Document:

EXHIBIT 4.1

 

 

JUNIOR SUBORDINATED INDENTURE

between

FLAGSTONE FINANCE S.A.,

as Issuer,

FLAGSTONE REINSURANCE HOLDINGS LIMITED,

as Guarantor,

and

WILMINGTON TRUST COMPANY,

as Trustee

 

Dated as of  June 8, 2007

 

 

	
  ARTICLE I.

  	
   

  	
  DEFINITIONS AND OTHER
  PROVISIONS OF GENERAL APPLICATION

  	
   

  	
  1

  	
   

  
	
  SECTION 1.1

  	
   

  	
  Definitions

  	
   

  	
  1

  	
   

  
	
  SECTION 1.2

  	
   

  	
  Compliance Certificate
  and Opinions

  	
   

  	
  10

  	
   

  
	
  SECTION 1.3

  	
   

  	
  Forms of Documents
  Delivered to Trustee

  	
   

  	
  10

  	
   

  
	
  SECTION 1.4

  	
   

  	
  Acts of Holders

  	
   

  	
  11

  	
   

  
	
  SECTION 1.5

  	
   

  	
  Notices, Etc. to
  Trustee, Company and Guarantor

  	
   

  	
  13

  	
   

  
	
  SECTION 1.6

  	
   

  	
  Notice to Holders;
  Waiver

  	
   

  	
  13

  	
   

  
	
  SECTION 1.7

  	
   

  	
  Effect of Headings and
  Table of Contents

  	
   

  	
  14

  	
   

  
	
  SECTION 1.8

  	
   

  	
  Successors and Assigns

  	
   

  	
  14

  	
   

  
	
  SECTION 1.9

  	
   

  	
  Separability Clause

  	
   

  	
  14

  	
   

  
	
  SECTION 1.10

  	
   

  	
  Benefits of Indenture

  	
   

  	
  14

  	
   

  
	
  SECTION 1.11

  	
   

  	
  Governing Law

  	
   

  	
  14

  	
   

  
	
  SECTION 1.12

  	
   

  	
  Submission to
  Jurisdiction

  	
   

  	
  14

  	
   

  
	
  SECTION 1.13

  	
   

  	
  Non-Business Days

  	
   

  	
  15

  	
   

  
	
  SECTION 1.14

  	
   

  	
  Agent for Service of
  Process

  	
   

  	
  15

  	
   

  
	
  SECTION 1.15

  	
   

  	
  Currency Indemnity

  	
   

  	
  15

  	
   

  
	
  SECTION 1.16

  	
   

  	
  No Recourse Against
  Others

  	
   

  	
  16

  	
   

  
	
  ARTICLE II.   SECURITY
  FORMS

  	
   

  	
  17

  	
   

  
	
  SECTION 2.1

  	
   

  	
  Form of Security

  	
   

  	
  17

  	
   

  
	
  SECTION 2.2

  	
   

  	
  Restricted Legend

  	
   

  	
  23

  	
   

  
	
  SECTION 2.3

  	
   

  	
  Form of Trustee’s
  Certificate of Authentication

  	
   

  	
  28

  	
   

  
	
  SECTION 2.4

  	
   

  	
  Temporary Securities

  	
   

  	
  28

  	
   

  
	
  SECTION 2.5

  	
   

  	
  Definitive Securities

  	
   

  	
  29

  	
   

  
	
  ARTICLE III.   THE
  SECURITIES

  	
   

  	
  29

  	
   

  
	
  SECTION 3.1

  	
   

  	
  Payment of Principal
  and Interest

  	
   

  	
  29

  	
   

  
	
  SECTION 3.2

  	
   

  	
  Denominations

  	
   

  	
  31

  	
   

  
	
  SECTION 3.3

  	
   

  	
  Execution,
  Authentication, Delivery and Dating

  	
   

  	
  31

  	
   

  
	
  SECTION 3.4

  	
   

  	
  Global Securities

  	
   

  	
  32

  	
   

  
	
  SECTION 3.5

  	
   

  	
  Registration, Transfer
  and Exchange Generally

  	
   

  	
  41

  	
   

  
	
  SECTION 3.6

  	
   

  	
  Mutilated, Destroyed,
  Lost and Stolen Securities

  	
   

  	
  42

  	
   

  
	
  SECTION 3.7

  	
   

  	
  Persons Deemed Owners

  	
   

  	
  42

  	
   

  
	
  SECTION 3.8

  	
   

  	
  Cancellation

  	
   

  	
  43

  	
   

  

 i
 

 

	
  SECTION 3.9

  	
   

  	
  Deferrals of Interest
  Payment Dates

  	
   

  	
  43

  	
   

  
	
  SECTION 3.10

  	
   

  	
  [Reserved]

  	
   

  	
  44

  	
   

  
	
  SECTION 3.11

  	
   

  	
  Agreed Tax Treatment

  	
   

  	
  44

  	
   

  
	
  SECTION 3.12

  	
   

  	
  CUSIP Numbers

  	
   

  	
  44

  	
   

  
	
  ARTICLE IV.   SATISFACTION
  AND DISCHARGE

  	
   

  	
  44

  	
   

  
	
  SECTION 4.1

  	
   

  	
  Satisfaction and
  Discharge of Indenture

  	
   

  	
  44

  	
   

  
	
  SECTION 4.2

  	
   

  	
  Application of Trust
  Money

  	
   

  	
  45

  	
   

  
	
  ARTICLE V.   REMEDIES

  	
   

  	
  46

  	
   

  
	
  SECTION 5.1

  	
   

  	
  Events of Default

  	
   

  	
  46

  	
   

  
	
  SECTION 5.2

  	
   

  	
  Acceleration of
  Maturity; Rescission, Annulment, Audit Rights and Additional Reports

  	
   

  	
  47

  	
   

  
	
  SECTION 5.3

  	
   

  	
  Collection of
  Indebtedness and Suits for Enforcement by Trustee

  	
   

  	
  48

  	
   

  
	
  SECTION 5.4

  	
   

  	
  Trustee May File Proofs
  of Claim

  	
   

  	
  49

  	
   

  
	
  SECTION 5.5

  	
   

  	
  Trustee May Enforce
  Claim Without Possession of Securities

  	
   

  	
  49

  	
   

  
	
  SECTION 5.6

  	
   

  	
  Application of Money
  Collected

  	
   

  	
  49

  	
   

  
	
  SECTION 5.7

  	
   

  	
  Limitation on Suits

  	
   

  	
  50

  	
   

  
	
  SECTION 5.8

  	
   

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

  	
   

  	
  51

  	
   

  
	
  SECTION 5.9

  	
   

  	
  Restoration of Rights
  and Remedies

  	
   

  	
  51

  	
   

  
	
  SECTION 5.10

  	
   

  	
  Rights and Remedies
  Cumulative

  	
   

  	
  51

  	
   

  
	
  SECTION 5.11

  	
   

  	
  Delay or Omission Not
  Waiver

  	
   

  	
  51

  	
   

  
	
  SECTION 5.12

  	
   

  	
  Control by Holders

  	
   

  	
  51

  	
   

  
	
  SECTION 5.13

  	
   

  	
  Waiver of Past Defaults

  	
   

  	
  52

  	
   

  
	
  SECTION 5.14

  	
   

  	
  Undertaking for Costs

  	
   

  	
  52

  	
   

  
	
  SECTION 5.15

  	
   

  	
  Waiver of Usury, Stay
  or Extension Laws

  	
   

  	
  53

  	
   

  
	
  ARTICLE VI.   THE
  TRUSTEE

  	
   

  	
  53

  	
   

  
	
  SECTION 6.1

  	
   

  	
  Corporate Trustee
  Required

  	
   

  	
  53

  	
   

  
	
  SECTION 6.2

  	
   

  	
  Certain Duties and
  Responsibilities

  	
   

  	
  53

  	
   

  
	
  SECTION 6.3

  	
   

  	
  Notice of Defaults

  	
   

  	
  54

  	
   

  
	
  SECTION 6.4

  	
   

  	
  Certain Rights of
  Trustee

  	
   

  	
  55

  	
   

  
	
  SECTION 6.5

  	
   

  	
  May Hold Securities

  	
   

  	
  56

  	
   

  
	
  SECTION 6.6

  	
   

  	
  Compensation;
  Reimbursement; Indemnity

  	
   

  	
  57

  	
   

  

 ii
 

 

	
  SECTION 6.7

  	
   

  	
  Resignation and
  Removal; Appointment of Successor

  	
   

  	
  58

  	
   

  
	
  SECTION 6.8

  	
   

  	
  Acceptance of
  Appointment by Successor

  	
   

  	
  59

  	
   

  
	
  SECTION 6.9

  	
   

  	
  Merger, Conversion,
  Consolidation or Succession to Business

  	
   

  	
  59

  	
   

  
	
  SECTION 6.10

  	
   

  	
  Not Responsible for
  Recitals or Issuance of Securities

  	
   

  	
  59

  	
   

  
	
  SECTION 6.11

  	
   

  	
  Appointment of
  Authenticating Agent

  	
   

  	
  59

  	
   

  
	
  ARTICLE VII.   HOLDER’S
  LISTS AND REPORTS BY COMPANY

  	
   

  	
  61

  	
   

  
	
  SECTION 7.1

  	
   

  	
  Company to Furnish
  Trustee Names and Addresses of Holders

  	
   

  	
  61

  	
   

  
	
  SECTION 7.2

  	
   

  	
  Preservation of
  Information, Communications to Holders

  	
   

  	
  61

  	
   

  
	
  SECTION 7.3

  	
   

  	
  Reports by Company and
  the Guarantor

  	
   

  	
  62

  	
   

  
	
  ARTICLE VIII.   CONSOLIDATION,
  MERGER, CONVEYANCE, TRANSFER OR LEASE

  	
   

  	
  63

  	
   

  
	
  SECTION 8.1

  	
   

  	
  Company and Guarantor
  May Consolidate, Etc., Only on Certain Terms

  	
   

  	
  63

  	
   

  
	
  SECTION 8.2

  	
   

  	
  Successor Company
  Substituted

  	
   

  	
  65

  	
   

  
	
  ARTICLE IX.   SUPPLEMENTAL
  INDENTURES

  	
   

  	
  66

  	
   

  
	
  SECTION 9.1

  	
   

  	
  Supplemental Indentures
  without Consent of Holders

  	
   

  	
  66

  	
   

  
	
  SECTION 9.2

  	
   

  	
  Supplemental Indentures
  with Consent of Holders

  	
   

  	
  66

  	
   

  
	
  SECTION 9.3

  	
   

  	
  Execution of
  Supplemental Indentures

  	
   

  	
  67

  	
   

  
	
  SECTION 9.4

  	
   

  	
  Effect of Supplemental
  Indentures

  	
   

  	
  67

  	
   

  
	
  SECTION 9.5

  	
   

  	
  Reference in Securities
  to Supplemental Indentures

  	
   

  	
  67

  	
   

  
	
  ARTICLE X.   COVENANTS

  	
   

  	
  68

  	
   

  
	
  SECTION 10.1

  	
   

  	
  Payment of Principal,
  Premium, if any, and Interest

  	
   

  	
  68

  	
   

  
	
  SECTION 10.2

  	
   

  	
  Money for Security
  Payments to be Held in Trust

  	
   

  	
  68

  	
   

  
	
  SECTION 10.3

  	
   

  	
  Statement as to
  Compliance

  	
   

  	
  69

  	
   

  
	
  SECTION 10.4

  	
   

  	
  Calculation Agent

  	
   

  	
  69

  	
   

  
	
  SECTION 10.5

  	
   

  	
  Additional Amounts

  	
   

  	
  70

  	
   

  
	
  SECTION 10.6

  	
   

  	
  Additional Covenants

  	
   

  	
  71

  	
   

  
	
  SECTION 10.7

  	
   

  	
  Waiver of Covenants

  	
   

  	
  72

  	
   

  
	
  SECTION 10.8

  	
   

  	
  Treatment of Securities

  	
   

  	
  73

  	
   

  
	
  ARTICLE XI.   REDEMPTION
  OF SECURITIES

  	
   

  	
  73

  	
   

  
	
  SECTION 11.1

  	
   

  	
  Optional Redemption

  	
   

  	
  73

  	
   

  
	
  SECTION 11.2

  	
   

  	
  Special Event
  Redemption

  	
   

  	
  73

  	
   

  
	
  SECTION 11.3

  	
   

  	
  Election to Redeem;
  Notice to Trustee

  	
   

  	
  73

  	
   

  

 iii
 

 

	
  SECTION 11.4

  	
   

  	
  Selection of Securities
  to be Redeemed

  	
   

  	
  74

  	
   

  
	
  SECTION 11.5

  	
   

  	
  Notice of Redemption

  	
   

  	
  74

  	
   

  
	
  SECTION 11.6

  	
   

  	
  Deposit of Redemption
  Price

  	
   

  	
  75

  	
   

  
	
  SECTION 11.7

  	
   

  	
  Payment of Securities
  Called for Redemption

  	
   

  	
  75

  	
   

  
	
  ARTICLE XII.   SUBORDINATION
  OF SECURITIES

  	
   

  	
  75

  	
   

  
	
  SECTION 12.1

  	
   

  	
  Securities Subordinate
  to Senior Debt

  	
   

  	
  75

  	
   

  
	
  SECTION 12.2

  	
   

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

  	
   

  	
  76

  	
   

  
	
  SECTION 12.3

  	
   

  	
  Payment Permitted If No
  Default

  	
   

  	
  77

  	
   

  
	
  SECTION 12.4

  	
   

  	
  Subrogation to Rights
  of Holders of Senior Debt

  	
   

  	
  77

  	
   

  
	
  SECTION 12.5

  	
   

  	
  Provisions Solely to
  Define Relative Rights

  	
   

  	
  78

  	
   

  
	
  SECTION 12.6

  	
   

  	
  Trustee to Effectuate
  Subordination

  	
   

  	
  78

  	
   

  
	
  SECTION 12.7

  	
   

  	
  No Waiver of
  Subordination Provisions

  	
   

  	
  78

  	
   

  
	
  SECTION 12.8

  	
   

  	
  Notice to Trustee

  	
   

  	
  79

  	
   

  
	
  SECTION 12.9

  	
   

  	
  Reliance on Judicial
  Order or Certificate of Liquidating Agent

  	
   

  	
  79

  	
   

  
	
  SECTION 12.10

  	
   

  	
  Trustee Not Fiduciary
  for Holders of Senior Debt

  	
   

  	
  80

  	
   

  
	
  SECTION 12.11

  	
   

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

  	
   

  	
  80

  	
   

  
	
  SECTION 12.12

  	
   

  	
  Article Applicable to
  Paying Agents

  	
   

  	
  80

  	
   

  
	
  ARTICLE XIII.   GUARANTEE

  	
   

  	
  80

  	
   

  
	
  SECTION 13.1

  	
   

  	
  The Guarantee

  	
   

  	
  80

  	
   

  
	
  SECTION 13.2

  	
   

  	
  Guarantee
  Unconditional, etc

  	
   

  	
  81

  	
   

  
	
  SECTION 13.3

  	
   

  	
  Reinstatement

  	
   

  	
  81

  	
   

  
	
  SECTION 13.4

  	
   

  	
  Subrogation

  	
   

  	
  81

  	
   

  
	
  ARTICLE XIV.   SUBORDINATION
  OF GUARANTEE

  	
   

  	
  82

  	
   

  
	
  SECTION 14.1

  	
   

  	
  Securities Subordinate
  to Senior Debt of the Guarantor

  	
   

  	
  82

  	
   

  
	
  SECTION 14.2

  	
   

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

  	
   

  	
  82

  	
   

  
	
  SECTION 14.3

  	
   

  	
  Payment Permitted If No
  Default

  	
   

  	
  83

  	
   

  
	
  SECTION 14.4

  	
   

  	
  Subrogation to Rights
  of Holders of Senior Debt of the Guarantor

  	
   

  	
  84

  	
   

  
	
  SECTION 14.5

  	
   

  	
  Provisions Solely to
  Define Relative Rights

  	
   

  	
  84

  	
   

  
	
  SECTION 14.6

  	
   

  	
  Trustee to Effectuate
  Subordination

  	
   

  	
  85

  	
   

  
	
  SECTION 14.7

  	
   

  	
  No Waiver of
  Subordination Provisions

  	
   

  	
  85

  	
   

  

 iv
 

 

	
  SECTION 14.8

  	
   

  	
  Notice to Trustee

  	
   

  	
  85

  	
   

  
	
  SECTION 14.9

  	
   

  	
  Reliance on Judicial
  Order or Certificate of Liquidating Agent

  	
   

  	
  86

  	
   

  
	
  SECTION 14.10

  	
   

  	
  Trustee Not Fiduciary
  for Holders of Senior Debt of the Guarantor

  	
   

  	
  86

  	
   

  
	
  SECTION 14.11

  	
   

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

  	
   

  	
  86

  	
   

  
	
  SECTION 14.12

  	
   

  	
  Article Applicable to
  Paying Agents

  	
   

  	
  86

  	
   

  

 

SCHEDULES

	
  Schedule A

  	
   

  	
  —

  	
   

  	
  Determination of LIBOR

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  —

  	
   

  	
  Form of Officer’s Financial Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  —

  	
   

  	
  Form of Rule 144A to Regulation S Security Transfer
  Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  —

  	
   

  	
  Form of Regulation S to Rule 144A Security Transfer
  Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  —

  	
   

  	
  Form of Transfer Certificate for non-Global
  Securities

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  —

  	
   

  	
  Form of Officers’ Certificate Under Section 10.3

  

 

 v

 

JUNIOR SUBORDINATED
INDENTURE, dated as of June 8, 2007, between FLAGSTONE FINANCE S.A., a
Luxembourg company (the “Company”), FLAGSTONE
REINSURANCE HOLDINGS LIMITED, a Bermuda company (the “Guarantor”), and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as Trustee (in such capacity,
the “Trustee”).

