Common Shares so offered for subscription or purchase would
purchase at such Current Market Price;

 

such increase to become
effective immediately after the opening of business on the Business Day
following the date of such announcement. 
The Company agrees that it shall notify the Purchase Contract Agent if
any issuance of such rights, warrants or options is cancelled or not completed
following the announcement thereof and each Fixed Settlement Rate shall
thereupon be readjusted to the Fixed Settlement Rate in effect immediately
prior to the date of such announcement. 
For purposes of this clause (ii), the number of Common Shares at any
time outstanding shall not include shares held in the treasury of the Company
but shall include any shares issuable in respect of any scrip certificates issued
in lieu of fractions of Common Shares. 
The Company agrees that it shall not issue any such rights, warrants or
options in respect of Common Shares held in the treasury of the Company.

 

(iii)                               In case
outstanding Common Shares shall be subdivided or split into a greater number of
Common Shares, each Fixed Settlement Rate in effect at the close of business on
the day preceding the day upon which such subdivision or split becomes
effective shall be proportionately increased, and, conversely, in case outstanding
Common Shares shall each be combined into a smaller number of Common Shares,
each Fixed Settlement Rate in effect at the close of business on the day
preceding the day upon which such combination becomes effective shall be
proportionately decreased, such increase or decrease, as the case may be, to
become effective immediately at the opening of business on the Business Day
following the day upon which such subdivision, split or combination becomes
effective.

 

(iv)                              In case the
Company shall, by dividend or otherwise, distribute to all holders of
outstanding Common Shares evidences of its indebtedness, shares of capital
stock, securities, cash or property (excluding (A) any dividend or
distribution covered by clause (i) or (ii) of this Section 5.04(a),
(B) any dividend or distribution paid exclusively in cash and (C) any
Spin-Off as to which an adjustment was effected under the provisions of clause (v) of
this Section 5.04(a)), each Fixed Settlement Rate in effect at the close
of business on the record date for the determination of shareholders entitled
to receive such distribution shall be adjusted by multiplying such rate by a
fraction of which:

 

62

 

(A)                              the numerator
shall be the Current Market Price per Common Share on the record date for such
determination, and

 

(B)                                the denominator
shall be the Current Market Price per Common Share on the record date for such
determination less the then fair
market value (as reasonably determined by the Board of Directors, whose
determination shall be conclusive and the basis for which shall be described in
a Board Resolution) of the portion of distribution applicable to one Common
Share;

 

such adjustment to become
effective at the opening of business on the Business Day following the record
date for the determination of shareholders entitled to receive such
distribution.  In the event that such
dividend or distribution is not so paid or made, each Fixed Settlement Rate
shall again be adjusted to be the Fixed Settlement Rate which would then be in
effect if such dividend or distribution had not been declared.

 

(v)                                 In case the
Company shall, by dividend or otherwise, make a distribution to all holders of
its Common Shares consisting of capital stock of, or similar equity interests
in, a subsidiary or other business unit of the Company (a “Spin-Off”) that are, or when issued
will be, traded on a U.S. securities exchange, each Fixed Settlement Rate in
effect at the close of business on the record date for the determination of shareholders
entitled to receive such distribution shall be adjusted by multiplying such
rate by a fraction of which

 

(A)                              the numerator
shall be the sum of (x) the
average of the closing prices of such capital stock or similar equity interests
distributed to holders of Common Shares applicable to one Common Share over the
10 consecutive Trading Day period (the “Relevant Period”) commencing on and
including the third Trading Day after the date on which “ex-distribution
trading” commences for such distribution on the NYSE or such other national or
regional exchange or market on which such dividend or distribution is listed or
quoted and (y) the average of the Closing Prices of one Common Share over
the Relevant Period, and

 

(B)                                the denominator
shall be the average of the Closing Prices of one Common Share over the
Relevant Period.

 

(vi)                              In case the
Company shall make a distribution consisting exclusively of cash to all holders
of Common Shares (excluding any dividend or distribution in connection with a
liquidation, dissolution or termination of the Company) in an amount per Common
Share that exceeds $0.045 per quarter (such per share amount, the “Reference Dividend”), then, in
such case, each Fixed Settlement Rate in effect at the close of business on the
record date for the determination of shareholders entitled to receive such
distribution shall be adjusted by multiplying such rate by a fraction of which:

 

63

 

(A)                              the numerator
shall be the Current Market Price per Common Share on such record date, and

 

(B)                                the denominator
shall be the Current Market Price per Common Share on such record date less the amount of cash per Common Share
so distributed (and not excluded as provided above) in excess of the Reference
Dividend;

 

such increase to be
effective at the opening of business on the Business Day following the record
date; provided, however, that in the event the portion of
cash so distributed applicable to one Common Share is equal to or greater than
the Current Market Price per Common Share on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder of a
Unit shall have the right to receive upon settlement of the Units the amount of
cash such Holder would have received had such Holder settled each Unit on the
record date.  The Reference Dividend
shall be subject to an inversely proportional adjustment whenever each Fixed
Settlement Rate is adjusted under this clause (vi).  In the event that such dividend or
distribution is not so paid or made, each Fixed Settlement Rate shall again be
adjusted to be the Fixed Settlement Rate which would then be in effect if such
dividend or distribution had not been declared.

 

(vii)                           The
reclassification of Common Shares into securities including securities other
than Common Shares (other than any reclassification upon a Reorganization Event
to which Section 5.04(b) applies) shall be deemed to involve:

 

(A)                              a distribution
of such securities other than Common Shares to all holders of Common Shares
(and the effective date of such reclassification shall be deemed to be “the
record date for the determination of shareholders entitled to receive such
distribution” and “the record date for such determination” within the meaning
of paragraph (iv) of this Section); and

 

(B)                                a subdivision,
split or combination, as the case may be, of the number of Common Shares
outstanding immediately prior to such reclassification into the number of
Common Shares outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be “the day upon which such
subdivision or split becomes effective” or “the day upon which such combination
becomes effective”, as the case may be, and “the day upon which such
subdivision, split or combination becomes effective” within the meaning of
paragraph (iii) of this Section).

 

(viii)                        In case the
Company or any subsidiary of the Company shall make a tender or exchange offer
(other than any odd-lot tender offer) for all or any portion of the Common Shares
and upon expiration of such tender or exchange offer (as amended upon the
expiration thereof), to the extent that the cash and the value of any other
consideration included in the payment per Common Share (as 

 

64

 

reasonably determined by the Board of Directors, whose determination
shall be conclusive and the basis for which shall be described in a Board
Resolution) exceeds the average closing price of the Common Shares for each of
the five consecutive Trading Days next succeeding the last date on which
tenders or exchanges may be made under such tender or exchange offer (the “Expiration Time”), each Fixed
Settlement Rate in effect at the Expiration Time shall be adjusted by
multiplying such rate by a fraction of which:

 

(A)                              the numerator
shall be equal to the sum of (1) the fair market value, as reasonably
determined by the Board of Directors (whose determination shall be conclusive
and the basis for which shall be described in a Board Resolution), of the
aggregate consideration payable for all Common Shares that the Company or a
subsidiary of the Company, as the case may be, purchased in such tender or
exchange offer (the “Purchased
Shares”) and (2) the product of (x) the number of
Common Shares outstanding at the Expiration Time, less any Purchased Shares, and (y) the Closing Price of
the Common Shares on the Trading Day next succeeding the Expiration Time, and

 

(B)                                the denominator
shall be equal to the product of the number of Common Shares outstanding at the
Expiration Time, including the Purchased Shares, and the Closing Price of the
Common Shares on the Trading Day next succeeding the Expiration Time;

 

such adjustment to become
effective at the opening of business on the Business Day following the date of
the Expiration Time.

 

(ix)                                All adjustments
to the Fixed Settlement Rate shall be calculated to the nearest 1/10,000th of a
Common Share (or if there is not a nearest 1/10,000th of a share, to the next
lower 1/10,000th of a share).  No
adjustment in the Fixed Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
thereof; provided, however, that (i) any adjustments
which by reason of this subclause are not required to be made shall be carried
forward and taken into account in any subsequent adjustment and (ii) that
effect shall be given to all anti-dilution adjustments no later than the close
of business on the Business Day immediately preceding the first Trading Day in
the 20 consecutive Trading Day period during which the Applicable Market Value
is determined (or, if earlier, the close of business on the Business Day
immediately preceding the date on which the Fundamental Change Early Settlement
Rate is determined).

 

(x)                                   If any
adjustment is made to each Fixed Settlement Rate pursuant to this Section 5.04(a),
an inversely proportional adjustment shall also be made to the Reference Price
and Threshold Appreciation Price.  In
addition, if any adjustment to each Fixed Settlement Rate is required to be
made pursuant to the 

 

65

 

occurrence of any of the events contemplated by this Section 5.04(a) during
the period taken into consideration for determining the Applicable Market
Value, the 20 individual Closing Prices used to determine the Applicable Market
Value shall be appropriately adjusted to account for the adjustment to each
Fixed Settlement Rate (as determined by the Board of Directors, whose
determination shall be conclusive and the basis for which shall be described in
a Board Resolution).

 

(xi)                                The Company
may, but shall not be required to, make such increases in the Fixed Settlement
Rate, in addition to those required by this Section 5.04(a), as the Board
of Directors considers to be advisable in order to avoid or diminish any income
tax to any holders of Common Shares resulting from any dividend or distribution
of stock or issuance of rights or warrants to purchase or subscribe for stock
or from any event treated as such for income tax purposes or for any other
reason.  The Company may make such a
discretionary adjustment only if it makes the same proportionate adjustment to
each Fixed Settlement Rate.

 

(xii)                             If the Company
hereafter adopts any stockholder rights plan involving the issuance of preference
share purchase rights or other similar rights (the “Rights”) to all holders of the Common Shares, a
Holder shall be entitled to receive upon settlement of any Purchase Contract,
in addition to the Common Shares issuable upon settlement of such Purchase
Contract, the related Rights for the Common Shares, unless such Rights under
the future stockholder rights plan have separated from the Common Shares at the
time of conversion, in which case each Fixed Settlement Rate shall be adjusted
as provided in Section 5.04(a)(iv) on the date such Rights separate
from the Common Shares.

 

(b)                                 Adjustment for
Consolidation, Merger or Other Reorganization Event.

 

(i)                                     In the event of
a Reorganization Event that causes the Common Shares to be converted into the
right to receive other securities, cash or property, each Purchase Contract
then outstanding would, without the consent of the Holders of the underlying
Corporate Units or Treasury Units, as the case may be, become a contract to
purchase such other securities instead of the Common Shares.  If such Reorganization Event causes the
Common Shares to be converted into the right to receive more than a single type
of consideration (determined based in part upon any form of stockholder
election), each Purchase Contract then outstanding would become a contract to
purchase the amount of other securities, cash and/or property corresponding to
the weighted average of the types and amounts of consideration received by the
holders of Common Shares that affirmatively make such election.  Upon the occurrence of any such transaction,
on the Purchase Contract Settlement Date, the Settlement Rate will be
determined based on the securities, cash or property a holder of Common Shares
would have received when such transaction occurred.  Upon the occurrence of such Reorganization
Event, the Company shall promptly prepare and transmit to the Purchase Contract
Agent an Officers’ Certificate setting forth in reasonable detail

 

66

 

such Reorganization Event and the other securities,
cash or property into which each Purchase Contract would become a contract to
purchase.

 

(ii)                                  If a
Fundamental Change occurs prior to the Purchase Contract Settlement Date, then
each Holder of a Unit shall have the right, to accelerate and settle (“Fundamental Change Early Settlement”) the
Purchase Contract contained in such Unit upon the conditions set forth below at
the Fundamental Change Early Settlement Rate; provided
that no Fundamental Change Early Settlement will be permitted pursuant to this Section 5.04(b)(ii) unless,
at the time such Fundamental Change Early Settlement is effected, there is an
effective Registration Statement with respect to any securities to be issued
and delivered in connection with such Fundamental Change Early Settlement, if
such a Registration Statement is required (in the view of counsel, which need
not be in the form of a written opinion, for the Company) under the Securities
Act.  If such a Registration Statement is
so required, the Company covenants and agrees to use its commercially
reasonable efforts to (x) have in effect a Registration Statement covering
any securities to be delivered in respect of the Purchase Contracts being
settled and (y) provide a Prospectus in connection therewith, in each case
in a form that may be used in connection with such Fundamental Change Early
Settlement.  In the event that a Holder
elects a Fundamental Change Early Settlement and a Registration Statement is
required to be effective in connection with the exercise of such Fundamental
Change Early Settlement but no such Registration Statement is then effective,
the Holder’s election shall be void unless and until such a Registration
Statement becomes effective.

 

The “Fundamental Change Early Settlement
Rate” shall be determined by reference to the table set forth
below, based on the date on which the Fundamental Change occurs or becomes
effective (the “Effective Date”) and the share price
(the “Share
Price”) in the Fundamental Change, which means: (A) in
the case of a Fundamental Change described in clause (ii) of the
definition of such term and holders of the Common Shares receive only cash in
the Fundamental Change, the Share Price shall be the cash amount paid per
share; or (B) otherwise, the Share Price shall be the average of the
Closing Prices of the Common Shares over the five Trading Day period ending on
the Trading Day preceding the Effective Date of the Fundamental Change.

 

The following table sets
forth the Share Price and Fundamental Change Early Settlement Rate per $50 of
Stated Amount of Units:

 

	
   

  	
   

  	
  Effective Date

  	
   

  
	
  Share Price

  	
   

  	
  June 24,
  2009

  	
   

  	
  June 1,
  2010

  	
   

  	
  June 1,
  2011

  	
   

  	
  June 1,
  2012

  	
   

  
	
  $

  	
  6.00

  	
   

  	
  5.6343

  	
   

  	
  5.3504

  	
   

  	
  5.0133

  	
   

  	
  4.5455

  	
   

  
	
  $

  	
  8.00

  	
   

  	
  5.0413

  	
   

  	
  4.8692

  	
   

  	
  4.7094

  	
   

  	
  4.5455

  	
   

  
	
  $

  	
  10.00

  	
   

  	
  4.6717

  	
   

  	
  4.5278

  	
   

  	
  4.4041

  	
   

  	
  4.5455

  	
   

  
	
  $

  	
  11.00

  	
   

  	
  4.5476

  	
   

  	
  4.4079

  	
   

  	
  4.2794

  	
   

  	
  4.5455

  	
   

  
	
  $

  	
  12.00

  	
   

  	
  4.4535

  	
   

  	
  4.3172

  	
   

  	
  4.1829

  	
   

  	
  4.1667

  	
   

  
	
  $

  	
  12.93

  	
   

  	
  4.3872

  	
   

  	
  4.2549

  	
   

  	
  4.1185

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  15.00

  	
   

  	
  4.2896

  	
   

  	
  4.1691

  	
   

  	
  4.0413

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  17.50

  	
   

  	
  4.2272

  	
   

  	
  4.1231

  	
   

  	
  4.0138

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  20.00

  	
   

  	
  4.1933

  	
   

  	
  4.1031

  	
   

  	
  4.0065

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  25.00

  	
   

  	
  4.1548

  	
   

  	
  4.0810

  	
   

  	
  3.9930

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  30.00

  	
   

  	
  4.1266

  	
   

  	
  4.0603

  	
   

  	
  3.9766

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  40.00

  	
   

  	
  4.0794

  	
   

  	
  4.0221

  	
   

  	
  3.9508

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  50.00

  	
   

  	
  4.0432

  	
   

  	
  3.9936

  	
   

  	
  3.9344

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  60.00

  	
   

  	
  4.0163

  	
   

  	
  3.9734

  	
   

  	
  3.9235

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  75.00

  	
   

  	
  3.9878

  	
   

  	
  3.9526

  	
   

  	
  3.9125

  	
   

  	
  3.8685

  	
   

  
	
  $

  	
  100.00

  	
   

  	
  3.9583

  	
   

  	
  3.9316

  	
   

  	
  3.9015

  	
   

  	
  3.8685

  	
   

  

 

67

 

The exact Share Prices and
Effective Dates may not be set forth in the table above, in which case:

 

(A)                              if the Share
Price on the Effective Date is between two Share Price amounts in the table or
the Effective Date is between two Effective Dates in the table, the Fundamental
Change Early Settlement Rate will be determined by a straight-line
interpolation between the number of shares set forth for the higher and lower
Share Price amount and the earlier and later Effective Dates, as applicable,
based on a 365-day year;

 

(B)                                if the actual
Share Price on the Effective Date exceeds $100.00 per Common Share, subject to
adjustment as set forth herein, the Fundamental Change Early Settlement Rate
will be the Minimum Settlement Rate; and

 

(C)                                if the actual
Share Price on the Effective Date is less than $6.00 per Common Share, subject
to adjustment as set forth herein, the Fundamental Change Early Settlement Rate
will be the Maximum Settlement Rate.

 

The Share Prices set forth
in the first column of the table above shall be adjusted as of any date on
which any Fixed Settlement Rate is adjusted pursuant to Section 5.04
hereof.  The adjusted Share Prices will
equal the Share Prices applicable immediately prior to such adjustment
multiplied by a fraction, the numerator of which is the applicable Fixed
Settlement Rate immediately prior to the adjustment giving rise to the Share
Price adjustment and the denominator of which is the Fixed Settlement Rate as
so adjusted.  The number of Common Shares
set forth in the table above will be adjusted in the same manner as the Fixed
Settlement Rate is adjusted pursuant to Section 5.04 hereof.

 

Within 15 Business Days of the
occurrence of a Fundamental Change, the Company shall provide written notice to
Holders of Units of such Fundamental Change, which shall specify the deadline
for submitting the notice to settle early in cash pursuant to this Section 5.04(b)(ii),
the date on which such Fundamental Change Early Settlement shall occur (which
date shall be at least 10 days after the date of such written notice by the
Company, but which shall in no event be later than the fifth Business Day 

 

68

 

immediately
preceding the Purchase Contract Settlement Date) (the “Fundamental Change Early Settlement
Date”), the applicable Fundamental Change Early Settlement
Rate and the amount (per Common Share) of cash, securities and other consideration
receivable by the Holder upon settlement.

 

Corporate Units Holders and
Treasury Units Holders may only effect Fundamental Change Early Settlement
pursuant to this Section 5.04(b)(ii) in integral multiples of 20
Corporate Units or Treasury Units, as the case may be.  If the Treasury Portfolio has replaced the
Notes as a component of the Corporate Units, Corporate Unit Holders may only
effect Fundamental Change Early Settlement pursuant to this Section 5.04(b)(ii) in
multiples of 16,000 Corporate Units or such other number of Corporate Units as
may be determined by the Remarketing Agent following a Successful Remarketing
of the Notes if the Reset Effective Date is not an Interest Payment Date.  Other than the provisions relating to timing
of notice and settlement, which shall be as set forth above, the provisions of Section 5.01
shall apply with respect to a Fundamental Change Early Settlement pursuant to
this Section 5.04(b)(ii).

 

In order to exercise the
Fundamental Change Early Settlement right with respect to any Purchase
Contracts, the Holder of the Certificate evidencing Units shall deliver, no
later than the close of business on the third Business Day immediately
preceding the Fundamental Change Early Settlement Date, such Certificate to the
Purchase Contract Agent at the Corporate Trust Office duly endorsed for
transfer to the Company or in blank with the form of “Election to Settle Early”
on the reverse thereof duly completed and accompanied by payment (payable to
the Company in immediately available funds) in an amount equal to the product
of (A) the Stated Amount and (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Fundamental Change Early
Settlement.

 

In the event that Units are
held by or through DTC or another Depository, the exercise of the right to
effect Fundamental Change Early Settlement shall occur in conformity with the
standing arrangements between DTC or such Depository and the Purchase Contract
Agent.

 

Upon receipt of any such
Certificate and payment of such funds, the Purchase Contract Agent shall pay
the Company from such funds the related Purchase Price pursuant to the terms of
the related Purchase Contracts, and notify the Collateral Agent that all the
conditions necessary for a Fundamental Change Early Settlement by a Holder of
Units have been satisfied pursuant to which the Purchase Contract Agent has
received from such Holder, and paid to the Company as confirmed in writing by
the Company, the related Purchase Price.

 

Upon receipt by the
Collateral Agent of the notice from the Purchase Contract Agent set forth in
the preceding paragraph, the Collateral Agent shall release from the Pledge, (1) the
Notes underlying the Pledged Applicable Ownership Interests in Notes or the
Pledged Applicable Ownership Interests in the Treasury Portfolio in the case of
a Holder of Corporate Units or (2) the Pledged Treasury Securities, in the
case of a Holder of Treasury Units, in each case with a Value equal to the
product of (x) the Stated 

 

69

 

Amount
and (y) the number of Purchase Contracts as to which such Holder has
elected to effect Fundamental Change Early Settlement, and shall instruct the
Securities Intermediary to Transfer all such Pledged Applicable Ownership
Interests in the Treasury Portfolio, Notes underlying Pledged Applicable
Ownership Interests in Notes or Pledged Treasury Securities, as the case may
be, to the Purchase Contract Agent for distribution to such Holder, in each
case free and clear of the Pledge created hereby.

 

If a Holder properly effects
a Fundamental Change Early Settlement in accordance with the provisions of this
Section 5.04(b)(ii), the Company shall deliver (or shall cause the
Collateral Agent to deliver) to the Holder on the Fundamental Change Early
Settlement Date:

 

(A)                              the kind and
amount of securities, cash and other property receivable upon such Fundamental
Change by a Holder of the number of Common Shares issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Fundamental Change at the Fundamental Change Early
Settlement Rate.  For purposes of the
foregoing, where a Fundamental Change involves a transaction that causes the
Common Shares to be converted into the right to receive more than a single type
of consideration (determined based in part upon any form of stockholder
election) and the Holder exercises a Fundamental Change Early Settlement, the
Company shall deliver to the Holder on the Fundamental Change Early Settlement
Date, the weighted average of the types and amounts of consideration received
by the holders of Common Shares that affirmatively make such an election.  For the avoidance of doubt, for the purposes
of determining the Applicable Market Value (in connection with determining the
appropriate Settlement Rate to be applied in the foregoing sentence), the date
of the closing of the Fundamental Change shall be deemed to be the Purchase
Contract Settlement Date;

 

(B)                                the Notes, the
Applicable Ownership Interests in the Treasury Portfolio or Treasury Securities
underlying the Corporate Units or the Treasury Units, as the case may be; and

 

(C)                                if so required
under the Securities Act, a Prospectus as contemplated by this Section 5.04(b)(ii).

 

In the event that
Fundamental Change Early Settlement is effected with respect to Purchase
Contracts underlying less than all the Units evidenced by a Certificate, upon
such Fundamental Change Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf of the Holder, authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Fundamental Change Early Settlement was not
effected.

 

70

 

(c)                                  All
calculations and determinations pursuant to this Section 5.04 shall be
made by the Company or its agent and the Purchase Contract Agent shall have no
responsibility with respect thereto.

 

(d)                                 The Corporate
Units or the Treasury Units of the Holders who do not elect Fundamental Change
Early Settlement in accordance with Section 5.04(b) shall continue to
remain outstanding and be subject to settlement on the Purchase Contract
Settlement Date in accordance with the terms hereof.

 

(e)                                  Neither Fixed
Settlement Rate shall be adjusted under this Section 5.04 upon the
occurrence of any of the following:

 

(i)                                     the issuance of
any Common Shares pursuant to any present or future Plan providing for the
reinvestment of dividends or interest payable on the Company’s securities and
the investment of additional option amounts in Common Shares upon any Plan;

 

(ii)                                  upon the
issuance of any Common Shares or options or rights to purchase those shares
pursuant to any present or future employee, director or consultant benefit Plan
or program of or assumed by the Company or any of its subsidiaries;

 

(iii)                               upon the
issuance of any Common Shares pursuant to any option, warrant, right or
exercisable, exchangeable or convertible security outstanding as of June 24,
2009;

 

(iv)                              for a change in
the par value or no par value of the Common Shares;

 

(v)                                 for accumulated
and unpaid dividends, other than to the extent contemplated by Section 5.04(a) hereof;

 

(vi)                              upon the
issuance of any Common Shares or securities convertible into, or exercisable or
exchangeable for, Common Shares, in public or private transactions, for
consideration in cash or property, at any price the Company deems appropriate;
or

 

(vii)                           upon the
issuance of any Common Shares upon the exercise or conversion of any right,
warrant or option described in Section 5.04(a)(ii).

 

Section 5.05.                             Notice of
Adjustments and Certain Other Events.  (a) Whenever the Fixed Settlement Rates
are adjusted as herein provided, the Company
shall within 10 Business Days following the occurrence of an event that
requires an adjustment to each Fixed Settlement Rate pursuant to Section 5.04
(or if the Company is not aware of such occurrence, as soon as practicable
after becoming so aware):

 

(i)                                     compute each
adjusted Fixed Settlement Rate in accordance with Section 5.04 and prepare
and transmit to the Purchase Contract Agent an Officers’ 

 

71

 

Certificate setting forth each Fixed Settlement
Rate, the method of calculation thereof in reasonable detail, and the facts
requiring such adjustment and upon which such adjustment is based; and

 

(ii)                                  provide a
written notice to the Holders of the Units of the occurrence of such event and
a statement in reasonable detail setting forth the method by which the
adjustment to each Fixed Settlement Rate was determined and setting forth each
adjusted Fixed Settlement Rate.

 

(b)                                 The Purchase
Contract Agent shall not at any time be under any duty or responsibility to any
Holder of Units to determine whether any facts exist which may require any
adjustment of each Fixed Settlement Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed in making the same.  The
Purchase Contract Agent shall be fully authorized and protected in relying on
any Officers’ Certificate delivered pursuant to Section 5.05(a)(i) and
any adjustment contained therein and the Purchase Contract Agent shall not be
deemed to have knowledge of any adjustment unless and until it has received
such certificate.  The Purchase Contract
Agent shall not be accountable with respect to the validity or value (or the
kind or amount) of any Common Shares, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase Contract;
and the Purchase Contract Agent makes no representation with respect
thereto.  The Purchase Contract Agent
shall not be responsible for any failure of the Company to issue, transfer or
deliver any Common Shares pursuant to a Purchase Contract or to comply with any
of the duties, responsibilities or covenants of the Company contained in this Article 5.

 

Section 5.06.                             Termination
Event; Notice.  The
Purchase Contracts and all obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights and obligations
of Holders to purchase Common Shares, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Purchase Contract Agent or the Company, if, prior to or on the Purchase
Contract Settlement Date, a Termination Event shall have occurred.

 

Upon and after the
occurrence of a Termination Event, the Units shall thereafter represent the
right to receive the Notes underlying the Applicable Ownership Interests in
Notes, the Treasury Securities or the Applicable Ownership Interests in the
Treasury Portfolio, as the case may be, forming part of such Units, in
accordance with the provisions of Section 3.15 hereof.  Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security Register.