RECITALS OF THE
COMPANY

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

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

NOW, THEREFORE,
this Indenture Witnesseth:

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

ARTICLE
I.

DEFINITIONS
AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.1         Definitions.

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

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

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

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

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

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

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

 

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

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

“Additional Amounts” has
the meaning specified in Section 10.5.

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

“Affiliate” of
any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person. For the purposes of this definition, “control,” when used with respect
to any specified Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative to the foregoing.

“Applicable Accounting Principles”  means accounting practices prescribed or permitted by the
National Association of Insurance Commissioners, if then applicable to the
Guarantor or its subsidiaries, and/or the applicable insurance department or
regulator of the jurisdiction of domicile of such Regulated Insurance Company,
and in each case, applied consistently throughout the periods involved.

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

“Applicable
Insurance Regulatory Authority” means, when used with respect to any
Regulated Insurance Company, (x) the insurance department or similar
administrative authority or agency located in each state or jurisdiction
(foreign or domestic) in which such Regulated Insurance Company is domiciled or
(y) to the extent asserting regulatory jurisdiction over such Regulated
Insurance Company, the insurance department, authority or agency in each state
or jurisdiction (foreign or domestic) in which such Regulated Insurance Company
is licensed, and shall include any Federal or national insurance regulatory
department, authority or agency that may be created and that asserts insurance
regulatory jurisdiction over such Regulated Insurance Company.

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

“Bankruptcy Code”
means Title 11 of the United States Code or any successor statute(s) thereto,
or any similar federal or state law for the relief of debtors, in each case as
amended from time to time.

“Board of Directors” means
the board of directors of the Company or the Guarantor, as the context
requires, or any duly authorized committee of that board.

 2
 

 

“Board Resolution” means
a copy of a resolution certified by the Secretary, an Assistant Secretary,
Director, Officer, Manager, General Counsel or any other duly authorized or
appointed person or agent of the Company or the Guarantor, as the context
requires, to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.

“Business Day”
means any day other than (i) a Saturday or Sunday, (ii) a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee is closed for business.

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

“Common Stock” means
the common shares, par value $0.01 per share, of the Guarantor.

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

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

“Covenant
Significant Subsidiaries” shall have the meaning set forth in Section
10.6.

“Corporate Trust Office” means
the principal office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of this
Indenture is located at  Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Capital Markets, or such other address as the Trustee may
designate from time to time by notice to the Holders, the Company and the
Guarantor or the principal corporate trust office of any successor trustee.

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

 3
 

 

another Person the
payment of which, in either case, such Person has guaranteed or is responsible
or liable for, directly or indirectly, as obligor or otherwise; and (viii) any
renewals, extensions, refundings, amendments or modifications of any obligation
of the type referred to in clauses (i) through (vii).

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

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

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

“Directors’ Certificate” means
a certificate signed by at least two directors of the Company or the Guarantor,
as the context requires, and delivered to the Trustee.

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

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

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

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

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

“Extension
Period” has the meaning specified in Section 3.9.

“GAAP” means United States generally
accepted accounting principles, consistently applied, from time to time in
effect.

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

“Government Obligation” means (a) any security
that is (i) a direct obligation of the United States of America of which the
full faith and credit of the United States of America is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (b) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any Government Obligation that is specified in clause
(a) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any Government Obligation that is so specified

 4
 

 

and held, provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.

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

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

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

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

“Insurance Business” means one or more aspects of the
business of selling, issuing or underwriting insurance or reinsurance.

“Interest Payment Date” means January 30, April
30, July 30 and October 30 of each year, commencing July 30, 2007 (or as set
forth in any Security issued hereunder) during the term of this Indenture, as
such dates may be adjusted pursuant to Section 1.13.

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

“Investment
Company Event” means the receipt by the Company of an Opinion of
Counsel experienced in such matters to the effect that, as a result of the
occurrence of a change in law or regulation (including any announced
prospective change) or a written change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Company is or,
within ninety (90) days of the date of such opinion will be, considered an “investment
company” that is required to be registered under the Investment Company Act,
which change or prospective change becomes effective or would become effective,
as the case may be, on or after the Original Issue Date.

“LIBOR”
has the meaning specified in Schedule A.

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

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

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

 5
 

 

“New York Court” has the meaning
specified in Section 1.12.

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

“Officers’ Certificate” means
a certificate signed by the Chairman of the Board, a Vice Chairman of the
Board, a Deputy Chairman, the Chief Executive Officer, the President, the
General Counsel or a Vice President, and by the Chief Financial Officer, a
Manager, a Director, the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company or the Guarantor, as the context requires,
and delivered to the Trustee.

“Operative Documents” means
the Indenture, the Subscription Agreement and the Securities.

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

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

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

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

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

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

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

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

 6
 

 

Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee’s right so to act with respect to such Securities
and that the pledgee is not the Company, the Guarantor or any other obligor
upon the Securities or any Affiliate of the Company, the Guarantor or such
other obligor.

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

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

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

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

“Proceeding”
has the meaning specified in Section 12.2.

“QIB”
or “Qualified Institutional Buyer” means a “qualified
institutional buyer” as defined in Rule 144A.

“QIB/QP”
means any Person that, at the time of its acquisition, purported acquisition or
proposed acquisition of Securities, is both a QIB and a QP.

“QP”
or “Qualified Purchaser” means any of (i) a “qualified
purchaser” within the meaning of Section 3(c)(7) of the Investment Company Act
or (ii) a company beneficially owned exclusively by one or more “qualified
purchasers” and/or “knowledgeable employees” with respect to the Company within
the meaning of Rule 3c-5 under the Investment Company Act.

“Redemption Date”
means, when used with respect to any Security to be redeemed, the date fixed
for such redemption by or pursuant to this Indenture, subject to adjustment as
specified in Section 1.13.

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

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

“Regulation
S”:  Regulation S under
the Securities Act.

 

 7

 

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

“Regulated
Insurance Company” means any subsidiary of the Guarantor, whether
now owned or hereafter acquired, that is authorized or admitted to carry on or
transact Insurance Business in any jurisdiction (foreign or domestic) and is
regulated by any Applicable Insurance Regulatory Authority.

“Responsible Officer” means, when
used with respect to the Trustee, the officer in the Corporate Trust Office of
the Trustee having direct responsibility for the administration of this
Indenture.

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

“Rule 144A”:  Rule 144A under the Securities Act.

“SEC” means the Securities and
Exchange Commission

“Securities” or “Security” means any debt securities or debt security, as the
case may be, authenticated and delivered under this Indenture.

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

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

“Senior Debt” means the principal
of and any premium and interest on (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to the
Company or the Guarantor, as the context requires, whether or not such claim
for post-petition interest is allowed in such proceeding) all Debt of the
Company or the Guarantor, as the context requires, whether incurred on or prior
to the date of this Indenture or thereafter incurred, unless it is provided in the instrument creating or
evidencing the same or pursuant to which the same is outstanding that the
obligations under such instrument are not superior in right of payment to the
Securities, in the case of the Company, or the Guarantee, in the case of the
Guarantor, issued under this Indenture; provided, however, that if the
Company or the Guarantor, as the context requires, is subject to the regulation
and supervision of any Applicable Insurance Regulatory Authority, the Company or the Guarantor, as the
context requires, shall have received
the approval of each appropriate Applicable Insurance Regulatory
Authority prior to issuing any such
obligation if then required; and  provided, further, that Senior Debt shall
not be deemed to include (i) any other debt securities and guarantees in
respect of such debt securities issued to any trust (or a trustee of any such
trust), partnership or other entity affiliated with the Company or the
Guarantor, as the context requires, that is a financing vehicle of the Company
or the

 8
 

 

Guarantor (a “financing entity”) in
connection with the issuance by such financing entity of equity securities or
other securities that are treated as equity capital for regulatory capital
purposes guaranteed by the Company or the Guarantor, as the context requires,
pursuant to an instrument that ranks pari passu with
or junior in right of payment to the Securities, in the case of the
Company, or the Guarantee, in the case of the Guarantor, or (ii) in the case of the Guarantor, $120,000,000 subordinated debt
securities and €13,000,000 subordinated debt securities each issued by the
Guarantor pursuant to the terms of a purchase agreement dated August 23, 2006.

“Significant
Subsidiary(ies)” is as defined in Section 1-02(w) of
Regulation S-X of the Securities Act.

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

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

“Special Redemption Price” has the meaning set forth in Section
11.2.

“Stated
Maturity” means July 30, 2037, subject to adjustment as
specified in Section 1.13.

“Statutory Financial Statements” means
all financial statements of the Guarantor’s subsidiary insurance companies for
each relevant period, each prepared in accordance with Applicable Accounting
Principles.

“Subscriber” has the meaning given to the
“Subscriber” in a Subscription Agreement.

“Subscription Agreement” means
the subscription agreement(s) between the Company and the Subscriber named
therein.

“Subsidiary” means a Person more
than fifty percent (50%) of the outstanding voting stock or other voting
interests of which is owned, directly or indirectly, by the Guarantor or by one
or more other Subsidiaries, or by the Guarantor and one or more other
Subsidiaries. For purposes of this definition, “voting stock” means stock that ordinarily has voting power
for the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.

“Tax Event” means the receipt by
the Company of an Opinion of Counsel experienced in such matters to the effect
that, as a result of (a) any amendment to or change (including any announced
prospective change) in the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein or
(b) any judicial decision or any official administrative pronouncement
(including any private letter ruling, technical advice memorandum or field
service advice) or regulatory procedure, including any notice or announcement
of intent to adopt any such pronouncement or procedure (an “Administrative Action”), regardless of
whether such judicial decision or Administrative Action is issued to or in
connection with a proceeding involving the Company and whether or not subject
to review or appeal, which amendment, change, judicial decision or
Administrative Action is enacted, promulgated or announced, in each case, on or
after the Original Issue Date, there is more than

 9
 

 

an insubstantial risk that interest payable by the Company on the
Securities is not, or within ninety (90) days of the date of such opinion, will
not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or that the Company will be subject to more than a
de minimis amount of other taxes, duties
or other governmental charges.

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

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

SECTION 1.2         Compliance Certificate and Opinions.

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

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

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

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

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

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

SECTION 1.3         Forms of Documents Delivered to Trustee.

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

 10
 

 

and any such Person may certify or give an opinion as to such matters
in one or several documents.

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

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

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

SECTION 1.4         Acts of Holders.

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

(b)           The fact and date of
the execution by any Person of any such instrument or writing may be proved by
the affidavit of a witness of such execution or by the certificate of any
notary public or other officer authorized by law to take acknowledgments of
deeds, certifying

 11
 

 

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

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

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

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

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

(g)           The Trustee may set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities entitled to join in the giving or making of (i) any
Notice of Default, (ii) any declaration of acceleration or rescission or
annulment thereof referred to in Section 5.2, (iii) any request to
institute proceedings referred to in Section 5.7(b) or (iv) any
direction referred to in Section 5.12. If any record date is set
pursuant to this paragraph, the Holders of Outstanding Securities on such
record date, and no other Holders, shall be entitled to join in such notice,
declaration, request or direction, whether or not such Holders remain Holders
after such record date; provided, that
no such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to

 12
 

 

prevent the Trustee from setting a new record date for any action for
which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no
action by any Person be canceled and of no effect).  Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities in the manner set forth in Section 1.6.

(h)           With respect to any
record date set pursuant to paragraph (f) or (g) of this Section 1.4,
the party hereto that sets such record date may designate any day as the “Expiration Date” and
from time to time may change the Expiration Date to any earlier or later day; provided, that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto
in writing, and to each Holder of Securities in the manner set forth in Section
1.6, on or prior to the existing Expiration Date. If an Expiration Date is
not designated with respect to any record date set pursuant to this Section
1.4, the party hereto that set such record date shall be deemed to have
initially designated the ninetieth (90th) day after such record date as the
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing,
no Expiration Date shall be later than the one hundred eightieth (180th) day after the applicable
record date.

SECTION 1.5         Notices, Etc. to Trustee, Company and Guarantor.

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

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

(b)           the Company or the
Guarantor by the Trustee or any Holder shall be sufficient for every purpose
hereunder if in writing and mailed, first class, postage prepaid, to the
Company addressed to it at 92, boulevard de la Pétrusse, L-2320 Luxembourg or
at any other address previously furnished in writing to the Trustee by the
Company and to the Guarantor addressed to it at Crawford House, 23 Church
Street, Hamilton, Bermuda, HM 11 or at any other address previously furnished
in writing to the Trustee by the Guarantor.

SECTION 1.6         Notice to Holders; Waiver.

Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first class, postage prepaid, to each Holder affected
by such event to the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail service or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture,
then any manner of service that effectuates delivery of such notice (as shall
be satisfactory to the Trustee) shall be a sufficient giving of such notice. In
any case where notice to

 13
 

 

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. Any request, demand,
authorization, direction, notice, consent or waiver required by or permitted
under this Indenture shall be in the English language, except that any
published notice may be in an official language of the country of publication.  Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.

SECTION 1.7         Effect of Headings and Table of Contents.

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

SECTION 1.8         Successors and Assigns.

This Indenture shall be binding upon and shall inure to the benefit of
any successor to the Company, the Guarantor and the Trustee, including any
successor by operation of law.  Except in
connection with a transaction involving the Company or the Guarantor that is
permitted under Article VIII, neither the Company nor the Guarantor
shall assign its obligations hereunder; provided, however,
that the Company may assign its obligations hereunder and under the Securities
to one of its Subsidiaries or to the Guarantor or one of its Subsidiaries if
the assignee agrees in writing to perform all of such obligations, in which
case the Company shall be discharged from all of such obligations.

SECTION 1.9         Separability Clause.

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

SECTION 1.10       Benefits of Indenture.

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

SECTION 1.11       Governing Law.

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

 14
 

 

SECTION 1.12       Submission to Jurisdiction.

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

SECTION 1.13       Non-Business Days.

If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest, premium, if any, or
principal or other amounts in respect of such Security shall not be made on
such date, but shall be made on the next succeeding Business Day (and
additional interest shall accrue in respect of the amounts whose payment is so
delayed for the period from and after any such Interest Payment Date, other
than Maturity date, as the case may be, through but excluding such next
succeeding Business Day) except that, if such Business Day falls in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the Interest Payment Date or Redemption Date or at the Stated Maturity.

SECTION 1.14       Agent for Service of Process.

The Company and the Guarantor will designate and
appoint CT Corporation System in New York City as its process agent (the “Process Agent”) upon which process may be served in any
action arising out of or relating to this Indenture which may be instituted in
any New York Court by the Trustee or the Holders, in accordance with legal
procedures prescribed for such courts within fifteen (15) days of execution of
the Indenture by the parties hereto, and will expressly consent to the
non-exclusive jurisdiction of any such court in respect of any such action, and
waive any other requirements of or objections to personal jurisdiction with
respect thereto.  Such appointment may
only be revoked upon the appointment of a new Process Agent in New York City,
by the Company or the Guarantor, as the case may be, and such Process Agent’s
acceptance in writing of such appointment upon the same terms specified herein
prior to the revocation of the previous Process Agent.  Service of process upon the Process Agent and
written notice of such service of process to it shall be deemed, in every
respect, effective service of process upon the Company or the Guarantor, as the
case may be.  Nothing herein shall in any
way be deemed to limit the ability of the Trustee or the Holders to serve any
such legal process, summons, notices and documents in any other manner
permitted by applicable law or to obtain jurisdiction over the Company or the
Guarantor or to bring actions, suits or proceedings against the Company or the
Guarantor in such other jurisdictions, and in such manner, as may be permitted
by applicable law.

 15
 

SECTION 1.15       Currency Indemnity.

If, for the purposes of obtaining judgment in any
court in any jurisdiction with respect to any payment due hereunder, it becomes
necessary to convert into the currency of such jurisdiction (the “Judgment Currency”) any amount due
hereunder in any currency other than the Judgment Currency (the “Currency Due”), then conversion shall be
made at the rate of exchange prevailing on the Business Day before the day on
which judgment is given.  For this
purpose, “rate of exchange” means the rate at which the Trustee is able, on the
relevant date, to purchase the Currency Due with the Judgment Currency in
accordance with its normal practices.  In
the event that there is a change in the rate of exchange prevailing between the
Business Day before the day on which the judgment is given and the date of
payment of the amount due, the Company will, on the day of payment, pay such
additional amount, if any, or be entitled to receive reimbursement of such
amount, if any, as may be necessary to ensure that the amount paid on such date
is the amount in the Judgment Currency which when converted at the rate of
exchange prevailing on the date of payment is the amount then due hereunder in
the Currency Due.  If the amount of the
Currency Due which the Trustee would be able to purchase at such rate of
exchange is less than the amount of the Currency Due originally due to it, the
Company and the Guarantor shall indemnify and save the Trustee (including in
its individual capacity) and the Holders harmless from and against loss or
damage arising as a result of such deficiency. 
This indemnity shall constitute an obligation separate and independent
from the other obligations contained herein, shall give rise to a separate and
independent cause of action and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.

SECTION 1.16       No Recourse Against Others.

No director, officer,
employee, incorporator, Affiliate or stockholder of the Company or the
Guarantor shall have any liability for any obligations of the Company or the
Guarantor under the Securities, the Guarantee or the Indenture or for a claim
based on, in respect of, or by reason of, such obligations or their
creation.  Each Holder of Securities by
accepting a Security waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Securities.

 

 16

 

ARTICLE
II

SECURITY
FORMS

SECTION 2.1         Form of Security.

(a)           Securities offered
and sold to Persons that are both (x) Qualified Purchasers and (y) QIBs
pursuant to a private placement exemption from the Securities Act shall be
issued initially in the form of Rule 144A Global Security, which shall be
deposited with the Trustee, as custodian for and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the Rule
144A Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee or the Depositary or its
nominee, as the case may be, as hereinafter provided.

(b)           Securities offered
and sold to Persons that are both non-U.S. Persons and non-U.S. Residents in
offshore transactions in reliance on Regulation S shall be issued in the form
of Regulation S Global Securities, which shall be deposited with the Trustee,
as custodian for and registered in the name of the Depositary or a nominee of
such Depositary, duly executed by the Company and authenticated by the Trustee
as provided herein.  The aggregate
principal amount of the Regulation S Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee or the
Depositary or its nominee, as the case may be, as hereinafter provided.

(c)           The Securities,
including the Certificates of Authentication, shall be in substantially the
forms required by this Article II, with such appropriate insertions and
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may be consistent herewith, determined by
authorized officers of the Company as evidenced by their execution of such
Securities.

FLAGSTONE FINANCE S.A.

Floating Rate Deferrable Interest Junior
Subordinated Note due 2037

[REG S CUSIP NUMBER: 

ISIN NUMBER.:]

[144A CUSIP NUMBER: 

ISIN NUMBER.:]

	
  No. [S/R]

  	
   

  	
     

  	
  $

  	
   

  

 

Flagstone Finance S.A., a
Luxembourg company (hereinafter called the “Company,” which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to [___________] or registered
assigns, the principal sum of up to [_________________________] Dollars
($[__________]) or such lesser amount as is specified in Schedule A [if the Security is a
Global Security, then insert—
or such other principal 

 17
 

 

amount
represented hereby as may be set forth in the records of the Securities
Registrar hereinafter referred to in accordance with the Indenture] on
July 30, 2037 (subject to Section 1.13 of the Indenture), unless redeemed prior
to such date in accordance herewith and with the Indenture.  The Company further promises to pay interest
on said principal sum from _________, 2007, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, quarterly (subject to deferral as set
forth herein) in arrears on January 30, April 30, July 30 and October 30 of
each year, commencing July 30, 2007, or if any such day is not a Business Day,
on the next succeeding Business Day (and additional interest shall accrue in respect
of the amounts whose payment is so delayed for the period from and after any
such Interest Payment Date, other than a Maturity date, through but excluding
such next succeeding Business Day), except that, if such Business Day falls in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force and
effect as if made on the Interest Payment Date, at a variable rate per annum,
reset quarterly on an Interest Payment Date, equal to LIBOR plus 3.00%,
together with Additional Amounts, if any, as provided in Section 10.5 of the
Indenture, until the principal hereof is paid or duly provided for or made
available for payment; provided, further, that any overdue principal,
premium, if any, or Additional Amounts and any overdue installment of interest
shall bear Additional Interest (to the extent that the payment of such interest
shall be legally enforceable) at a variable rate per annum, reset quarterly on
an Interest Payment Date, equal to LIBOR plus 3.00%, compounded quarterly,
from the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand.  Notwithstanding the foregoing, in no event
shall interest accrue hereon at a rate that is higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.

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

So long as no Event of
Default has occurred and is continuing, the Company shall have the right, at
any time and from time to time during the term of this Security, to defer the
payment of interest on this Security for a period of up to twenty (20) consecutive quarterly
interest payment periods (each such period, an “Extension
Period”), during which Extension Period(s), no interest shall be due
and payable.  No Extension Period shall
end on a date other than an Interest Payment Date, and no Extension Period
shall extend beyond the Stated Maturity of the principal of this Security.  No interest shall be due and payable during
an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and

 18
 

 

payable during such
Extension Period shall bear Additional Interest (to the extent payment of such
interest would be legally enforceable) at a variable rate per annum, reset
quarterly on an Interest Payment Date, equal to LIBOR plus 3.00%, compounded quarterly, from the dates on which
amounts would have otherwise been due and payable until paid or made available
for payment.  At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on
this Security, together with such Additional Interest.  Prior to the termination of any such
Extension Period, the Company may further defer the payment of interest; provided, that (i) all such previous and further extensions
comprising such Extension Period do not exceed twenty (20) consecutive quarterly interest payment periods, (ii)
no Extension Period shall end on a date other than an Interest Payment Date and
(iii) no Extension Period shall extend beyond the Stated Maturity of the
principal of this Security.  Upon the
termination of any such Extension Period and upon the payment of all accrued
and unpaid interest and any Additional Interest then due on any Interest
Payment Date, the Company may elect to begin a new Extension Period; provided, that (i) such Extension Period does not exceed twenty (20) consecutive quarterly interest
payment periods, (ii) no Extension Period shall end on a date other than an
Interest Payment Date, (iii) no Extension Period shall extend beyond the Stated
Maturity of the principal of this Security and (iv) no Event of Default has
occurred and is continuing.  The Company
shall give the Holder of this Security and the Trustee written notice of its
election to begin any such Extension Period at least five (5) Business Days
prior to the next succeeding Interest Payment Date on which interest on this
Security would be payable but for such deferral.

Under the Indenture,
during any such Extension Period, the Guarantor shall not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Guarantor’s capital stock or
make any guarantee payments with respect to the foregoing, (ii) make any
payment of principal of or any interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Guarantor that rank pari passu in all respects with or junior in interest to the
Guarantee (other than (a) repurchases, redemptions or other acquisitions of
shares of capital stock of the Guarantor in connection with (1) any employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more employees, officers, directors or consultants, (2) a dividend
reinvestment or stockholder stock purchase plan and/or (3) the issuance of
capital stock of the Guarantor (or securities convertible into or exercisable
for such capital stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period, (b) as a result of an exchange
or conversion of any class or series of the Guarantor’s capital stock for any
class or series of the Guarantor capital stock or of any class or series of the
Guarantor’s indebtedness for any class or series of the Guarantor’s capital
stock, (c) the purchase of fractional interests in shares of the Guarantor’s
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any Rights Plan, the issuance of rights, stock or
other property under any Rights Plan, or the redemption or repurchase of rights
pursuant thereto or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with
or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith), or (iii) enter into any contracts with
shareholders holding more than 10% of the outstanding shares of common stock of
the Guarantor other than on an arm’s-length-basis and in the ordinary course of
business.

 19
 

 

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

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

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

[FORM
OF REVERSE OF SECURITY]

This Security is one of a
duly authorized issue of securities of the Company (the “Securities”)
issued under the Junior Subordinated Indenture, dated as of June 8, 2007 (the “Indenture”), among the Company, Flagstone Reinsurance
Holdings Limited (hereinafter called the “Guarantor,”
which term includes any successor Person under the Indenture hereinafter
referred to) and Wilmington Trust Company, as trustee (in such capacity, the “Trustee,” which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Guarantor, the
Trustee, the holders of Senior Debt and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and delivered.

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

The Company may, on any
Interest Payment Date, at its option and in accordance with the Indenture, on
or after July 30, 2012 and subject to the terms and conditions of Article XI
of the Indenture, redeem this Security in whole at any time or in part from
time to time at a Redemption Price equal to one hundred percent (100%) of the
principal amount hereof, together, in the case of any such redemption, with
accrued interest, including any Additional Interest, through but excluding the
date fixed as the Redemption Date; provided, that
the Company shall

 20
 

 

have received the prior
approval of any Applicable Insurance Regulatory Authority then required.

In addition, upon the
occurrence and during the continuation of a Special Event, the Company may, at
its option and in accordance with the Indenture, redeem this Security, in whole
but not in part, subject to the terms and conditions of Article XI of
the Indenture at a Redemption Price equal to one hundred seven and one half
percent (107.5%) of the principal amount hereof, together, in the case of any
such redemption, with accrued interest, including any Additional Interest,
through but excluding the date fixed as the Redemption Date; provided, that the Company shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required.

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

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

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

As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable in the Securities Register, upon surrender of this
Security for registration of transfer at the office or agency of the Company
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Securities
Registrar and duly executed by, the Holder hereof or such Holder’s attorney
duly authorized in writing, and thereupon one or more new Securities, of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

 21
 

 

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

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

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

The Company and, by its
acceptance of this Security or a beneficial interest herein, the Holder of, and
any Person that acquires a direct or indirect beneficial interest in, this
Security intend and agree to treat this Security as indebtedness of the
Company, for United States federal, state and local tax purposes.

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

Schedule A

The initial principal
amount of this Note is $________.  The
aggregate principal amount of any Notes issued or canceled in exchange for a
portion or portions hereof, any portion or portions hereof exchanged for a
definitive certificated note or other global note and any portion or portions
of a definitive certificated note or other global note exchanged for a portion
or portions hereof:

	
  Date

  	
   

  	
  Principal Amount

  Issued,

  Canceled or

  Exchanged

  	
   

  	
  Remaining Principal

  Amount of this

  Global Note

  	
   

  	
  Notation

  Made by or on

  Behalf of

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
									

 

IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed on this ____ day of __________, 20__.

 22
 

 

	
     

  	
  Flagstone Finance S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
     

  	
  By:

  	
   

  
	
     

  	
  Name:

  	
   

  
	
     

  	
  Title:

  	
   

  

 

SECTION 2.2         Restricted Legend.

(a)           Rule 144A
Security:  Any Security
issued, sold or otherwise transferred hereunder pursuant to a private placement
exemption or Rule 144A shall bear a legend in substantially the following form
and transfers thereof, or any beneficial interests therein, may not be made
except in compliance with the restrictions specified in such legend:

“[IF THIS
SECURITY IS A GLOBAL SECURITY INSERT:  THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF
DTC.  THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

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

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

 

 23

 

THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY AND THE GUARANTOR THAT (A)
SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE
COMPANY OR THE GUARANTOR, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH
(a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
SUCH SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN “ACCREDITED
INVESTOR” (WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT), FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (V) TO A PERSON THAT IS NEITHER A U.S. PERSON (AS DEFINED IN
REGULATION S) NOR A U.S. RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”)) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S, ACTING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE PERSONS WITH RESPECT TO WHICH
IT EXERCISES SOLE INVESTMENT DISCRETION, EACH OF WHICH IS NEITHER A U.S. PERSON
(AS DEFINED IN REGULATIONS S) NOR A U.S. RESIDENT (WITHIN THE MEANING OF THE
INVESTMENT COMPANY ACT) OR (VI) PURSUANT TO AN EXEMPTION FROM THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND IN
COMPLIANCE WITH THE CERTIFICATIONS AND OTHER REQUIREMENTS SPECIFIED IN THE
INDENTURE REFERRED TO HEREIN AND, IN THE CASE OF (III) OR (VI), SUBJECT TO THE
RIGHT OF THE COMPANY AND THE GUARANTOR TO REQUIRE AN OPINION OF COUNSEL AND
OTHER INFORMATION SATISFACTORY TO THEM AND (B) THE HOLDER WILL NOTIFY ANY
PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE.

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

 24
 

 

TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH SECURITIES.

THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN,
BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT
IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED (“ERISA”), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN
ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON
INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY
INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE
RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION 96-23, 95-60, 91-38, 90-1, OR 84-14 OR ANOTHER APPLICABLE EXEMPTION
OR ITS PURCHASE AND HOLDING OF THIS SECURITY, OR ANY INTEREST HEREIN, ARE NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO
SUCH PURCHASE AND HOLDING.  ANY PURCHASER
OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR OTHER
PLAN TO WHICH TITLE 1 OF ERISA OR 
SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE “PLAN ASSETS” OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO
FINANCE SUCH PURCHASE OR (ii) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER AN APPLICABLE STATUTORY
OR ADMINISTRATIVE EXEMPTION.”

(b)           Regulation S
Security:  Any Security
issued, sold or otherwise transferred hereunder pursuant to Regulation S shall
bear a legend in substantially the following form and transfers thereof, or any
beneficial interests therein, may not be made except in compliance with the
restrictions specified in such legend:

“[IF THIS
SECURITY IS A GLOBAL SECURITY INSERT:  THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF
DTC.  THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC

 25
 

 

OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.

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

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

THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE AGREES FOR THE BENEFIT OF THE COMPANY AND THE GUARANTOR THAT (A)
SUCH SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE
COMPANY OR THE GUARANTOR, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
SUCH SECURITIES FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN “ACCREDITED
INVESTOR” (WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT), FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO,
OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, (V) TO A PERSON THAT IS NEITHER A U.S. PERSON (AS DEFINED IN
REGULATION S) NOR A U.S. RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY
ACT OF 1940, AS AMENDED (THE “INVESTMENT COMPANY ACT”)) IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S, ACTING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE PERSONS WITH RESPECT TO

 26
 

 

WHICH IT EXERCISES SOLE INVESTMENT DISCRETION, EACH OF
WHICH IS NEITHER A U.S. PERSON (AS DEFINED IN REGULATIONS S) NOR A U.S.
RESIDENT (WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT) OR (VI) PURSUANT TO
AN EXEMPTION FROM THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND IN COMPLIANCE WITH THE CERTIFICATIONS AND OTHER
REQUIREMENTS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN AND, IN THE CASE OF
(III) OR (VI), SUBJECT TO THE RIGHT OF THE COMPANY AND THE GUARANTOR TO REQUIRE
AN OPINION OF COUNSEL AND OTHER INFORMATION SATISFACTORY TO THEM AND (B) THE
HOLDER WILL NOTIFY ANY PURCHASER OF ANY SECURITIES FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.

AN INTEREST IN THIS SECURITY MAY NOT BE HELD BY A
PERSON THAT IS A U.S. PERSON (AS DEFINED IN REGULATION S) OR A U.S. RESIDENT
(WITHIN THE MEANING OF THE INVESTMENT COMPANY ACT) AT ANY TIME.

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

THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN,
BY ITS ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT
IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED (“ERISA”), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN
ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON
INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY
INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE
RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION 96-23, 95-60, 91-38, 90-1, OR 84-14 OR ANOTHER APPLICABLE EXEMPTION
OR

 27
 

 

ITS PURCHASE AND HOLDING OF THIS SECURITY, OR ANY
INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE WITH RESPECT TO SUCH PURCHASE AND HOLDING.  ANY PURCHASER OR HOLDER OF THE SECURITIES OR
ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR OTHER PLAN TO WHICH TITLE 1 OF ERISA
OR  SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH
EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE OR (ii) SUCH PURCHASE OR
HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE
UNDER AN APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.”

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

SECTION 2.3         Form of Trustee’s Certificate of Authentication.

The Trustee’s certificate of authentication shall be
in substantially the following form:

This represents Securities referred to in the
within-mentioned Indenture.

Dated:

	
     

  	
   

  	
  WILMINGTON TRUST COMPANY, not in its

  individual capacity but solely  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
     

  	
   

  	
  By:   

  	
   

  	
   

  
	
     

  	
   

  	
     

  	
   

  	
  Authorized
  signatory

  

 

SECTION 2.4         Temporary Securities.

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

 

 28

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

SECTION 2.5         Definitive Securities.

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

ARTICLE
III.

THE
SECURITIES

SECTION 3.1         Payment of Principal and Interest.