 

Section 5.07.                             Early
Settlement.  (a) Subject
to and upon compliance with the provisions of this Section 5.07, at the
option of the Holder thereof, Purchase Contracts underlying Units may be
settled early (“Early
Settlement”) at any time prior to the close of business on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date; provided that no Early
Settlement will be permitted pursuant to this 

 

72

 

Section 5.07 unless, at the time such
Early Settlement is effected, there is an effective Registration Statement with
respect to any securities to be issued and delivered in connection with such
Early Settlement, if such a Registration Statement is required (in the view of
counsel, which need not be in the form of a written opinion, for the Company)
under the Securities Act.  If such a
Registration Statement is so required, the Company covenants and agrees to use
its commercially reasonable efforts to (i) have in effect a Registration
Statement covering any securities to be delivered in respect of the Purchase
Contracts being settled and (ii) provide a Prospectus in connection
therewith, in each case in a form that may be used in connection with such
Early Settlement (it being understood that if there is a material business
transaction or development with respect to the Company that has not yet been
publicly disclosed, the Company shall not be required to provide such
Prospectus and the Early Settlement right shall not be available until the
Company has publicly disclosed such transaction or development; provided that the Company shall use its
commercially reasonable efforts to make such disclosure as soon as it is
commercially reasonable to do so).  In
the event that a Holder of a Purchase Contract seeks to exercise its Early
Settlement right and a Registration Statement is so required but no such
Registration Statement is then effective, the Holder’s attempt to exercise such
right shall be void unless and until such Registration Statement becomes
effective.  Unless a Successful
Remarketing of the Notes or a Special Event Redemption has previously occurred,
Holders of Corporate Units shall not be permitted to effect Early Settlement (i) during
a Restricted Period or (ii) following the effectiveness of a Fundamental
Change in which case the provisions of Section 5.04(b)(ii) shall
apply.

 

(b)                                 In order to
exercise the right to effect Early Settlement with respect to any Purchase
Contracts, the Holder of the Certificate evidencing Units (in the case of
Certificates in definitive certificated form) shall deliver, at any time prior
to the close of business on the seventh Business Day immediately preceding the
Purchase Contract Settlement Date, other than during a Restricted Period or
following the effectiveness of a Fundamental Change (in which case Section 5.04
shall apply) such Certificate to the Purchase Contract Agent at the Corporate
Trust Office duly endorsed for transfer to the Company or in blank with the
form of “Election to Settle Early” on the reverse thereof duly completed and
executed as indicated and accompanied by payment (payable to the Company in
immediately available funds) in an amount (the “Early Settlement Amount”) equal to the sum of the product of (A) the Stated
Amount and (B) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement.

 

In the case of Book-Entry
Interests, each Beneficial Owner electing Early Settlement must deliver the
Early Settlement Amount to the Purchase Contract Agent along with a facsimile
of the form of “Election to Settle Early” duly completed, make book-entry
transfer of such Book-Entry Interests and comply with the applicable procedures
of the Depository.  In addition, so long
as the Units are evidenced by one or more Global Certificates deposited with
the Depository, procedures for early settlement will also be governed by
standing arrangements between the Depository and the Purchase Contract Agent.

 

73

 

No payment shall be made
upon Early Settlement of any Purchase Contract on account of any dividends on
the Common Shares issued upon such Early Settlement.  If the foregoing requirements are first
satisfied with respect to Purchase Contracts underlying any Units at or prior
to the close of business on a Business Day, such day shall be the “Early
Settlement Date” with respect to such Units and if such
requirements are first satisfied after the close of business on a Business Day
or at any time on a day that is not a Business Day, the “Early Settlement Date”
with respect to such Units shall be the next succeeding Business Day.

 

Upon the receipt of such
Certificate and Early Settlement Amount from the Holder, the Purchase Contract
Agent shall pay to the Company such Early Settlement Amount, the receipt of
which payment the Company shall confirm in writing.  The Purchase Contract Agent shall then notify
the Collateral Agent that (A) such Holder has elected to effect an Early
Settlement, which notice shall set forth the number of such Purchase Contracts
as to which such Holder has elected to effect Early Settlement, (B) the
Purchase Contract Agent has received from such Holder, and paid to the Company
as confirmed in writing by the Company, the related Early Settlement Amount and
(C) all conditions to such Early Settlement have been satisfied.

 

Upon receipt by the
Collateral Agent of the notice from the Purchase Contract Agent set forth in
the preceding paragraph, the Collateral Agent shall release from the Pledge, (1) the
Notes underlying Pledged Applicable Ownership Interests in Notes or the Pledged
Applicable Ownership Interests in the Treasury Portfolio the case of a Holder
of Corporate Units or (2) Pledged Treasury Securities, in the case of a
Holder of Treasury Units, in each case with a Value equal to the product of (x) the
Stated Amount and (y) the number of Purchase Contracts as to which such
Holder has elected to effect Early Settlement, and shall instruct the
Securities Intermediary to Transfer all such Pledged Applicable Ownership
Interests in the Treasury Portfolio, Notes underlying Pledged Applicable
Ownership Interests in Notes or Pledged Treasury Securities, as the case may
be, to the Purchase Contract Agent for distribution to such Holder, in each case
free and clear of the Pledge created hereby.

 

Holders of Corporate Units
or Treasury Units may only exercise the Early Settlement right pursuant to this
Section 5.07 in integral multiples of 20 Corporate Units or Treasury
Units, as the case may be.  If the
Treasury Portfolio has replaced the Notes underlying Pledged Applicable
Ownership Interests in Notes, Holders of Corporate Units may exercise the Early
Settlement right pursuant to this Section 5.07 only in integral multiples
of 16,000 Corporate Units or such other number of Corporate Units as may be
determined by the Remarketing Agent following a Successful Remarketing of the
Notes if the Reset Effective Date is not an Interest Payment Date.  In such instance, the Collateral Agent shall
release any applicable portion of the interest payment the Company made on a
Reset Effective Date (if not a quarterly Interest Payment Date) under the First
Supplemental Indenture for distribution to such Holder exercising the Early
Settlement right pursuant to this Section 5.07, if such cash payment has
not already been paid to Holders of the Corporate Units.

 

74

 

(c)                                  Upon Early
Settlement of Purchase Contracts by a Holder of the related Units, the Company
shall issue, and the Holder shall be entitled to receive, a number of Common
Shares equal to the Minimum Settlement Rate for each Purchase Contract as to
which Early Settlement is effected.

 

(d)                                 No later than
the third Business Day after the applicable Early Settlement Date, the Company
shall cause the Common Shares issuable upon Early Settlement of Purchase
Contracts to be issued and delivered, together with payment in lieu of any
fraction of a share, as provided in Section 5.08.

 

(e)                                  Upon Early
Settlement of any Purchase Contracts, and subject to receipt of Common Shares
from the Company and the Notes, the Applicable Ownership Interests in the
Treasury Portfolio or Treasury Securities, as the case may be, from the
Securities Intermediary, as applicable, the Purchase Contract Agent shall, in
accordance with the instructions provided by the Holder thereof on the
applicable form of “Election to Settle Early” on the reverse of the Certificate
evidencing the related Units:

 

(i)                                     transfer to the
Holder the Notes, the Applicable Ownership Interests in the Treasury Portfolio
or Treasury Securities, as the case may be, related to such Units,

 

(ii)                                  deliver to the
Holder a certificate or certificates for the full number of Common Shares
issuable upon such Early Settlement, together with payment in lieu of any
fraction of a share, as provided in Section 5.08, and

 

(iii)                               the Company
shall, if so required under the Securities Act, deliver a Prospectus for the
Common Shares issuable upon such Early Settlement as contemplated by Section 5.07(a).

 

(f)                                    In the event
that Early Settlement is effected with respect to Purchase Contracts underlying
less than all the Units evidenced by a Certificate, upon such Early Settlement
the Company shall execute and the Purchase Contract Agent shall execute on behalf
of the Holder, authenticate and deliver to the Holder thereof, at the expense
of the Company, a Certificate evidencing the Units as to which Early Settlement
was not effected.

 

(g)                                 A Holder of a
Unit who effects Early Settlement may elect to have the Notes no longer a part
of a Corporate Unit remarketed in accordance with the provisions of Section 5.02.

 

Section 5.08.                             No Fractional
Shares.  No fractional shares or scrip
representing fractional Common Shares shall be issued or delivered upon
settlement on the Purchase Contract Settlement Date, or upon Early Settlement
or Fundamental Change Early Settlement of any Purchase Contracts.  If Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time by the same Holder,
the number of full Common Shares which shall be delivered upon settlement shall
be computed on the basis of the aggregate number of Purchase Contracts
evidenced by the Certificates so surrendered. 
Instead of any fractional Common Share which would otherwise be 

 

75

 

deliverable upon settlement of any Purchase
Contracts on the Purchase Contract Settlement Date, or upon Early Settlement or
Fundamental Change Early Settlement, the Company, through the Purchase Contract
Agent, shall make a cash payment in respect of such fractional interest in an
amount equal to the percentage of such fractional share multiplied by the
Applicable Market Value calculated as if the date of such settlement were the
Purchase Contract Settlement Date.  The
Company shall provide the Purchase Contract Agent from time to time with
sufficient funds to permit the Purchase Contract Agent to make all cash
payments required by this Section 5.08 in a timely manner.

 

Section 5.09.                             Charges and
Taxes.  The Company will pay all stock
transfer and similar taxes attributable to the initial issuance and delivery of
the Common Shares pursuant to the Purchase Contracts; provided, however, that the Company shall
not be required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a Unit or any
issuance of a Common Share in a name other than that of the registered Holder
of a Certificate surrendered in respect of the Units evidenced thereby, other
than in the name of the Purchase Contract Agent, as custodian for such Holder,
and the Company shall not be required to issue or deliver such share
certificates or Certificates unless or until the Person or Persons requesting
the transfer or issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

 

ARTICLE 6

RIGHTS AND REMEDIES OF HOLDERS

 

Section 6.01.                             Unconditional
Right of Holders to Purchase Common Shares.  Each Holder of a Unit shall have the right,
which is absolute and unconditional, except upon and following a Termination
Event, to purchase Common Shares pursuant to the Purchase Contract comprising
part of such Unit and to institute suit for the enforcement of any such right
to purchase Common Shares, and such right shall not be impaired without the
consent of such Holder.

 

Section 6.02.                             Restoration of
Rights and Remedies.  If any
Holder has instituted any proceeding to enforce any right or remedy under this
Agreement and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.

 

Section 6.03.                             Rights and
Remedies Cumulative.  Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates in the last paragraph of Section 3.10,
no right or remedy herein conferred upon or reserved to 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 

 

76

 

hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.

 

Section 6.04.                             Delay or
Omission Not Waiver.  No delay or
omission of any Holder to exercise any right upon a default or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any
such right.  Every right and remedy given
by this Article 6 or by law to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by such Holders.

 

Section 6.05.                             Undertaking for
Costs.  All parties to this Agreement
agree, and each Holder of a Unit, by its acceptance of such Unit shall be
deemed to have agreed, that any court of competent jurisdiction may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Agreement, or in any suit against the Purchase Contract Agent for
any action taken, suffered or omitted by it as Purchase Contract Agent, 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 costs 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; provided that the
provisions of this Section shall not apply to any suit instituted by the
Purchase Contract Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Units, or to
any suit instituted by any Holder for the enforcement of interest on any Notes
on or after the respective Payment Date therefor in respect of any Unit held by
such Holder, or for enforcement of the right to purchase Common Shares under
the Purchase Contracts constituting part of any Unit held by such Holder.

 

Section 6.06.                             Waiver of 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 stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance
of this Agreement; 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 Purchase Contract Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.

 

ARTICLE 7

THE PURCHASE CONTRACT AGENT

 

Section 7.01.                             Certain Duties
and Responsibilities.  (a) The
Purchase Contract Agent:

 

(i)                                     undertakes to
perform, with respect to the Units, such duties and only such duties as are
specifically set forth in this Agreement and the Remarketing Agreement to be
performed by the Purchase Contract Agent and no 

 

77

 

implied covenants or obligations shall be read into
this Agreement or the Remarketing Agreement against the Purchase Contract
Agent; and

 

(ii)                                  in the absence
of bad faith or gross negligence on its part, may, with respect to the Units,
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Purchase Contract Agent and conforming to the requirements of this Agreement or
the Remarketing Agreement, as applicable, but in the case of any certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Purchase Contract Agent, the Purchase Contract Agent shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Agreement or the Remarketing Agreement, as applicable
(but need not confirm or investigate the accuracy of the mathematical
calculations or other facts stated therein).

 

(b)                                 No provision of
this Agreement or the Remarketing Agreement shall be construed to relieve the
Purchase Contract Agent from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:

 

(i)                                     this Section 7.01(b) shall
not be construed to limit the effect of Section 7.01(a);

 

(ii)                                  the Purchase
Contract Agent shall not be liable for any error of judgment made in good faith
by a Responsible Officer, unless it shall be conclusively determined by a court
of competent jurisdiction that the Purchase Contract Agent was negligent in
ascertaining the pertinent facts; and

 

(iii)                               no provision of
this Agreement or the Remarketing Agreement shall require the Purchase Contract
Agent to expend or risk its own funds or otherwise incur any 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.

 

(c)                                  Whether or not
therein expressly so provided, every provision of this Agreement and the
Remarketing Agreement relating to the conduct or affecting the liability of or
affording protection to the Purchase Contract Agent shall be subject to the
provisions of this Section 7.01.

 

(d)                                 On or prior to
the date that is 30 days prior to the first day of the Applicable Remarketing
Period, at the Company’s request given at least five Business Days prior to
such 30th day, the Purchase Contract Agent shall deliver
to the Company, Assured Guaranty US Holdings Inc. and the Remarketing Agent a
signed counterpart of the Remarketing Agreement, signed by an authorized
signatory of the Purchase Contract Agent.

 

78

 

(e)                                  The Purchase
Contract Agent is authorized to execute and deliver the Remarketing Agreement
in its capacity as Purchase Contract Agent.

 

Section 7.02.                             Notice of
Default.  Within 30 days after the
occurrence of any default by the Company hereunder of which a Responsible
Officer of the Purchase Contract Agent has actual knowledge, the Purchase
Contract Agent shall transmit by mail to the Company and the Holders of Units,
as their names and addresses appear in the Security Register, notice of such
default hereunder, unless such default shall have been cured or waived.

 

Section 7.03.                             Certain Rights
of Purchase Contract Agent.  Subject to the provisions of Section 7.01:

 

(a)                                  the Purchase
Contract Agent may, in the absence of bad faith, conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness 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)                                 any request or
direction of the Company mentioned herein shall be sufficiently evidenced by an
Officers’ Certificate, Issuer Order or Issuer Request, and any resolution of
the Board of Directors of the Company may be sufficiently evidenced by a Board
Resolution;

 

(c)                                  whenever in the
administration of this Agreement or the Remarketing Agreement the Purchase
Contract Agent shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting to take any action hereunder or
thereunder, the Purchase Contract Agent (unless other evidence be herein or
therein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers’ Certificate of the Company;

 

(d)                                 the Purchase
Contract Agent may consult with counsel of its selection 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 Purchase
Contract Agent shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the Purchase
Contract Agent, in its discretion, may make reasonable further inquiry or
investigation into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if the Purchase
Contract Agent shall determine to make such further inquiry or investigation,
it shall be entitled to examine the relevant books, records and premises of the
Company, personally or by agent or attorney at the 

 

79

 

expense of the Company and shall incur no
liability of any kind by reason of such inquiry or investigation;

 

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

 

(g)                                 the Purchase
Contract Agent shall be under no obligation to exercise any of the rights or
powers vested in it by this Agreement at the request or direction of any of the
Holders pursuant to this Agreement, unless such Holders shall have offered to
the Purchase Contract Agent security or indemnity satisfactory to the Purchase
Contract Agent against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;

 

(h)                                 the Purchase
Contract Agent shall not be liable for any action taken, suffered, or omitted
to be taken by it in the absence of bad faith or negligence by it and believed
by it to be authorized and within the discretion or rights or powers conferred
upon it by this Agreement;

 

(i)                                     the Purchase
Contract Agent shall not be deemed to have notice of any adjustment to the
Fixed Settlement Rate, the occurrence of a Termination Event or any default
hereunder unless a Responsible Officer of the Purchase Contract Agent has
actual knowledge thereof or unless written notice of any such adjustment,
occurrence or event which is in fact such a default is received by a
Responsible Offer at the Corporate Trust Office of the Purchase Contract Agent,
and such notice references the Units or this Agreement;

 

(j)                                     the Purchase
Contract Agent may request that the Company deliver an Officers’ Certificate
setting forth the names of individuals and/or titles of officers authorized at
such time to take specified actions pursuant to this Agreement, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded;

 

(k)                                  the rights,
privileges, protections, immunities and benefits given to the Purchase Contract
Agent, including, without limitation, its right to be indemnified, are extended
to, and shall be enforceable by, the Purchase Contract Agent in each of its
capacities hereunder, and to each agent, custodian and other Person employed to
act hereunder; and

 

(l)                                     the Purchase
Contract Agent shall not be required to initiate or conduct any litigation or
collection proceedings hereunder and shall have no responsibilities with
respect to any default hereunder except as expressly set forth herein.

 

80

 

Section 7.04.                             Not Responsible
for Recitals or Issuance of Units.  The recitals contained herein, in the
Remarketing Agreement and in the Certificates shall be taken as the statements
of the Company, and the Purchase Contract Agent assumes no responsibility for their
accuracy or validity.  The Purchase
Contract Agent makes no representations as to the validity or sufficiency of
either this Agreement or of the Units or the Pledge or the Collateral and shall
have no responsibility for perfecting or maintaining the perfection of any
security interest in the Collateral.  The
Purchase Contract Agent shall not be accountable for the use or application by
the Company of the proceeds in respect of the Units or the Purchase Contracts.

 

Section 7.05.                             May Hold
Units.  Any Security Registrar or any
other agent of the Company, or the Purchase Contract Agent and its Affiliates,
in their individual or any other capacity, may become the owner or pledgee of
Units and may otherwise deal with the Company, the Collateral Agent or any other
Person with the same rights it would have if it were not Security Registrar or
such other agent, or the Purchase Contract Agent.  The Company may become the owner or pledgee
of Units.

 

Section 7.06.                             Money Held in
Custody.  Money held by the Purchase Contract
Agent in custody hereunder need not be segregated from the Purchase Contract
Agent’s other funds except to the extent required by law or provided
herein.  The Purchase Contract Agent
shall be under no obligation to invest or pay interest on any money received by
it hereunder except as otherwise provided hereunder or agreed in writing with
the Company.

 

Section 7.07.                             Compensation
and Reimbursement.  The Company
agrees: (a) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Remarketing Agreement as the
Company and the Purchase Contract Agent shall from time to time agree in
writing;

 

(b)                                 except as
otherwise expressly provided for herein, to reimburse the Purchase Contract
Agent upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Purchase Contract Agent in accordance with any
provision of this Agreement and the Remarketing Agreement (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel) in connection with the negotiation, preparation, execution and
delivery and performance of this Agreement and the Remarketing Agreement and
any modification, supplement or waiver of any of the terms thereof, except any
such expense, disbursement or advance as shall have been caused by its gross
negligence, willful misconduct or bad faith; and

 

(c)                                  to indemnify
the Purchase Contract Agent and any predecessor Purchase Contract Agent (and
each of its directors, officers, agents and employees) (collectively with the
Purchase Contract Agent, the “Indemnitees”) for, and to hold each
Indemnitee harmless against, any loss, claim, damage, fine, penalty, liability,
fee or expense (including reasonable fees and expenses of counsel) incurred
without negligence, willful misconduct or bad faith on its part, arising out of
or in connection with the acceptance or administration of its duties hereunder
and the Remarketing Agreement, including the Indemnitees’ reasonable costs and
expenses of defending themselves 

 

81

 

against any claim (whether asserted by the
Company, a Holder or any other Person) or liability in connection with the
exercise or performance of any of the Purchase Contract Agent’s powers or
duties hereunder or thereunder.

 

In addition, and without
prejudice to the rights provided to the Purchase Contract Agent hereunder and
under applicable law, when the Purchase Contract Agent incurs expenses or
renders services after a Termination Event occurs, the expense and the
compensation for the services (including the fees and expenses of its counsel)
are intended to constitute expenses of administration under any applicable
federal or state bankruptcy law.

 

The provisions of this Section shall
survive the resignation and removal of the Purchase Contract Agent, the
satisfaction and discharge of the Units and the termination of this Agreement.

 

Section 7.08.                             Corporate
Purchase Contract Agent Required; Eligibility.  There shall at all times be a Purchase
Contract Agent hereunder which shall be a Person organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to exercise corporate trust
powers and having (or being a member of a bank holding company having) a
combined capital and surplus of at least $50,000,000, subject to supervision or
examination by Federal or State authority, qualified and eligible under this
Article.  If such Person publishes or
files 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, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published or filed. 
If at any time the Purchase Contract Agent shall cease to be eligible in
accordance with the provisions of this Section 7, it shall resign
immediately in the manner and with the effect hereinafter specified in this Article 7.

 

Section 7.09.                             Resignation and
Removal; Appointment of Successor.  (a) No resignation or removal of the
Purchase Contract Agent and no appointment of a successor Purchase Contract
Agent pursuant to this Article 7 shall become effective until the
acceptance of appointment by the successor Purchase Contract Agent in
accordance with the applicable requirements of Section 7.10.

 

(b)                                 The Purchase
Contract Agent may resign at any time by giving written notice thereof to the
Company 60 days prior to the effective date of such resignation.  If the instrument of acceptance by a
successor Purchase Contract Agent required by Section 7.10 shall not have
been delivered to the Purchase Contract Agent within 30 days after the giving
of such notice of resignation, the resigning Purchase Contract Agent may
petition, at the expense of the Company, any court of competent jurisdiction
for the appointment of a successor Purchase Contract Agent.

 

(c)                                  The Purchase
Contract Agent may be removed at any time by Act of the Holders of a majority
in number of the Outstanding Units delivered to the Purchase Contract Agent and
the Company.  If the instrument of
acceptance by a successor 

 

82

 

Purchase Contract Agent required by Section 7.10
shall not have been delivered to the Purchase Contract Agent within 30 days
after such Act, the Purchase Contract Agent being removed may petition at the
expense of the Company any court of competent jurisdiction for the appointment
of a successor Purchase Contract Agent.

 

(d)                                 If at any time:

 

(i)                                     the Purchase
Contract Agent fails to comply with Section 310(b) of the TIA, as if
the Purchase Contract Agent were an indenture trustee under an indenture
qualified under the TIA, and shall fail to resign after written request
therefor by the Company or by any Holder who has been a bona fide Holder of a
Unit for at least six months;

 

(ii)                                  the Purchase
Contract Agent shall cease to be eligible under Section 7.08 and shall
fail to resign after written request therefor by the Company or by any such
Holder; or

 

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

 

then, in any such case, (i) the
Company by a Board Resolution may remove the Purchase Contract Agent, or (ii) any
Holder who has been a bona fide Holder of a Unit for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Purchase Contract Agent and the
appointment of a successor Purchase Contract Agent.

 

(e)                                  If the Purchase
Contract Agent shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Purchase Contract Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Purchase
Contract Agent and shall comply with the applicable requirements of Section 7.10.  If no successor Purchase Contract Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 7.10, any Holder who has been a bona fide Holder of a
Unit for at least six months, on behalf of itself and all others similarly
situated, or the Purchase Contract Agent may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.

 

(f)                                    The Company
shall give, or shall cause such successor Purchase Contract Agent to give,
notice of each resignation and each removal of the Purchase Contract Agent and
each appointment of a successor Purchase Contract Agent by mailing written
notice of such event by first-class mail, postage prepaid, to all Holders as
their names and addresses appear in the applicable Security Register.  Each notice shall 

 

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include the name of the successor Purchase
Contract Agent and the address of its Corporate Trust Office.

 

Section 7.10.                             Acceptance of
Appointment by Successor.  (a) In
case of the appointment hereunder of a successor Purchase Contract Agent, every
such successor Purchase Contract Agent so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Purchase Contract Agent an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Purchase Contract Agent shall become effective and such
successor Purchase Contract Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Purchase Contract Agent; but, on the request of the Company or the
successor Purchase Contract Agent, such retiring Purchase Contract Agent shall,
upon payment of amounts owed to it pursuant to Section 7.07, execute and
deliver an instrument transferring to such successor Purchase Contract Agent
all the rights, powers and trusts of the retiring Purchase Contract Agent and
duly assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.

 

(b)                                 Upon request of
any such successor Purchase Contract Agent, the Company shall execute any and
all instruments for more fully and certainly vesting in and confirming to such
successor Purchase Contract Agent all such rights, powers and agencies referred
to in clause (a) of this Section 7.10.

 

(c)                                  No successor
Purchase Contract Agent shall accept its appointment unless at the time of such
acceptance such successor Purchase Contract Agent shall be qualified and
eligible under this Article 7.

 

Section 7.11.                             Merger,
Conversion, Consolidation or Succession to Business.  Any Person into which the Purchase Contract
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 the
Purchase Contract Agent shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Purchase Contract Agent,
shall be the successor of the Purchase Contract Agent hereunder; provided that such
Person shall be otherwise qualified and eligible under this Article 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.  In case any
Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract
Agent may adopt such authentication and execution and deliver the Certificates
so authenticated and executed with the same effect as if such successor
Purchase Contract Agent had itself authenticated and executed such Units.

 

Section 7.12.                             Preservation of
Information; Communications to Holders.  (a) The Purchase Contract Agent shall
preserve, in as current a form as is reasonably practicable, the names and
addresses of Holders received by the Purchase Contract Agent in its capacity as
Security Registrar.

 

84

 

(b)                                 If three or
more Holders (herein referred to as “Applicants”) apply in writing to the
Purchase Contract Agent, and furnish to the Purchase Contract Agent reasonable
proof that each such Applicant has owned a Unit for a period of at least six
months preceding the date of such application, and such application states that
the Applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Units and is accompanied by a copy of
the form of proxy or other communication which such Applicants propose to
transmit, then the Purchase Contract Agent shall mail to all the Holders copies
of the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Purchase Contract Agent of the
materials to be mailed and of payment, or provision for the payment, of the
reasonable expenses of such mailing.

 

Section 7.13.                             No Obligations
of Purchase Contract Agent.  Except to the extent otherwise expressly
provided in this Agreement, the Purchase Contract Agent assumes no obligations
and shall not be subject to any liability under this Agreement, the Remarketing
Agreement or any Purchase Contract in respect of the obligations of the Holder
of any Unit thereunder.  The Company agrees,
and each Holder of a Certificate, by its acceptance thereof, shall be deemed to
have agreed, that the Purchase Contract Agent’s execution of the Certificates
on behalf of the Holders shall be solely as agent and attorney-in-fact for the
Holders, and that the Purchase Contract Agent shall have no obligation to
perform such Purchase Contracts on behalf of the Holders, except to the extent
expressly provided in Article 5 hereof. 
Anything contained in this Agreement to the contrary notwithstanding, in
no event shall the Purchase Contract Agent or its officers, directors,
employees or agents be liable under this Agreement or the Remarketing Agreement
for (i) indirect, incidental, special, punitive, or consequential loss or
damage of any kind whatsoever, including lost profits, whether or not the
likelihood of such loss or damage was known to the Purchase Contract Agent and
regardless of the form of action; or (ii) any failure or delay in the
performance of its obligations under this Agreement arising out of or caused
directly or indirectly, by acts of God; earthquake; fires; floods; wars; civil
or military disturbances; terrorist acts; sabotage; epidemics; riots;
interruptions, loss or malfunctions of utilities; accidents; labor disputes;
and acts of civil or military authority or governmental actions; it being
understood that the Purchase Contract Agent shall use reasonable efforts which
are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.