(a)           The unpaid principal
amount of the Securities shall bear interest at a variable rate per annum,
reset quarterly on an Interest Payment Date, equal to LIBOR plus 3.00% until
paid or duly provided for; such interest to accrue from the Original Issue Date
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for, and any overdue principal, premium, if any, or Additional
Amounts and any overdue installment of interest shall, to the extent legally
enforceable, bear Additional Interest at the rate equal to a variable  rate per annum, reset quarterly on an Interest Payment
Date, equal to LIBOR plus 3.00%; compounded quarterly from the dates such amounts are due until they are
paid or funds for the payment thereof are made available for payment.

(b)           Interest and
Additional Interest on any Security that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, except
that interest and any Additional Interest payable on the Stated Maturity (or
any date of principal repayment upon early maturity) of the principal of a
Security or on a Redemption Date shall be paid to the Person to whom principal
is paid. The initial payment of interest on any Security that is issued between
a Regular Record Date and the related Interest Payment Date shall be payable as
provided in such Security.

(c)           Any interest
(including Additional Interest) on any Security that is due and payable, but is
not timely paid or duly provided for, on any Interest Payment Date for
Securities

 29
 

(other than a Maturity date) (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the registered
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in paragraph (i) or (ii) below:

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

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

(d)           Payments of interest
on the Securities shall include interest accrued to but excluding the
respective Interest Payment Dates or Maturity dates.  Interest payments for the Securities shall be
computed and paid on the basis of a 360-day year and the actual number of
days elapsed in the relevant interest period.

(e)           Payment of principal
of, premium, if any, and interest (including Additional Interest) on the
Securities shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.  Payments of principal of,
premium, if any, and interest (including Additional Interest) due at the
Maturity of such Securities shall be made at the Place of Payment upon
surrender of such Securities to the Paying Agent and other payments of interest
(including Additional Interest) shall be made by

 30
 

wire transfer at such place and to such account at a banking
institution in the United States as may be designated in writing to the Paying
Agent at least ten (10) Business Days prior to the date for payment by the
Person entitled thereto unless proper written transfer instructions have not
been received by the relevant date, in which case such payments shall be made
by check mailed to the address of such Person as such address shall appear in
the Security Register.

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

SECTION 3.2         Denominations.

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

SECTION 3.3         Execution, Authentication, Delivery and Dating.

(a)           At any time and from
time to time after the execution and delivery of this Indenture,  the Company may deliver Securities in an
aggregate principal amount (including all then Outstanding Securities) not in
excess of ONE HUNDRED MILLION AND 00/100 ($100,000,000) DOLLARS executed by the
Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities; it being understood that all such Securities issued under this
Indenture shall constitute a single series. In authenticating such Securities,
and accepting the additional responsibilities under this Indenture in relation
to such Securities, the Trustee shall be entitled to receive, and shall be
fully protected in relying upon:

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

(ii)           an Opinion of Counsel stating that:
(1) such Securities, when authenticated by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute, and the Indenture constitutes, valid and legally
binding obligations of the Company, each enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws affecting creditors’ rights generally or by general principles
of equity; (2) the Securities have been duly authorized and executed by the
Company and have been delivered to the Trustee for authentication in accordance
with this Indenture; (3) it is not necessary in connection with the Company’s
offer, sale and delivery of the Securities to the Subscriber to register the
same under the Securities Act under the circumstances contemplated by the
Subscription Agreement and this Indenture; and (4) it is not necessary in
connection with the Company’s offer, sale and delivery of the Securities to the
Subscriber to require qualification of the Indenture under the Trust Indenture
Act.

(b)           The Securities shall
be executed on behalf of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its Chief Financial
Officer, its President, its General Counsel or one of its Vice Presidents.  The signature of any of these

 31
 

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

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

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

SECTION 3.4         Global Securities.

(a)           Upon the election of
a Holder after the Original Issue Date other than an institutional “accredited
investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, which election need not be in writing, the Securities owned by
such Holder shall be issued in the form of one or more Global Securities
registered in the name of the Depositary or its nominee.  Each Global Security issued under this
Indenture shall be registered in the name of the Depositary designated by the
Company for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Security for all purposes of this Indenture.

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

 32
 

of such Securities and the registration in the Securities Register of
such Securities in the names of the Holders of the beneficial interests
therein, the Trustee shall recognize such owners of beneficial interests as
Holders.

(c)           Notwithstanding any
provision to the contrary herein, so long as a Global Security remains
Outstanding and is held by or on behalf of the Depositary, transfers of a
Global Security or any interest therein, in whole or in part, shall only be
made in accordance with this Article III.

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

(ii)           Rule 144A Global Security
to Regulation S Global Security. 
If an owner of a beneficial interest in a Rule 144A Global Security
deposited with the Depositary wishes at any time to exchange its interest in
such Rule 144A Global Security for an interest in the corresponding Regulation
S Global Security, or to transfer its interest in such Rule 144A Global
Security to a Person who wishes to take delivery thereof in the form of an
interest in the corresponding Regulation S Global Security, such owner,
provided such owner or, in the case of a transfer to another Person, such
Person is not a U.S. Person or a U.S. Resident, may, subject to the immediately
succeeding sentence and the rules and procedures of the Depositary, exchange or
transfer or cause the exchange or transfer of such interest for an equivalent
beneficial interest in the Regulation S Global Security.  Upon receipt by the Trustee, as Securities
Registrar, of (A) instructions given in accordance with the Depositary’s
procedures from an Agent Member directing the Trustee to cause to be credited a
beneficial interest in the Regulation S Global Security in an amount equal to
the beneficial interest in the Rule 144A Global Security to be exchanged or
transferred, but not less than the minimum denomination applicable to
Securities held through Regulation S Global Securities, (B) a written order
given in accordance with the Depositary’s procedures containing information
regarding the participant account of the Depositary and, in the case of a
transfer or exchange pursuant to and in accordance with Regulation S, the
account to be credited with such increase and

 33
 

(C) a certificate in the form of Exhibit B attached hereto, given by the owner
of such beneficial interest (in the case of an exchange) or the transferee of
such beneficial interest (in the case of a transfer) stating that the exchange
or transfer of such interest has been made in compliance with the transfer
restrictions applicable to the Global Securities, including in accordance with
Regulation S, the Trustee, as Securities Registrar, shall instruct the
Depositary to reduce the principal amount of the Rule 144A Global Security and
to increase the principal amount of the Regulation S Global Security by the
aggregate principal amount of the beneficial interest in the Rule 144A Global
Security to be exchanged or transferred, and to credit or cause to be credited
to the account of the Person specified in such instructions a beneficial
interest in the Regulation S Global Security equal to the reduction in the
principal amount of the Rule 144A Global Security.

(iii)          Regulation S Global
Security to Rule 144A Global Security.  If an owner of a beneficial interest in a
Regulation S Global Security deposited with the Depositary wishes at any time
to exchange its interest in such Regulation S Global Security for an interest
in a corresponding Rule 144A Global Security or to transfer its interest in
such Regulation S Global Security to a Person who wishes to take delivery thereof
in the form of an interest in the corresponding Rule 144A Global Security, such
owner may, subject to the immediately succeeding sentence and the rules and
procedures of the applicable Depositary, as the case may be, cause the exchange
or transfer of such interest for an equivalent beneficial interest in the Rule
144A Global Security.  To the extent that
the Trustee, as Securities Registrar, has received (A) instructions from the
applicable Depositary, as the case may be, directing the Trustee, as Securities
Registrar, to cause to be credited a beneficial interest in the Rule 144A
Global Security equal to the beneficial interest in the Regulation S Global
Security to be exchanged or transferred but not less than the minimum
denomination applicable to Securities held through Rule 144A Global Securities,
such instructions to contain information regarding the participant account with
the Depositary to be credited with such increase, and (B) a certificate in the
form of Exhibit C attached hereto,
given by the owner of such beneficial interest (in the case of an exchange) or
the transferee of such beneficial interest (in the case of a transfer) stating
that the Person acquiring such interest in the Rule 144A Global Security is a
QIB/QP and is obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A and in accordance with any applicable securities laws
of any state of the U.S. or any other relevant jurisdiction, or that, in the
case of an exchange, the owner is a QIB/QP, then the Trustee, as Securities
Registrar, will instruct the Depositary to reduce the Regulation S Global
Security by the aggregate principal amount of the beneficial interest in the
Regulation S Global Security to be transferred or exchanged, and the Trustee,
as Securities Registrar, shall instruct the Depositary, concurrently with such
reduction, to credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Rule 144A Global
Security equal to the reduction in the principal amount of the Regulation S
Global Security.

(iv)          Other Exchanges.

(A)          Notwithstanding the foregoing, if an
owner of a beneficial interest in a Global Security wishes at any time to
transfer an interest in such Global Security to a Person other than a QIB/QP or
a Person that is not a U.S. Person or U.S. Resident pursuant to Regulation S,
such transfer shall be effected, subject to

 34
 

the Applicable
Depositary Procedures, in accordance with the provisions of this Article III
and the transferee shall receive a definitive, physical Securities certificate
in connection with such transfer upon delivery of a certificate in the form of Exhibit
D attached hereto to the Trustee.  A
Holder of a definitive, physical Security certificate that is a QIB/QP or that
is not a U.S. Person or U.S. Resident pursuant to Regulation S may, upon
request, and in accordance with the provisions of this Article III,
exchange such definitive, physical Security certificate for a beneficial
interest in a Global Security.

(B)           In the event that a Global Security
is exchanged for Securities in definitive, physical registered form without
interest coupons, such Securities may be exchanged for one another only in
accordance with such procedures and restrictions as are substantially
consistent with the provisions above (including certification requirements
intended to ensure that such transfers comply with Rule 144A or another
exemption from the registration requirements of the Securities Act, or are to
non-U.S. Persons and non-U.S. Residents, or otherwise comply with Regulation S,
as the case may be) and as may be from time to time adopted by the Company and
the Trustee.

(C)           Subject to compliance with the
transfer restrictions contained in Section 2.2 and Section 3.4(c)(iv),
transfers of interests in a Global Security may be made (x) by book-entry
transfer of beneficial interests within the relevant Depositary or (y)(i) in
the case of transfers of interests in a Rule 144A Global Security or in a
Regulation S Global Security, in accordance with this Article III; provided,
that, in the case of any such transfer of interests pursuant to clause (x)
or (y) above, such transfer is made in accordance with subclause (D) below.

(D)          Restrictions on Transfers.

(1)           Transfers of interests in a Regulation
S Global Security to a U.S. Person or a U.S. Resident that is a QIB/QP shall be
made by delivery of an interest in the corresponding Rule 144A Global Security
and shall be limited to transfers made pursuant to this Article III.  Beneficial interests in a Rule 144A Global
Security may only be held through the applicable Depositary.

(2)           Any transfer of an interest in a
Security to a U.S. Person or a U.S. Resident that is not a QIB/QP and/or a
institutional “accredited investor” within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act shall be null and void ab initio
and shall not be given effect for any purpose hereunder.

(3)           Any transfer of an interest in a
Global Security to a U.S. Person or a U.S. Resident that is not a QIB/QP, but
who is an institutional “accredited investor”, may and shall be made by
delivery of an interest in definitive, physical Securities and shall be limited
to transfers made pursuant to this Article III.

(4)           Transfers of interests in a Rule 144A
Global Security to a Person that is not a U.S. Person or U.S. Resident shall be
made by delivery of an interest in the corresponding Regulation S Global
Security and shall be limited to transfers made

 35
 

pursuant to this
Article III.  Beneficial interests in a
Regulation S Global Security may only be held through the applicable
Depositary.

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

(e)           Execution of Global Securities Generally.  The Company shall execute and the Trustee
shall, in accordance with this Section 3.4(e),
authenticate and deliver initially one or more Global Securities evidencing the
Securities that shall be (i) registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (ii)
delivered by the Trustee to such Depositary or pursuant to such Depositary’s
instructions or held by the Trustee, as custodian for the Depositary; provided,
that no initial Holder may be an institutional “accredited investor” within the
meaning of Rule 501(a)(1), (2), (3) or (7) unless such initial Holder is also a
(i) QIB/QP or (ii) a Person that is not a U.S. Person or U.S. Resident pursuant
to Regulation S.

(f)            Rights of Agent Members in Global Securities Generally.  Members of, or participants in, the
Depositary  (“Agent
Members”) shall have no rights under this Indenture with respect to
any interest in a Global Security held on their behalf by the Depositary or
under the Global Security, and the Depositary may be treated by the Company,
the Guarantor, the Trustee and any agent of the Company, the Guarantor or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever (except to the extent otherwise specifically provided herein).  Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Guarantor, the Trustee or any agent of the
Company, the Guarantor or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.

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

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

 36
 

(i)            Each owner of a
beneficial interest in a Rule 144A Global Security will be deemed to have
represented and agreed with the Company and the Guarantor as follows (except
that in a transfer of a beneficial interest in a Regulation S Global Security
to a transferee that takes delivery in the form of an interest in a Rule 144A
Global Security, the transferee will be required to make the required
representations in a transfer certificate in the form set forth as Exhibit B):

(i)            The owner is purchasing the Security
for its own account or one or more accounts with respect to which it exercises
sole investment discretion, in each case in minimum denominations of $100,000
and integral multiples of $1,000 in excess thereof, and both it and each such
account (if any) and (A) is a QIB/QP, (B) is not a dealer of the type described
in paragraph (a)(1)(ii) of Rule 144A unless it owns and invests on a
discretionary basis not less than $25,000,000 in securities of issuers that are
not Affiliated to it, (C) is not a participant-directed employee plan, such as
a 401(k) plan, or any other type of plan referred to in paragraph (a)(1)(i)(D)
or (a)(1)(i)(E) of Rule 144A, or a trust fund referred to in paragraph
(a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, unless
investment decisions with respect to the plan are made solely by the fiduciary,
trustee or sponsor of such plan, (D) was not formed for the purpose of
investing in the Company (except where each beneficial owner of the holder is a
QP) and (E) shall provide written notice to any transferee that any transferee
taking delivery of the Security in the form of an interest in a Rule 144A
Global Security must satisfy the foregoing qualifications.

(ii)           The owner agrees on its own behalf
and on behalf of any account for which it is holding the Security to offer,
sell or otherwise transfer such Security (or a beneficial interest therein)
only (A) in the required minimum denomination, and (B)(1) in the U.S., only in
the form of an interest in a Rule 144A Global Security to a QP that the owner
reasonably believes is a QIB, purchasing for its own account or one or more
accounts, each of which is a QP that the owner reasonably believes is a QIB, in
accordance with Rule l44A, and none of which are (i) a dealer of the type
described in paragraph (a)(1)(ii) of Rule 144A unless it owns and invests on a
discretionary basis not less than $25,000,000 in securities of issuers that are
not Affiliated to it, (ii) a participant-directed employee plan, such as a
401(k) plan, or any other type of plan referred to in paragraph (a)(1)(i)(D) or
(a)(1)(i)(E) of Rule 144A, or a trust fund referred to in paragraph
(a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, unless
investment decisions with respect to the plan are made solely by the fiduciary,
trustee or sponsor of such plan or (iii) formed for the purpose of investing in
the Company (except where each beneficial owner is a QP) or (2) outside the
U.S. in the form of an interest in a Regulation S Global Security to a Person
that is neither a U.S. Person nor a U.S. Resident in an offshore transaction in
accordance with Regulation S under the Securities Act.  The owner understands and agrees that neither
a U.S. Person nor a U.S. Resident may hold an interest in a Security in the
form of a Regulation S Global Security at any time.  The owner agrees to provide notice of such
transfer restrictions to any subsequent transferee.

(iii)          The owner understands that the Company
is entitled to require any Holder of Securities who is a U.S. Person or a U.S.
Resident who is determined not to have been a QIB/QP at the time of acquisition
of the Security (or interest therein) to (A) if such Person is an institutional
“accredited investor” within the meaning of Rule 501(a)(1), (2),

 37
 

(3) or (7) under the Securities Act, receive
definitive, physical Securities or (B) sell such interest to a Person that is a
QIB/QP or to a Person that is neither a U.S. Person nor a U.S. Resident in a
transaction meeting the requirements of Regulation S.

(iv)          The owner understands that the
Securities have not been approved or disapproved by the SEC or any other governmental
authority or agency of any jurisdiction. 
Any representation to the contrary is a criminal offense.

(v)           The owner agrees that no Security (or
any interest therein) may be sold, pledged or otherwise transferred in a
denomination of less than $100,000 and integral multiples of $1,000 in excess
thereof.

(vi)          The owner (A) has such knowledge and
experience in financial and business matters that the owner is capable of
evaluating the merits and risks (including for tax, legal, regulatory,
accounting and other financial purposes) of its prospective investment in the
Securities, (B) is financially able to bear such risk, (C) in making such
investment is not relying on the advice or recommendations of the Company, the
Guarantor, the Trustee or any of their respective Affiliates (or any
representative of any of the foregoing), (D) has determined that an investment
in the Securities is suitable and appropriate for it, and (E) has had access to
such financial and other information concerning the Company, the Guarantor and
the Securities as it has deemed necessary to make its own independent decision
to purchase such Securities, including the opportunity, at a reasonable time
prior to its purchase of such Securities, to ask questions and receive answers
concerning the Company and the Guarantor and the terms and conditions of the
offering of the Securities.

(vii)         The owner understands that there is no
market for the Securities and that no assurance can be given as to the
liquidity of any trading market for the Securities and that it is unlikely that
a trading market for the Securities will develop.  Accordingly, the owner must be prepared to
hold the Securities for an indefinite period of time or until their maturity.

(viii)        The owner agrees that no sale, pledge or
other transfer of a Security (or any interest therein) may be made if such
transfer would have the effect of requiring the Company or the Guarantor to
register as an investment company under the Investment Company Act.

(ix)           The owner will be deemed to represent,
warrant and covenant, for the duration that it holds an interest in such
Security, that either (A) it is not acquiring such Securities with the assets
of a Person who is or will be an employee benefit, individual retirement
account or other Plan or arrangement (each, a “Plan”)
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), OR Section
4975 of the Internal Revenue Code of 1986, as amended (the “Code”) or (B) its acquisition, holding
and disposition of such Securities, throughout the period that it holds such
Securities, will not result in a non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or any substantially similar
applicable law), because the acquisition, holding and disposition of such
Securities by the holder is and will be eligible for relief under a prohibited
transaction exemption, all of the conditions

 38
 

of which are and will be satisfied upon its
acquisition of, and throughout the term that it holds, such Securities.  Each owner of such Securities will be deemed
to represent, warrant and covenant that it will not sell, pledge or otherwise
transfer such Securities in violation of the foregoing.  In addition, if the owner is, or is acting on
behalf of, a Plan, the fiduciaries of such Plan represent, warrant and covenant
that they have been informed of and understand the investment objectives,
policies and strategies of the Company and the Guarantor and that the decision
to invest such Plan’s assets in such Securities was made with appropriate
consideration of relevant investment factors with regard to such Plan and is
consistent with the duties and responsibilities imposed upon fiduciaries with
regard to their investment decisions under ERISA.

(x)            The owner agrees that (A) any sale,
pledge or other transfer of a Security (or any interest therein) made in
violation of the transfer restrictions contained in this Indenture, or made
based upon any false or inaccurate representation made by the holder or a
transferee to the Company or the Guarantor, will be void and of no force or
effect and (B) none of the Company, the Guarantor, the Trustee or the
Securities Registrar has any obligation to recognize any sale, pledge or other
transfer of a Security (or any interest therein) made in violation of any such
transfer restriction or made based upon any such false or inaccurate
representation.

(xi)           The owner is not a member of the
public in the Cayman Islands.

(xii)          The Rule 144A Global Securities will
bear the applicable legends set forth in herein.

(xiii)         The owner has the power and authority
to enter into each agreement required to be executed and delivered by or on
behalf of the owner in connection with its purchase of Securities and to
perform its obligations thereunder and consummate the transactions contemplated
thereby, and the Person signing any such documents on behalf of the owner has
been duly authorized to execute and deliver such documents and each other
document required to be executed and delivered by the owner in connection with
its purchase of Securities.  Such
execution, delivery and compliance by the owner does not conflict with, or
constitute a default under, any instruments governing the holder, any
applicable law, regulation or order, or any material agreement to which the
owner is a party or by which the owner is bound.

(xiv)        If the owner’s permanent address is
located in the U.S., the owner was offered the Securities in the state of such
owner’s permanent address and intends that the securities law of that state
govern the owner’s subscription for the Securities.

(xv)         The owner understands that the Company
or the Guarantor may require certification acceptable to it (i) to permit it to
make payments to it without, or at a reduced rate of, withholding or (ii) to
enable it to qualify for a reduced rate of withholding in any jurisdiction from
or through which it receives payments on its assets.  The owner agrees to provide any such
certification that is requested by the Company or the Guarantor.

 

 39

(xvi)        The owner
acknowledges that the Company, the Guarantor, the Trustee and others will rely
upon the truth and accuracy of the foregoing acknowledgments, representations
and agreements and agrees that, if any of the acknowledgments, representations
or warranties made or deemed to have been made by it in connection with its
purchase of the Securities are no longer accurate, the owner will promptly
notify the Company, the Guarantor and the Trustee.

(j)            Each
owner of a beneficial interest in a Regulation S Global Security shall be
deemed to have represented and agreed with the Company and the Guarantor as set
forth in clauses (ii) through (xvi) of clause
(i) above (except that in a transfer of an interest in a Rule 144A
Global Security to a transferee that takes delivery in the form of an interest
in a Regulation S Global Security, the transferee will be required to make the
required representations in a transfer certificate in the form set forth as Exhibit C). 
Each owner of a beneficial interest in a Regulation S Global Security
will also be deemed or required (as applicable) to represent, warrant and agree
as follows:

(i)            The owner is
neither a U.S. Person nor a U.S. Resident purchasing for its own account or one
or more accounts, each of which is neither a U.S. Person nor a U.S. Resident,
and as to each of which the owner exercises sole investment discretion, in an
offshore transaction pursuant to Regulation S and is aware that the sale of the
Securities to it is being made in reliance on the exemption from registration
provided by Regulation S.

(ii)           The Regulation S
Global Securities will bear the applicable legends set forth in herein.

(iii)          The owner
understands and agrees that before a Security in the form of an interest in a
Regulation S Global Security may be offered, sold, pledged or otherwise
transferred to a transferee that takes delivery in the form of a Rule 144A
Global Security, the transferee shall be required to provide the Trustee with a
transfer certificate in the form attached hereto as Exhibit
C to the effect that the transferee is a QIB/QP which is acquiring
the interest in the Security in the form of a Rule 144A Global Security in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the U.S. or any other relevant
jurisdiction.

(k)           Notwithstanding
anything contained in this Indenture to the contrary, and to the maximum extent
permitted under applicable law, neither the Trustee nor the Securities
Registrar (nor any other Transfer Agent) shall be responsible or liable for
compliance with applicable federal or state securities law (including the
Securities Act, Rule 144A or Regulation S promulgated thereunder), the
Investment Company Act, ERISA or the Code (or any applicable regulations
thereunder); provided, however, that if a specified transfer
certificate or Opinion of Counsel is required by the express terms of this Article III to be delivered to the Trustee or
Securities Registrar prior to registration of transfer of a Security, the
Trustee and/or Securities Registrar, as applicable, shall be under a duty to
receive such certificate or Opinion of Counsel and to examine the same to
determine whether it conforms on its face to the requirements hereof (and the
Trustee or Securities Registrar, as the case may be, shall promptly notify the
party delivering the same if it determines that such certificate or Opinion of
Counsel does not so conform).

 40
 

SECTION 3.5         Registration, Transfer and Exchange Generally.

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

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

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

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

(e)           Every
Security presented or surrendered for transfer or exchange shall (if so
required by the Company or the Trustee) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Securities Registrar, duly executed by the Holder thereof or such Holder’s
attorney duly authorized in writing and, in the case of Securities other than
Global Securities, must be accompanied by a certificate substantially in the
form set forth as Exhibit D hereto.

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

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

(h)           The
Company shall designate an office or offices or agency or agencies where
Securities may be surrendered for registration or transfer or exchange.  The Company initially

 41
 

designates the Corporate Trust Office as its office and agency for such
purposes.  The Company shall give prompt
written notice to the Trustee and to the Holders of any change in the location
of any such office or agency.

(i)            Each
Holder of a Security agrees to indemnify the Company and the Trustee (including
in its individual capacity) against any liability that may result from the
transfer, exchange or assignment of such Holder’s Security in violation of
provisions of this Indenture or applicable United States or state securities
law.

SECTION 3.6         Mutilated, Destroyed, Lost and Stolen Securities.

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

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

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

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

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

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

SECTION 3.7         Persons Deemed Owners.

The Company, the Guarantor or the Trustee and any
agent of the Company, the Guarantor or the Trustee shall treat the Person in
whose name any Security is registered as the

 42
 

owner of such Security
for the purpose of receiving payment of principal of and any interest on such
Security and for all other purposes whatsoever, and neither the Company, the
Guarantor or the Trustee nor any agent of the Company, the Guarantor or the
Trustee shall be affected by notice to the contrary.

SECTION 3.8         Cancellation.

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

SECTION 3.9         Deferrals of Interest Payment Dates.

(a)           So
long as no Event of Default has occurred and is continuing, the Company shall
have the right, at any time and from time to time during the term of the
Securities, to defer the payment of interest on the Securities for a period of
up to twenty (20) consecutive quarterly interest payment periods (each such
period, an “Extension Period”), during which Extension Period(s), the Company shall have
the right to make no payments or partial payments of interest on any Interest
Payment Date.  No Extension Period shall
end on a date other than an Interest Payment Date and no Extension Period shall
extend beyond the Stated Maturity of the principal of the Securities.  No interest shall be due and payable during
an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest (to the extent payment of such interest would be
legally enforceable) at the rate equal to a variable rate per annum equal to
LIBOR plus 3.00%, compounded quarterly,
from the dates on which amounts would have otherwise been due and payable until
paid or until funds for the payment thereof have been made available for
payment.  At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid on
the Securities together with such Additional Interest.  Prior to the termination of any such
Extension Period, the Company may extend such Extension Period and further
defer the payment of interest; provided, that
(i) all such previous and further extensions comprising such Extension Period
do not exceed twenty (20) consecutive quarterly interest payment periods, (ii)
no Extension Period shall end on a date other than an Interest Payment Date and
(iii) no Extension Period shall extend beyond the Stated Maturity of the
principal of the Securities.  Upon the
termination of any such Extension Period and upon the payment of all accrued
and unpaid interest and any Additional Interest then due on any Interest
Payment Date, the Company may elect to begin a new Extension Period; provided, that (i) such Extension Period does not exceed
twenty (20) consecutive quarterly  interest
payment periods, (ii) no Extension Period shall end on a date other than an
Interest Payment Date, (iii) no Extension Period shall extend beyond the Stated
Maturity of the principal of the Securities and (iv) no Event of Default has
occurred and is continuing.  The Company
shall notify (i) the

 43
 

Holders of the Securities at the address
provided upon request to the Securities Registrar, (ii) the Trustee at its
Corporate Trust Office and (iii) TWE, Ltd., c/o Maples Finance Limited, P.O.
Box 1093 GT, Queensgate House, South Church Street, George Town, Grand Cayman,
Cayman Islands, Attention: The Directors, in writing and by telephone (except
in the case of notice to the Holders) of its election to begin any such
Extension Period at least five (5) Business Days prior to the next succeeding
Interest Payment Date on which interest on the Securities would be payable but
for such deferral.

(b)           In
connection with any such Extension Period, the Guarantor shall be subject to
the restrictions set forth in Section 10.6.

SECTION 3.10       [Reserved]

SECTION 3.11       Agreed Tax Treatment.

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

SECTION 3.12       CUSIP Numbers.

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

ARTICLE
IV.

SATISFACTION AND DISCHARGE

SECTION 4.1         Satisfaction and Discharge of Indenture.

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

(a)           either

(i)            all Securities
theretofore authenticated and delivered (other than (A) Securities that have
been mutilated, destroyed, lost or stolen and that have been replaced or paid
as provided in Section 3.6 and (B) Securities for whose payment money
has

 44
 

theretofore
been deposited in trust or segregated and held by the Company and thereafter
repaid to the Company or discharged as provided in Section 10.2) have
been delivered to the Trustee for cancellation; or

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

(A)          have become due and
payable, or

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

(C)           are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company,

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

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

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

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

SECTION 4.2         Application of Trust Money.

Subject to the provisions of Section 10.2(e),
all money or Government Obligations deposited with the Trustee pursuant to Section
4.1 shall be held in trust and applied by the Trustee, in accordance with
the provisions of the Securities and this Indenture, to the payment in
accordance with Section 3.1, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled

 45
 

thereto, of the principal
and any premium and interest (including any Additional Interest) for the payment
of which such money or obligations have been deposited with or received by the
Trustee.  Moneys held by the Trustee
under this Section 4.2 shall not be subject to the claims of holders of
Senior Debt under Article XII.

ARTICLE
V.

REMEDIES

SECTION 5.1         Events of Default.

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

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

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

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

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

(e)           the
institution by the Company or the Guarantor of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by the Company or the Guarantor to the
institution of bankruptcy or insolvency proceedings against it, or the filing
by the Company or the Guarantor of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver,

 46
 

liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of its
property or the Guarantor, or the making by the Company or the Guarantor of an
assignment for the benefit of creditors, or the admission by the Company or the
Guarantor in writing of its inability to pay its debts generally as they become
due and its willingness to be adjudicated a bankrupt or insolvent, or the
taking of corporate action by the Company or the Guarantor in furtherance of
any such action;

(f)            any
representation, warranty, certification or statement of fact made or deemed
made by the Company or Guarantor (i) herein or in the Securities shall be
incorrect or misleading in any material respect when made or deemed made or
(ii) in the Subscription Agreement or in any document delivered in connection
herewith or therewith shall be incorrect or misleading so as to reasonably be
expected to have, singly or in the aggregate, a material adverse effect on the
condition (financial or otherwise), earnings, business or business prospects,
of the Guarantor, the Company and their respective subsidiaries, taken as a
whole, whether or not occurring in the ordinary course of business; or

(g)           the
Guarantee shall cease to be in full force and effect or the Guarantor shall, in
writing to the Trustee, to a Holder or to any governmental agency or regulatory
authority, deny or disaffirm its obligations under the Guarantee.

SECTION 5.2         Acceleration of Maturity; Rescission, Annulment,
Audit Rights and Additional Reports.

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

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

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

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

(B)           any accrued Additional Interest on
all Securities,

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

 47

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

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

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

(c)           If
the Guarantor is not a reporting company under the Exchange Act or is not
filing reports under the Exchange Act within the time periods provided for
therein, in the event that either (a) an Event of Default has occurred and is
continuing or (b) the Company has elected to defer payments of interest on the
Securities by extending the interest payment period (as provided for in Section
3.9 hereof), the Guarantor shall provide to the Trustee and the Holders
GAAP and statutory financial statements and interim quarterly financial
statements, if available, including accompanying management discussion and
analysis, for the Guarantor and, if and as available, for its Significant
Subsidiaries; provided, however, that if the Guarantor is a reporting company
under the Exchange Act but is not filing reports under the Exchange Act within
the time periods provided for therein, then the Guarantor’s delivery of such
financial statements (including management discussion and analysis), shall be
preconditioned upon the Guarantor’s receipt of a confidentiality agreement
unless the Guarantor determines, in its sole discretion, that such agreement is
not required by the U.S. federal securities laws.  In addition, if the Guarantor is not a
reporting company under the Exchange Act or is not filing reports under the
Exchange Act within the time periods provided for therein, for the Guarantor or
any of its Significant Subsidiaries which may be in liquidation, under
regulatory supervision or in runoff, the Guarantor shall provide to the
Subscriber any reports and presentations to rating agencies, any run-off plan
shared with Applicable Insurance Regulatory Authorities, internal or external
actuarial reports and management projections; provided, however, that if the
Guarantor is a reporting company but is not filing reports under the Exchange
Act within the time periods provided for therein, than the Guarantor’s delivery
of such reports, run-off plan, presentations, actuarial reports and management
projections shall be preconditioned upon the Guarantor’s, receipt of a
confidentiality agreement unless the Guarantor determines, in its sole
discretion, that such agreement is not required by the U.S. federal securities
laws.  For the purposes of this section 5.2(c),
the definition of Significant Subsidiaries shall also include any subsidiary of
the Guarantor that, at the time of such report, would be considered a
significant subsidiary under Section 1-02(w) of Regulation S-X of the
Securities Act.

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

(a)           The
Company covenants that if:

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

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

 48
 

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

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

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

SECTION 5.4         Trustee May File Proofs of Claim.

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

SECTION 5.5         Trustee May Enforce Claim Without Possession of
Securities.

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

 49
 

 

SECTION 5.6         Application of Money Collected.

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

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

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

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

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

SECTION 5.7         Limitation on Suits.

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

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

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

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

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

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

it being understood and intended that no one or more
of such Holders shall have any right in any manner whatever by virtue of, or by
availing itself of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Securities, or to obtain or to
seek to obtain

 50
 

priority or preference over any other of such Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all such Holders.

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

Notwithstanding any other
provision in this Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
any premium on such Security at its Maturity and payment of interest (including
any Additional Interest (to the extent legally enforceable)) on such Security
when due and payable and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder.  The rights of any Holder
hereunder or under any other Operative Document may be exercised by such Holder
or any collateral manager thereof.

SECTION 5.9         Restoration of Rights and Remedies.

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

SECTION 5.10       Rights and Remedies Cumulative.