 

Section 7.14.                             Tax Compliance.  (a) The Purchase Contract Agent, on its
own behalf and on behalf of the Company, will comply with all applicable
certification, information reporting and withholding (including “backup”
withholding) requirements imposed by applicable tax laws, regulations or
administrative practice with respect to (i) any payments made with respect
to the Units or (ii) the issuance, delivery, holding, transfer, redemption
or exercise of rights under the Units. 
Such compliance shall include, without limitation, the preparation and
timely filing of required returns and the timely payment of all amounts
required to be withheld to the appropriate taxing authority or its designated
agent.

 

85

 

(b)                                 The Purchase
Contract Agent shall comply in accordance with the terms hereof with any
written direction received from the Company with respect to the execution or
certification of any required documentation and the application of such
requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on any
such direction in accordance with the provisions of Section 7.01(a) hereof.

 

(c)                                  The Purchase
Contract Agent shall maintain all appropriate records documenting compliance
with such requirements, and shall make such records available, on written
request, to the Company or its authorized representative within a reasonable
period of time after receipt of such request.

 

ARTICLE 8

SUPPLEMENTAL AGREEMENTS

 

Section 8.01.                             Supplemental
Agreements without Consent of Holders.  Without the consent of any Holders, the
Company, when authorized by a Board Resolution, the Purchase Contract Agent,
the Collateral Agent, the Custodial Agent and the Securities Intermediary at
any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Purchase
Contract Agent, to:

 

(a)                                  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 Certificates;

 

(b)                                 evidence and
provide for the acceptance of appointment hereunder by a successor Purchase
Contract Agent, Collateral Agent, Securities Intermediary or Custodial Agent;

 

(c)                                  add to the
covenants of the Company for the benefit of the Holders, or surrender any right
or power herein conferred upon the Company;

 

(d)                                 make provision
with respect to the rights of Holders pursuant to the requirements of Section 5.04(b);
or

 

(e)                                  except as
provided for in Section 5.04, cure any ambiguity (or formal defect), or
correct or supplement any provisions herein that may be inconsistent with any
other provisions herein or to make such other provisions in regard to such
matters or questions arising under this Agreement; provided that such action shall not materially adversely
affect the interests of the Holders; provided,
further, that any amendment made
solely to conform the provisions of this Agreement to the description of the
Units and the Purchase Contracts contained in the final prospectus supplement
dated June 18, 2009, relating to the Units under the sections entitled “Description
of the Equity Units,” “Description of the Purchase Contracts,” “Certain
Provisions of the Purchase Contract and Pledge Agreement” or “Description of
the Notes” shall be deemed not to adversely affect the interests of the
Holders.

 

86

 

Section 8.02.                             Supplemental
Agreements with Consent of Holders.  With the consent of the Holders of not less
than a majority of the Outstanding Units voting together as one class,
including, without limitation, the consent of the Holders obtained in
connection with a tender or an exchange offer, by Act of said Holders delivered
to the Company, the Purchase Contract Agent, the Company, the Collateral Agent,
the Securities Intermediary and the Custodial Agent, as the case may be, when
authorized by a Board Resolution, may enter into an agreement or agreements supplemental
hereto for the purpose of modifying in any manner the terms of the Purchase
Contracts, or the provisions of this Agreement or the rights of the Holders in
respect of the Units; provided, however, that, except
as contemplated herein, no such supplemental agreement shall, without the
consent of the Holder of each outstanding Purchase Contract affected thereby,

 

(a)                                  change the
amount or type of Collateral required to be Pledged to secure a Holder’s
obligations under the Purchase Contract (except for the rights of Holders of
Corporate Units to substitute Treasury Securities for the Notes underlying the
Pledged Applicable Ownership Interests in Notes or the Pledged Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, or the rights
of Holders of Treasury Units to substitute Notes underlying the Pledged
Applicable Ownership Interests in Notes or the Applicable Ownership Interests
in the Treasury Portfolio (as specified in clause (i) in each paragraph of
the definitions of Applicable Ownership Interest in the Special Event Treasury
Portfolio and Applicable Ownership Interest in the Remarketing Treasury
Portfolio), as applicable, for the Pledged Treasury Securities), impair the
right of the Holder of any Purchase Contract to receive distributions on the
related Collateral or otherwise adversely affect the Holder’s rights in or to
such Collateral;

 

(b)                                 impair the
Holders’ right to institute suit for the enforcement of any Purchase Contract;

 

(c)                                  except as set
forth in Section 5.04, reduce the number of Common Shares or the amount of
any other property to be purchased pursuant to any Purchase Contract, increase
the price to purchase Common Shares or any other property upon settlement of
any Purchase Contract or change the Purchase Contract Settlement Date or the
right to Early Settlement or Fundamental Change Early Settlement or otherwise
adversely affect the Holder’s rights under the Purchase Contract; or

 

(d)                                 reduce the
percentage of the outstanding Purchase Contracts the consent of whose Holders
is required for any modification or amendment to the provisions of this
Agreement or the Purchase Contracts;

 

provided that if any
amendment or proposal referred to above would adversely affect only the
Corporate Units or the Treasury Units, then only the affected class of Holders
as of the record date for the Holders entitled to vote thereon will be entitled
to vote on such amendment or proposal, and such amendment or proposal shall not
be effective except with the consent of Holders of not less than a majority of
such class; and provided, further, that the unanimous consent of the
Holders of each outstanding Purchase Contract 

 

87

 

of such class affected
thereby shall be required to approve any amendment or proposal specified in
clauses (a) through (d) of this Section 8.02.

 

It shall not be necessary
for any Act of Holders under this Section 8.02 to approve the particular
form of any proposed supplemental agreement, but it shall be sufficient if such
Act shall approve the substance thereof.

 

Section 8.03.                             Execution of
Supplemental Agreements.  In
executing, or accepting the additional agencies created by, any supplemental
agreement permitted by this Article or the modifications thereby of the
agencies created by this Agreement, the Purchase Contract Agent, the Collateral
Agent, the Securities Intermediary and the Custodial Agent shall be provided,
and (subject to Section 7.01 with respect to the Purchase Contract Agent)
shall be fully authorized and protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement and that
any and all conditions precedent to the execution and delivery of such
supplemental agreement have been satisfied. 
The Purchase Contract Agent, the Collateral Agent, the Securities
Intermediary and the Custodial Agent may, but shall not be obligated to, enter
into any such supplemental agreement which affects their own rights, duties or
immunities under this Agreement or otherwise.

 

Section 8.04.                             Effect of
Supplemental Agreements.  Upon
the execution of any supplemental agreement under this Article 8, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every
Holder of Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered hereunder, shall be bound thereby.

 

Section 8.05. Reference
to Supplemental Agreements. 
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this Article 8
may, and shall if required by the Purchase Contract Agent, bear a notation in
form approved by the Purchase Contract Agent as to any matter provided for in
such supplemental agreement.  If the
Company shall so determine, new Certificates so modified as to conform, in the
opinion of the Purchase Contract Agent and the Company, to any such
supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Purchase
Contract Agent in exchange for outstanding Certificates.

 

ARTICLE 9

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

 

Section 9.01.                             Covenant Not to
Consolidate, Merge, Convey, Transfer or Lease Property Except under Certain
Conditions.  The Company
covenants that it will not merge with or into, consolidate with or convert into
any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets to any other Person, unless:

 

88

 

(a)                                  either the
Company shall be the surviving Person, or the successor Person (if other than
the Company) shall be an entity organized and existing under the laws of the
United States of America or a state thereof or the District of Columbia or
Bermuda and such Person shall expressly assume all the obligations of the
Company under the Purchase Contracts, this Agreement (including the Pledge
provided for herein) and the Remarketing Agreement (if the Company and Assured
Guaranty US Holding Inc. have executed the Remarketing Agreement on or prior to
the time of the merger, consolidation, sale, assignment, transfer, lease or
conveyance) by one or more supplemental agreements in form reasonably
satisfactory to the Purchase Contract Agent and the Collateral Agent, executed
and delivered to the Purchase Contract Agent and the Collateral Agent by such
Person; and

 

(b)                                 the Company or
such successor Person, as the case may be, shall not, immediately after such
merger, consolidation, conversion, sale, assignment, transfer, lease or
conveyance, be in default of payment obligations under the Purchase Contracts,
this Agreement or the Remarketing Agreement (if the Company and Assured
Guaranty US Holding Inc. have executed the Remarketing Agreement on or prior to
the time of the merger, consolidation, sale, assignment, transfer, lease or
conveyance) or in material default in the performance of any other covenants
under any of the foregoing agreements.

 

Section 9.02.                             Rights and
Duties of Successor Corporation.  In case of any such merger, consolidation,
conversion, sale, assignment, transfer, lease or conveyance and upon any such
assumption by a successor Person in accordance with Section 9.01, such
successor Person shall succeed to and be substituted for the Company with the
same effect as if it had been named herein as the Company and the Company
(except in the case of a lease) shall be relieved of any of their Obligations
under this Agreement and under the Units. 
Such successor Person thereupon may cause to be signed, and may issue
either in its own name or in the name of Assured Guaranty Ltd. (or any permitted
successor thereto) any or all of the Certificates evidencing Units issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Purchase Contract Agent; and, upon the order of such surviving
Person, instead of the Company, and subject to all the terms, conditions and
limitations in this Agreement prescribed, the Purchase Contract Agent shall
authenticate and execute on behalf of the Holders and deliver any Certificates
which previously shall have been signed and delivered by the officers of the
Company to the Purchase Contract Agent for authentication and execution, and
any Certificate evidencing Units which such successor Person thereafter shall
cause to be signed and delivered to the Purchase Contract Agent for that
purpose.  All the Certificates issued
shall in all respects have the same legal rank and benefit under this Agreement
as the Certificates theretofore or thereafter issued in accordance with the
terms of this Agreement as though all of such Certificates had been issued at
the date of the execution hereof.

 

In case of any such merger,
consolidation, conversion, sale, assignment, transfer, lease or conveyance such
change in phraseology and form (but not in substance) may be made in the
Certificates evidencing Units thereafter to be issued as may be appropriate.

 

89

 

Section 9.03.                             Officers’
Certificate and Opinion of Counsel Given to Purchase Contract Agent.  The Purchase Contract Agent, subject to Section 7.01
and Section 7.03, shall receive an Officers’ Certificate and an Opinion of
Counsel as conclusive evidence that any such merger, consolidation, conversion,
sale, assignment, transfer, lease or conveyance, and any such assumption,
complies with the provisions of this Article and that all conditions
precedent to the consummation of any such merger, consolidation, conversion,
sale, assignment, transfer, lease or conveyance have been met.

 

ARTICLE 10

COVENANTS

 

Section 10.01.                       Performance
under Purchase Contracts.  The
Company covenants and agrees for the benefit of the Holders from time to time
of the Units that it will duly and punctually perform its obligations under the
Purchase Contracts in accordance with the terms of the Purchase Contracts and
this Agreement.

 

Section 10.02.                       Maintenance of
Office or Agency.  The Company
will maintain in the Borough of Manhattan, City of New York, New York, an
office or agency where Certificates may be presented or surrendered for
acquisition of Common Shares upon settlement of the Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement or Fundamental
Change Early Settlement and for transfer of Collateral upon occurrence of a
Termination Event, where Certificates may be surrendered for registration of
transfer or exchange, for a Collateral Substitution or recreation of Corporate
Units and where notices and demands to or upon the Company in respect of the
Units and this Agreement may be served. 
The Company will give prompt written notice to the Purchase Contract
Agent of the location, and any change in the location, of such office or
agency.  The Company initially designates
the Corporate Trust Office of the Purchase Contract Agent as such office of the
Company.  If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Purchase Contract Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Purchase Contract
Agent as its agent to receive all such presentations, surrenders, notices and
demands.

 

The Company may also from
time to time designate one or more other offices or agencies where Certificates
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided,
however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, City of New York, New
York for such purposes.  The Company will
give prompt written notice to the Purchase Contract Agent of any such
designation or rescission and of any change in the location of any such other
office or agency.  The Company hereby
designates as the place of payment for the Units the Corporate Trust Office and
appoints the Purchase Contract Agent at its Corporate Trust Office as paying
agent in such city.

 

90

 

Section 10.03.                       Company to
Reserve Common Shares.  The
Company shall at all times prior to the Purchase Contract Settlement Date
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Shares the full number of Common Shares issuable against
tender of payment in respect of all Purchase Contracts constituting a part of
the Units evidenced by Outstanding Certificates.

 

Section 10.04.                       Covenants as to
Common Shares; Listing.  (a) The
Company covenants that all Common Shares which may be issued against tender of
payment in respect of any Purchase Contract constituting a part of the
Outstanding Units will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable.

 

The Company further
covenants that, if at any time the Common Shares shall be listed on the NYSE or
any other national securities exchange or automated quotation system, the
Company will, if permitted by the rules of such exchange or automated
quotation system, list and keep listed, so long as the Common Shares shall be
so listed on such exchange or automated quotation system, all Common Shares
issuable upon Settlement of Purchase Contracts; provided, however,
that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Shares until the date on which
any Purchase Contract is first settled in accordance with the provisions of
this Agreement, the Company covenants to list such Common Shares issuable upon
settlement of the Purchase Contracts in accordance with the requirements of
such exchange or automated quotation system at such time.

 

Section 10.05.                       Statements of
Officers of the Company as to Default.  The Company will deliver to the Purchase
Contract Agent, within 120 days after the end of each fiscal year of the
Company (which as of the date hereof is December 31) ending after the date
hereof, an Officers’ Certificate, stating whether or not to the knowledge of
the signers thereof, the Company is in default in the performance and observance
of any of the terms, provisions and conditions of this Agreement, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

 

Section 10.06.                       ERISA.  Each Holder from time to time of the Units
that is a Plan or who used assets of a Plan to purchase Units hereby represents
that either (i) no portion of the assets used by such Holder to acquire
Units (or by any Beneficial Owner with a Book-Entry Interest in such Units that
is a Plan or that used assets of a Plan to acquire such Book-Entry Interest)
constitutes assets of the Plan or (ii) the purchase or holding of the
Units by such Holder or Beneficial Owner will not constitute a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code or similar violation under any applicable laws.

 

Section 10.07.                       Tax Treatment.  The Company covenants and agrees for all tax
purposes (i) to treat each Beneficial Owner of a Unit as the owner of the
related Notes underlying the Corporate Units, the Applicable Ownership
Interests in the Treasury Portfolio or the Treasury Securities, as the case may
be, (ii) to treat the Notes as indebtedness of Assured Guaranty US
Holdings Inc. that are subject to the rules applicable to contingent
payment debt instruments under Treas. Reg. Sec. 1.1275-4 for 

 

91

 

U.S. federal, state and local income and
franchise tax purposes and (iii) to treat the Corporate Units as comprised
of the Notes and the Purchase Contracts as separate securities.

 

ARTICLE 11

PLEDGE

 

Section 11.01.                       Pledge.  Each Holder, acting through the Purchase
Contract Agent as such Holder’s attorney-in-fact, and the Purchase Contract
Agent, acting solely as such attorney-in-fact, hereby pledges and grants to the
Collateral Agent, as agent of and for the benefit of the Company, a continuing
first priority security interest in and to, and a lien upon and right of
set-off against, all of such Person’s right, title and interest in and to the
Collateral to secure the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the
Obligations.  The Collateral Agent shall
have all of the rights, remedies and recourses with respect to the Collateral
afforded a secured party by the UCC, in addition to, and not in limitation of,
the other rights, remedies and recourses afforded to the Collateral Agent by
this Agreement.

 

Section 11.02.                       Termination.  As to each Holder, the Pledge created hereby
shall terminate upon the satisfaction of such Holder’s Obligations.  Upon such termination, the Collateral Agent
shall instruct the Securities Intermediary to Transfer such portion of the
Collateral attributable to such Holder to the Purchase Contract Agent for
distribution to such Holder, free and clear of the Pledge created hereby.

 

ARTICLE 12

ADMINISTRATION OF COLLATERAL

 

Section 12.01.                       Initial Deposit
of Notes.  (a) Prior
to or concurrently with the execution and delivery of this Agreement, the
Purchase Contract Agent, on behalf of the initial Holders of the Corporate
Units, shall Transfer to the Securities Intermediary, for credit to the
Collateral Account, the Applicable Ownership Interests in Notes and the Notes
underlying such Applicable Ownership Interests in Notes or security
entitlements relating thereto and the Securities Intermediary shall indicate by
book-entry that a securities entitlement with respect to such Applicable
Ownership Interests in Notes has been credited to the Collateral Account.

 

(b)                                 The Collateral
Agent may, at any time or from time to time, in its sole discretion, cause any
or all securities or other property underlying any financial assets credited to
the Collateral Account to be registered in the name of the Securities
Intermediary, the Collateral Agent or their respective nominees; provided, however,
that unless any Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the Collateral Agent agrees not to cause any Notes
to be so re-registered.

 

92

 

Section 12.02.                       Establishment
of Collateral Account.  The
Securities Intermediary hereby confirms that:

 

(a)                                  the Securities
Intermediary has established the Collateral Account;

 

(b)                                 the Collateral
Account is a securities account;

 

(c)                                  subject to the
terms of this Agreement, the Securities Intermediary shall identify in its
records the Collateral Agent as the entitlement holder entitled to exercise the
rights that comprise any financial asset credited to the Collateral Account;

 

(d)                                 all property
delivered to the Securities Intermediary pursuant to this Agreement, including
any Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (i) of each paragraph of the definitions Applicable Ownership
Interest in the Special Event Treasury Portfolio and Applicable Ownership
Interest in the Remarketing Treasury Portfolio) or Treasury Securities and the
Permitted Investments, will be credited promptly to the Collateral Account; and

 

(e)                                  all securities
or other property underlying any financial assets credited to the Collateral
Account shall be (i) registered in the name of the Purchase Contract Agent
and indorsed to the Securities Intermediary or in blank, (ii) registered
in the name of the Securities Intermediary or (iii) credited to another
securities account maintained in the name of the Securities Intermediary.

 

In
no case will any financial asset credited to the Collateral Account be
registered in the name of the Purchase Contract Agent (in its capacity as such)
or any Holder or specially indorsed to the Purchase Contract Agent (in its
capacity as such) or any Holder, unless such financial asset has been further
indorsed to the Securities Intermediary or in blank.

 

Section 12.03.                       Treatment as
Financial Assets.  Each item
of property (whether investment property, financial asset, security, instrument
or cash) credited to the Collateral Account shall be treated as a financial
asset.

 

Section 12.04.                       Sole Control by
Collateral Agent.  Except as
provided in Section 15.01, at all times prior to the termination of the
Pledge, the Collateral Agent shall have sole control of the Collateral Account,
and the Securities Intermediary shall take instructions and directions, and
comply with entitlement orders, with respect to the Collateral Account or any
financial asset credited thereto solely from the Collateral Agent.  If at any time the Securities Intermediary
shall receive an entitlement order issued by the Collateral Agent and relating
to the Collateral Account, the Securities Intermediary shall comply with such
entitlement order without further consent by the Purchase Contract Agent or any
Holder or any other Person.  Except as
otherwise permitted under this Agreement, until termination of the Pledge, the
Securities Intermediary will not comply with any entitlement orders issued by
the Purchase Contract Agent or any Holder.

 

93

 

Section 12.05.                       Jurisdiction.  The Collateral Account, and the rights and
obligations of the Securities Intermediary, the Collateral Agent, the Purchase
Contract Agent and the Holders with respect thereto, shall be governed by the
internal laws of the State of New York. 
Regardless of any provision in any other agreement, the Securities
Intermediary’s jurisdiction is the State of New York.

 

Section 12.06.                       No Other Claims.  Except for the claims and interest of the
Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without having conducted any
investigation) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto.  If the Securities Intermediary receives written
notice at its corporate trust office in New York City or if an officer thereof
assigned to such office has actual knowledge that any Person has asserted any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Purchase Contract Agent.

 

Section 12.07.                       Investment and
Release.  All proceeds of financial
assets from time to time credited to the Collateral Account shall be invested
and reinvested as provided in this Agreement. 
At all times prior to termination of the Pledge, no property shall be
released from the Collateral Account except in accordance with this Agreement
or upon written instructions of the Collateral Agent.

 

Section 12.08.                       Statements and
Confirmations.  The
Securities Intermediary will promptly send copies of all statements,
confirmations and other correspondence concerning the Collateral Account and
any financial assets credited thereto simultaneously to each of the Purchase
Contract Agent and the Collateral Agent at their addresses for notices under
this Agreement.

 

Section 12.09.                       Tax Allocations.  The Collateral Agent shall report all items
of income, gain, expense and loss recognized in the Collateral Account, to the
extent such reporting is required by law, to the Internal Revenue Service
authorities in the manner required by law. 
Neither the Securities Intermediary nor the Purchase Contract Agent shall
have any tax reporting duties hereunder.

 

Section 12.10.                       No Other
Agreements.  The
Securities Intermediary has not entered into, and prior to the termination of
the Pledge will not enter into, any agreement with any other Person relating to
the Collateral Account or any financial assets credited thereto, including,
without limitation, any agreement to comply with entitlement orders of any
Person other than the Collateral Agent.

 

Section 12.11.                       Powers Coupled
with an Interest.  The rights
and powers granted in this Purchase Contract and Pledge Agreement to the
Collateral Agent have been granted in order to perfect its security interests
in the Collateral Account, are powers coupled with an interest and will be
affected neither by the bankruptcy of the Purchase Contract Agent or any Holder
nor by the lapse of time.  The
obligations of the Securities 

 

94

 

Intermediary under this Purchase Contract and
Pledge Agreement shall continue in effect until the termination of the Pledge.

 

Section 12.12.                       Waiver of Lien;
Waiver of Set-off.  The
Securities Intermediary waives any security interest, lien or right to make
deductions or set-offs that it may now have or hereafter acquire in or with
respect to the Collateral Account, any financial asset credited thereto or any
security entitlement in respect thereof. 
Neither the financial assets credited to the Collateral Account nor the
security entitlements in respect thereof will be subject to deduction, set-off,
banker’s lien, or any other right in favor of any person other than the
Company.

 

ARTICLE 13

RIGHTS AND REMEDIES OF THE COLLATERAL AGENT

 

Section 13.01.                       Rights and
Remedies of the Collateral Agent.  (a) In addition to the rights and
remedies set forth herein or otherwise available at law or in equity, after a
collateral event of default (as specified in Section 13.01(b) below)
hereunder, the Collateral Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the UCC (whether or not the
UCC is in effect in the jurisdiction where the rights and remedies are
asserted) and the TRADES Regulations and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted.  Without limiting the generality of the
foregoing, such remedies may include, to the extent permitted by applicable
law, (1) retention of the Notes underlying Pledged Applicable Ownership
Interests in Notes, the Pledged Treasury Securities or the Pledged Applicable
Ownership Interests in the Treasury Portfolio in satisfaction, in whole or in
part, of the Holders’ obligations under the Purchase Contracts and the Purchase
Contract Agreement or (2) sale of the Notes underlying Pledged Applicable
Ownership Interests in Notes, Pledged Treasury Securities or the Pledged
Applicable Ownership Interests in the Treasury Portfolio in one or more public
or private sales.

 

(b)                                 Without
limiting any rights or powers otherwise granted by this Agreement to the
Collateral Agent, in the event the Collateral Agent is unable to make payments
to the Company on account of the Proceeds of (i) the Notes underlying
Pledged Applicable Ownership Interest in Notes, (ii) the Pledged
Applicable Ownership Interests in the Treasury Portfolio or (iii) the
Pledged Treasury Securities as provided in this Agreement in satisfaction of
the Obligations of the Holder of the Units of which such applicable Pledged
Applicable Ownership Interest in Notes, Pledged Applicable Ownership Interests
in the Treasury Portfolio or such Pledged Treasury Securities, as applicable,
are a part under the related Purchase Contracts, the inability to make such
payments shall constitute a “collateral event of default” hereunder and
the Collateral Agent shall have and may exercise, with reference to such Notes
underlying Pledged Applicable Ownership Interests in Notes, Pledged Treasury
Securities or Pledged Applicable Ownership Interests in the Treasury Portfolio,
as applicable, any and all of the rights and remedies available to a secured
party under the UCC and the TRADES 

 

95

 

Regulations after default by a debtor, and as
otherwise granted herein or under any other law.

 

(c)                                  Without
limiting any rights or powers otherwise granted by this Agreement to the
Collateral Agent, the Collateral Agent is hereby irrevocably authorized to
receive, collect and apply to the satisfaction of the Obligations all payments
of (i) the principal amount of the Notes underlying Pledged Applicable
Ownership Interests in Notes, (ii) the principal amount of the Pledged
Treasury Securities and (iii) the Pledged Applicable Ownership Interests
in the Treasury Portfolio (as specified in clause (i) of each paragraph of
the definitions of Applicable Ownership Interest in the Special Event Treasury
Portfolio and Applicable Ownership Interest in the Remarketing Treasury
Portfolio), subject, in each case, to the provisions of this Agreement, and as
otherwise provided herein.

 

(d)                                 The Purchase
Contract Agent and each Holder of Units agrees that, from time to time, upon
the written request of the Collateral Agent, the Purchase Contract Agent on
behalf of such Holder, shall execute and deliver such further documents and do
such other acts and things as the Collateral Agent may reasonably request in
order to maintain the Pledge, and the perfection and priority thereof, and to
confirm the rights of the Collateral Agent hereunder.  The Purchase Contract Agent shall have no liability
to any Holder for executing any documents or taking any such acts requested by
the Collateral Agent hereunder, except for liability for its own negligent
acts, its own negligent failure to act or its own willful misconduct.

 

ARTICLE 14

REPRESENTATIONS AND WARRANTIES TO

COLLATERAL AGENT; HOLDER COVENANTS

 

Section 14.01.                       Representations
and Warranties.  Each Holder
from time to time, acting through the Purchase Contract Agent as
attorney-in-fact (it being understood that the Purchase Contract Agent shall
not be liable for any representation or warranty made by or on behalf of a
Holder), hereby represents and warrants to the Collateral Agent (with respect
to such Holder’s interest in the Collateral), which representations and
warranties shall be deemed repeated on each day a Holder effects a Transfer of
Collateral, that:

 

(a)                                  such Holder has
the power to grant a security interest in and lien on the Collateral;

 

(b)                                 such Holder is
the sole beneficial owner of the Collateral and, in the case of Collateral
delivered in physical form, is the sole holder of such Collateral and is the
sole beneficial owner of, or has the right to Transfer, the Collateral it
Transfers to the Collateral Agent for credit to the Collateral Account, free
and clear of any security interest, lien, encumbrance, call, liability to pay
money or other restriction other than the security interest and lien granted
under Article 11 hereof;

 

96

 

(c)                                  upon the
Transfer of the Collateral to the Securities Intermediary for credit to the
Collateral Account, the Collateral Agent, for the benefit of the Company, will
have a valid and perfected first priority security interest therein (assuming
that any central clearing operation or any securities intermediary or other
entity not within the control of the Holder involved in the Transfer of the
Collateral, including the Collateral Agent and the Securities Intermediary,
gives the notices and takes the action required of it hereunder and under
applicable law for perfection of that interest and assuming the establishment
and exercise of control pursuant to Article 12 hereof); and

 

(d)                                 the execution
and performance by the Holder of its obligations under this Agreement will not
result in the creation of any security interest, lien or other encumbrance on
the Collateral (other than the security interest and lien granted under Article 11
hereof) or violate any provision of any existing law or regulation applicable
to it or of any mortgage, charge, pledge, indenture, contract or undertaking to
which it is a party or which is binding on it or any of its assets.