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

SECTION 5.11       Delay or Omission Not Waiver.

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

SECTION 5.12       Control by Holders.

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

 51
 

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

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

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

SECTION 5.13       Waiver of Past Defaults.

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

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

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

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

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

SECTION 5.14       Undertaking for Costs.

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

 52
 

SECTION 5.15       Waiver of Usury, Stay or Extension Laws.

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

ARTICLE
VI.

THE
TRUSTEE

SECTION 6.1         Corporate Trustee Required.

There shall at all times
be a Trustee hereunder with respect to the Securities.  The Trustee shall be a corporation organized
and doing business under the laws of the United States or of any state thereof,
authorized to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or state authority and having an office within the United States. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of such supervising or examining authority, then,
for the purposes of this Section 6.1, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.  If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.1, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article VI.

SECTION 6.2         Certain Duties and Responsibilities.

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

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

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

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

 53
 

prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs.

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

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

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

(ii)           the Trustee shall
not be liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee under this Indenture; and

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

(e)           [Reserved]

SECTION 6.3         Notice of Defaults.

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

 54
 

SECTION 6.4         Certain Rights of Trustee.

Subject to the
provisions of Section 6.2:

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

(b)           if
(i) in performing its duties under this Indenture the Trustee is required to
decide between alternative courses of action, (ii) in construing any of the
provisions of this Indenture the Trustee finds ambiguous or inconsistent with
any other provisions contained herein or (iii) the Trustee is unsure of the
application of any provision of this Indenture, then, except as to any matter
as to which the Holders are entitled to decide under the terms of this Indenture,
the Trustee shall deliver a notice to the Company and the Guarantor requesting
their joint written instruction as to the course of action to be taken and the
Trustee shall take such action, or refrain from taking such action, as the
Trustee shall be instructed in writing to take, or to refrain from taking, by
the Company and the Guarantor; provided, that
if the Trustee does not receive such instructions from the Company and the
Guarantor within ten (10) Business Days after it has delivered such notice or
such reasonably shorter period of time set forth in such notice the Trustee
may, but shall be under no duty to, take such action, or refrain from taking
such action, as the Trustee shall deem advisable and in the best interests of
the Holders, in which event the Trustee shall have no liability except for its
own negligence, bad faith or willful misconduct;

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

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

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

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

 55
 

examine the books, records and premises of
the Company and the Guarantor, personally or by agent or attorney;

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

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

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

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

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

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

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

SECTION 6.5         May Hold Securities.

The Trustee, any
Authenticating Agent, any Paying Agent, any Securities Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner

 56
 

or pledgee of Securities
and may otherwise deal with the Company and the Guarantor with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Securities Registrar or such other agent.

SECTION 6.6         Compensation; Reimbursement; Indemnity.

(a)           The
Company and the Guarantor agree:

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

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

(iii)          to the fullest
extent permitted by applicable law, to indemnify the Trustee (including in its
individual capacity) and its Affiliates, and their officers, directors,
shareholders, agents, representatives and employees for, and to hold them
harmless against, any loss, damage, liability, tax (other than income,
franchise or other taxes imposed on amounts paid pursuant to (i) or (ii)
hereof), penalty, expense or claim of any kind or nature whatsoever incurred
without negligence, bad faith, willful misconduct or fraud on its part arising
out of or in connection with the acceptance or administration of this trust or
the performance of the Trustee’s duties hereunder, including the advancement of
funds to cover the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.

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

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

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

(e)           In
no event shall the Trustee be liable for any failure or delay in the
performance of its obligations hereunder because of circumstances beyond its
control, including, but not

 57
 

limited to, acts of God, flood, war (whether
declared or undeclared), terrorism, fire, riot, embargo, government action,
including any laws, ordinances, regulations, governmental action or the like
which delay, restrict or prohibit the providing of the services contemplated by
this Indenture.

SECTION 6.7         Resignation and Removal; Appointment of
Successor.

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

(b)           The
Trustee may resign at any time by giving written notice thereof to the Company
and the Guarantor.  If the instrument of
acceptance by a successor Trustee required by Section 6.8 shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities.  If the acceptance of appointment
is substantially contemporaneous with the resignation, then the notice called
for by the first sentence of this subsection may be combined with the
instrument called for by Section 6.8.

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

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

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

 

 58

SECTION 6.8         Acceptance of Appointment by Successor.

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

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

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

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

Any Person into which the
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided,
that such Person shall be otherwise qualified and eligible under this Article
VI. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation or as otherwise provided above in this Section 6.9 to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated, and in case any Securities shall not have been
authenticated, any successor to the Trustee may authenticate such Securities
either in the name of any predecessor Trustee or in the name of such successor
Trustee, and in all cases the certificate of authentication shall have the full
force which it is provided anywhere in the Securities or in this Indenture that
the certificate of the Trustee shall have.

SECTION 6.10       Not Responsible for Recitals or Issuance of Securities.

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

 59
 

 

SECTION 6.11       Appointment of Authenticating Agent.

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

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

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

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

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

 60
 

This represents
Securities referred to in the within mentioned Indenture.

Dated:

	
  

  	
   

  	
  WILMINGTON TRUST COMPANY, not in its individual capacity,
  but solely as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authenticating Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  signatory

  
	
   

  	
   

  	
   

  

 

ARTICLE
VII.

HOLDER’S LISTS AND REPORTS BY COMPANY

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

The Company will
furnish or cause to be furnished to the Trustee:

(a)           semiannually, on or
before June 30 and December 31 of each year, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders as of
a date not more than fifteen (15) days prior to the delivery thereof, and

(b)           at such other times
as the Trustee may request in writing, within thirty (30) days after the
receipt by the Company of any such request, a list of similar form and content
as of a date not more than fifteen (15) days prior to the time such list is
furnished,

in each case to the extent such information is in the
possession or control of the Company and has not otherwise been received by the
Trustee in its capacity as Securities Registrar.

SECTION 7.2           Preservation
of Information, Communications to Holders.

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

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

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

SECTION 7.3         Reports by Company and the Guarantor.

(a)           If and so long as the
Guarantor is neither subject to Section 13 or 15(d) of the Exchange Act nor
exempt from such reporting requirements pursuant to Rule 12g3-2(b) under the
Exchange Act, the Guarantor shall furnish to the Holders and to prospective
purchasers of Securities, upon their request, the information required to be
furnished pursuant to Rule 144A(d)(4) under the Securities Act until such time
as the Securities are no long “restricted securities” under Rule 144 under the
Securities Act.  The Guarantor shall
furnish to the Trustee its Statutory Financial Statements promptly following
their filing with the Applicable Insurance Regulatory Authority.  The delivery
requirement set forth in the preceding sentence may be satisfied by compliance
with Section 7.3(b) hereof.

(b)           The
Guarantor shall furnish to each of (i) the Trustee, (ii) the Holders and to
subsequent holders of Securities and (iii) TWE, Ltd. (at TWE, Ltd., c/o Maples
Finance Limited, P.O. Box 1093 GT, Queensgate House, South Church Street,
George Town, Grand Cayman, Cayman Islands, Attention: The Directors, or such
other address as designated by TWE, Ltd. and (iv) any beneficial owner of the
Securities reasonably identified to the Company, a duly completed and executed
certificate substantially and substantively in the form attached hereto as Exhibit
A, including, if the Guarantor is no longer a reporting company under the
Exchange Act or is not filing reports under the Exchange Act within the time
periods provided for therein, the financial statements referenced in such
Exhibit, which certificate and financial statements shall be so furnished by
the Guarantor not later than forty-five (45) days after the end of each of the
first three fiscal quarters of each fiscal year of the Guarantor and not later
than one hundred twenty five (125) days after the end of each fiscal year of
the Guarantor; provided, however, that if any of such required information or financial
statements is not at such time publicly available, then the Guarantor’s
delivery of such certificate and financial statements shall be preconditioned
upon the Guarantor’s receipt of a confidentiality agreement unless the
Guarantor determines, in its sole discretion, that such agreement is not
required by the U.S. federal securities laws. 
To the extent that the parties identified in this Section 7.3(b)
receive certificates and statements pursuant to the Subscription Agreement,
delivery of such certificates and statements to such party pursuant to the
Subscription Agreement shall satisfy the obligation of the Guarantor under this
Section 7.3(b).

(c)           If
the Guarantor is a reporting company under the Exchange Act and files its
information with the Securities and Exchange Commission (the “Commission”) in electronic form pursuant
to Regulation S-T of the Commission using the Commission’s Electronic Data
Gathering, Analysis and Retrieval (“EDGAR”)
system, the Guarantor shall notify the Trustee in the manner prescribed herein
of each annual and quarterly filing with the Commission.  The Trustee is hereby directed to access the
EDGAR system for purposes of retrieving the information so filed.  Compliance with the foregoing shall
constitute delivery by the Guarantor of its financial statements to the Trustee
in compliance with the provisions of Section 314(a) of the Trust Indenture Act,
if applicable.  Except for its accessing
the EDGAR system as described above in this Section 7.3(c), the Trustee
shall have no duty to search for or obtain any electronic

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or other filings that the Guarantor makes
with the Commission, regardless of whether such filings are periodic,
supplemental or otherwise.  Delivery of
reports, information and documents to the Trustee pursuant to this Section
7.3(c) shall be solely for purposes of compliance with this Section
7.3(c) and, if applicable, with Section 314(a) of the Trust Indenture
Act.  The Trustee’s receipt of such
reports, information and documents shall not constitute notice to it of the
content thereof or any matter determinable from the content thereof, including
the Guarantor’s compliance with any of its covenants hereunder, as to which the
Trustee is entitled to rely upon Officers’ Certificates.

ARTICLE
VIII.

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1         Company and Guarantor May Consolidate,
Etc., Only on Certain Terms.

(a)           The
Company shall not, while any of the Securities remain outstanding, consolidate
or amalgamate with or merge into any other Person or sell, convey, transfer or
lease all or substantially all of its properties and assets as an entirety to
any Person unless:

(i)            if the Company
shall consolidate or amalgamate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, the entity formed by such consolidation or amalgamation or into which
the Company is merged or the Person that acquires by conveyance or transfer, or
that leases, the properties and assets of the Company substantially as an
entirety shall be an entity organized and existing under the laws of the United
States of America or any State or Territory thereof, the District of Columbia,
Bermuda, the Cayman Islands, Luxembourg or any other country which is a member
state of the Organization for Economic Cooperation and Development unless it
has:  (1) agreed to make all payments due
in respect of the Securities without withholding or deduction for, or on
account of, any taxes, duties, assessments or other governmental charges under
the laws or regulations of the jurisdiction of organization or residence (for
tax purposes) of such entity or any political subdivision or taxing authority
thereof or therein unless required by applicable law, in which case such entity
shall have agreed to pay such additional amounts as shall be required so that
the net amounts received and retained by the Holders of such Securities after
payment of all taxes (including withholding taxes), duties, assessments or
other governmental charges will be equal to the amounts that such Holders would
have received and retained had no such taxes (including withholding taxes),
duties, assessments or other governmental charges been imposed; (2) irrevocably
and unconditionally consented and submitted to the jurisdiction of any United
States federal court or New York state court, in each case located in the
Borough of Manhattan, The City of New York, in respect of any action, suit or
proceeding against it arising out of or in connection with this Indenture or
the Securities and irrevocably and unconditionally waived, to the fullest
extent permitted by law, any objection to the laying of venue in any such court
or that any such action, suit or proceeding has been brought in an inconvenient
forum; (3) irrevocably appointed an agent in The City of New York for

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service or
process in any action, suit or proceeding referred to in clause (2) above; and
(4) has provided an Opinion of Counsel that the Holders’ rights to enforce the
Company’s obligations in the successor’s jurisdiction of organization are
substantially the same as provided to creditors in Luxembourg and there are no
currency restrictions in such jurisdiction; and the successor shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and punctual
payment of the principal of and any premium and interest (including any
Additional Interest) on all the Securities and the performance of every
covenant of this Indenture on the part of the Company to be performed or
observed;

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

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

(b)           The
Guarantor shall not, while any of the Securities remain outstanding,
consolidate or amalgamate with or merge into any other Person or sell, convey,
transfer or lease all or substantially all of its properties and assets as an
entirety to any Person unless:

(i)            if the Guarantor
shall consolidate or amalgamate with or merge into another Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, the entity formed by such consolidation or amalgamation or into which
the Guarantor is merged or the Person that acquires by conveyance or transfer,
or that leases, the properties and assets of the Guarantor substantially as an
entirety shall be an entity organized and existing under the laws of the United
States of America or any State or Territory thereof, the District of Columbia,
Bermuda, the Cayman Islands, Luxembourg or any other country which is a member
state of the Organization for Economic Cooperation and Development unless it
has:  (1) agreed to make all payments due
under the Guarantee without withholding or deduction for, or on account of, any
taxes, duties, assessments or other governmental charges under the laws or
regulations of the jurisdiction of organization or residence (for tax purposes)
of such entity or any political subdivision or taxing authority thereof or
therein unless required by applicable law, in which case such entity shall have
agreed to pay such additional amounts as shall be required so that the net
amounts received and retained by the Holders of such Securities pursuant to the
Guarantee after payment of all taxes (including withholding taxes), duties,
assessments or other governmental charges will be equal to the amounts that
such Holders would have received and retained had no such taxes (including
withholding taxes), duties, assessments or other governmental charges been
imposed; (2) irrevocably and unconditionally consented and submitted to the
jurisdiction of any United States federal court or New York state court, in
each case located in the Borough of

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Manhattan, The
City of New York, in respect of any action, suit or proceeding against it arising
out of or in connection with this Indenture or the Guarantee and irrevocably
and unconditionally waived, to the fullest extent permitted by law, any
objection to the laying of venue in any such court or that any such action,
suit or proceeding has been brought in an inconvenient forum; (3) irrevocably
appointed an agent in The City of New York for service or process in any
action, suit or proceeding referred to in clause (2) above; and (4) has
provided an Opinion of Counsel that the Holders’ rights to enforce the
Guarantor’s obligations under the Guarantee in the successor’s jurisdiction of
organization are substantially the same as provided to creditors in Bermuda and
there are no currency restrictions in such jurisdiction; and the successor
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the Trustee, all
of the obligations of the Guarantor to be performed or observed by it under the
Indenture or the Guarantee;

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

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

SECTION 8.2         Successor Company Substituted.

(a)           Upon
any consolidation, amalgamation or merger by the Company or the Guarantor with
or into any other Person, or any sale, conveyance, transfer or lease by the
Company or Guarantor of its properties and assets substantially as an entirety
to any Person in accordance with Section 8.1 and the execution and
delivery to the Trustee of the supplemental indenture described in Section
8.1(a), the successor entity formed by such consolidation or amalgamation
or into which the Company or the Guarantor is merged or to which such sale,
conveyance, transfer or lease is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company or the Guarantor under
this Indenture with the same effect as if such successor Person had been named
as the Company or the Guarantor herein; and in the event of any such sale,
conveyance, transfer or lease, following the execution and delivery of such
supplemental indenture, the Company or the Guarantor shall be discharged from
all obligations and covenants under the Indenture and the Securities.

(b)           Any
successor Person to the Company may cause to be executed, and may issue either
in its own name or in the name of the Company, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities that previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
that such successor

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Person thereafter shall cause to be executed
and delivered to the Trustee on its behalf. All the Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as
the Securities theretofore or thereafter issued in accordance with the terms of
this Indenture.

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

ARTICLE
IX.

SUPPLEMENTAL INDENTURES

SECTION 9.1         Supplemental Indentures without Consent
of Holders.

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

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

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

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

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

(e)           provide
for any replacement Trustee in accordance with Article VI.

SECTION 9.2         Supplemental Indentures with Consent of
Holders.

(a)           With
the consent of the Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company, the Guarantor and the Trustee, the Company and the Guarantor, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of Securities

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under this Indenture; provided, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security,

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

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

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

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

SECTION 9.3         Execution of Supplemental Indentures.

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

SECTION 9.4         Effect of Supplemental Indentures.

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

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SECTION 9.5         Reference in Securities to Supplemental Indentures.

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

ARTICLE
X.

COVENANTS

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

The Company covenants and
agrees for the benefit of the Holders of the Securities that it will duly and
punctually pay the principal of and any premium and interest (including any
Additional Interest) on the Securities in accordance with the terms of the
Securities and this Indenture.  As of the
date of this Indenture, the Company represents that it has no present intention
to exercise its right under Section 3.9 to defer payments of interest on
the Securities.

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

(a)           If the Company shall
at any time act as its own Paying Agent with respect to the Securities, it
will, on or before each due date of the principal of and any premium or interest
(including any Additional Interest) on the Securities, segregate and hold on
behalf of the Persons entitled thereto a sum sufficient to pay the principal
and any premium or interest (including Additional Interest) so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee in writing of its failure
so to act.

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

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

(d)           The Company may at
any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held by the Company or held in trust by
such Paying Agent,

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such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held in trust by such Paying Agent; and, upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from
all further liability with respect to such money.

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

SECTION 10.3       Statement as to Compliance.

The Guarantor shall
deliver to the Trustee, within one hundred and twenty (125) days after the end
of each fiscal year of the Guarantor ending after the date hereof, an Officers’
Certificate  (substantially in the form
attached hereto as Exhibit E) covering the preceding fiscal year,
stating whether or not to the knowledge of the signers thereof the Company or
the Guarantor is in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder), and if the
Company or the Guarantor shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.

SECTION 10.4       Calculation Agent.

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

 

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

SECTION 10.5       Additional
Amounts.

All payments of principal of and premium, if any, interest (including
any Additional Interest) and any other amounts on, or in respect of, the
Securities of any series shall be made without withholding or deduction at source
for, or on account of, any present or future taxes, fees, duties, assessments
or governmental charges of whatever nature imposed or levied by or on behalf of
Luxembourg or any other jurisdiction in which the Company is organized (each, a
“taxing jurisdiction”) or any political
subdivision or taxing authority thereof or therein, unless such taxes, fees,
duties, assessments or governmental charges are required to be withheld or deducted
by (i) the laws (or any regulations or ruling promulgated thereunder) of a
taxing jurisdiction or any political subdivision or taxing authority thereof or
therein or (ii) an official position regarding the application, administration,
interpretation or enforcement of any such laws, regulations or rulings
(including, without limitation, a holding by a court of competent jurisdiction
or by a taxing authority in a taxing jurisdiction or any political subdivision
thereof).

If a
withholding or deduction at source is required, the Company shall, subject to
certain limitations and exceptions set forth below, pay to the Holder of any
such Security such additional amounts (“Additional Amounts”)
as may be necessary so that every net payment of principal, premium, if any,
interest (including any Additional Interest) or any other amount made to such
Holder, after such withholding or deduction, shall not be less than the amount
provided for in such Security and this Indenture to be then due and payable; provided, however, that
the Company shall not be required to make payment of such Additional Amounts
for or on account of:

(a)           any tax, fee, duty, assessment or
governmental charge of whatever nature which would not have been imposed but
for the fact that such Holder: (A) was a resident, domiciliary or national of,
or engaged in business or maintained a permanent establishment or was
physically present in, the relevant taxing jurisdiction or any political
subdivision thereof or otherwise had some connection with the relevant taxing
jurisdiction other than by reason of the mere ownership of, or receipt of
payment under, such Security; (B) presented such Security, where presentation
is

 70
 

 

required,
for payment in the relevant taxing jurisdiction or any political subdivision
thereof, unless such Security could not have been presented for payment elsewhere;
or (C) presented such Security, where presentation is required, more than
thirty (30) days after the date on which the payment in respect of such
Security first became due and payable or provided for, whichever is later,
except to the extent that the Holder would have been entitled to such
Additional Amounts if it had presented such Security for payment on any day
within such period of thirty (30) days;

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

(c)           any tax, assessment or other
governmental charge that is imposed or withheld by reason of the failure by the
Holder or the beneficial owner of such Security to comply with any reasonable
request by the Company or the Guarantor addressed to the Holder within ninety
(90) days of such request (A) to provide information concerning the nationality,
residence or identity of the Holder or such beneficial owner or (B) to make any
declaration or other similar claim or satisfy any information or reporting
requirement, which, in the case of (A) or (B), is required or imposed by
statute, treaty, regulation or administrative practice of the relevant taxing
jurisdiction or any political subdivision thereof as a precondition to
exemption from all or part of such tax, assessment or other governmental
charge;

(d)           any withholding or deduction required
to be made pursuant to any EU Directive on the taxation of savings implementing
the conclusions of the ECOFIN Council meetings of 26-27 November 2000, 3 June
2003 or any law implementing or complying with, or introduced in order to
confirm to, such EU Directive; or

(e)           any combination of items (a), (b),
(c) and (d);

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

SECTION 10.6       Additional Covenants.

(a)           The Guarantor
covenants and agrees with each Holder of Securities that if (1) an Event of
Default shall have occurred and be continuing, (2) the Company shall have given
notice of its election to begin an Extension Period with respect to the
Securities or such Extension Period, or any extension thereof, shall be
continuing, or (3) any insurance company, which is a Covenant Significant
Subsidiary (as defined hereinafter) of the Guarantor, is rated by A.M. Best
Company, Inc. and (x) is downgraded by A.M. Best Company, Inc. to a rating
below A- and fails to renew more than 51% of its net premiums written in one or
more transactions during any twelve (12) month period; (y) is downgraded by
A.M. Best Company, Inc. to a rating below A- and sells more than 51% of its
rights to renew net premiums written of the Guarantor’s Covenant

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Significant Subsidiaries in one or more transactions over the course of
a twelve (12) month period; or (z) (A) is downgraded by A.M. Best Company, Inc.
to a rating below B++ or (B) withdraws its rating by A.M. Best Company, Inc.,
then, the Guarantor shall not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any shares of the Guarantor’s capital stock or make any guarantee payments with
respect to the foregoing, (ii) make any payment of principal of or any interest
or premium, if any, on or repay, repurchase or redeem any debt securities of
the Guarantor that rank pari passu in
all respects with or junior in interest to the Guarantee (other than (A)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Guarantor in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase or similar plan or in connection with the
issuance of capital stock of the Guarantor (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Event of Default, Extension
Period or the application of the circumstances specified in clause (3) above,
(B) as a result of an exchange or conversion of any class or series of the
Guarantor’s capital stock for any class or series of the Guarantor’s capital
stock or of any class or series of the Guarantor’s indebtedness for any class
or series of the Guarantor’s capital stock, (C) the purchase of fractional
interests in shares of the Guarantor’s capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (D) any declaration of a dividend in connection with any Rights
Plan, the issuance of rights, stock or other property under any Rights Plan or
the redemption or repurchase of rights pursuant thereto, (E) any dividend in
the form of stock, warrants, options or other rights where the dividend stock
or the stock issuable upon exercise of such warrants, options or other rights
is the same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock and any cash
payments in lieu of fractional shares issued in connection therewith), or (iii)
enter into any contracts with shareholders holding more than 10% of the
outstanding shares of common stock of the Guarantor other than on an arm’s-length-basis
and in the ordinary course of business ((i), (ii) and (iii) above,
collectively, the “Block”); provided, however, that the Block shall only apply to
subsections 3(x) and (y) above for so long as any such insurance subsidiary of
the Guarantor which is a Covenant Significant Subsidiary is rated below A- by
A.M. Best Company, Inc.; provided, further,
that the Block shall only apply to subsection 3(z) above for so long as any
such insurance subsidiary of the Guarantor which is a Covenant Significant
Subsidiary is rated below B++ by A.M. Best Company, Inc.  For purposes of this Section 10.6
only, a “Covenant Significant Subsidiary” shall
have the meaning as defined in Section 1-02(w) of Regulation S-X (“Reg S-X”) of the Securities Act, except that wherever Reg
S-X states “10 percent,” such “10 percent” shall be replaced by “20 percent.”

SECTION 10.7       Waiver of Covenants.

The Guarantor may omit in any particular instance to
comply with any covenant or condition contained in Section 10.6 if,
before or after the time for such compliance, the Holders of at least a
majority in aggregate principal amount of the Outstanding Securities shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the
obligations of the Guarantor in respect of any such covenant or condition shall
remain in full force and effect.

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SECTION 10.8       Treatment of Securities.

The Company will treat the Securities as indebtedness,
and the amounts, other than payments of principal, payable in respect of the
principal amount of such Securities as interest, for all U.S. federal income
tax purposes.  All payments in respect of
the Securities will be made free and clear of U.S. withholding and back-up
withholding tax to any beneficial owner thereof that has provided an Internal
Revenue Service Form W-9 or W-8BEN (or any substitute or successor form)
establishing its U.S. or non-U.S. status for U.S. federal income tax purposes,
or any other applicable form establishing a complete exemption from U.S.
withholding and back-up withholding tax.

ARTICLE
XI.

REDEMPTION OF SECURITIES

SECTION 11.1       Optional Redemption.

The Company may, at its
option, on any Interest Payment Date, on or after July 30, 2012, redeem the
Securities in whole at any time or in part from time to time, at a Redemption
Price equal to one hundred percent (100%) of the principal amount thereof (or
of the redeemed portion thereof, as applicable), together, in the case of any
such redemption, with accrued interest, including any Additional Interest (to
the extent legally enforceable), through but excluding the date fixed as the
Redemption Date (the “Optional Redemption Price”); provided,
that the Company shall have received the prior approval of any Applicable
Insurance Regulatory Authorities with respect to such redemption if then
required.

SECTION 11.2       Special Event Redemption.

Prior to July 30, 2012,
upon the occurrence and during the continuation of a Special Event, the Company
may, at its option, redeem the Securities, in whole but not in part, at a
Redemption Price equal to one hundred seven and one half percent (107.5%) of
the principal amount thereof, together, in the case of any such redemption,
with accrued interest, including any Additional Interest (to the extent legally
enforceable), through but excluding the date fixed as the Redemption Date (the “Special
Redemption Price”), provided, that
the Company shall have received the prior approval of any Applicable Insurance
Regulatory Authority with respect to such redemption if then required.

SECTION 11.3       Election to Redeem; Notice to Trustee.

The election of the
Company to redeem any Securities, in whole or in part, shall be evidenced by or
pursuant to a Board Resolution.  In case
of any redemption at the election of the Company, the Company shall, not less
than forty-five (45) days and not more than seventy-five (75) days prior to the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee in writing of such date and of the principal amount of the
Securities to be redeemed and provide the additional information required to be
included in the notice or notices contemplated by Section 11.5. In the
case of any redemption of Securities, in whole or in part, (a) prior to the
expiration of any restriction on such redemption provided in this Indenture or
the Securities or (b) pursuant to an election of the Company which is subject
to a condition specified in this Indenture or the Securities, the Company shall
furnish the Trustee with an

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Officers’ Certificate or
Directors’ Certificate and an Opinion of Counsel evidencing compliance with
such restriction or condition.

SECTION 11.4       Selection of Securities to be Redeemed.

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

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

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

SECTION 11.5       Notice of Redemption.

(a)           Notice of redemption
shall be given not later than the thirtieth (30th) day, and not earlier than
the sixtieth (60th)
day, prior to the Redemption Date to each Holder of Securities to be redeemed,
in whole or in part.

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

(i)            the Redemption Date;

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

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

(iv)          that on the Redemption Date, the
Redemption Price will become due and payable upon each such Security or portion
thereof, and that any interest (including any

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Additional Interest) on such Security or such
portion, as the case may be, shall cease to accrue on and after said date; and

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

(c)           Notice of redemption
of Securities to be redeemed, in whole or in part, at the election of the
Company shall be given by the Company or, at the Company’s request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
The notice if mailed in the manner provided above shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, a failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.

SECTION 11.6       Deposit of Redemption Price.

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

SECTION 11.7       Payment of Securities Called for Redemption.

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

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

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

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ARTICLE
XII.

SUBORDINATION OF SECURITIES

SECTION 12.1       Securities Subordinate to Senior Debt.

The Company covenants and agrees, and each Holder of a
Security, by its acceptance thereof, likewise covenants and agrees, that, to
the extent and in the manner hereinafter set forth in this Article XII,
the payment of the principal of and any premium and interest (including any
Additional Interest) on each and all of the Securities are hereby expressly
made subordinate and subject in right of payment to the prior payment in full
of all Senior Debt of the Company (which for purposes of this Article XII
only, shall be defined as “Senior Debt”) .

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

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

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

(c)           In the event of any
Proceeding, after payment in full of all sums owing with respect to Senior
Debt, the Holders of the Securities, together with the holders of any
obligations of the Company ranking on a parity with the Securities, shall be
entitled to be paid from the remaining assets of the Company the amounts at the
time due and owing on account of unpaid principal of and any premium and
interest (including any Additional Interest) on the Securities and such other
obligations before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any capital stock or any obligations
of the Company ranking junior to the Securities and such other obligations. If,
notwithstanding the foregoing, any payment or distribution of any character or
any security, whether in cash, securities or other property (other than
securities of the Company or any other entity provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent

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provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior Debt at
the time outstanding and to any securities issued in respect thereof under any
such plan of reorganization or readjustment) shall be received by the Trustee
or any Holder in contravention of any of the terms hereof and before all Senior
Debt shall have been paid in full, such payment or distribution or security shall
be received in trust for the benefit of, and shall be paid over or delivered
and transferred to, the holders of the Senior Debt at the time outstanding in
accordance with the priorities then existing among such holders for application
to the payment of all Senior Debt remaining unpaid, to the extent necessary to
pay all such Senior Debt (including any interest thereon accruing after the
commencement of any Proceeding) in full. In the event of the failure of the
Trustee or any Holder to endorse or assign any such payment, distribution or
security, each holder of Senior Debt is hereby irrevocably authorized to
endorse or assign the same.

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

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

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

SECTION 12.3       Payment Permitted If No Default.

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

SECTION 12.4       Subrogation to Rights of Holders of Senior Debt.

Subject to the payment in
full of all amounts due or to become due on all Senior Debt, or the provision
for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, the Holders of the Securities shall
be subrogated to the extent of the payments or distributions made to the
holders of such Senior Debt pursuant to the provisions

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of this Article XII
(equally and ratably with the holders of all indebtedness of the Company that
by its express terms is subordinated to Senior Debt of the Company to
substantially the same extent as the Securities are subordinated to the Senior
Debt and is entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Debt) to the rights of the holders
of such Senior Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Debt until the principal of and any premium
and interest (including any Additional Interest) on the Securities shall be
paid in full. For purposes of such subrogation, no payments or distributions to
the holders of the Senior Debt of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article XII, and no payments made pursuant to the
provisions of this Article XII to the holders of Senior Debt by Holders
of the Securities or the Trustee, shall, as among the Company, its creditors
other than holders of Senior Debt, and the Holders of the Securities, be deemed
to be a payment or distribution by the Company to or on account of the Senior
Debt.

SECTION 12.5       Provisions Solely to Define Relative Rights.

The provisions of this Article
XII are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities on the one hand and the holders of
Senior Debt on the other hand. Nothing contained in this Article XII or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as between the Company and the Holders of the Securities, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Securities the principal of and any premium and interest
(including any Additional Interest) on the Securities as and when the same
shall become due and payable in accordance with their terms, (b) affect the
relative rights against the Company of the Holders of the Securities and
creditors of the Company other than their rights in relation to the holders of
Senior Debt or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, including filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article XII of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder. 
In addition, nothing contained in this Article XII is intended to
or shall apply to or affect any amounts payable or paid to the Trustee
(including in its individual capacity) pursuant to Sections 1.15 or 6.6.

SECTION 12.6       Trustee to Effectuate Subordination.

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

SECTION 12.7       No
Waiver of Subordination Provisions.

(a)           No right of any present or future
holder of any Senior Debt to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms, provisions
and 

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covenants of this Indenture, regardless of
any knowledge thereof that any such holder may have or be otherwise charged
with.

(b)           Without in any way limiting the
generality of paragraph (a) of this Section 12.7, the holders of Senior
Debt may, at any time and from to time, without the consent of or notice to the
Trustee or the Holders of the Securities, without incurring responsibility to
such Holders of the Securities and without impairing or releasing the subordination
provided in this Article XII or the obligations hereunder of such
Holders of the Securities to the holders of Senior Debt, do any one or more of
the following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding, (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Debt, (iii) release any Person liable in any manner for the
payment of Senior Debt and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.

SECTION 12.8       Notice
to Trustee.

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

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

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

Upon any payment or distribution
of assets of the Company referred to in this Article XII, the Trustee
and the Holders of the Securities shall be entitled to conclusively rely upon
any order or decree entered by any court of competent jurisdiction in which
such Proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders of Securities, for the purpose of ascertaining
the Persons entitled to participate in such payment or distribution, the
holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Article XII.

SECTION 12.10     Trustee
Not Fiduciary for Holders of Senior Debt.

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

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

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

SECTION 12.12     Article
Applicable to Paying Agents.

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

ARTICLE XIII.

GUARANTEE

SECTION 13.1       The
Guarantee.

The Guarantor hereby
fully, unconditionally and irrevocably guarantees to each Holder of a Security
authenticated and delivered by the Trustee the due and punctual payment of the
principal of and premium, if any, and interest (including Additional Interest)
on such Security, when and as the same shall become due and payable, whether at
maturity, by acceleration, upon redemption or otherwise, in accordance with the
terms of such Security and this Indenture, as well as the due and punctual
performance of all other obligations contained in the Securities and this
Indenture (including, if the Company does not pay any Additional

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Amounts required
hereunder, any amount necessary to ensure each Holder of a Security receives
the full amount of principal and interest due on the Security).  In case of the failure of the Company to
punctually pay its obligations on any Security, the Guarantor hereby agrees to
cause any such payment to be made punctually when and as the same shall become
due and payable, whether at maturity, by acceleration, upon redemption or
otherwise, and as if such payment were made by the Company.