 

Section 14.02.                       Covenants.  The Purchase Contract Agent and the Holders
from time to time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the Purchase Contract Agent shall
not be liable for any covenant made by or on behalf of a Holder), hereby
covenant to the Collateral Agent and the Company that for so long as the
Collateral remains subject to the Pledge:

 

(a)                                  neither the
Purchase Contract Agent nor such Holders will create or purport to create or
allow to subsist any mortgage, charge, lien, pledge or any other security
interest whatsoever over the Collateral or any part of it other than pursuant
to this Agreement; and

 

(b)                                 neither the
Purchase Contract Agent nor such Holders will sell or otherwise dispose (or
attempt to dispose) of the Collateral or any part of it except for the
beneficial interest therein, subject to the Pledge hereunder, transferred in
connection with a Transfer of the Units.

 

ARTICLE 15

THE COLLATERAL AGENT, THE CUSTODIAL AGENT 

AND THE SECURITIES INTERMEDIARY

 

Section 15.01.                       Appointment,
Powers and Immunities.  The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall act
as agent for the Company hereunder with such powers as are specifically vested
in the Collateral Agent, the Custodial Agent and the Securities Intermediary,
as the case may be, by the terms of this Agreement.  The Collateral Agent, the Custodial Agent and
Securities Intermediary shall:

 

(a)                                  have no duties
or responsibilities except those expressly set forth in this Agreement and no
implied covenants or obligations shall be inferred from this Agreement against
the Collateral Agent, the Custodial Agent or the Securities Intermediary, nor
shall the Collateral Agent, the Custodial Agent or the Securities 

 

97

 

Intermediary be bound by the provisions of
any agreement by any party hereto beyond the specific terms hereof;

 

(b)                                 not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement or the Units, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement (other than as against the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be), the Units, any Collateral or any other document referred to or
provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or Securities
Intermediary, as the case may be) to perform any of its obligations hereunder
or thereunder or, except as expressly required hereby, for the perfection,
priority or maintenance of any security interest created hereunder;

 

(c)                                  not be required
to initiate or conduct any litigation or collection proceedings hereunder
(except pursuant to directions furnished under Section 15.02 hereof, subject
to Section 15.08 hereof);

 

(d)                                 not be
responsible for any action taken or omitted to be taken by it hereunder or
under any other document or instrument referred to or provided for herein or in
connection herewith or therewith, except for its own gross negligence or
willful misconduct; and

 

(e)                                  not be required
to advise any party as to selling or retaining, or taking or refraining from
taking any action with respect to, any securities or other property deposited
hereunder.

 

Subject to the foregoing, during
the term of this Agreement, the Collateral Agent, the Custodial Agent and the
Securities Intermediary shall take all reasonable action in connection with the
safekeeping and preservation of the Collateral hereunder as determined by
industry standards.

 

No provision of this
Agreement shall require the Collateral Agent, the Custodial Agent or the
Securities Intermediary to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder.  In no event shall the Collateral Agent, the
Custodial Agent or the Securities Intermediary be liable for any amount in
excess of the Value of the Collateral.

 

Section 15.02.                       Instructions of
the Company.  The Company
shall have the right, by one or more written instruments executed and delivered
to the Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however,
that (i) such direction shall not conflict with the provisions of any law
or of this Agreement or involve the Collateral Agent in personal liability and (ii) the
Collateral Agent shall be indemnified to its satisfaction as provided
herein.  Nothing contained in this Section 15.02
shall impair the right of the 

 

98

 

Collateral Agent in its discretion to take
any action or omit to take any action which it deems proper and which is not
inconsistent with such direction.  None
of the Collateral Agent, the Custodial Agent or the Securities Intermediary has
any obligation or responsibility to file UCC financing statements.

 

Section 15.03.                       Reliance by
Collateral Agent, Custodial Agent and Securities Intermediary.  Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled to rely conclusively
upon any certification, order, judgment, opinion, notice or other written
communication (including, without limitation, any thereof by electronic mail or
similar electronic means, telecopy or facsimile) believed by it in good faith
to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons (without being required to determine the
correctness of any fact stated therein) and consult with and conclusively rely
upon advice, opinions and statements of legal counsel and other experts selected
by the Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be.  As to any matters not
expressly provided for by this Agreement, the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company in accordance with this Agreement.

 

Section 15.04.                       Certain Rights.  (a) Whenever in the administration of
the provisions of this Agreement the Collateral Agent, the Custodial Agent or
the Securities Intermediary shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering any action to be taken
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Collateral Agent, the Custodial Agent or the Securities
Intermediary, be deemed to be conclusively proved and established by an Officers’
Certificate delivered to the Collateral Agent, the Custodial Agent or the
Securities Intermediary and such certificate, in the absence of gross
negligence or bad faith on the part of the Collateral Agent, the Custodial
Agent or the Securities Intermediary, shall be full warrant to the Collateral
Agent, the Custodial Agent or the Securities Intermediary for any action taken,
suffered or omitted by it under the provisions of this Agreement upon the faith
thereof.

 

(b)                                 The Collateral
Agent, the Custodial Agent or the Securities Intermediary shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
entitlement order, approval or other paper or document.

 

Section 15.05.                       Merger,
Conversion, Consolidation or Succession to Business.  Any Person or national association into which
the Collateral Agent, the Custodial Agent or the Securities Intermediary may be
merged or converted or with which it may be consolidated, or any Person or
national association resulting from any merger, conversion or consolidation to
which the Collateral Agent, the Custodial Agent or the Securities Intermediary
shall be a party, or any Person or national association succeeding to all or
substantially all of the corporate trust business of the Collateral Agent, the
Custodial Agent or the Securities Intermediary shall be the successor of the
Collateral Agent, the 

 

99

 

Custodial Agent or the Securities
Intermediary hereunder without the execution or filing of any paper with any
party hereto or any further act on the part of any of the parties hereto except
where an instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding.

 

Section 15.06.                       Rights in Other
Capacities.  The
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may (without having to account therefor to the Company) accept
deposits from, lend money to, make their investments in and generally engage in
any kind of banking, trust or other business with the Purchase Contract Agent,
any other Person interested herein and any Holder of Units (and any of their
respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, and the Collateral Agent, the Custodial Agent, the Securities
Intermediary and their affiliates may accept fees and other consideration from
the Purchase Contract Agent and any Holder of Units without having to account
for the same to the Company; provided that each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary covenants and agrees
with the Company that it shall not accept, receive or permit there to be
created in favor of itself and shall take no affirmative action to permit there
to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral other than the lien
created by the Pledge.

 

Section 15.07.                       Non-reliance on
Collateral Agent, the Custodial Agent and Securities Intermediary.  None of the Collateral Agent, the Custodial
Agent or the Securities Intermediary shall be required to keep itself informed
as to the performance or observance by the Purchase Contract Agent or any
Holder of Units of this Agreement, the Units or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Purchase Contract Agent or any Holder of Units. 
None of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have any duty or responsibility to provide the Company with
any credit or other information concerning the affairs, financial condition or
business of the Purchase Contract Agent or any Holder of Units (or any of their
respective affiliates) that may come into the possession of the Collateral
Agent, the Custodial Agent or the Securities Intermediary or any of their
respective affiliates.

 

Section 15.08.                       Compensation
and Indemnity.  The Company
agrees to:

 

(a)                                  pay the
Collateral Agent, the Custodial Agent and the Securities Intermediary from time
to time such compensation as shall be agreed in writing between the Company and
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be, for all services rendered by them hereunder;

 

(b)                                 indemnify and
hold harmless the Collateral Agent, the Custodial Agent, the Securities Intermediary
and each of their respective directors, officers, agents and employees (for
purposes of this Section 15.08, the “Pledge  Indemnitees”), from and
against any and all claims, liabilities, losses, damages, fines, penalties and
expenses (including reasonable fees and expenses of counsel) (collectively, “Losses” and individually, a “Loss”) that may be imposed on,
incurred by, or asserted against, the 

 

100

 

Pledge Indemnitees or any of them for
following any instructions or other directions upon which any of the Collateral
Agent, the Custodial Agent or the Securities Intermediary is entitled to rely
pursuant to the terms of this Agreement; provided
that the Collateral Agent, the Custodial Agent or the Securities Intermediary
has not acted with negligence or engaged in willful misconduct or bad faith
with respect to the specific Loss against which indemnification is sought; and

 

(c)                                  in addition to
and not in limitation of clause (b) of this Section 15.08, indemnify
and hold the Pledge Indemnitees and each of them harmless from and against any
and all Losses that may be imposed on, incurred by or asserted against, the
Pledge Indemnitees or any of them in connection with or arising out of the
Collateral Agent’s, the Custodial Agent’s or the Securities Intermediary’s
acceptance or performance of its powers and duties under this Agreement,
provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with negligence or engaged in willful misconduct or
bad faith with respect to the specific Loss against which indemnification is
sought, including the Pledge Indemnitee’s reasonable costs and expenses of
defending themselves against any claim (whether asserted by the Company, a
Holder or any other Person) or liability in connection with the exercise or
performance of any of the Collateral Agent’s, the Custodial Agent’s or
Securities Intermediary’s powers or duties hereunder or thereunder or of
enforcing the provisions of this Section and Section 15.14.

 

Without prejudice to its
rights hereunder or under applicable law, when any of the Collateral Agent,
Custodial Agent or Securities Intermediary incurs expenses after a Termination
Event occurs, or renders services after a Termination Event occurs, such
expenses and compensation are intended to constitute expenses of administration
under the Bankruptcy Code or any applicable state bankruptcy, insolvency or
other similar law

 

The provisions of this Section and
Section 15.14 shall survive the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary and the termination
of this Agreement.

 

Section 15.09.                       Failure to Act.  In the event that, in the good faith belief
of the Collateral Agent, the Custodial Agent or the Securities Intermediary, an
ambiguity in the provisions of this Agreement arises or any actual dispute
between or conflicting claims by or among the parties hereto or any other
Person with respect to any funds or property deposited hereunder has been
asserted in writing, then at its sole option, each of the Collateral Agent, the
Custodial Agent and the Securities Intermediary shall be entitled, after prompt
notice to the Company and the Purchase Contract Agent, to refuse to comply with
any and all claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and the Collateral
Agent, the Custodial Agent and the Securities Intermediary, as the case may be,
shall not be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions.  The Collateral Agent, the
Custodial Agent and the Securities Intermediary shall be entitled to refuse to
act until either:

 

101

 

(a)                                  such
conflicting or adverse claims or demands shall have been finally determined by
a court of competent jurisdiction or settled by agreement between the
conflicting parties as evidenced in a writing satisfactory to the Collateral
Agent, the Custodial Agent or the Securities Intermediary; or

 

(b)                                 the Collateral
Agent, the Custodial Agent or the Securities Intermediary shall have received
security or an indemnity satisfactory to it sufficient to hold it harmless from
and against any and all loss, liability or reasonable out-of-pocket expense
which it may incur by reason of its acting.

 

The Collateral Agent, the
Custodial Agent and the Securities Intermediary may in addition elect to
commence an interpleader action or seek other judicial relief or orders as the
Collateral Agent, the Custodial Agent or the Securities Intermediary may deem
necessary.  Notwithstanding anything
contained herein to the contrary, none of the Collateral Agent, the Custodial
Agent or the Securities Intermediary shall be required to take any action that
is in its opinion contrary to law or to the terms of this Agreement, or which
would in its opinion subject it or any of its officers, employees or directors
to personal liability.

 

Section 15.10.                       Resignation and
Removal of Collateral Agent, the Custodial Agent and the Securities
Intermediary.  (a) Subject
to the appointment and acceptance of a successor Collateral Agent, Custodial
Agent or Securities Intermediary as provided below:

 

(i)                                     the Collateral
Agent, the Custodial Agent or the Securities Intermediary may resign at any
time by giving notice thereof to the Company and the Purchase Contract Agent as
attorney-in-fact for the Holders of Units;

 

(ii)                                  the Collateral Agent, the
Custodial Agent or the Securities Intermediary may be removed at any time by
the Company; and

 

(iii)                               if the Collateral Agent, the
Custodial Agent or the Securities Intermediary fails to perform any of its
material obligations hereunder in any material respect for a period of not less
than 20 days after receiving written notice of such failure by the Purchase
Contract Agent and such failure shall be continuing, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may be removed by the Purchase
Contract Agent, acting at the direction of Holders of a majority of the Units.

 

The Purchase Contract Agent
shall promptly notify the Company upon the transmission of notice as
contemplated by clause (iii) of this Section 15.10(a) and any
removal of the Collateral Agent, the Custodial Agent or the Securities
Intermediary pursuant to clause (iii) of this Section 15.10(a).  Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, which shall not be an
Affiliate of the Purchase Contract Agent. 
If no successor Collateral Agent, Custodial Agent or Securities
Intermediary shall have been so appointed and shall have accepted such

 

102

 

appointment
within 45 days after the retiring Collateral Agent’s, Custodial Agent’s or
Securities Intermediary’s giving of notice of resignation or the Company’s or
the Purchase Contract Agent’s giving notice of such removal, then the retiring
or removed Collateral Agent, Custodial Agent or Securities Intermediary may
petition any court of competent jurisdiction, at the expense of the Company,
for the appointment of a successor Collateral Agent, Custodial Agent or
Securities Intermediary.  The Collateral
Agent, the Custodial Agent and the Securities Intermediary shall each be a bank
or a national banking association which has an office (or an agency office) in
the City of New York, New York, with a combined capital and surplus of at least
$50,000,000.  Upon the acceptance of any
appointment as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder by a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, such successor Collateral Agent, Custodial
Agent or Securities Intermediary, as the case may be, shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, and the retiring Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall take all appropriate action, subject to
payment of any amounts then due and payable to it hereunder, to transfer any
money and property held by it hereunder (including the Collateral) to such
successor.  The retiring Collateral
Agent, Custodial Agent or Securities Intermediary shall, upon such succession,
be discharged from its duties and obligations as Collateral Agent, Custodial
Agent or Securities Intermediary hereunder. 
After any retiring Collateral Agent’s, Custodial Agent’s or Securities
Intermediary’s resignation hereunder as Collateral Agent, Custodial Agent or
Securities Intermediary, the provisions of this Article 15 shall continue
in effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as the Collateral Agent, the Custodial Agent or
the Securities Intermediary.  Any
resignation or removal of the Collateral Agent, the Custodial Agent or the
Securities Intermediary hereunder, at a time when such Person is also acting as
the Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be, shall be deemed for all purposes of this Agreement as the
simultaneous resignation or removal of the Collateral Agent, the Securities
Intermediary or the Custodial Agent, as the case may be.

 

(b)                                 Because The
Bank of New York Mellon is serving as the Collateral Agent hereunder and also
as the Purchase Contract Agent hereunder, if an Event of Default (as defined in
the Indenture) with respect to the Notes or a collateral event of default
occurs and is continuing thereunder or hereunder The Bank of New York Mellon
will resign as the Collateral Agent, Custodial Agent and the Securities
Intermediary, effective upon the appointment of one or more successors in
accordance with this Article 15, but continue to act as the Purchase
Contract Agent.  A successor Collateral
Agent, Custodial Agent and Securities Intermediary will be appointed in
accordance with the terms of this Article 15.

 

Section 15.11.                       Right to
Appoint Agent or Advisor.  The
Collateral Agent shall have the right to appoint agents or advisors in
connection with any of its duties hereunder, and the Collateral Agent shall not
be liable for any action taken or omitted by, or in reliance upon the advice
of, such agents or advisors selected in good faith.  The

 

103

 

appointment of agents pursuant to this Section 15.11
shall be subject to prior written consent of the Company, which consent shall
not be unreasonably withheld.

 

Section 15.12.                       Survival.  The provisions of this Article 15 shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent, the Custodial Agent or the Securities Intermediary.

 

Section 15.13.                       Exculpation.  Anything contained in this Agreement to the
contrary notwithstanding, in no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, directors, employees or
agents be liable under this Agreement for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including, but not limited
to, lost profits, whether or not the likelihood of such loss or damage was
known to the Collateral Agent, the Custodial Agent or the Securities
Intermediary, or any of them and regardless of the form of action.

 

Section 15.14.                       Expenses, Etc.  The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:

 

(a)                                  all reasonable
costs, fees and expenses of the Collateral Agent, the Custodial Agent and the
Securities Intermediary (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent, the Custodial Agent and the
Securities Intermediary), in connection with (i) the negotiation,
preparation, execution and delivery or performance of this Agreement (excluding
taxes on or measured by income) and (ii) any modification, supplement or
waiver of any of the terms of this Agreement;

 

(b)                                 all reasonable
costs and expenses of the Collateral Agent, the Custodial Agent and the
Securities Intermediary (including, without limitation, reasonable fees and
expenses of counsel) in connection with (i) any enforcement or proceedings
resulting or incurred in connection with causing any Holder of Units to satisfy
its obligations under the Purchase Contracts forming a part of the Units and (ii) the
enforcement of this Section 15.14;

 

(c)                                  all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any other
document referred to herein and all costs, expenses, taxes, assessments and
other charges incurred in connection with any filing, registration, recording
or perfection of any security interest contemplated hereby;

 

(d)                                 all reasonable
fees and expenses of any agent or advisor appointed by the Collateral Agent and
consented to by the Company under Section 15.11 of this Agreement; and

 

(e)                                  any other
out-of-pocket costs and expenses reasonably incurred by the Collateral Agent,
the Custodial Agent and the Securities Intermediary in connection with the
performance of their duties hereunder.

 

104

 

Section 15.15.                       Force Majeure.  In no event shall any of the Collateral
Agent, Custodial Agent and Securities Intermediary be responsible or liable for
any failure or delay in the performance of its obligations under this Agreement
arising out of or caused directly or indirectly, by circumstances beyond its
control, including, without limitation, acts of God; earthquake; fires; floods;
wars; civil or military disturbances; terrorist acts; sabotage; epidemics;
riots; interruptions, loss or malfunctions of utilities; or acts of civil or
military authority or governmental actions; it being understood that the
Collateral Agent, Custodial Agent and Securities Intermediary shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under such circumstances.

 

ARTICLE 16

MISCELLANEOUS

 

Section 16.01.                       Security
Interest Absolute.  All rights
of the Collateral Agent and security interests hereunder, and all obligations
of the Holders from time to time hereunder pursuant to the Pledge, shall be
absolute and unconditional irrespective of:

 

(a)                                  any lack of
validity or enforceability of any provision of the Purchase Contracts or the
Units or any other agreement or instrument relating thereto;

 

(b)                                 any change in
the time, manner or place of payment of, or any other term of, or any increase
in the amount of, all or any of the obligations of Holders of the Units under
the related Purchase Contracts, or any other amendment or waiver of any term
of, or any consent to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other agreement or
instrument relating thereto; or

 

(c)                                  any other
circumstance which might otherwise constitute a defense available to, or
discharge of, a borrower, a guarantor or a pledgor.

 

Section 16.02.                       Notice of
Special Event, Special Event Redemption and Termination Event.  Upon the occurrence of a Special Event, a
Special Event Redemption or a Termination Event, the Company shall deliver
written notice to the Purchase Contract Agent, the Collateral Agent and the
Securities Intermediary.  Upon the
written request of the Collateral Agent or the Securities Intermediary, the
Company shall inform such party whether or not a Special Event, a Special Event
Redemption or a Termination Event has occurred.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

105

 

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

 

	
  ASSURED GUARANTY LTD.

  	
  THE BANK OF NEW YORK MELLON, 

  
	
   

  	
  as
  Purchase Contract Agent and as attorney-in-fact of the Holders from time to
  time of the Units

  
	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
  By:
  

  	
   

  
	
   

  	
  Name:

  	
   

  	
  Name:
  

  
	
   

  	
  Title:

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Address for Notices:

  	
  Address for Notices:

  
	
   

  	
   

  
	
  Assured Guaranty Ltd.

  	
  The Bank of New York
  Mellon

  
	
  30 Woodbourne Avenue

  	
  101 Barclay Street, Floor
  8W

  
	
  Hamilton, HM 08 Bermuda

  	
  New York, New York 10286

  
	
  Attention: General Counsel

  	
  Attention: Corporate Trust
  Administration

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE BANK
  OF NEW YORK MELLON,

  	
   

  
	
  as Collateral Agent,
  Custodial Agent and Securities Intermediary

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
  Address for Notices:

  	
   

  
	
   

  	
   

  
	
  The Bank of New York
  Mellon

  101 Barclay Street, Floor 8W

  New York, New York 10286

  Attention: Corporate Trust Administration

  	
   

  

 

 

EXHIBIT A

 

(FORM OF FACE OF CORPORATE UNITS CERTIFICATE)

 

[For
inclusion in Global Certificates only - THIS CERTIFICATE IS A GLOBAL
CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AND PLEDGE AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO.,
AS THE NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITORY”),
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY.  THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AND PLEDGE AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

 

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

 

	
  No.

  	
   

  	
  CUSIP No. G0585R 122

  
	
  Number
  of Corporate Units:

  	
   

  	
  ISIN No. BMG0585R1227

  

 

ASSURED GUARANTY LTD.

Corporate Units

 

This Corporate Units
Certificate certifies that
                    
is the registered Holder of the number of Corporate Units set forth above [For
inclusion in Global Certificates only — or such other number of Corporate Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto, which number shall not exceed 3,000,000  (or 3,450,000 if the Underwriters exercise
their overallotment option to purchase additional Units in full as set forth in
the Underwriting Agreement)].  Each
Corporate Unit consists of (i) beneficial ownership by the Holder of
either (A) prior to the occurrence of a Special Event Redemption (1) an
Applicable Ownership Interest in Notes, or (2) on and after a Successful
Early Remarketing, (x) an Applicable Ownership Interest in the Remarketing
Treasury Portfolio, subject to the Pledge of such Applicable

 

A-1

 

Ownership Interest in the Remarketing
Treasury Portfolio by the Holder pursuant to the Purchase Contract and Pledge
Agreement (except that only the Pledged Applicable Ownership Interest in the
Treasury Portfolio shall be subject to the Pledge), and (y) if the Reset
Effective Date occurs on a date that is not also an Interest Payment Date,
prior to the Interest Payment Date next following the Reset Effective Date
(assuming a Remarketing of the Notes had not occurred), the right to receive
the interest accrued on the 1/20, or 5.00%, undivided beneficial ownership
interest in $1,000 principal amount of Notes from and including the Interest
Payment Date immediately preceding the Reset Effective Date to, but excluding,
the Reset Effective Date (assuming the interest rate had not been reset), or (B) on
or after the occurrence of a Special Event Redemption but prior to the Purchase
Contract Settlement Date, an Applicable Ownership Interest in the Special Event
Treasury Portfolio, subject to the Pledge of such Applicable Ownership Interest
in the Special Event Treasury Portfolio by the Holder pursuant to the Purchase
Contract and Pledge Agreement (except that the Applicable Ownership Interest in
the Special Event Treasury Portfolio specified in clause (ii) of each
paragraph of the definition thereof shall not be subject to the Pledge), and (ii) the
rights and obligations of the Company and the Holder under one Purchase
Contract.  All capitalized terms used
herein that are defined in the Purchase Contract and Pledge Agreement (as
defined on the reverse hereof) have the meaning set forth therein.

 

Pursuant to the Purchase
Contract and Pledge Agreement, the Pledged Applicable Ownership Interests in
Notes or the Pledged Applicable Ownership Interests in the Treasury Portfolio,
as the case may be, constituting part of each Corporate Unit evidenced hereby
have been pledged to the Collateral Agent, for the benefit of the Company, to
secure the obligations of the Holder under the Purchase Contract comprising
part of such Corporate Unit.

 

All payments of the
principal amount with respect to the Notes underlying the Pledged Applicable
Ownership Interests in Notes or all payments with respect to the Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (i) of
each paragraph of the definitions of Applicable Ownership Interest in the
Special Event Treasury Portfolio and Applicable Ownership Interest in the
Remarketing Treasury Portfolio), as the case may be, or payments of interest on
the Pledged Applicable Ownership Interests in Notes or distributions with
respect to the Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (ii) and (in the case of Applicable Ownership
Interests in the Remarketing Treasury Portfolio) clause (iii) of each
paragraph of the definitions of each of Applicable Ownership Interests in the
Remarketing Treasury Portfolio and Applicable Ownership Interests in the
Special Event Treasury Portfolio, as the case may be), as the case may be,
constituting part of the Corporate Units shall be paid on the dates and in the
manner set forth in the Purchase Contract and Pledge Agreement.  Interest on the Notes underlying the
Applicable Ownership Interests in Notes and distributions on the Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (ii) and
(in the case of Applicable Ownership Interests in the Remarketing Treasury
Portfolio) clause (iii) of each paragraph of the definitions of each of
Applicable Ownership Interests in the Remarketing Treasury Portfolio and
Applicable Ownership Interests in the Special Event Treasury Portfolio, as the
case may be), as the case may be, forming part of the Corporate Units evidenced

 

A-2

 

hereby,
which are payable on each Payment Date, shall, subject to receipt thereof by
the Purchase Contract Agent, be paid to the Person in whose name this Corporate
Units Certificate (or a Predecessor Corporate Units Certificate) is registered
at the close of business on the Record Date for such Payment Date.

 

Each Purchase Contract
evidenced hereby obligates the Holder of this Corporate Units Certificate to
purchase, and the Company to sell, on the Purchase Contract Settlement Date at
a Purchase Price equal to the Stated Amount, a number of newly issued Common
Shares of the Company, equal to the Settlement Rate, unless on or prior to the
Purchase Contract Settlement Date there shall have occurred a Termination Event
or an Early Settlement or Fundamental Change Early Settlement with respect to
such Purchase Contract, all as provided in the Purchase Contract and Pledge
Agreement.  The Purchase Price for the
Common Shares purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid, subject to Section 5.02(f) of the
Purchase Contract and Pledge Agreement, on the Purchase Contract Settlement
Date by application of payment received in the Remarketing of the Notes
underlying Pledged Applicable Ownership Interests in Notes or the proceeds of
the Pledged Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, pledged to secure the obligations under such Purchase Contract of
the Holder of the Corporate Units of which such Purchase Contract is a part.

 

Each Purchase Contract evidenced
hereby obligates the Beneficial Owner to agree, for all tax purposes (i) to
treat itself as the owner of the related Notes underlying the Corporate Units,
the Applicable Ownership Interests in the Treasury Portfolio or the Treasury
Securities, as the case may be, (ii) to treat the Notes as indebtedness of
Assured Guaranty US Holdings Inc. that are subject to the rules applicable
to contingent payment debt instruments under Treas. Reg. Sec. 1.1275-4 for U.S.
federal, state and local income and franchise tax purposes and (iii) to
treat the Corporate Units as comprised of the Notes and the Purchase Contracts
as separate securities.

 

Distributions on the
Applicable Ownership Interests in Notes and distributions on the Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (ii) and
(in the case of Applicable Ownership Interests in the Remarketing Treasury
Portfolio) clause (iii) of each paragraph of the definitions of each of
Applicable Ownership Interests in the Remarketing Treasury Portfolio and
Applicable Ownership Interests in the Special Event Treasury Portfolio, as the
case may be), will be payable at the office of the Purchase Contract Agent in
the City of New York.

 

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

 

Unless the certificate of
authentication hereon has been executed by the Purchase Contract Agent by
manual signature, this Corporate Units Certificate shall not be entitled to any
benefit under the Purchase Contract and Pledge Agreement or be valid or
obligatory for any purpose.

 

A-3

 

IN WITNESS WHEREOF, the
Company and the Holder specified above have caused this instrument to be duly
executed.

 

	
   

  	
  ASSURED
  GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDER
  SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
  Contracts)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  THE
  BANK OF NEW YORK MELLON, not individually but solely as attorney-in-fact of
  such Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  

 

A-4

 

CERTIFICATE OF AUTHENTICATION

OF PURCHASE CONTRACT AGENT

 

This
is one of the Corporate Units Certificates referred to in the within mentioned
Purchase Contract and Pledge Agreement.

 

	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
  as
  Purchase Contract Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					

 

A-5

 

(FORM OF REVERSE OF CORPORATE UNITS CERTIFICATE)

 

Each Purchase Contract
evidenced hereby is governed by a Purchase Contract and Pledge Agreement, dated
as of June 24, 2009 (as may be supplemented from time to time, the “Purchase
Contract and Pledge Agreement”), between the Company and The
Bank of New York Mellon, as Collateral Agent, as Custodial Agent, as Securities
Intermediary, as Purchase Contract Agent and as attorney-in-fact for the
Holders of Corporate Units and Treasury Units from time to time, to which
Purchase Contract and Pledge Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Purchase Contract Agent, the Company, and the Holders and of the terms upon
which the Corporate Units Certificates are, and are to be, executed and
delivered.

 

Each Purchase Contract
evidenced hereby obligates the Holder of this Corporate Units Certificate to
purchase, and the Company to sell, on the Purchase Contract Settlement Date at
a price equal to the Stated Amount, a number of Common Shares equal to the
Settlement Rate, unless an Early Settlement, a Fundamental Change Early
Settlement or a Termination Event with respect to the Units of which such
Purchase Contract is a part shall have occurred.  The Settlement Rate is subject to adjustment
as described in the Purchase Contract and Pledge Agreement.

 

No fractional Common Shares
will be issued upon settlement of Purchase Contracts, as provided in Section 5.08
of the Purchase Contract and Pledge Agreement.

 

Each Purchase Contract
evidenced hereby that is settled through Early Settlement or Fundamental Change
Early Settlement shall obligate the Holder of the related Corporate Units to
purchase at the Purchase Price, and the Company to sell, a number of newly
issued Common Shares equal to the Minimum Settlement Rate (in the case of an
Early Settlement) or applicable Settlement Rate (in the case of a Fundamental
Change Early Settlement).

 

In accordance with the terms
of the Purchase Contract and Pledge Agreement, unless a Termination Event shall
have occurred, the Holder of this Corporate Units Certificate shall pay the
Purchase Price for the Common Shares purchased pursuant to each Purchase
Contract evidenced hereby by effecting a Cash Settlement, an Early Settlement
or, if applicable, a Fundamental Change Early Settlement or from the proceeds
of the Pledged Applicable Ownership Interest in the Treasury Portfolio or a
Remarketing of the Notes underlying Pledged Applicable Ownership Interests in
Notes.  Unless the Applicable Ownership
Interests in the Treasury Portfolio have replaced the Notes underlying the
Applicable Ownership Interests in Notes as a component of the Corporate Units,
a Holder of Corporate Units who (1) does not, on or prior to the close of
business on the seventh Business Day immediately preceding the Purchase
Contract Settlement Date, notify the Purchase Contract Agent of its intention
to effect a Cash Settlement, or who does so notify the Purchase Contract Agent
but fails to make an effective Cash Settlement prior to 11:00 a.m., New
York City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date, or (2) on or prior to the close of business on
the seventh Business Day prior to the Purchase Contract 

 

A-6

 

Settlement
Date, does not make an effective Early Settlement, shall, subject to Section 5.02(f) of
the Purchase Contract and Pledge Agreement, pay the Purchase Price for the
Common Shares to be delivered under the related Purchase Contract from the
proceeds of the sale of the Notes underlying Pledged Applicable Ownership
Interests in Notes held by the Collateral Agent in the Remarketing unless the
Holder has previously made a Fundamental Change Early Settlement.  If the Treasury Portfolio has replaced the
Notes as a component of Corporate Units, a Holder of Corporate Units shall,
subject to Section 5.02(f) of the Purchase Contract and Pledge
Agreement, pay the Purchase Price for the Common Shares to be delivered under
the related Purchase Contract from the proceeds at maturity of the Applicable
Ownership Interests in the Treasury Portfolio.

 

As provided in the Purchase
Contract and Pledge Agreement, upon the occurrence of a Failed Final
Remarketing, as of the Purchase Contract Settlement Date, each Holder of any
Pledged Applicable Ownership Interests in Notes, unless such Holder has elected
Cash Settlement and delivered Cash in accordance with Section 5.02(b) of
the Purchase Contract and Pledge Agreement, shall be deemed to have exercised
such Holder’s Put Right with respect to the Notes underlying such Pledged
Applicable Ownership Interests in Notes and to have elected to have the
Proceeds of the Put Right set-off against such Holder’s obligation to pay the
aggregate Purchase Price for Common Shares to be issued under the related
Purchase Contracts in full satisfaction of such Holder’s obligations under such
Purchase Contracts.

 

The Company shall not be
obligated to issue any Common Shares in respect of a Purchase Contract or
deliver any certificates therefor to the Holder unless it shall have received
payment of the aggregate Purchase Price for the Common Shares to be purchased
thereunder in the manner set forth in the Purchase Contract and Pledge
Agreement.

 

The Purchase Contracts and
all obligations and rights of the Company and the Holders thereunder shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Purchase Contract Agent or the Company, if, on or
prior to the Purchase Contract Settlement Date, a Termination Event shall have
occurred.  Upon the occurrence of a
Termination Event, the Company shall give written notice to the Purchase
Contract Agent and to the Holders, at their addresses as they appear in the
Security Register.  Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the Notes
underlying Pledged Applicable Ownership Interests in Notes or the Applicable
Ownership Interests in the Treasury Portfolio forming a part of each Corporate
Unit from the Pledge.  A Corporate Unit
shall thereafter represent the right to receive the Notes or the appropriate
Applicable Ownership Interests in the Treasury Portfolio forming a part of such
Corporate Units in accordance with the terms of the Purchase Contract and
Pledge Agreement.

 

Under the terms of the
Purchase Contract and Pledge Agreement, the Purchase Contract Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Notes underlying Pledged Applicable Ownership Interests in Notes, but only
to the extent instructed in writing by the Holders.  Upon receipt of notice of any meeting at
which holders of Notes are entitled to vote or upon any solicitation of 

 

A-7

 

consents,
waivers or proxies of holders of Notes, the Purchase Contract Agent shall, as
soon as practicable thereafter, mail, first class, postage pre-paid, to the
Corporate Units Holders the notice required by the Purchase Contract and Pledge
Agreement.

 

Upon the occurrence of a
Special Event Redemption, the Collateral Agent shall surrender the Notes
underlying Pledged Applicable Ownership Interests in Notes against delivery of
an amount equal to the aggregate Redemption Price of such Notes and shall
deposit the funds in the Collateral Account in exchange for such Notes.  Thereafter, the Collateral Agent shall cause
the Securities Intermediary to apply an amount equal to the aggregate
Redemption Amount of such funds to purchase, on behalf of the Holders of
Corporate Units, the Special Event Treasury Portfolio.

 

Upon the occurrence of a
Successful Remarketing of the Notes underlying Pledged Applicable Ownership Interests
in Notes during the Period for Early Remarketing, pursuant to the terms of the
Remarketing Agreement, the Remarketing Agent will apply an amount equal to the
Remarketing Treasury Portfolio Purchase Price to purchase on behalf of the
Holders of Corporate Units, the Remarketing Treasury Portfolio.

 

Following the occurrence of (i) a
Special Event Redemption prior to the Purchase Contract Settlement Date, or (ii) a
Successful Early Remarketing of the Notes, the Holders of Corporate Units and
the Collateral Agent shall have such security interest rights with respect to
the Applicable Ownership Interests in the Treasury Portfolio as the Collateral
Agent had in respect of the Applicable Ownership Interests in Notes and the
underlying Notes as provided in the Purchase Contract and Pledge Agreement and
any reference herein to the Notes or Applicable Ownership Interests in Notes
shall be deemed to be a reference to such Treasury Portfolio or the Applicable
Ownership Interests in the Treasury Portfolio, as the case may be.

 

The Corporate Units
Certificates are issuable only in registered form and only in denominations of
a single Corporate Unit and any integral multiple thereof.  The transfer of any Corporate Units
Certificate will be registered and Corporate Units Certificates may be
exchanged as provided in the Purchase Contract and Pledge Agreement.  A Holder who elects to substitute a Treasury
Security for a Note underlying the Applicable Ownership Interests in Notes or
Applicable Ownership Interests in the Treasury Portfolio, as the case may be,
thereby creating Treasury Units, shall be responsible for any fees or expenses
payable in connection therewith.  Except
as provided in the Purchase Contract and Pledge Agreement, such Corporate Units
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Corporate Units in respect of the Applicable
Ownership Interests in Notes or Applicable Ownership Interests in the Treasury
Portfolio, as the case may be and Purchase Contract constituting such Corporate
Units may be transferred and exchanged only as a Corporate Unit.

 

Subject to, and in
compliance with, the terms and conditions set forth in the Purchase Contract
and Pledge Agreement, a Holder of Corporate Units may effect a Collateral
Substitution.  From and after such
Collateral Substitution, each Unit for which Pledged Treasury Securities secure
the Holder’s obligations under the Purchase Contract 

 

A-8

 

shall
be referred to as a “Treasury Unit.”  A Holder may make such Collateral
Substitution only in integral multiples of 20 Corporate Units.

 

If Applicable Ownership
Interests in the Treasury Portfolio have replaced the Applicable Ownership
Interests in Notes as a component of the Corporate Units, a Holder may
substitute Treasury Securities for the Applicable Ownership Interests in the
Treasury Portfolio, but only in integral multiples of 16,000 Corporate Units or
such other number of Corporate Units as may be determined by the Remarketing
Agent following a Successful Remarketing of the Notes if the Reset Effective
Date is not an Interest Payment Date.

 

Subject to and upon
compliance with the provisions of the Purchase Contract and Pledge Agreement at
the option of the Holder thereof, Purchase Contracts underlying Units may be
settled early by effecting an Early Settlement as provided in the Purchase
Contract and Pledge Agreement.

 

Upon Early Settlement of
Purchase Contracts by a Holder of the related Units, the Notes underlying
Pledged Applicable Ownership Interests in Notes or the Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, underlying such Units
shall be released from the Pledge as provided in the Purchase Contract and
Pledge Agreement and the Holder shall be entitled to receive a number of Common
Shares on account of each Purchase Contract forming part of a Corporate Unit as
to which Early Settlement is effected equal to the Minimum Settlement Rate.

 

Upon the occurrence of a
Fundamental Change, a Holder of Corporate Units may effect Fundamental Change
Early Settlement of the Purchase Contract underlying such Corporate Units
pursuant to the terms of Section 5.04(b)(ii) of the Purchase Contract
and Pledge Agreement.  Upon Fundamental
Change Early Settlement of Purchase Contracts by a Holder of the related
Corporate Units, the Notes underlying Pledged Applicable Ownership Interests in
Notes or the Pledged Applicable Ownership Interests in the Treasury Portfolio,
as the case may be, underlying such Corporate Units shall be released from the
Pledge as provided in the Purchase Contract and Pledge Agreement and the Holder
shall be entitled to receive a number of Common Shares on account of each
Purchase Contract forming part of a Corporate Unit as to which Fundamental
Change Early Settlement is effected equal to the applicable Settlement Rate.

 

Upon registration of
transfer of this Corporate Units Certificate, the transferee shall be bound
(without the necessity of any other action on the part of such transferee,
except as may be required by the Purchase Contract Agent pursuant to the
Purchase Contract and Pledge Agreement), under the terms of the Purchase
Contract and Pledge Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Corporate Units Certificate.  The Company covenants and agrees, and the
Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by
the provisions of this paragraph.

 

The Holder of this Corporate
Units Certificate, by its acceptance hereof, authorizes the Purchase Contract
Agent to enter into and perform the related Purchase 

 

A-9

 

Contracts
forming part of the Corporate Units evidenced hereby on its behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase
Contracts by the Company or its trustee in the event that the Company becomes
the subject of a case under the Bankruptcy Code, agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform its obligations
under such Purchase Contracts, consents to the provisions of the Purchase
Contract and Pledge Agreement, authorizes the Purchase Contract Agent to enter
into and perform the Purchase Contract and Pledge Agreement on its behalf as
its attorney-in-fact, and consents to the Pledge of the Applicable Ownership
Interests in Notes or the Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, underlying this Corporate Units Certificate
pursuant to the Purchase Contract and Pledge Agreement.  The Holder further covenants and agrees that,
to the extent and in the manner provided in the Purchase Contract and Pledge Agreement,
but subject to the terms thereof, any payments with respect to the aggregate
principal amount of the Notes underlying Pledged Applicable Ownership Interests
in Notes (other than interest payments thereon) or the Proceeds of the
Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (i) of each paragraph of the definitions of Applicable Ownership
Interest in the Special Event Treasury Portfolio and Applicable Ownership
Interest in the Remarketing Treasury Portfolio), as the case may be, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder’s obligations under the related Purchase
Contracts and such Holder shall acquire no right, title or interest in such
payments.

 

Subject to certain
exceptions, the provisions of the Purchase Contract and Pledge Agreement may be
amended with the consent of the Holders of a majority of the Purchase
Contracts.

 

The Purchase Contracts shall
be governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflicts of law provisions thereof to the
extent that the application of a law of a different jurisdiction would govern
as a result.

 

Prior to due presentment of
this Certificate for registration of transfer, the Company, the Purchase
Contract Agent and its Affiliates and any agent of the Company or the Purchase
Contract Agent may treat the Person in whose name this Corporate Units
Certificate is registered as the owner of the Corporate Units evidenced hereby
for the purpose of receiving payments of interest payable on the Notes
underlying the Applicable Ownership Interests in Notes, performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Purchase Contract Agent nor any such
agent shall be affected by notice to the contrary.

 

The Purchase Contracts shall
not, prior to the settlement thereof, entitle the Holder to any of the rights
of a holder of Common Shares.

 

A copy of the Purchase
Contract and Pledge Agreement is available for inspection at the offices of the
Purchase Contract Agent.

 

A-10

 

ABBREVIATIONS

 

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:

 

	
  TEN COM:

  	
  as tenants in common

  
	
   

  	
   

  
	
  UNIF GIFT MIN ACT:

  	
                    
  Custodian
                   

  
	
   

  	
       (cust)                         (minor)

  
	
   

  	
   

  
	
   

  	
  Under Uniform Gifts to
  Minors Act of

  
	
   

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
  as tenants by the
  entireties

  
	
   

  	
   

  
	
   

  	
   

  
	
  JT TEN:

  	
  as joint tenants with
  right of survivorship and not as tenants in common

  

 

Additional abbreviations may also be used though not
in the above list.

 

 

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

 

 

(Please insert
Social Security or Taxpayer I.D. or other Identifying Number of Assignee)

 

 

(Please Print or
Type Name and Address Including Postal Zip Code of Assignee)

 

the within Corporate Units Certificates and all rights
thereunder, hereby irrevocably constituting and appointing attorney
                      ,
to transfer said Corporate Units Certificates on the books of Assured Guaranty
Ltd., with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTICE: The signature
  to this assignment must correspond with the name as it appears upon the face
  of the within Corporate Units Certificates in every particular, without
  alteration or enlargement or any change whatsoever.

  
	
   

  
	
  Signature
  Guarantee:

  	
   

  	
   

  
							

 

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, all in accordance with Securities Exchange Act of 1934, as amended.

 

A-11

 

SETTLEMENT INSTRUCTIONS

 

The undersigned Holder
directs that a certificate for Common Shares deliverable upon settlement on or
after the Purchase Contract Settlement Date of the Purchase Contracts
underlying the number of Corporate Units evidenced by this Corporate Units
Certificate be registered in the name of, and delivered, together with a check
in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated
below.  If shares are to be registered in
the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  
	
   

  	
  (if
  assigned to another person)

  
						

 

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, all in accordance with Securities Exchange Act of 1934, as amended.

 

	
  If shares are to be
  registered in the name of and delivered to a Person other than the Holder,
  please (i) print such Person’s name and address and (ii) provide a
  guarantee of your signature:

  	
   

  	
  REGISTERED HOLDER  

  

  Please print name
  and address of Registered Holder:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
  Address

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Social Security or
  other

  Taxpayer Identification

  Number, if any

  	
  DTC Participant #:

  
	
   

  	
   

  

 

A-12

 

ELECTION TO SETTLE EARLY/EARLY SETTLEMENT 

UPON A FUNDAMENTAL CHANGE

 

The undersigned Holder of
this Corporate Units Certificate hereby irrevocably exercises the option to
effect [Early Settlement] [Fundamental Change Early Settlement] in accordance
with the terms of the Purchase Contract and Pledge Agreement with respect to
the Purchase Contracts underlying the number of Corporate Units evidenced by
this Corporate Units Certificate specified below.  The option to effect [Early Settlement]
[Fundamental Change Early Settlement] may be exercised only with respect to
Purchase Contracts underlying Corporate Units in multiples of 20 Corporate
Units or an integral multiple thereof; provided
that if Applicable Ownership Interest in the Treasury Portfolio have replaced
Applicable Ownership Interests in the Notes as a component of Corporate Units,
Corporate Unit Holders may only effect [Early Settlement] [Fundamental Change
Early Settlement] in multiples of 16,000 Corporate Units.  The undersigned Holder directs that a
certificate for Common Shares or other securities deliverable upon such [Early
Settlement] [Fundamental Change Early Settlement] be registered in the name of,
and delivered, together with a check in payment for any fractional share and
any Corporate Units Certificate representing any Corporate Units evidenced
hereby as to which [Early Settlement] [Fundamental Change Early Settlement] of
the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below.  Notes underlying Pledged
Applicable Ownership Interests in Notes or the appropriate Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, deliverable upon such
[Early Settlement] [Fundamental Change Early Settlement] will be transferred in
accordance with the transfer instructions set forth below.  If shares are to be registered in the name of
a Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  
						

 

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, all in accordance with Securities Exchange Act of 1934, as amended.

 

	
  DTC
  Participant #:

  	
   

  	
   

  	
   

  	
   

  

 

A-13

 

Number of Units evidenced
hereby as to which [Early Settlement] [Fundamental Change Early Settlement] of
the related Purchase Contracts is being elected:

 

	
  If Common Shares or
  Corporate Units Certificates are to be registered in the name of and
  delivered to and Notes underlying Pledged Applicable Ownership Interests in
  Notes or the Applicable Ownership Interests in the Treasury Portfolio, as the
  case may be, are to be transferred to a Person other than the Holder, please
  print such Person’s name and address:

  	
   

  	
  REGISTERED HOLDER  

  

  Please print name
  and address of Registered Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or
  other

  Taxpayer Identification

  Number, if any

  	
   

  	
  DTC Participant #:

  
	
   

  	
   

  	
   

  

 

A-14

 

Transfer Instructions for
Notes underlying Pledged Applicable Ownership Interests in Notes or the
Applicable Ownership Interests in the Treasury Portfolio, as the case may be,
transferable upon [Early Settlement] [Fundamental Change Early Settlement]:

 

 

 

A-15

 

[TO BE ATTACHED TO GLOBAL CERTIFICATES]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

 

The initial number of
Corporate Units evidenced by this Global Certificate is
               .  The following increases or decreases in this Global
Certificate have been made:

 

	
  Date

  	
   

  	
  Amount of increase

  in number of

  Corporate Units

  evidenced by the

  Global Certificate

  	
   

  	
  Amount of decrease

  in number of

  Corporate Units

  evidenced by the

  Global Certificate

  	
   

  	
  Number of

  Corporate Units

  evidenced by this

  Global Certificate

  following such

  decrease or increase

  	
   

  	
  Signature of

  authorized signatory

  of Purchase Contract

  Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-16

 

EXHIBIT B

 

(FORM OF FACE OF TREASURY UNITS CERTIFICATE)

 

[For
inclusion in Global Certificate only - THIS CERTIFICATE IS A GLOBAL CERTIFICATE
WITHIN THE MEANING OF THE PURCHASE CONTRACT AND PLEDGE AGREEMENT HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITORY”),
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY.  THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AND PLEDGE AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

 

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

 

	
  No.

  	
   

  	
  CUSIP No. G0585R 114

  
	
  Number
  of Treasury Units:

  	
   

  	
  ISIN No. BMG0585R1144

  

 

ASSURED GUARANTY LTD.

Treasury Units

 

This Treasury Units
Certificate certifies that
                    
is the registered Holder of the number of Treasury Units set forth above [For
inclusion in Global Certificates only - or such other number of Treasury Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto, which number shall not exceed 3,000,000  (or 3,450,000 if the Underwriters exercise
their overallotment option to purchase additional Units in full as set forth in
the Underwriting Agreement)].  Each
Treasury Unit consists of (i) a 1/20, or 5.00%, undivided beneficial
ownership interest in a Treasury Security having a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Purchase Contract and Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Purchase Contract.  Capitalized terms used herein but not defined
shall have the meaning set forth in the Purchase Contract and Pledge Agreement
(as defined on the reverse hereof).

 

B-1

 

Pursuant to the Purchase
Contract and Pledge Agreement, the Treasury Securities constituting part of
each Treasury Unit evidenced hereby have been pledged to the Collateral Agent,
for the benefit of the Company, to secure the obligations of the Holder under
the Purchase Contract comprising part of such Treasury Unit.

 

Each Purchase Contract
evidenced hereby obligates the Holder of this Treasury Units Certificate to
purchase, and the Company to sell, on the Purchase Contract Settlement Date, at
a Purchase Price equal to the Stated Amount, a number of newly issued Common
Shares of the Company, equal to the Settlement Rate, unless prior to or on the
Purchase Contract Settlement Date there shall have occurred a Termination
Event, an Early Settlement or a Fundamental Change Early Settlement with
respect to such Purchase Contract, all as provided in the Purchase Contract and
Pledge Agreement.  The Purchase Price for
the Common Shares purchased pursuant to each Purchase Contract evidenced
hereby, if not paid earlier, shall be paid, subject to Section 5.02(f) of
the Purchase Contract and Pledge Agreement, on the Purchase Contract Settlement
Date by application of the proceeds from the Treasury Securities at maturity
pledged to secure the obligations under such Purchase Contract of the Holder of
the Treasury Units of which such Purchase Contract is a part.

 

Each Purchase Contract
evidenced hereby obligates the Beneficial Owner to agree, for all tax purposes (i) to
treat itself as the owner of the related Treasury Securities (ii) to treat
the Treasury Units as comprised of the Treasury Securities and the Purchase
Contracts as separate securities.

 

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

 

Unless the certificate of
authentication hereon has been executed by the Purchase Contract Agent by
manual signature, this Treasury Units Certificate shall not be entitled to any
benefit under the Purchase Contract and Pledge Agreement or be valid or
obligatory for any purpose.

 

B-2

 

IN WITNESS WHEREOF, the
Company and the Holder specified above have caused this instrument to be duly
executed.

 

	
   

  	
  ASSURED
  GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDER
  SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
  Contracts)

  
	
   

  	
   

  
	
   

  	
  By:

  	
  THE
  BANK OF NEW YORK MELLON, not individually but solely as attorney-in-fact of
  such Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  

 

B-3

 

CERTIFICATE OF AUTHENTICATION OF

PURCHASE CONTRACT AGENT

 

This is one of the Treasury
Units Certificates referred to in the within-mentioned Purchase Contract and
Pledge Agreement.

 

	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
  as
  Purchase Contract Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
					

 

B-4

 

(REVERSE OF TREASURY UNITS CERTIFICATE)

 

Each Purchase Contract
evidenced hereby is governed by a Purchase Contract and Pledge Agreement, dated
as of June 24, 2009 (as may be supplemented from time to time, the “Purchase
Contract and Pledge Agreement”), between the Company and The
Bank of New York Mellon, as Collateral Agent, as Custodial Agent, as Securities
Intermediary, as Purchase Contract Agent and as attorney-in-fact for the
Holders of Corporate Units and Treasury Units from time to time, to which
Purchase Contract and Pledge Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Purchase Contract Agent, the Company, and the Holders and of the terms upon
which the Treasury Units Certificates are, and are to be, executed and
delivered.

 

Each Purchase Contract
evidenced hereby obligates the Holder of this Treasury Units Certificate to
purchase, and the Company to sell, on the Purchase Contract Settlement Date at
a price equal to the Stated Amount, a number of newly issued Common Shares
equal to the Settlement Rate, unless an Early Settlement, a Fundamental Change
Early Settlement or a Termination Event with respect to the Unit of which such
Purchase Contract is a part shall have occurred.  The Settlement Rate is subject to adjustment
as described in the Purchase Contract and Pledge Agreement.

 

No fractional Common Shares
will be issued upon settlement of Purchase Contracts, as provided in Section 5.08
of the Purchase Contract and Pledge Agreement.

 

Each Purchase Contract
evidenced hereby that is settled through Early Settlement or Fundamental Change
Early Settlement shall obligate the Holder of the related Treasury Units to
purchase at the Purchase Price, and the Company to sell, a number of newly
issued Common Shares equal to the Minimum Settlement Rate (in the case of an
Early Settlement) or applicable Settlement Rate (in the case of a Fundamental
Change Early Settlement).

 

In accordance with the terms
of the Purchase Contract and Pledge Agreement, the Holder of this Treasury Unit
shall pay the Purchase Price for the Common Shares to be purchased pursuant to
each Purchase Contract evidenced hereby either by effecting an Early Settlement
or, if applicable, a Fundamental Change Early Settlement of each such Purchase
Contract or by applying the proceeds of the Pledged Treasury Securities
underlying such Holder’s Treasury Unit equal to the Purchase Price for such
Purchase Contract to the purchase of the Common Shares.  A Holder of Treasury Units who on or prior to
the close of business on the seventh Business Day prior to the Purchase
Contract Settlement Date, does not make an effective Early Settlement, shall,
subject to Section 5.02(f) of the Purchase Contract and Pledge
Agreement, pay the Purchase Price for the Common Shares to be issued under the
related Purchase Contract from the proceeds of the Pledged Treasury Securities.

 

The Company shall not be
obligated to issue any Common Shares in respect of a Purchase Contract or
deliver any certificates therefor to the Holder unless it shall have received
payment of the aggregate Purchase Price for the Common Shares to be 

 

B-5

 

purchased
thereunder in the manner set forth in the Purchase Contract and Pledge
Agreement.

 

The Purchase Contract and
all obligations and rights of the Company and the Holders thereunder shall
immediately and automatically terminate without the necessity of any notice or
action by any Holder, the Purchase Contract Agent or the Company, if, on or
prior to the Purchase Contract Settlement Date, a Termination Event shall have
occurred.  Upon the occurrence of a
Termination Event, the Company shall promptly give written notice to the
Purchase Contract Agent and the Holders, at their addresses as they appear in
the Security Register.  Upon and after
the occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Treasury Securities underlying each Treasury Unit from the Pledge.  A Treasury Unit shall thereafter represent
the right to receive the Treasury Security underlying such Treasury Unit, in
accordance with the terms of the Purchase Contract and Pledge Agreement.

 

The Treasury Units
Certificates are issuable only in registered form and only in denominations of
a single Treasury Unit and any integral multiple thereof.  The transfer of any Treasury Units
Certificate will be registered and Treasury Units Certificates may be exchanged
as provided in the Purchase Contract and Pledge Agreement.  A Holder who elects to substitute a Note or
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
for Treasury Securities, thereby recreating Corporate Units, shall be responsible
for any fees or expenses payable in connection therewith.  Except as provided in the Purchase Contract
and Pledge Agreement, such Treasury Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such
Treasury Unit in respect of the Treasury Security and the Purchase Contract
constituting such Treasury Unit may be transferred and exchanged only as a
Treasury Unit.

 

Subject to, and in
compliance with, the terms and conditions set forth in the Purchase Contract
and Pledge Agreement, a Holder of Treasury Units may effect a Collateral
Substitution.  From and after such
Collateral Substitution, each Unit for which Pledged Applicable Ownership
Interests in Notes, or Pledged Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, secure the Holder’s obligations under the
Purchase Contract shall be referred to as a “Corporate Unit.”  A Holder may make such Collateral
Substitution only in multiples of 20 Treasury Units.  If Applicable Ownership Interests in the
Treasury Portfolio have replaced the Applicable Ownership Interests in Notes as
a component of the Corporate Units, a Holder of Treasury Units may substitute
Applicable Ownership Interests in the Treasury Portfolio for Treasury Securities
only in multiples of 16,000 Treasury Units or such other number of Treasury
Units as may be determined by the Remarketing Agent upon a Successful
Remarketing of the Notes if the Reset Effective Date is not an Interest Payment
Date.

 

Subject to and upon
compliance with the provisions of the Purchase Contract and Pledge Agreement,
at the option of the Holder thereof, Purchase Contracts underlying Units may be
settled early by effecting an Early Settlement as provided in the Purchase
Contract and Pledge Agreement.

 

B-6

 

Upon Early Settlement of
Purchase Contracts by a Holder of the related Units, the Pledged Treasury
Securities underlying such Units shall be released from the Pledge as provided
in the Purchase Contract and Pledge Agreement and the Holder shall be entitled
to receive a number of Common Shares on account of each Purchase Contract
forming part of a Treasury Unit as to which Early Settlement is effected equal
to the Minimum Settlement Rate.

 

Upon the occurrence of a
Fundamental Change, a Holder of Treasury Units may effect Fundamental Change
Early Settlement of the Purchase Contract underlying such Treasury Units
pursuant to the terms of Section 5.04(b)(ii) of the Purchase Contract
and Pledge Agreement.  Upon Fundamental
Change Early Settlement of Purchase Contracts by a Holder of the related
Treasury Units, the Pledged Treasury Securities underlying such Treasury Units
shall be released from the Pledge as provided in the Purchase Contract and
Pledge Agreement and the Holder shall be entitled to receive a number of Common
Shares on account of each Purchase Contract forming part of a Treasury Unit as
to which Fundamental Change Early Settlement is effected equal to the
applicable Settlement Rate.

 

Upon registration of
transfer of this Treasury Units Certificate, the transferee shall be bound
(without the necessity of any other action on the part of such transferee,
except as may be required by the Purchase Contract Agent pursuant to the
Purchase Contract and Pledge Agreement), under the terms of the Purchase
Contract and Pledge Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Treasury Units Certificate.  The Company covenants and agrees, and the
Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by
the provisions of this paragraph.

 

The Holder of this Treasury
Units Certificate, by its acceptance hereof, authorizes the Purchase Contract
Agent to enter into and perform the related Purchase Contracts forming part of
the Treasury Units evidenced hereby on its behalf as its attorney-in-fact,
expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company
or its trustee in the event that the Company becomes the subject of a case
under the Bankruptcy Code, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract and Pledge
Agreement, authorizes the Purchase Contract Agent to enter into and perform the
Purchase Contract and Pledge Agreement on its behalf as its attorney-in-fact,
and consents to the Pledge of the Treasury Securities underlying this Treasury
Units Certificate pursuant to the Purchase Contract and Pledge Agreement.  The Holder further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract and
Pledge Agreement, but subject to the terms thereof, payments in respect to the
aggregate principal amount at maturity of the Pledged Treasury Securities on
the Purchase Contract Settlement Date equal to the aggregate Purchase Price for
the related Purchase Contracts shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder’s obligations under such Purchase
Contracts and such Holder shall acquire no right, title or interest in such
payments.

 

B-7

 

Subject to certain
exceptions, the provisions of the Purchase Contract and Pledge Agreement may be
amended with the consent of the Holders of a majority of the Purchase
Contracts.

 

The Purchase Contracts shall
for all purposes be governed by, and construed in accordance with, the laws of
the State of New York, without giving effect to the conflicts of law provisions
thereof to the extent that the application of a law of a different jurisdiction
would govern as a result.

 

Prior to due presentment of
this Certificate for registration or transfer, the Company, the Purchase
Contract Agent and its Affiliates and any agent of the Company or the Purchase
Contract Agent may treat the Person in whose name this Treasury Units
Certificate is registered as the owner of the Treasury Units evidenced hereby
for the purpose of, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent shall be affected by notice to the
contrary.

 

The Purchase Contracts shall
not, prior to the settlement thereof, entitle the Holder to any of the rights
of a holder of Common Shares.

 

A copy of the Purchase
Contract and Pledge Agreement is available for inspection at the offices of the
Purchase Contract Agent.

 

B-8

 

ABBREVIATIONS

 

The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:

 

	
  TEN COM:

  	
  as tenants in common

  
	
   

  	
   

  
	
  UNIF GIFT MIN ACT:

  	
                         Custodian                         

  
	
   

  	
         (cust)
                                         
  (minor)

  
	
   

  	
   

  
	
   

  	
  Under Uniform Gifts to
  Minors Act of

  
	
   

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
  as tenants by the
  entireties

  
	
   

  	
   

  
	
   

  	
   

  
	
  JT TEN:

  	
  as joint tenants with
  right of survivorship and not as tenants in common

  

 

Additional abbreviations may also be used though not
in the above list.

 

 

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

 

 

(Please insert
Social Security or Taxpayer I.D.  or
other Identifying Number of Assignee)

 

 

(Please Print or
Type Name and Address Including Postal Zip Code of Assignee)

 

the within Treasury Units Certificates and all rights
thereunder, hereby irrevocably constituting and appointing attorney
                      ,
to transfer said Treasury Units Certificates on the books of Assured Guaranty Ltd.,
with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTICE: The signature
  to this assignment must correspond with the name as it appears upon the face
  of the within Treasury Units Certificates in every particular, without alteration
  or enlargement or any change whatsoever.

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
							

 

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, all in accordance with Securities Exchange Act of 1934, as amended.

 

B-9

 

SETTLEMENT INSTRUCTIONS

 

The undersigned Holder
directs that a certificate for Common Shares deliverable upon settlement on or
after the Purchase Contract Settlement Date of the Purchase Contracts underlying
the number of Treasury Units evidenced by this Treasury Units Certificate be
registered in the name of, and delivered, together with a check in payment for
any fractional share, to the undersigned at the address indicated below unless
a different name and address have been indicated below.  If shares are to be registered in the name of
a Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  
	
   

  	
  Signature
  Guarantee:

  	
   

  
	
   

  	
  (if
  assigned to another person)

  
						

 

Signatures must be
guaranteed by an “eligible guarantor institution” meeting the requirements of
the Security Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, all in accordance with Securities Exchange Act of 1934, as amended.

 

	
  If shares are to be
  registered in the name of and delivered to a Person other than the Holder,
  please (i) print such Person’s name and address and (ii) provide a
  guarantee of your signature:

  	
   

  	
  REGISTERED HOLDER

  

  Please print name and address of Registered Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or
  other

  Taxpayer Identification

  Number, if any

  	
   

  	
  DTC Participant #:

  
	
   

  	
   

  	
   

  

 

B-10

 

ELECTION TO SETTLE EARLY/FUNDAMENTAL 

CHANGE EARLY SETTLEMENT

 

The undersigned Holder of
this Treasury Units Certificate hereby irrevocably exercises the option to
effect [Early Settlement] [Fundamental Change Early Settlement] in accordance
with the terms of the Purchase Contract and Pledge Agreement with respect to
the Purchase Contracts underlying the number of Treasury Units evidenced by
this Treasury Units Certificate specified below.  The option to effect [Early Settlement]
[Fundamental Change Early Settlement] may be exercised only with respect to
Purchase Contracts underlying Treasury Units in multiples of 20 Treasury Units
or an integral multiple thereof.  The
undersigned Holder directs that a certificate for Common Shares or other
securities deliverable upon such [Early Settlement] [Fundamental Change Early
Settlement] be registered in the name of, and delivered, together with a check
in payment for any fractional share and any Treasury Units Certificate
representing any Treasury Units evidenced hereby as to which [Early Settlement]
[Fundamental Change Early Settlement] of the related Purchase Contracts is not
effected, to the undersigned at the address indicated below unless a different
name and address have been indicated below. 
Pledged Treasury Securities deliverable upon such [Early Settlement]
[Fundamental Change Early Settlement] will be transferred in accordance with
the transfer instructions set forth below. 
If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident
thereto.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature
  

  	
   

  
	
   

  	
   

  	
  Guarantee:

  	
   

  
	
   

  	
   

  	
   

  	
  (if assigned to another person)

  

 

B-11

 

Number of Treasury Units
evidenced hereby as to which [Early Settlement] [Fundamental Change Early
Settlement] of the related Purchase Contracts is being elected:

 

	
  If Common Shares or
  Treasury Units Certificates are to be registered in the name of and delivered
  to and Treasury Securities, as the case may be, are to be transferred to a
  Person other than the Holder, please print such Person’s name and address:

  	
   

  	
  REGISTERED HOLDER

   

  Please print name and
  address of Registered Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or
  other

  Taxpayer Identification

  Number, if any

  	
   

  	
  DTC Participant #:

  

 

B-12

 

Transfer Instructions for
Pledged Treasury Securities transferable upon [Early Settlement] [Fundamental
Change Early Settlement] or a Termination Event:

 

 

 

 

B-13

 

[TO BE ATTACHED TO GLOBAL CERTIFICATES]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

 

The initial number of
Treasury Units evidenced by this Global Certificate is 0.  The following increases or decreases in this
Global Certificate have been made:

 

	
  Date

  	
   

  	
  Amount of increase

  in number of

  Treasury Units

  evidenced by the

  Global Certificate

  	
   

  	
  Amount of decrease

  in number of

  Treasury Units

  evidenced by the

  Global Certificate

  	
   

  	
  Number of Treasury

  Units evidenced by

  this Global

  Certificate following

  such decrease or

  increase

  	
   

  	
  Signature of

  authorized signatory

  of Purchase Contract

  Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-14

 

EXHIBIT C

 

INSTRUCTION TO PURCHASE CONTRACT AGENT FROM HOLDER

(To Create Treasury Units or Corporate Units)

 

The
Bank of New York Mellon,

as
Purchase Contract Agent

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               [                 Corporate Units] [               Treasury Units] of Assured
Guranty Ltd., a Bermuda company (the “Company”).

 

The undersigned Holder
hereby notifies you that it has delivered to The Bank of New York Mellon, as
Securities Intermediary, for credit to the Collateral Account, $      
aggregate principal amount of [Notes] [Applicable Ownership Interests in the
Treasury Portfolio] [Treasury Securities] in exchange for the [Notes underlying
Pledged Applicable Ownership Interests in Notes] [Pledged Applicable Ownership
Interests in the Treasury Portfolio] [Pledged Treasury Securities] held in the
Collateral Account, in accordance with the Purchase Contract and Pledge Agreement,
dated as of June 24, 2009 (the “Agreement”;
unless otherwise defined herein, terms defined in the Agreement are used herein
as defined therein), between the Company and The Bank of New York Mellon, as
Collateral Agent, as Custodial Agent, as Securities Intermediary, as Purchase
Contract Agent and as attorney-in-fact for the Holders of Corporate Units and
Treasury Units from time to time.  The
undersigned Holder has paid all applicable fees and expenses relating to such
exchange.  The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Notes underlying Pledged Applicable Ownership
Interests in Notes] [Pledged Applicable Ownership Interests in the Treasury
Portfolio] [Pledged Treasury Securities] related to such [Corporate Units]
[Treasury Units].

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
  Guarantee:

  	
   

  
	
  DTC
  Participant No.

  	
   

  	
   

  	
   

  
						

 

C-1

 

Please
print name and address of Registered Holder:

 

	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Social
  Security or other Taxpayer

  
	
   

  	
   

  	
  Identification
  Number, if any

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

C-2

 

EXHIBIT D

 

NOTICE FROM PURCHASE CONTRACT AGENT

TO HOLDERS UPON TERMINATION EVENT

(Transfer of Collateral upon Occurrence of a Termination Event)

 

[HOLDER]

 

Attention:

Telecopy:

 

Re:               [                 Corporate Units] [               Treasury Units] of Assured
Guaranty Ltd., a Bermuda company (the “Company”).

 

Please refer to the Purchase
Contract and Pledge Agreement, dated as of June 24, 2009 (the “Purchase
Contract and Pledge Agreement”; unless otherwise defined
herein, terms defined in the Purchase Contract and Pledge Agreement are used
herein as defined therein), between the Company and The Bank of New York
Mellon, as Collateral Agent, as Custodial Agent, as Securities Intermediary, as
Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate
Units and Treasury Units from time to time.

 

We hereby notify you that a
Termination Event has occurred and that [the Notes underlying Pledged
Applicable Ownership Interests in Notes] [Pledged Applicable Ownership
Interests in the Treasury Portfolio] [Pledged Treasury Securities] comprising a
portion of your ownership interest in           
[Corporate Units] [Treasury Units] have been released and are being held by us
for your account pending receipt of transfer instructions with respect to such
[Notes underlying Pledged Applicable Ownership Interests in Notes] [Pledged
Applicable Ownership Interests in the Treasury Portfolio] [Pledged Treasury
Securities] (the “Released Securities”).

 

Pursuant to Section 3.15
of the Purchase Contract and Pledge Agreement, we hereby request written
transfer instructions with respect to the Released Securities.  Upon receipt of your instructions and upon
transfer to us of your [Corporate Units][Treasury Units] effected through
book-entry or by delivery to us of your [Corporate Units Certificate][Treasury
Units Certificate], we shall transfer the Released Securities by book-entry
transfer or other appropriate procedures, in accordance with your
instructions.  In the event you fail to
effect such transfer or delivery, the Released Securities and any distributions
thereon, shall be held in our name, or a nominee in trust for your benefit,
until such time as such [Corporate Units][Treasury Units] are transferred or
your [Corporate Units Certificate] [Treasury Units Certificate] is surrendered
or satisfactory evidence is provided that such [Corporate Units Certificate][Treasury
Units Certificate] has been destroyed, lost or stolen, together with any
indemnification that we or the Company may require.

 

D-1

 

	
  Date:

  	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
   

  	
  as
  the Purchase Contract Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  Authorized
  Signatory

  

 

F-2

 

EXHIBIT E

 

NOTICE TO SETTLE BY SEPARATE CASH

 

The
Bank of New York Mellon

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               [                 Corporate Units] [               Treasury Units] of Assured
Guaranty Ltd., a Bermuda company (the “Company”).

 

The undersigned Holder
hereby irrevocably notifies you in accordance with Section 5.02 of the
Purchase Contract and Pledge Agreement, dated as of June 24, 2009 (the “Purchase
Contract and Pledge Agreement”; unless otherwise defined
herein, terms defined in the Purchase Contract and Pledge Agreement are used
herein as defined therein), between the Company and The Bank of New York
Mellon, as Collateral Agent, as Custodial Agent, as Securities Intermediary, as
Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate
Units and Treasury Units from time to time, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m., New York City time, on the sixth Business Day
immediately preceding the Purchase Contract Settlement Date (in lawful money of
the United States by certified or cashiers’ check or wire transfer, in
immediately available funds payable to or upon order of the Securities
Intermediary), $          as the
Purchase Price for the Common Shares issuable to such Holder by the Company
with respect to            
Purchase Contracts on the Purchase Contract Settlement Date.  The undersigned Holder hereby instructs you
to notify promptly the Collateral Agent of the undersigned Holders’ election to
make such Cash Settlement with respect to the Purchase Contracts related to
such Holder’s Corporate Units.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
  Guarantee:

  	
   

  

 

Please print name and address of Registered Holder:

 

 

 

DTC Participant No.

 

E-1

 

EXHIBIT F

 

FORM OF REMARKETING AGREEMENT

 

[·]

 

The Bank of New York Mellon

101 Barclay Street, Floor 8W

New York, New York 10286

Attention:  Corporate Trust
Administration

 

Ladies and Gentlemen:

 

This Agreement is dated as of [·] (the “Agreement”) by
and among Assured Guaranty Ltd., a Bermuda company (the “Unit Issuer”),
Assured Guaranty US Holdings Inc. (the “Company”
and, together with the Unit Issuer, the “Issuers”),
[·](1), as the
reset agent and the remarketing agent[s] (the “Remarketing
Agent”), and The Bank of New York Mellon, a New York Banking
corporation, not individually but solely as Purchase Contract Agent (the “Purchase Contract Agent”) and as attorney-in-fact of the
holders of Purchase Contracts (as defined in the Purchase Contract and Pledge
Agreement referred to below), relating to the appointment of [·] to serve as Remarketing Agent with respect to the
Remarketing of the Notes.

 

The Unit Issuer has also entered into: (i) a
Purchase Contract and Pledge Agreement, dated as of June 24, 2009 (the “Purchase Contract and Pledge Agreement”), among the Unit Issuer,
The Bank of New York Mellon, as Collateral Agent, Custodial Agent and
Securities Intermediary, Purchase Contract Agent and attorney-in-fact for the
Holders of the Purchase Contracts; and (ii) an Underwriting Agreement,
dated June 18, 2009 (the “Underwriting Agreement”),
among the Unit Issuer, the Company and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as representative of the several Underwriters named
therein.

 

The Company issued its 8.50% senior notes due June 1,
2014 (the “Notes”) under the Indenture dated
as of May 1, 2004 (the “Base Indenture”)
among the Company, the Unit Issuer, as guarantor, and The Bank of New York
Mellon (formerly known as The Bank of New York), as Trustee (the “Trustee”), as amended and supplemented by the First Supplemental
Indenture dated as of June 24, 2009 (the “Supplemental
Indenture,” and together with the Base Indenture, the “Indenture”).

 

The terms and conditions under which the Remarketing
will occur are provided for in the Indenture, the Purchase Contract and Pledge
Agreement and as provided for herein.

 

(1) Insert one or more Remarketing
Agents to be designated by the Company.

 

F-1

 

SECTION  1.  Definitions.

 

(a)     Capitalized
terms used and not defined in this Agreement shall have the meanings set forth
in the Purchase Contract and Pledge Agreement, as the case may be.

 

(b)    As
used in this Agreement, the following terms have the following meanings:

 

“Agreement” has
the meaning specified in the first paragraph of this Remarketing Agreement.

 

“Commencement Date”
has the meaning specified in Section 3.

 

“Commission”
means the Securities and Exchange Commission.

 

“Company”
has the meaning specified in the first paragraph of this Remarketing Agreement.

 

“Contract Settlement
Price” has the meaning specified in the Supplemental Indenture.

 

“Disclosure Package”
means the Registration Statement or any amendment thereof and any Preliminary
Prospectus taken together with any Issuer Free Writing Prospectus used at or
prior to the time of the first sale.

 

“Issuer Free Writing
Prospectus” means an issuer free writing prospectus, as defined in Rule 433
under the Securities Act relating to the Remarketed Notes.

 

“Minimum Price”
has the meaning specified in the Supplemental Indenture.

 

“Preliminary Prospectus”
means any preliminary prospectus relating to the Remarketed Notes included in
the Registration Statement, including the documents incorporated by reference
therein as of the date of such Preliminary Prospectus.

 

“Prospectus”
means the prospectus relating to the Remarketed Notes, in the form in which
first filed, or transmitted for filing, with the Commission after the effective
date of the Registration Statement pursuant to Rule 424(b) under the
Securities Act, including the documents incorporated by reference therein as of
the date of such Prospectus; and any reference to any amendment or supplement
to such Prospectus shall be deemed to refer to and include any documents filed
after the date of such Prospectus, under the Exchange Act, and incorporated by
reference in such Prospectus.

 

“Purchase Contract and
Pledge Agreement” has the meaning specified in the second paragraph
of this Agreement.

 

“Registration Statement”
means a registration statement under the Securities Act prepared by the Issuers
covering, inter alia, the Remarketing of the Remarketed Notes pursuant to Section 5(a) hereunder,
including all exhibits thereto and the documents incorporated by reference in
the Prospectus and any post-effective amendments thereto.

 

F-2

 

“Remarketed Notes”
means, with respect to all Remarketings during any Applicable Remarketing
Period, the aggregate principal amount of Notes underlying the Pledged
Applicable Ownership Interests in Notes and the Separate Notes, if any, subject
to Remarketing as identified to the Remarketing Agent by the Purchase Contract
Agent and the Custodial Agent, respectively, in accordance with the Purchase
Contract and Pledge Agreement.

 

“Remarketing Fee”
has the meaning specified in Section 4.

 

“Remarketing Materials”
means the Preliminary Prospectus, the Prospectus or any other information
furnished by the Issuers to the Remarketing Agent for distribution to investors
in connection with the Remarketing.

 

“Remarketing Price”
has the meaning specified in the Supplemental Indenture.

 

“Representation
Date” has the meaning specified in Section 3.

 

“Reset Rate” has
the meaning specified in Section 2(d).

 

“Securities” has
the meaning specified in Section 10.

 

“Transaction Documents”
means this Agreement, the Purchase Contract and Pledge Agreement and the
Indenture, in each case as amended or supplemented from time to time.

 

SECTION 
2.  Appointment and Obligations of the Remarketing Agent.

 

(a)     The
Issuers hereby appoint [·] as the
exclusive Remarketing Agent, and, subject to the terms and conditions set forth
herein, [·] hereby accepts appointment
as Remarketing Agent, for the purpose of (i) remarketing the Remarketed
Notes on behalf of the holders thereof, (ii) determining, in consultation
with the Company, in the manner provided for herein and in the Purchase
Contract and Pledge Agreement and the Supplemental Indenture, the Reset Rate
for the Notes, and (iii) performing such other duties as are assigned to
the Remarketing Agent in the Transaction Documents.

 

(b)    Unless
a Termination Event has occurred prior to such date, if the Company elects to
conduct a Remarketing during a Three-Business Day Remarketing Period during the
Period for Early Remarketing selected by the Company pursuant to the Purchase
Contract and Pledge Agreement, the Remarketing Agent shall use its reasonable
efforts to remarket the Remarketed Notes at the Remarketing Price. If the
Remarketing Agent is unsuccessful on the first Remarketing Date during such
Three-Business Day Remarketing Period, a subsequent Remarketing shall be
attempted (unless impracticable) by the Remarketing Agent on each of the two
succeeding Remarketing Dates in that Three-Business Day Remarketing Period
until a Successful Early Remarketing occurs. For the avoidance of doubt, the
Company shall determine in its sole discretion if and when to attempt a
Remarketing during a Three-Business Day Remarketing Period during the Period
for Early Remarketing, and the Company may postpone a Remarketing during a

 

F-3

 

Three-Business Day Remarketing Period during the
Period for Early Remarketing in its absolute discretion.

 

(c)     If
there is no Successful Early Remarketing during the Period for Early Remarketing,
and unless a Termination Event has occurred prior to such date, on each
Remarketing Date in the Final Three-Business Day Remarketing Period, the
Remarketing Agent shall use its reasonable efforts to remarket the Remarketed
Notes at the Contract Settlement Price. It is understood and agreed that the
Remarketing on any Remarketing Date in the Final Three-Business Day Remarketing
Period will be considered successful and no further attempts will be made if
the resulting proceeds are at least equal to the Minimum Price. The Company may
not postpone a Remarketing during the Final Remarketing Period.

 

(d)    In
connection with each Remarketing, the Remarketing Agent shall determine, in
consultation with the Company, the terms of the Remarketed Notes, including
those which may be modified in connection with the Remarketing pursuant to the
Indenture, including the Company’s election whether to modify the maturity
date, optional redemption provisions, interest payment dates and/or the rate
per annum, rounded to the nearest one-thousandth (0.001) of one percent per
annum, that the Remarketed Notes should bear (the “Reset Rate”)
in order for the Remarketed Notes to have an aggregate market value equal to at
least the Minimum Price, and that in the sole reasonable discretion of the
Remarketing Agent will enable them to remarket all of the Remarketed Notes at
no less than the Minimum Price in such Remarketing; provided that such rate shall not exceed the maximum
interest rate permitted by applicable law and shall not be a contingent or
floating rate.

 

(e)     If
a Failed Remarketing shall have occurred, the Remarketing Agent shall advise by
telephone the Depository, the Purchase Contract Agent and the Company of any
such Failed Remarketing. Whether or not there has been a Failed Remarketing
will be determined in the sole reasonable discretion of the Remarketing Agent.
In the event of a Failed Remarketing, the applicable interest rate on the Notes
will not be reset, and will continue to be the interest rate set forth in the Supplemental
Indenture.

 

(f)     In
the event of a Successful Remarketing, by approximately 4:30 p.m., New
York City time, on the applicable Remarketing Date, the Remarketing Agent shall
advise, by telephone:

 

(i)            the
Depository, the Purchase Contract Agent, the Trustee, the Collateral Agent, the
Custodial Agent and the Company of the Reset Rate, interest payment dates and
related record dates, maturity date and optional redemption terms, if any,
determined by the Remarketing Agent in such Remarketing and the aggregate
principal amount of Remarketed Notes sold in such Remarketing;

 

(ii)           each
purchaser (or the Depository Participant thereof) of Remarketed Notes of the
Reset Rate, interest payment dates and related record dates and maturity date
and the aggregate principal amount of Remarketed Notes such purchaser is to
purchase;

 

F-4

 

(iii)          each
such purchaser (if other than a Depository Participant) to give instructions to
its Depository Participant to pay the purchase price on the Reset Effective
Date in same day funds against delivery of the Remarketed Notes purchased
through the facilities of the Depository; and

 

(iv)          each
such purchaser (or Depository Participant thereof) that the Remarketed Notes
will not be delivered until the Reset Effective Date and that if such purchaser
wishes to trade the Remarketed Notes that it has purchased prior to the third
Business Day preceding the Reset Effective Date, such purchaser will have to
specify an alternative settlement cycle at the time of any such trade to
prevent failed settlement.

 

The Remarketing Agent shall also, if required
by the Securities Act, deliver, in conformity with the requirements of the
Securities Act, to each purchaser a Prospectus in connection with the
Remarketing.

 

(g)    The
proceeds from a Successful Remarketing (i) with respect to the Notes
underlying the Applicable Ownership Interests in Notes that are components of
the Corporate Units, shall be paid to the Collateral Agent in accordance with Section 5.02
of the Purchase Contract and Pledge Agreement and (ii) with respect to the
Separate Notes, shall be paid to the Custodial Agent for payment to the holders
of such Separate Notes in accordance with Section 5.02 of the Purchase
Contract and Pledge Agreement.

 

(h)    It
is understood and agreed that the Remarketing Agent shall not have any
obligation whatsoever to purchase any Remarketed Notes, whether in the
Remarketing or otherwise, and shall in no way be obligated to provide funds to
make payment upon tender of Remarketed Notes for Remarketing or to otherwise
expend or risk its own funds or incur or to be exposed to financial liability
in the performance of its duties under this Agreement. Neither the Company nor
the Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of the Remarketed Notes for Remarketing.

 

SECTION 
3.  Representations and Warranties of The Issuers.

 

The Issuers represent and warrant (i) on and as
of the date any Remarketing Materials are first distributed in connection with
the Remarketing (the “Commencement Date”),
(ii) at the first time of sale of the Remarketed Notes during the
applicable Three-Business Day Remarketing Period or Final Three-Business Day
Remarketing Period and (iii) on and as of the Reset Effective Date (in
each case a “Representation Date”), that:

 

(a)     This
Agreement has been duly authorized, executed and delivered by the Issuers,
constitutes a valid and binding obligation of the Issuers, enforceable against
the Issuers in accordance with its terms, except to the extent enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general applicability relating to or
affecting the enforcement of creditors’ rights and by the effect of general
principles of equity (regardless of whether enforceability is

 

F-5

 

considered in a proceeding in equity or at law) and
except that rights to indemnification hereunder may be limited by federal or
state securities laws or public policy.

 

(b)    Each
of the representations and warranties of the Issuers as set forth in Section 1(a) (other
than those made in subsection (vii)(with respect to equity securities), (xii),
(xiv), (xv), (xvi), (xvii), (xviii), (xx) and (xxvii)) of the Underwriting
Agreement is true and correct as if made on each of the dates specified above;
provided that for purposes of this Section 3(b), any reference in such
sections of the Underwriting Agreement to (a) the “Registration Statement,”
the “preliminary prospectus,” the “Prospectus,” the “Disclosure Package” and
the “Transaction Documents” shall be deemed to refer to such terms as defined
herein, (b) the “Closing Date” shall be deemed to refer to the Reset Effective
Date, (c) the “Securities” shall be deemed to refer to the Remarketed
Notes, (d) “Agreement” shall be deemed to refer to this Agreement, (e) “Underwriters”
or “Representatives” shall be deemed to refer to the Remarketing Agent, (f) “Execution
Time” shall be deemed to refer to the date and time this Agreement is executed
and delivered by the parties hereto and (g) “Applicable Time” shall be
deemed to refer to the time of the first sale of the Remarketed Notes during
the Applicable Remarketing Period.

 

(c)     The
Remarketed Notes and the Guarantees (as defined in the Underwriting Agreement)
have been duly authorized for issuance and sale pursuant to this Agreement and
the Indenture and, at the Reset Effective Date, will have been duly executed
and delivered by the Company and the Unit Issuer, respectively, and when duly
executed, authenticated, issued and delivered in accordance with the Indenture,
will constitute valid and binding obligations of the Company and the Unit
Issuer, as applicable, enforceable in accordance with their terms, except to
the extent enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or other similar laws of general
applicability relating to or affecting the enforcement of creditors’ rights and
by the effect of general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and will be
entitled to the benefits of the Indenture.

 

(d)    The
Remarketed Notes and the Indenture conform in all material respects to the
description thereof contained in the Disclosure Package and the Prospectus, if
any.

 

(e)     No
default or an event of default, and no event that with the passage of time or
the giving of notice or both would become an event of default, shall occur and
be continuing, under any of the Securities Agreements (as defined in the
Underwriting Agreement). .

 

SECTION 
4.  Fees.

 

(a)     In
the event of a Successful Remarketing of the Remarketed Notes, the Company
shall direct the Remarketing Agent to include a remarketing fee to be agreed
upon in writing by the Company and the Unit Issuer prior to any such
Remarketing (the “Remarketing Fee”)
in the Remarketing Price or the Contract Settlement Price, as applicable.  The Remarketing Agent may deduct the
applicable Remarketing Fee from any amount of the proceeds from the Successful
Remarketing in excess of the Minimum Price. 
Any unpaid portion of the Remarketing Fee shall be paid by the Company
on the

 

F-6

 

Reset Effective Date in cash by wire transfer of
immediately available funds to the account designated by the Remarketing Agent.

 

SECTION 
5.  Covenants of The Issuers.

 

The Issuers covenant and agree as follows:

 

(a)     If
and to the extent the Remarketed Notes are required (in the view of counsel,
which need not be in the form of a written opinion, for either the Remarketing
Agent or the Issuers) to be registered under the Securities Act as in effect at
the time of the Remarketing, the Issuers shall:

 

(i)            prepare
the Registration Statement and the Prospectus, in a form approved by the
Remarketing Agent, file any such Prospectus pursuant to the Securities Act
within the period required by the Securities Act and the rules and
regulations thereunder and use commercially reasonable efforts to cause the
Registration Statement to be declared effective by the Commission prior to the
second Business Day immediately preceding the applicable Remarketing Date;

 

(ii)           file
promptly with the Commission any amendment to the Registration Statement or the
Prospectus or any supplement to the Prospectus that may, in the reasonable
judgment of the Issuers or the Remarketing Agent, be required by the Securities
Act or requested by the Commission;

 

(iii)          advise
the Remarketing Agent, promptly after they receive notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish the Remarketing Agent with copies thereof;

 

(iv)          file
promptly all reports and any definitive proxy or information statements
required to be filed by the Unit Issuer with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a Prospectus is required in
connection with the offering or sale of the Remarketed Notes;

 

(v)           file
all Issuer Free Writing Prospectuses required to be filed by the Issuers with
the Commission pursuant to Rule 433(d) under the Securities Act;

 

(vi)          advise
the Remarketing Agent, promptly after they receive notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of the Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of any of the Remarketed Notes for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information, and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or any
Prospectus or suspending any such qualification, to use promptly every
reasonable effort to obtain its withdrawal;

 

F-7

 

(vii)         furnish
promptly to the Remarketing Agent such copies of the following documents as the
Remarketing Agent shall reasonably request: (a) conformed copies of the
Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits); (b) the Preliminary
Prospectus and any amended or supplemented Preliminary Prospectus; (c) the
Prospectus and any amended or supplemented Prospectus; and (d) any
document incorporated by reference in the Prospectus (excluding exhibits
thereto); and, if at any time when delivery of a prospectus (or in lieu
thereof, the notice referred to in Rule 173(a) under the Securities
Act) is required in connection with the Remarketing, any event shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made when such Prospectus (or in
lieu thereof, the notice referred to in Rule 173(a) under the
Securities Act) is delivered, not misleading, or if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act or the
Exchange Act, to notify the Remarketing Agent and, upon its request, to file
such document and to prepare and furnish without charge to the Remarketing
Agent and to any dealer in securities as many copies as the Remarketing Agent
may from time to time reasonably request of an amended or supplemented
Prospectus that will correct such statement or omission or effect such
compliance;

 

(viii)        during
the time between the applicable Commencement Date and the Reset Effective Date,
prior to filing with the Commission (a) any amendment to the Registration
Statement or supplement to the Prospectus or (b) any Prospectus pursuant
to Rule 424 under the Securities Act, furnish a copy thereof to the
Remarketing Agent; and not file any such amendment or supplement that shall be
reasonably disapproved by the Remarketing Agent;

 

(ix)           as
soon as practicable, but in any event not later than eighteen months, after the
date of a Successful Remarketing, the Unit Issuer will make “generally
available to its security holders” an “earnings statement” of the Unit Issuer
complying with (which need not be audited) Section 11(a) of the
Securities Act and the rules and regulations thereunder (including, at the
option of the Unit Issuer, Rule 158 under the Securities Act). The terms “generally
available to its security holders” and “earnings statement” shall have the
meanings set forth in Rule 158; and

 

(x)            take
such action as the Remarketing Agent may reasonably request in order to qualify
the Remarketed Notes for offer and sale under the securities or “blue sky” laws
of such jurisdictions as the Remarketing Agent may reasonably request; provided
that in no event shall either Issuer be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.

 

(b)    The
Issuers shall pay: (i) the costs incident to the preparation and printing
of the Registration Statement, if any, any Preliminary Prospectus, any Issuer
Free Writing Prospectus, any Prospectus and any other Remarketing Materials and
any amendments or

 

F-8

 

supplements thereto; (ii) the costs of
distributing the Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements thereto; (iii) any
fees and expenses of qualifying the Remarketed Notes under the securities laws
of the several jurisdictions as provided in Section 5(a)(x) and of
preparing, printing and distributing a Blue Sky Memorandum, if any (including
any related reasonable fees and expenses of counsel to the Remarketing Agent); (iv) any
filing fees incident to any required review and clearance by the Financial
Industry Regulatory Authority (“FINRA”) of the
terms of the sale of the Remarketed Notes; (v) all other costs and
expenses incident to the performance of the obligations of the Issuers
hereunder and the Remarketing Agent hereunder; and (vi) the reasonable
fees and expenses of counsel to the Remarketing Agent in connection with its
duties hereunder.

 

(c)     The
Issuers shall furnish the Remarketing Agent with such information and documents
as the Remarketing Agent may reasonably request in connection with the
transactions contemplated hereby, and to make reasonably available to the
Remarketing Agent and any accountant, attorney or other advisor retained by the
Remarketing Agent such information that parties would customarily require in
connection with a due diligence investigation conducted in accordance with
applicable securities laws and to cause the Issuers’ officers, directors,
employees and accountants to participate in all such discussions and to supply
all such information reasonably requested by any such Person in connection with
such investigation.

 

(d)    At
the written request of the Remarketing Agent, between the applicable
Commencement Date and the applicable Reset Effective Date, the Issuers will
not, without the prior written consent of the Remarketing Agent (which consent
may be withheld at the sole discretion of the Remarketing Agent), directly or
indirectly, sell, offer, contract or grant any option to sell, transfer or
establish an open “put equivalent position” within the meaning of Rule 16a-1(h) under
the Exchange Act, or otherwise dispose of or transfer, or announce the offering
of, or file any registration statement under the Securities Act in respect of,
any debt securities of either Issuer similar to the Remarketed Notes or
securities exchangeable for or convertible into debt securities similar to the
Remarketed Notes.

 

(e)     The
Issuers represent and agree that, unless they obtain the prior consent of the
Remarketing Agent, and the Remarketing Agent represents and agrees that, unless
it obtains the prior consent of each Issuer, it has not made and will not make
any offer relating to the Remarketed Notes that would constitute an Issuer Free
Writing Prospectus, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405 of the Act, required to be filed with
the Commission.  Any such free writing
prospectus consented to in writing by the Issuers and the Remarketing Agent is
hereinafter referred to as a “Permitted Free Writing
Prospectus.”  The Issuers
represent that they have treated and agree that they will treat each Permitted
Free Writing Prospectus as an Issuer Free Writing Prospectus and have complied
and will comply with the requirements of Rules 164 and 433 of the Act
applicable to any Permitted Free Writing Prospectus, including timely filing
with the Commission where required, legending and record keeping.

 

F-9

 

(f)     The
Issuers shall prepare a final term sheet relating to the Remarketed Notes,
containing only information that describes the final terms of the Remarketed
Notes after providing the Remarketing Agent and its legal counsel with a
reasonable opportunity to review and comment on such final term sheet (such
final term sheet to be in form and substance as last reviewed by the
Remarketing Agent and the Issuers), and will file such final term sheet within
the period required by Rule 433(d) of the Act following the date such
final terms have been established for the Remarketed Notes.  Any such final term sheet is an Issuer Free
Writing Prospectus and a Permitted Free Writing Prospectus for purposes of this
Agreement.

 

SECTION 
6.  Conditions To The Remarketing Agent’s Obligations.

 

The obligations of the Remarketing Agent hereunder
shall be subject to the following conditions:

 

(a)     The
Prospectus, and any supplement thereto, has been filed in the manner and within
the time period required by Rule 424(b); the Issuer Free Writing
Prospectus, if any, and any other material required to be filed by the Issuers
pursuant to Rule 433(d) under the Securities Act, shall have been
timely filed with the Commission within the applicable time periods prescribed
for such filings by Rule 433; the Issuers have paid the fees required by
the Commission relating to the Remarketed Notes within the time required by Rule 456(b)(1) without
regard to the proviso therein and otherwise in accordance with Rules 456(b) and
457(r); and no stop order suspending the effectiveness of the Registration
Statement or any notice objecting to its use shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.

 

(b)    During the period of time between the applicable
Commencement Date and the Reset Effective Date, (i) trading or quotation
in any of the Unit Issuer’s securities shall not have been suspended or
materially limited by the New York Stock Exchange or the Commission, or trading
in securities generally on the New York Stock Exchange shall not have been
suspended or limited, or minimum or maximum prices shall have been generally
established on such stock exchange by the Commission or the FINRA; (ii) a
general banking moratorium shall not have been declared by any federal or New
York authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States has occurred; or (iii) there
shall not have occurred any outbreak or escalation of national or international
hostilities or any crisis or calamity, or any change in the United States or
international financial markets, or any substantial change or development
involving a prospective substantial change in United States or international
political, financial or economic conditions, as in the judgment of the
Remarketing Agent is material and adverse and makes it impracticable or
inadvisable to proceed with the Remarketing in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of the
Remarketed Notes.

 

(c)     The
representations and warranties of the Issuers contained herein shall be true
and correct in all material respects on and as of the applicable Remarketing
Date, and the Issuers, the Purchase Contract Agent and the Collateral Agent
shall have performed in all material respects all covenants and agreements
contained herein and in the Purchase

 

F-10

 

Contract and Pledge Agreement to be performed on
their part at or prior to such Remarketing Date.

 

(d)    The
Issuers shall have furnished to the Remarketing Agent a written certificate executed by the Chairman of the Board, Chief
Executive Officer or President of each of the Issuers and the Chief Financial
Officer or Chief Accounting Officer of each of the Issuers, dated the
applicable Reset Effective Date, to the effect
that the signers of such certificate have carefully examined the Registration
Statement, the Prospectus and any amendment thereto, the Disclosure Package and
any amendment or supplement thereto and this Agreement, and further to the
effect that:

 

(i)            such Issuer has received no stop order suspending the
effectiveness of the Registration Statement, and no proceedings for such
purpose have been instituted or threatened by the Commission;

 

(ii)           there has not occurred any downgrading, and such
Issuer has not received any notice of any intended or potential downgrading or
of any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of such Issuer by any “nationally
recognized statistical rating organization” as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;

 

(iii)          for the period from the Commencement Date to such
Reset Effective Date, there has not occurred any Material Adverse Change;

 

(iv)          the
representations and warranties of such Issuer in Section 3 of this Agreement are true and correct with the same force
and effect as though expressly made on and as of such Reset Effective Date.

 

(v)           such
Issuer has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to
such Reset Effective Date.

 

(e)     (i) On the date of a Successful Remarketing,
the Remarketing Agent shall have received a letter addressed to the Remarketing
Agent and dated such date, in form and substance satisfactory to the
Remarketing Agent, of the independent public accountants of the Unit Issuer,
containing statements and information of the type ordinarily included in
accountants’ “comfort letters” with respect to certain financial information
contained or incorporated by reference in the Remarketing Materials, if any,
and (ii) on the applicable Reset Effective Date, the Remarketing Agent
shall have received a letter addressed to the Remarketing Agent and dated such
date, in form and substance satisfactory to the Remarketing Agent, of the
independent public accountants of the Unit Issuer, to the effect that they reaffirm the statements made in the letter
furnished by them pursuant to subsection (e)(i) of this Section 6,
except that the specified date referred to therein for the carrying out of
procedures shall be no more than three Business Days prior to the applicable
Reset Effective Date.

 

F-11

 

(f)     Each
of (i) outside counsel for the Issuers reasonably acceptable to the
Remarketing Agent, and (ii) counsel of the Issuers, shall have furnished
to the Remarketing Agent its opinion, addressed to the Remarketing Agent and
dated the applicable Reset Effective Date, in form and substance reasonably
satisfactory to the Remarketing Agent addressing such matters as are set forth
in such counsel’s opinion furnished pursuant to Section 5(e)(i), 5(e)(ii) and
5(e)(iii), respectively, of the Underwriting Agreement, adapted as necessary to
relate to the securities being remarketed hereunder and to the Remarketing
Materials, if any, or to any changed circumstances or events occurring
subsequent to the date of this Agreement, such adaptations being reasonably acceptable
to counsel to the Remarketing Agent.

 

(g)    Counsel
for the Remarketing Agent, shall have furnished to the Remarketing Agent its
opinion, addressed to the Remarketing Agent and dated the applicable Reset
Effective Date, in form and substance reasonably satisfactory to the
Remarketing Agent.

 

(h)    At
the applicable Reset Effective Date, counsel for the Remarketing Agent shall
have been furnished with such documents as they may reasonably require for the
purpose of enabling them to pass upon the issuance and sale of the Remarketed
Notes as contemplated herein.

 

SECTION 
7.  Indemnification.

 

(a)     The Issuers jointly and severally agree to indemnify
and hold harmless the Remarketing Agent, its directors, officers, employees and
agents, and each person, if any, who controls the Remarketing Agent within the
meaning of the Securities Act and the Exchange Act against any loss, claim,
damage, liability or expense, as incurred, to which such Remarketing Agent,
director, officer, employee, agent or controlling person may become subject,
insofar as such loss, claim, damage, liability or expense (or actions in
respect thereof as contemplated below) arises out of or is based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, or any amendment or supplement thereto, including
any information deemed to be a part thereof pursuant to Rule 430A, Rule 430B
or Rule 430C under the Securities Act, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to make
the statements therein not misleading; or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; and to
reimburse the Remarketing Agent, its officers, directors, employees, agents and
controlling persons for any and all expenses (including the reasonable fees and
disbursements of counsel chosen by the Remarketing Agent) as such expenses are
reasonably incurred by such Remarketing Agent, officer, director, employee,
agent or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the extent,
but only to the extent, arising out of or based upon any untrue statement or
alleged untrue statement or omission

 

F-12

 

or alleged omission made in
reliance upon and in conformity with written information furnished to the
Issuers by the Remarketing Agent expressly for use in the Registration
Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus or
the Prospectus (or any amendment or supplement thereto).

 

(b)    Each Remarketing Agent agrees, severally and not
jointly, to indemnify and hold harmless the Issuers, each of their directors,
each of their officers who signed the Registration Statement and each person,
if any, who controls either Issuer within the meaning of the Securities Act or
the Exchange Act, against any loss, claim, damage, liability or expense, as
incurred, to which the Issuers, or any such director, officer or controlling
person may become subject, insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, or any amendment or
supplement thereto, or the omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to make the statements therein
not misleading; or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, in each case to the extent, and only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, such Preliminary
Prospectus, such Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto), in reliance upon and in conformity with
written information furnished to the Issuers by the Remarketing Agent expressly
for use therein; and to reimburse the Issuers, such director, officer or
controlling person for any legal and other expense reasonably incurred by the
Issuers, such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. The indemnity agreement set forth
in this Section 7(b) shall be in addition to any liabilities that
each Remarketing Agent may otherwise have.

 

(c)     Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement
thereof; but the failure to so notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party
from any liability other than the indemnification obligation provided in
paragraph (a) or (b) above.  In
case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel satisfactory to such indemnified party;
provided,

 

F-13

 

however, such indemnified party
shall have the right to employ its own counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such indemnified party, unless:  (i) the employment of such counsel has
been specifically authorized by the indemnifying party; (ii) the
indemnifying party has failed promptly to assume the defense and employ counsel
reasonably satisfactory to the indemnified party; or (iii) the named
parties to any such action (including any impleaded parties) include both such
indemnified party and the indemnifying party or any affiliate of the
indemnifying party, and such indemnified party shall have reasonably concluded
that either (x) there may be one or more legal defenses available to it
which are different from or additional to those available to the indemnifying
party or such affiliate of the indemnifying party or (y) a conflict may
exist between such indemnified party and the indemnifying party or such
affiliate of the indemnifying party (it being understood, however, that the
indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in addition to a
single firm of local counsel) for all such indemnified parties, which firm
shall be designated in writing by (i) the Remarketing Agent, in the case
of indemnification pursuant to Section 7(a) hereof, or (ii) the
Issuers, in the case of indemnification pursuant to Section 7(b) hereof,
and that all such reasonable fees and expenses shall be reimbursed as they are
incurred).

 

(d)    The indemnifying party under this Section 7 shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there is a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.  Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 7(c) hereof, the
indemnifying party agrees that it shall be liable for any settlement of any proceeding
effected without its written consent if (i) such settlement is entered
into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement.  No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending
or threatened action, suit or proceeding in respect of which any indemnified
party is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (i) includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such action, suit
or proceeding and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.

 

SECTION 
8.  Contribution.

 

(a)     If
the indemnification provided for in Section 7 hereof is for any reason
unavailable to or otherwise insufficient to hold harmless an indemnified party
in respect

 

F-14

 

of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Issuers, on the one hand, and the Remarketing Agent,
on the other hand, from the remarketing of the Remarketed Notes pursuant to
this Agreement or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Issuers, on the one hand, and the Remarketing
Agent, on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. 
The relative benefits received by the Issuers, on the one hand, and the
Remarketing Agent, on the other hand, in connection with the remarketing of the
Remarketed Notes pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the remarketing of the
Remarketed Notes pursuant to this Agreement (before deducting expenses)
received by the Issuers, and the total fees received by the Remarketing Agent,
in each case as set forth on the front cover of the Prospectus, bear to the
aggregate initial public offering price of the Remarketed Notes as set forth on
such cover.  The relative fault of the
Issuers, on the one hand, and the Remarketing Agent, on the other hand, shall
be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Issuers, on the
one hand, or the Remarketing Agent, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

(b)    The
amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 7(c) hereof, any legal or
other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. 
The provisions set forth in Section 7(c) hereof with respect
to notice of commencement of any action shall apply if a claim for contribution
is to be made under this Section 8; provided, however, that no additional
notice shall be required with respect to any action for which notice has been
given under Section 7(c) hereof for purposes of indemnification.

 

(c)     The
Issuers and the Remarketing Agent agree that it would not be just and equitable
if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in this Section 8.

 

(d)    Notwithstanding
the provisions of this Section 8, the Remarketing Agent shall not be
required to contribute any amount in excess of the Remarketing Fee received by
the Remarketing Agent in connection with the Remarketing.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
For purposes of this Section 8, each director, officer, employee
and

 

F-15

 

agent of the Remarketing Agent and each person, if
any, who controls the Remarketing Agent within the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as the
Remarketing Agent, and each director of either Issuer, each officer of either
Issuer who signed the Registration Statement and each person, if any, who
controls either Issuer within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as the Issuers.

 

SECTION 
9.  Resignation And Removal of The Remarketing Agent.

 

The Remarketing Agent may resign and be discharged
from its duties and obligations hereunder, and the Issuers may remove the
Remarketing Agent, by giving 30 days’ prior written notice, in the case of a
resignation, to the Issuers and the Purchase Contract Agent and, in the case of
a removal, to the Remarketing Agent and the Purchase Contract Agent; provided,
however, that no such resignation nor any such removal shall become effective
until the Issuers shall have appointed at least one nationally recognized
broker-dealer as a successor Remarketing Agent and such successor Remarketing
Agent shall have entered into a remarketing agreement with the Company, in
which it shall have agreed to conduct the Remarketing in accordance with the
Transaction Documents in all material respects.

 

In any such case, the Issuers will use commercially
reasonable efforts to appoint a successor Remarketing Agent and enter into such
a remarketing agreement with such person as soon as reasonably practicable. The
provisions of Section 7 and Section 8 shall survive the resignation
or removal of the Remarketing Agent pursuant to this Agreement.

 

SECTION 
10.  Dealing in Securities.

 

The Remarketing Agent, when acting as the
Remarketing Agent or in its individual or any other capacity, may, to the
extent permitted by law, buy, sell, hold and deal in any of the Remarketed
Notes, Corporate Units, Treasury Units or any of the securities of the Issuers
(collectively, the “Securities”).
The Remarketing Agent may exercise any vote or join in any action which any
beneficial owner of such Securities may be entitled to exercise or take
pursuant to the Indenture with like effect as if it did not act in any capacity
hereunder. The Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or have an interest in any financial or
other transaction with either Issuer as freely as if it did not act in any
capacity hereunder.

 

SECTION 
11.  Remarketing Agent’s Performance; Duty of Care.

 

The duties and obligations of the Remarketing Agent
shall be determined solely by the express provisions of the Transaction
Documents. No implied covenants or obligations of or against the Remarketing
Agent shall be read into any of the Transaction Documents. In the absence of
bad faith on the part of the Remarketing Agent, the Remarketing Agent may
conclusively rely upon any document furnished to it, as to the truth of the
statements expressed in any of such documents. The Remarketing Agent shall be
protected in acting upon any document or communication reasonably believed by
it to have been signed, presented or made by the proper party or parties except
as otherwise 

 

F-16

 

set forth herein. The Remarketing Agent shall
have no obligation to determine whether there is any limitation under
applicable law on the Reset Rate on the Notes or, if there is any such
limitation, the maximum permissible Reset Rate on the Notes, and it shall rely
solely upon written notice from the Issuers (which the Company agrees to
provide prior to the third Business Day before the applicable Remarketing Date)
as to whether or not there is any such limitation and, if so, the maximum
permissible Reset Rate. The Remarketing Agent, acting under this Agreement,
shall incur no liability to the Issuers or to any holder of Remarketed Notes in
its individual capacity or as Remarketing Agent for any action or failure to
act, on its part in connection with a Remarketing or otherwise, except if such
liability is (i) judicially determined to have resulted from its failure
to comply with the material terms of this Agreement or bad faith, gross
negligence or willful misconduct on its part or (ii) determined pursuant
to Section 7 or 8 of this Agreement. The provisions of this Section 11
shall survive the termination of this Agreement and shall survive the
resignation or removal of the Remarketing Agent pursuant to this Agreement.

 

SECTION 
12.  Termination.

 

This Agreement shall automatically terminate (i) as
to the Remarketing Agent on the effective date of the resignation or removal of
the Remarketing Agent pursuant to Section 9 and (ii) on the earlier
of (x) the occurrence of a Termination Event and (y) the Business Day
immediately following the Purchase Contract Settlement Date. If this Agreement
is terminated pursuant to any of the other provisions hereof, except as
otherwise provided herein, the Issuers shall not be under any liability to the
Remarketing Agent and the Remarketing Agent shall not be under any liability to
the Issuers, except that if this Agreement is terminated by the Remarketing
Agent because of any failure or refusal on the part of the Issuers to comply
with the terms or to fulfill any of the conditions of this Agreement, the
Issuers will reimburse the Remarketing Agent for all of its out-of-pocket
expenses (including the fees and disbursements of its counsel) reasonably
incurred by it. Notwithstanding any termination of this Agreement, in the event
there has been a Successful Remarketing, the obligations set forth in Section 4
hereof shall survive and remain in full force and effect until all amounts
payable under said Section 4 shall have been paid in full. In addition,
Sections 7, 8 and 11 hereof shall survive the termination of this Agreement or
the resignation or removal of the Remarketing Agent.

 

SECTION 
13.  Notices.

 

All statements, requests, notices and agreements
hereunder shall be in writing, and:

 

(a)     if
to the Remarketing Agent, shall be delivered or sent by mail, telex or
facsimile transmission to:

 

[·]

 

F-17

 

with a copy to:

 

[·]

 

(b)    if
to the Company, shall be delivered or sent by mail, telex or facsimile
transmission to:

 

Assured Guaranty US Holdings Inc.

1325 6th Avenue, 18th Floor

New York, New York 1019-6066

Facsimile:  (212) 581-3268

Attention:  General Counsel

 

with a copy to:

 

Mayer
Brown LLP

71
South Wacker Drive

Chicago, Illinois 60606

Facsimile:  (312) 701-7711

Attention:  Edward S. Best, Esq.;

 

If to the Unit Issuer, shall be delivered or
sent by mail, telex or facsimile transmission to:

 

Assured Guaranty Ltd.

30 Woodbourne Avenue

Hamilton, HM 08 Bermuda

Facsimile:  (441) 296-1083

Attention:  General Counsel

 

with a copy to:

 

Mayer
Brown LLP

71 South Wacker Drive

Chicago, Illinois 60606

Facsimile:  (312) 701-7711

Attention:  Edward S. Best, Esq.;

 

(c)     if to the Purchase Contract Agent, shall be delivered or sent by
mail or facsimile transmission to:

 

The
Bank of New York Mellon 

101 Barclay Street, Floor 8W

New York, New York  10286

Tel:  (212) 815-5360 

Fax:  (212) 815-5704

Attention:  Global Corporate Trust

 

F-18

 

Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof.

 

SECTION 
14.  Persons Entitled To Benefit of Agreement.

 

This Agreement shall inure to the benefit of and be
binding upon each party hereto and its respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (x) the representations, warranties, indemnities and
agreements of the Issuers contained in this Agreement shall also be deemed to
be for the benefit of the Remarketing Agent and the person or persons, if any,
who control the Remarketing Agent within the meaning of Section 15 of the
Securities Act and (y) the indemnity agreement of the Remarketing Agent
contained in Section 7 of this Agreement shall be deemed to be for the
benefit of the each Issuer’s directors and officers who sign the Registration
Statement, if any, and any person controlling each Issuer within the meaning of
Section 15 of the Securities Act. Nothing contained in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to herein, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

 

SECTION 
15.  Survival.

 

The respective agreements, representations,
warranties, indemnities and other statements of the Issuers or their officers
and the Remarketing Agent set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of the Remarketing Agent, the Issuers or any of the indemnified persons
referred to in Section 7 hereof, and will survive delivery of the
Remarketed Notes. The provisions of Sections 7, 8 and 11 shall survive the
termination and cancellation of this Agreement.

 

SECTION 
16.  Governing Law.

 

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED WHOLLY WITHIN SUCH STATE.

 

SECTION 
17.  Judicial Proceedings.

 

Each party hereto expressly accepts and irrevocably
submits to the nonexclusive jurisdiction of the United States District Court
for the Southern District of New York and of any New York state court sitting
in New York City for the purposes of all legal proceedings arising out of or
relating to this Agreement or the transactions contemplated hereby. Each party
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.

 

F-19

 

SECTION 
18.  Counterparts.

 

This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.

 

SECTION 
19.  Headings.

 

The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

 

SECTION 
20.  Severability.

 

If any provision of this Agreement shall be held or
deemed to be or shall, in fact, be invalid, inoperative or unenforceable as
applied in any particular case in any or all jurisdictions because it conflicts
with any provisions of any constitution, statute, rule or public policy or
for any other reason, then, to the extent permitted by law, such circumstances
shall not have the effect of rendering the provision in question invalid,
inoperative or unenforceable in any other case, circumstance or jurisdiction,
or of rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.

 

SECTION 
21.  Amendments.

 

This Agreement may be amended by an instrument in
writing signed by the parties hereto. Each of the Issuers and the Purchase
Contract Agent agrees that it will not enter into, cause or permit any
amendment or modification of the Transaction Documents or any other instruments
or agreements relating to the Applicable Ownership Interests in Notes, the
Notes or the Corporate Units that would in any way adversely affect the rights,
duties and obligations of the Remarketing Agent, without the prior written
consent of the Remarketing Agent.

 

SECTION 
22.  Successors and Assigns.

 

Except in the case of a succession pursuant to the
terms of the Purchase Contract and Pledge Agreement, the rights and obligations
of the Issuers hereunder may not be assigned or delegated to any other Person
without the prior written consent of the Remarketing Agent. The rights and
obligations of the Remarketing Agent hereunder may not be assigned or delegated
to any other Person (other than an affiliate of the Remarketing Agent) without
the prior written consent of the Issuers.

 

If the foregoing correctly sets forth the agreement
by and among the Issuers, the Remarketing Agent and the Purchase Contract
Agent, please indicate your acceptance in the space provided for that purpose
below.

 

F-20

 

SECTION 
23.   Rights of the Purchase Contract Agent.

 

Notwithstanding any other provisions of this
Agreement, the Purchase Contract Agent shall be entitled to all the rights,
protections and privileges granted to the Purchase Contract Agent in the
Purchase Contract and Pledge Agreement.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

F-21

 

	
   

  	
  Very
  truly yours, 

  
	
   

  	
   

  
	
   

  	
  ASSURED
  GUARANTY LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSURED
  GUARANTY US HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
  CONFIRMED
  AND ACCEPTED:  

  	
   

  
	
   

  	
   

  
	
  [·]

  	
   

  
	
  as
  Remarketing Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  THE
  BANK OF NEW YORK MELLON, not individually, but solely as Purchase Contract
  Agent and as attorney-in-fact for the Holders of the Purchase Contracts

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

F-22

 

EXHIBIT G

 

INSTRUCTION FROM PURCHASE CONTRACT AGENT

TO COLLATERAL AGENT

(Creation of Treasury Units)

 

The
Bank of New York Mellon,

as
Collateral Agent

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               [                 Corporate Units of Assured
Guaranty Ltd. (the “Company”).

 

Please refer to the Purchase
Contract and Pledge Agreement, dated as of June 24, 2009 (the “Agreement”),
between the Company and The Bank of New York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time.  Capitalized terms used
herein but not defined shall have the meaning set forth in the Agreement.

 

We hereby notify you in
accordance with Section 3.13 of the Agreement that the holder of
securities named below (the “Holder”)
has elected to substitute $        Value of
Treasury Securities or security entitlements with respect thereto in exchange
for an equal Value of [Notes underlying Pledged Applicable Ownership Interests
in Notes] [Pledged Applicable Ownership Interests in the Treasury Portfolio]
relating to         Corporate Units and has
delivered to the undersigned a notice stating that the Holder has Transferred
such Treasury Securities or security entitlements with respect thereto to the
Securities Intermediary, for credit to the Collateral Account.

 

We hereby request that you
instruct the Securities Intermediary, upon confirmation that such Treasury
Securities or security entitlements thereto have been credited to the
Collateral Account, to release to the undersigned an equal Value of [Notes
underlying Pledged Applicable Ownership Interests in Notes] [Pledged Applicable
Ownership Interests in the Treasury Portfolio] or security entitlements with
respect thereto related to         Corporate
Units of such Holder in accordance with Section 3.13 of the Agreement.

 

	
  Dated:

  	
   

  	
   

  

 

G-1

 

	
   

  	
  BANK OF NEW YORK MELLON, as Purchase Contract
  Agent and as attorney-in-fact of the Holders from time to time of the Units

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:  Authorized
  Signatory

  

 

Please print name and
address of Holder electing to substitute Treasury Securities or security
entitlements with respect thereto for the [Notes underlying Pledged Applicable
Ownership Interests in Notes] [Pledged Applicable Ownership Interests in the
Treasury Portfolio]:

 

	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Social Security or other Taxpayer Identification Number, if any

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

G-2

 

EXHIBIT H

 

INSTRUCTION FROM COLLATERAL AGENT

TO SECURITIES INTERMEDIARY

(Creation of Treasury Units)

 

The
Bank of New York Mellon,

as
Securities Intermediary

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               Corporate Units of Assured Guaranty Ltd. (the
“Company”).

 

The securities account of
The Bank of New York Mellon, as Collateral Agent, maintained by the Securities
Intermediary and designated “The Bank of New York Mellon, as Collateral Agent
of Assured Guaranty Ltd., as pledgee of The Bank of New York Mellon, as the Purchase
Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “Collateral
Account”).

 

Please refer to the Purchase
Contract and Pledge Agreement, dated as of June 24, 2009 (the “Agreement”),
between the Company and The Bank of New York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time.  Capitalized terms used
herein but not defined shall have the meaning set forth in the Agreement.

 

When you have confirmed that
$          Value of Treasury
Securities or security entitlements with respect thereto has been credited to
the Collateral Account by or for the benefit of               ,
as Holder of Corporate Units (the “Holder”), you are hereby instructed
to release from the Collateral Account an equal Value of [Notes underlying
Pledged Applicable Ownership Interests in Notes] [Pledged Applicable Ownership
Interests in the Treasury Portfolio] or security entitlements with respect
thereto relating to
           Corporate Units of
the Holder by Transfer to the Purchase Contract Agent.

 

	
  Dated:

  	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:  Authorized
  Signatory

  

 

H-1

 

EXHIBIT I

 

INSTRUCTION FROM PURCHASE CONTRACT AGENT

TO COLLATERAL AGENT

(Recreation of Corporate Units )

 

The
Bank of New York Mellon,

as
Collateral Agent

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               Treasury Units of Assured Guranty Ltd. (the “Company”).

 

Please refer to the Purchase
Contract and Pledge Agreement dated as of June 24 , 2009 (the “Agreement”),
between the Company and The Bank of New York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time.  Capitalized terms used
herein but not defined shall have the meaning set forth in the Agreement.

 

We hereby notify you in
accordance with Section 3.14 of the Agreement that the holder of
securities named below (the “Holder”) has elected to substitute
$       Value of [Notes] [Applicable Ownership
Interests in the Treasury Portfolio] or security entitlements with respect
thereto in exchange for $        Value of
Pledged Treasury Securities relating to Treasury Units and has delivered to the
undersigned a notice stating that the holder has Transferred such [Notes]
[Applicable Ownership Interests in the Treasury Portfolio] or security
entitlements with respect thereto to the Securities Intermediary, for credit to
the Collateral Account.

 

We hereby request that you
instruct the Securities Intermediary, upon confirmation that such [Notes]
[Applicable Ownership Interests in the Treasury Portfolio] or security
entitlements with respect thereto have been credited to the Collateral Account,
to release to the undersigned
$             Value
of Treasury Securities or security entitlements with respect thereto related to
         Treasury Units of such Holder
in accordance with Section 3.14 of the Agreement.

 

	
  Dated:

  	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
   

  	
  as Purchase Contract Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:  Authorized
  Signatory

  

 

I-1

 

Please print name and
address of Holder electing to substitute [Notes] [Applicable Ownership
Interests in the Treasury Portfolio] or security entitlements with respect
thereto for Pledged Treasury Securities:

 

	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Social Security or other Taxpayer Identification Number, if any

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DTC
  Participant No.

  	
   

  	
   

  

 

I-2

 

EXHIBIT J

 

INSTRUCTION FROM COLLATERAL AGENT

TO SECURITIES INTERMEDIARY

(Recreation of Corporate Units)

 

The
Bank of New York Mellon,

as
Securities Intermediary

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               Treasury Units of Assured Guaranty Ltd. (the “Company”).

 

The securities account of
The Bank of New York Mellon, as Collateral Agent, maintained by the Securities
Intermediary and designated “The Bank of New York Mellon, as Collateral Agent
of Assured Guaranty Ltd., as pledgee of The Bank of New York Mellon, as the
Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders”
(the “Collateral
Account”).

 

Please refer to the Purchase
Contract and Pledge Agreement dated as of June 24,  2009 (the “Agreement”),
between the Company and The Bank of New York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time.  Capitalized terms used
herein but not defined shall have the meaning set forth in the Agreement.

 

When you have confirmed that
$             
Value of [Notes] [Applicable Ownership Interests in the Treasury Portfolio] or
security entitlements with respect thereto has been credited to the Collateral
Account by or for the benefit of
               ,
as Holder of Treasury Units (the “Holder”), you are hereby instructed
to release from the Collateral Account
$            Value of
Treasury Securities or security entitlements thereto by Transfer to the
Purchase Contract Agent.

 

	
  Dated:

  	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
   

  	
  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:  Authorized
  Signatory

  

 

J-1

 

EXHIBIT K

 

NOTICE OF CASH SETTLEMENT FROM THE PURCHASE

CONTRACT AGENT TO THE COLLATERAL AGENT

(Cash Settlement Amounts)

 

	
  The Bank of New York
  Mellon,

  	
   

  	
  The Bank of New York
  Mellon,

  
	
  as
  Collateral Agent

  	
   

  	
  as
  Indenture Trustee

  
	
  101 Barclay Street, Floor
  8W

  	
   

  	
  101 Barclay Street, Floor
  8W

  
	
  New York, New York 10286

  	
   

  	
  New York, New York 10286

  
	
  Telephone: (212) 815-5360

  	
   

  	
  Telephone: (212) 815-5360

  
	
  Facsimile: (212) 815-5704

  	
   

  	
  Facsimile: (212) 815-5704

  
	
  Attention: Corporate Trust
  Administration

  	
   

  	
  Attention: Corporate Trust
  Administration

  

 

Re:               Corporate Units of Assured Guaranty Ltd. (the
“Company”).

 

Please refer to the Purchase
Contract and Pledge Agreement dated as of June 24, 2009 (the “Agreement”),
between the Company and The Bank of York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time.  Capitalized terms used
herein but not defined shall have the meaning set forth in the Agreement.

 

In accordance with Section 5.02(b)(iv) of
the Agreement, we hereby notify you that as of 11:00 a.m., New York City
time, on the sixth Business Day immediately preceding June 1, 2012 (the “Purchase
Contract Settlement Date”), we have received (i) $              
in immediately available funds paid in an aggregate amount equal to the
Purchase Price due to the Company on the Purchase Contract Settlement Date with
respect to             
Corporate Units and (ii) based on the funds received set forth in clause (i) above,
an aggregate principal amount of
$           of Notes
underlying Pledged Applicable Ownership Interests in Notes are to be tendered
for purchase in the Remarketing during the Final Three-Business Day Remarketing
Period.

 

	
  Dated:

  	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON, 

  
	
   

  	
   

  	
  as Purchase Contract Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:  Authorized
  Signatory

  

 

K-1

 

EXHIBIT L

 

INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

 

The
Bank of New York Mellon,

as
Custodial Agent

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               Senior Notes Due 2014 of Assured Guaranty US
Holdings Inc. (the “Company”).

 

The undersigned hereby
notifies you in accordance with the Purchase Contract and Pledge Agreement,
dated as of June 24, 2009 (the “Agreement”), between Assured
Guaranty Ltd. and The Bank of New York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time, that the undersigned elects to deliver
$            
aggregate principal amount of Separate Notes for delivery to the Remarketing
Agent prior to the close of business on the second Business Day immediately
preceding the first of the three sequential Remarketing Dates of the applicable
[Three-Business Day Remarketing Period][Final Three-Day Remarketing Period] for
Remarketing pursuant to Section 5.02(a)(ii) of the Agreement.  The undersigned will, upon request of the
Remarketing Agent, execute and deliver any additional documents deemed by the
Remarketing Agent or by the Company to be necessary or desirable to complete
the sale, assignment and transfer of the Separate Notes tendered hereby.  Capitalized terms used herein but not defined
shall have the meaning set forth in the Agreement.

 

The undersigned hereby
instructs you, upon receipt of the Proceeds of a Successful Remarketing from
the Remarketing Agent, to deliver such Proceeds to the undersigned in
accordance with the instructions indicated herein under “A.  Payment Instructions.”  The undersigned hereby instructs you, in the
event of a Failed Remarketing, upon receipt of the Separate Notes tendered
herewith from the Remarketing Agent, to deliver such Separate Notes to the
person(s) and the address(es) indicated herein under “B.  Delivery Instructions.”

 

With this notice, the
undersigned hereby (i) represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Separate
Notes tendered hereby and that the undersigned is the record owner of any
Separate Notes tendered herewith in physical form or a participant in The
Depository Trust Company (“DTC”) and the beneficial owner of
any Separate Notes tendered herewith by book-entry transfer to your account at
DTC, (ii) agrees to be bound by the terms and conditions of Section 5.02(a)(ii) and
5.02(c)(i), as applicable, of the Agreement and (iii) acknowledges and
agrees that after the close of business on the second Business Day immediately
preceding the first of the three sequential Remarketing Dates of the Applicable
Remarketing Period, such election shall become an irrevocable election to 

 

L-1

 

have
such Separate Notes remarketed in each Remarketing, and that the Separate Notes
tendered herewith will only be returned in the event of a Failed Remarketing.

 

 

	
  Date:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guarantee:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social Security or other
  Taxpayer Identification Number, if any

  
	
  Address

  	
   

  	
   

  
	
  DTC Participant No.

  	
   

  	
   

  	
   

  
							

 

L-2

 

A.            PAYMENT INSTRUCTIONS

 

Proceeds of a Successful
Remarketing should be paid by check in the name of the person(s) set forth
below and mailed to the address set forth below.

 

	
  Name(s)

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Zip Code)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Tax
  Identification or Social Security Number)

  	
   

  

 

B.            DELIVERY
INSTRUCTIONS

 

In the event of a Failed
Remarketing, Notes which are in physical form should be delivered to the person(s) set
forth below and mailed to the address set forth below.

 

	
  Name(s)

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Zip Code)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Tax
  Identification or Social Security Number)

  	
   

  

 

In the event of a Failed
Remarketing, Notes which are in book-entry form should be credited to the
account at The Depository Trust Company set forth below.

 

	
   

  	
   

  
	
  DTC
  Account Number

  	
   

  
	
   

  	
   

  
	
  Name
  of Account Party:

  	
   

  	
   

  
			

 

L-3

 

EXHIBIT M

 

INSTRUCTION TO CUSTODIAL AGENT REGARDING

WITHDRAWAL FROM REMARKETING

 

The
Bank of New York Mellon,

as
Custodial Agent

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               Senior Notes Due 2014 of Assured Guaranty US
Holdings Inc.  (the “Company”).

 

The undersigned hereby
notifies you in accordance with Section 5.02(a)(ii) of the Purchase
Contract and Pledge Agreement, dated as of June 24, 2009 (the “Agreement”),
between the Assured Guaranty Ltd. and The Bank of New York Mellon, as
Collateral Agent, as Custodial Agent, as Securities Intermediary, as Purchase
Contract Agent and as attorney-in-fact for the Holders of Corporate Units and
Treasury Units from time to time, that the undersigned elects to withdraw the
$            
aggregate principal amount of Separate Notes delivered to you for Remarketing
pursuant to Section 5.02(a)(ii) of the Agreement.  The undersigned hereby instructs you to
return such Separate Notes to the undersigned in accordance with the
undersigned’s instructions.  With this
notice, the Undersigned hereby agrees to be bound by the terms and conditions
of Section 5.02(a)(ii) of the Agreement.  Capitalized terms used herein but not defined
shall have the meaning set forth in the Agreement.

 

	
  Date:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guarantee:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Social Security or other
  Taxpayer Identification Number, if any

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DTC Participant No.

  	
   

  	
   

  	
   

  
							

 

M-1

 

B.            DELIVERY INSTRUCTIONS

 

In the event of a withdrawal
of Separate Notes from a Remarketing, Separate Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the
address set forth below.

 

	
  Name(s)

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
  (Please Print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Zip Code)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Tax
  Identification or Social Security Number)

  	
   

  

 

In the event of a withdrawal
of Separate Notes from a Remarketing, Separate Notes which are in book-entry
form should be credited to the account at The Depository Trust Company to the
person(s) set forth below.

 

	
   

  	
   

  
	
  DTC
  Account Number

  	
   

  

 

	
  Name
  of Account Party:

  	
   

  	
   

  

 

M-2

 

EXHIBIT N

 

NOTICE OF CASH SETTLEMENT AFTER FAILED FINAL
REMARKETING

 

The
Bank of New York Mellon

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               Corporate Units of Assured Guaranty Ltd., a
Bermuda company (the “Company”).

 

The undersigned Holder
hereby irrevocably notifies you in accordance with Section 5.02 of the
Purchase Contract and Pledge Agreement, dated as of June 24, 2009 (the “Purchase
Contract and Pledge Agreement”; unless otherwise defined
herein, terms defined in the Purchase Contract and Pledge Agreement are used
herein as defined therein), between the Company and The Bank of New York
Mellon, as Collateral Agent, as Custodial Agent, as Securities Intermediary, as
Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate
Units and Treasury Units from time to time, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 4:00 p.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date (in lawful money of the United
States by certified or cashiers’ check or wire transfer, in immediately
available funds payable to or upon order of the Securities Intermediary),
$          as the Purchase Price
for the Common Shares issuable to such Holder by the Company with respect to
            Purchase
Contracts on the Purchase Contract Settlement Date.  The undersigned Holder hereby instructs you
to notify promptly the Collateral Agent of the undersigned Holders’ election to
settle the Purchase Contracts related to such Holders’ Corporate Units with
separate cash.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
  Guarantee:

  	
   

  

 

Please print name and address of Registered Holder:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DTC
  Participant No.

  	
   

  	
   

  	
   

  
				

 

N-1

 

EXHIBIT O

 

NOTICE FROM PURCHASE CONTRACT AGENT TO COLLATERAL
AGENT

(Settlement with Separate Cash)

 

The
Bank of New York Mellon,

as
Collateral Agent

101
Barclay Street, Floor 8W

New
York, New York  10286

Telephone:  (212) 815-5360

Facsimile:  (212) 815-5704

Attention:  Corporate Trust Administration

 

Re:               Corporate Units of Assured Guaranty Ltd. (the
“Company”).

 

Please refer to the Purchase
Contract and Pledge Agreement dated as of June 24, 2009 (the “Agreement”),
between the Company and The Bank of York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time.  Capitalized terms used
herein but not defined shall have the meaning set forth in the Agreement.

 

In accordance with Section 5.02(c)(ii) of
the Agreement, we hereby notify you that that the Holder of Corporate Units
named below (the “Holder”) has
elected to settle the          
Purchase Contracts related to its Pledged Applicable Ownership Interests in
Notes with $          of separate
cash prior to 11:00 a.m., New York City time, on the second Business Day
immediately preceding the Purchase Contract Settlement Date (in lawful money of
the United States by certified or cashiers check or wire transfer, in
immediately available funds payable to or upon the order of the Securities
Intermediary) and has delivered to the undersigned a notice to that effect.

 

We hereby request that you,
upon confirmation that the Purchase Price has been paid by the Holder to the
Securities Intermediary in accordance with Section 5.02(c)(ii) of the
Agreement in lieu of exercise of such Holder’s Put Right, give us notice of the
receipt of such payment and (A) promptly invest the separate cash received
in Permitted Investments consistent with the instructions of the Company as
provided in Section 5.02(b)(v) of the Agreement with respect to Cash
Settlement, (B) promptly release from the Pledge the Notes underlying the
Applicable Ownership Interest in Notes related to the Corporate Units as to
which such Holder has paid such separate cash; and (C) promptly Transfer
all such Notes to us for distribution to such Holder, in each case free and
clear of the Pledge created by the Agreement

 

	
  Dated:

  	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON,

  
	
   

  	
   

  	
  as Purchase Contract Agent and attorney-in-fact of the Holders from
  time to time of the Units

  

 

O-1

 

	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title: 
  Authorized Signatory

  

 

Please print name and address of Holder
electing to settle with separate cash:

 

	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Social
  Security or other Taxpayer Identification Number, if any

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
  DTC Participant No.

  	
   

  	
   

  	
   

  
				

 

M-2

 

EXHIBIT P

 

NOTICE OF SETTLEMENT WTH SEPARATE CASH FROM SECURITIES
INTERMEDIARY TO PURCHASE CONTRACT AGENT

(Settlement with Separate Cash)

 

The
Bank of New York Mellon,

as
Purchase Contract Agent

101
Barclay Street, Floor 8W

New
York, New York 10286

Telephone:
(212) 815-5360

Facsimile:
(212) 815-5704

Attention:
Corporate Trust Administration

 

Re:               Corporate Units of Assured Guaranty Ltd. (the
“Company”).

 

Please refer to the Purchase
Contract and Pledge Agreement, dated as of June 24 , 2009 (the “Agreement”),
between the Company and The Bank of New York Mellon, as Collateral Agent, as
Custodial Agent, as Securities Intermediary, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units and Treasury Units from
time to time.  Capitalized terms used
herein but not defined shall have the meaning set forth in the Agreement.

 

In accordance with Section 5.02(c)(ii) of
the Agreement, we hereby notify you that as of 4:00 p.m., New York City
time, on the Business Day immediately preceding June 1, 2012 (the “Purchase
Contract Settlement Date”), (i) we have received from
         
$          in immediately
available funds paid in an aggregate amount equal to the Purchase Price due to
the Company on the Purchase Contract Settlement Date with respect to
          Corporate Units and (ii) based
on the funds received set forth in clause (i) above, an aggregate
principal amount of $          of
Notes underlying the related Pledged Applicable Ownership Interests in Notes
are to be released from the Pledge and Transferred to you.

 

	
  Dated:

  	
   

  	
   

  	
  THE
  BANK OF NEW YORK MELLON, 

  
	
   

  	
   

  	
   

  	
  as Securities Intermediary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:  Authorized Signatory

  

 

P-1

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