SECTION 13.2       Guarantee
Unconditional, etc.

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

SECTION 13.3       Reinstatement.

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

SECTION 13.4       Subrogation.

The Guarantor shall be
subrogated to all rights of the Holder of any Security against the Company in
respect of any amounts paid to such Holder by the Guarantor pursuant to the
provisions of this Guarantee; provided, however, that the
Guarantor shall not be entitled to enforce, or to receive any payments arising
out of or based upon, such right of subrogation as a result of payment under
this Guarantee if, after giving effect to any such payment, any amounts are due
and unpaid under this Guarantee.  If any
amount shall be paid to the Guarantor in

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violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay such amount to the Holders.

ARTICLE XIV.

SUBORDINATION OF GUARANTEE

SECTION 14.1       Securities
Subordinate to Senior Debt of the Guarantor.

The Guarantor covenants
and agrees, and each Holder of a Security, by its acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set
forth in this Article XIV, the payment of the principal of and any
premium and interest (including any Additional Interest) on each and all of the
Securities pursuant to the Guarantee are hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior Debt of
the Guarantor.

SECTION 14.2       No
Payment When Senior Debt of the Guarantor in Default; Payment Over of Proceeds
Upon Dissolution, Etc.

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

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

 

 82

 

In the event
of any Proceeding, after payment in full of all sums owing with respect to
Senior Debt of the Guarantor, the Holders of the Securities, by virtue of the
Guarantee, together with the holders of any obligations of the Guarantor
ranking on a parity with the Guarantee, shall be entitled to be paid from the
remaining assets of the Guarantor the amounts at the time due and owing on
account of unpaid principal of and any premium and interest (including any
Additional Interest) on the Securities and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any capital stock or any obligations of the Guarantor
ranking junior to the Guarantee and such other obligations. If, notwithstanding
the foregoing, any payment or distribution of any character or any security,
whether in cash, securities or other property (other than securities of the
Guarantor or any other entity provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Guarantee, to the payment of all Senior Debt of the Guarantor
at the time outstanding and to any securities issued in respect thereof under
any such plan of reorganization or readjustment) shall be received by the
Trustee or any Holder in contravention of any of the terms hereof and before
all Senior Debt of the Guarantor shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Debt of the Guarantor at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Debt of the Guarantor remaining unpaid, to the extent necessary to pay all such
Senior Debt of the Guarantor (including any interest thereon accruing after the
commencement of any Proceeding) in full. In the event of the failure of the
Trustee or any Holder to endorse or assign any such payment, distribution or
security, each holder of Senior Debt of the Guarantor is hereby irrevocably
authorized to endorse or assign the same.

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

The provisions
of this Section 14.2 shall not impair any rights, interests, remedies or
powers of any secured creditor of the Guarantor in respect of any security
interest the creation of which is not prohibited by the provisions of this
Indenture.

The securing
of any obligations of the Guarantor, otherwise ranking on a parity with the
Guarantee or ranking junior to the Guarantee, shall not be deemed to prevent
such obligations from constituting, respectively, obligations ranking on a
parity with the Guarantee or ranking junior to the Guarantee.

SECTION 14.3       Payment Permitted If No Default.

Nothing contained in this Article XIV or elsewhere in this
Indenture or in any of the Securities shall prevent (a) the Guarantor, at any
time, except during the pendency of the conditions described in paragraph (a)
of Section 14.2 or of any Proceeding referred to in Section 14.2,
from making payments at any time of principal of and any premium or interest
(including any Additional Interest) on the Securities pursuant to the Guarantee
or (b) the

 83
 

 

application by the Trustee of any moneys deposited
with it hereunder to the payment of or on account of the principal of and any
premium or interest (including any Additional Interest) on the Securities
pursuant to the Guarantee or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge (in
accordance with Section 14.8) that such payment would have been
prohibited by the provisions of this Article XIV, except as provided in Section
14.8.

SECTION 14.4       Subrogation to Rights of Holders of Senior Debt of
the Guarantor.

Subject to the payment in full of all amounts due or to become due on
all Senior Debt of the Guarantor, or the provision for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Debt of the Guarantor, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior Debt
of the Guarantor pursuant to the provisions of this Article XIV (equally
and ratably with the holders of all indebtedness of the Guarantor that by its
express terms is subordinated to Senior Debt of the Guarantor to substantially
the same extent as the Guarantee is subordinated to the Senior Debt of the
Guarantor and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt of the Guarantor)
to the rights of the holders of such Senior Debt of the Guarantor to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt of the Guarantor until the principal of and any premium and
interest (including any Additional Interest) on the Securities shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Debt of the Guarantor of any cash, property or securities
to which the Holders of the Securities or the Trustee would be entitled under
the Guarantee except for the provisions of this Article XIV, and no
payments made pursuant to the provisions of this Article XIV to the
holders of Senior Debt of the Guarantor by Holders of the Securities or the
Trustee, shall, as among the Guarantor, its creditors other than holders of
Senior Debt of the Guarantor, and the Holders of the Securities, be deemed to
be a payment or distribution by the Guarantor to or on account of the Senior
Debt of the Guarantor.

SECTION 14.5       Provisions Solely to Define Relative Rights.

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

 84
 

 

Article XIV
is intended to or shall apply to or affect any amounts payable or paid to the
Trustee (including in its individual capacity) pursuant to Sections 1.15
or 6.6.

SECTION 14.6       Trustee to Effectuate Subordination.

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

SECTION 14.7       No Waiver of Subordination Provisions.

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

Without in any
way limiting the generality of paragraph (a) of this Section 14.7, the
holders of Senior Debt of the Guarantor may, at any time and from to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to such Holders of the Securities and
without impairing or releasing the subordination provided in this Article
XIV or the obligations hereunder of such Holders of the Securities to the
holders of Senior Debt of the Guarantor, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Senior Debt of the Guarantor, or otherwise amend or
supplement in any manner Senior Debt of the Guarantor or any instrument
evidencing the same or any agreement under which Senior Debt of the Guarantor
is outstanding, (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt of the Guarantor,
(iii) release any Person liable in any manner for the payment of Senior Debt of
the Guarantor and (iv) exercise or refrain from exercising any rights against
the Guarantor and any other Person.

SECTION 14.8       Notice to Trustee.

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

 85
 

 

to receive such monies and to apply the same
to the purpose for which they were received and shall not be affected by any
notice to the contrary that may be received by it within two Business Days
prior to such date.

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

SECTION 14.9       Reliance on Judicial Order or Certificate of
Liquidating Agent.

Upon any payment or distribution of assets of the Guarantor referred to
in this Article XIV, the Trustee and the Holders of the Securities shall
be entitled to conclusively rely upon any order or decree entered by any court of
competent jurisdiction in which such Proceeding is pending, or a certificate of
the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee
for the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt of the Guarantor and other
indebtedness of the Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XIV.

SECTION 14.10     Trustee Not Fiduciary for Holders of Senior Debt of
the Guarantor.

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

SECTION 14.11      Rights of Trustee as Holder of Senior Debt of the
Guarantor; Preservation of Trustee’s Rights.

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

 86
 

 

SECTION 14.12     Article Applicable to Paying Agents.

If at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
“Trustee” as used in this Article XIV
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article
XIV in addition to or in place of the Trustee; provided,
that Sections  14.8 and 14.11 shall not apply to the
Guarantor or any Affiliate of the Guarantor if the Company or such Affiliate
acts as Paying Agent.

This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed signature page of this Indenture by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.

* * * *

 

 87

 

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

	
     

  	
   

  	
  FLAGSTONE FINANCE S.A.,

  
	
     

  	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
  By:

  	
   

  	
  /s/ Rene Dubois

  
	
     

  	
   

  	
  Name:

  	
   

  	
  Rene Dubois

  
	
     

  	
   

  	
  Title:

  	
   

  	
  Duly Authorized Agent

  

 

	
     

  	
   

  	
  Flagstone Reinsurance
  Holdings Limited, 

  
	
     

  	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
  By:

  	
   

  	
  /s/ James O’Shaughnessy

  
	
     

  	
   

  	
  Name:

  	
   

  	
  James O’Shaughnessy

  
	
     

  	
   

  	
  Title:

  	
   

  	
  Chief Financial Officer

  

 

	
     

  	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
     

  	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
  By:

  	
   

  	
  /s/ Christopher J. Slaybaugh

  
	
     

  	
   

  	
  Name:

  	
   

  	
  Christopher J. Slaybaugh

  
	
     

  	
   

  	
  Title:

  	
   

  	
  Senior Financial Services Officer

  

 

 S-1

 

DETERMINATION OF LIBOR

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

(1)           On
the second LIBOR Business Day (as defined below) prior to an Interest Payment
Date  (except, (i) with respect to the
interest payment period commencing on the Original Issue Date for Securities
originally issued on June 8, 2007, on June 6, 2007 and (ii) with respect to the
interest payment period commencing on any Original Issue Date for Securities
originally issued after June 8, 2007, the second LIBOR Business Day prior to
such Original Issue Date) (each such day, a “LIBOR Determination Date”), LIBOR
for any given Security shall, for the following interest payment period, equal
the rate, as obtained by the Calculation Agent from Bloomberg Financial Markets
Commodities News, for three-month U.S. Dollar deposits in Europe, which is
displayed on Reuters on page LIBOR01 (or any other page as may replace such
page on such service for the purpose of displaying the London interbank rates
of major banks for three-month U.S. Dollar deposits in Europe), as of 11:00
a.m. (London time) on such LIBOR Determination Date.

(2)           If,
on any LIBOR Determination Date, such rate does not appear on Reuters page
LIBOR01 or such other page as may replace such Reuters page LIBOR01, the
Calculation Agent shall determine the arithmetic mean of the offered quotations
of the Reference Banks (as defined below) to leading banks in the London
interbank market for three-month U.S. Dollar deposits in Europe in an amount
determined by the Calculation Agent by reference to requests for quotations as
of approximately 11:00 a.m. (London time) on the LIBOR Determination Date made
by the Calculation Agent to the Reference Banks.  If, on any LIBOR Determination Date, at least
two of the Reference Banks provide such quotations, LIBOR shall equal such
arithmetic mean of such quotations.  If,
on any LIBOR Determination Date, only one or none of the Reference Banks
provide such quotations, LIBOR shall be deemed to be the arithmetic mean of the
offered quotations that leading banks in the City of New York selected by the
Calculation Agent are quoting on the relevant LIBOR Determination Date for
three-month U.S. Dollar deposits in Europe in an amount determined by the
Calculation Agent by reference to the principal London offices of leading banks
in the London interbank market; provided, that if the Calculation Agent is required
but is unable to determine a rate in accordance with at least one of the
procedures provided above, LIBOR shall be LIBOR as determined on the previous
LIBOR Determination Date.

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

 

Form of Officer’s Financial Certificate

The undersigned, the
[Chief Financial Officer/Treasurer/Assistant Treasurer/ Secretary/ Assistant
Secretary, Chairman/ViceChairman/Chief Executive Officer/President/Vice
President] hereby certifies, pursuant to Section 7.3(b) and Section 10.3 of the
Junior Subordinated Indenture, dated as of June 8, 2007 (the “Indenture”),
among Flagstone Finance S.A. (the “Company”), Flagstone Reinsurance Holdings Limited (the “Guarantor”) and
Wilmington Trust Company, as trustee, 
that, as of [date], [20__], the Guarantor, if applicable,  and its Subsidiary Insurance Companies (as
defined below) had the following ratios and balances:

As of
[Quarterly/Annual Financial Date], 20__

	
  Total
  Policyholders’ Surplus

  	
   

  	
  $

  	
  _____

  	
   

  
	
  Consolidated Debt to Total Policyholders’ Surplus

  	
   

  	
  _____

  	
  %

  
	
  Total Assets

  	
   

  	
  $

  	
  _____

  	
   

  
	
  Return on Policyholders’ Surplus

  	
   

  	
  _____

  	
  %

  
	
  Net Premiums Written

  	
   

  	
  $

  	
  _____

  	
   

  
	
  Expense Ratio

  	
   

  	
  _____

  	
  %

  
	
  Loss and LAE Ratio

  	
   

  	
  _____

  	
  %

  
	
  Combined Ratio

  	
   

  	
  _____

  	
  %

  

 

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

The following is a complete list as of
[Quarterly/Annual Financial Data] of the Guarantor’s subsidiaries which conduct
insurance or reinsurance business (the “Subsidiary Insurance Companies”):

[List of
subsidiary insurance companies]

[FOR FISCAL YEAR END: 
Attached hereto are the audited consolidated financial statements
(including the balance sheet, income statement and statement of cash flows, and
notes thereto, together with the report of the independent accountants thereon)
of the Guarantor and its consolidated subsidiaries for the three years ended
[date], 20__ and the Statutory Financial Statements (as defined in the
Indenture) for the one year ended [date] 200_.

Pursuant to Section 10.3 of the Indenture, each of the
undersigned hereby certifies that, to the knowledge of the undersigned, neither
the Guarantor nor the Company is in default in the performance or observance of
any of the terms, provisions or conditions contained in the Indenture (without
regard to any period of grace or requirement of notice provided under the
Indenture), for the calendar year ending on ________, 20__ [, except as
follows:  specify each
such default and the nature and status thereof.]

[FOR FISCAL QUARTER END:  Attached hereto are the unaudited consolidated
financial statements (including the balance sheet and income statement) of the
Guarantor and its

 

consolidated subsidiaries and the Statutory Financial
Statements (as defined in the Indenture), if any, for the fiscal quarter ended
[date], 20__, to the extent applicable.] DISCUSSING.

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

The Statutory Financial Statements fairly present in
all material respects in accordance with Applicable Accounting Principles, as
defined in the Indenture, the financial position of the subject insurance company
and have been prepared in accordance with Applicable Accounting Principles.

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

	
     

  	
  By:

  	
   

  
	
   

  	
   

  
	
     

  	
  Name:

  	
   

  

 

 

Flagstone Reinsurance
Holdings Limited

Crawford House

23 Church Street, 3rd Floor

Hamilton HM11 Bermuda

 

Financial Definitions

INSURANCE COMPANY

	
  Report Item

  	
   

  	
  Description of Calculation

  
	
  NAIC
  Risk Based Capital Ratio-P&C

  	
   

  	
  Total Adjusted Capital/Authorized Control Level
  Risk-Based Capital

  
	
  NAICRisk
  Based Capital Ratio-Life

  	
   

  	
  (Total Adjusted Capital-Asset Valuation
  Reserve)/Authorized Control Level Risk-Based Capital

  
	
  Total
  Capital and Surplus-Life

  	
   

  	
  Common Capital Stock + Preferred Capital Stock +
  Aggregate Write-Ins for other than special surplus funds + Surplus Notes +
  Gross Paid-In and Contributed Surplus + Aggregate Write-Ins for Special
  Surplus Funds + Unassigned Funds (Surplus) — Treasury Stock

  
	
  Total
  Capital and Surplus-P&C

  	
   

  	
  Aggregate Write-Ins for Special Surplus Funds +
  Common Capital Stock + Preferred Capital Stock + Aggregate Write Ins for
  other than special surplus funds + Surplus Notes + Gross Paid-In and
  Contributed Surplus + Unassigned Funds (Surplus) — Treasury Stock

  
	
  Total
  Class 1 & 2 Rated Investments to Total Fixed Income Investments

  	
   

  	
  (Total Class 1 + Total Class 2 Rated
  Investments)/Total Fixed Income Investments

  
	
  Total
  Class 1 & 2 Rated Investments to Total Investments

  	
   

  	
  (Total Class 1 + Total Class 2 Rated Investments)/Total
  Investments

  
	
  Total
  Assets

  	
   

  	
  Total Assets

  
	
  Return
  on Policyholders’ Surplus

  	
   

  	
  Net Income/Policyholders’ Surplus

  
	
  Expense
  Ratio

  	
   

  	
  Other Underwriting Expenses Incurred/Net premiums
  Earned

  
	
  Loss
  and LAE Ratio

  	
   

  	
  (Losses Incurred + Loss Expenses Incurred)/Net Premiums
  Earned

  
	
  Combined
  Ratio

  	
   

  	
  Expense Ratio + Loss and LAE Ratio

  
	
  Net
  Premiums Written (annualized) to Policyholders’ Surplus

  	
   

  	
  Net Premiums Written/Policyholders’ Surplus

  

 

 

 

Exhibit B

FORM
OF REGULATION S GLOBAL SECURITY TRANSFEREE CERTIFICATE

Wilmington
Trust Company,
       as Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: Flagstone Finance S.A.

Re:          Floating Rate Deferrable Interest
Junior Subordinated Notes due 2037 (the Securities”)

Reference is hereby made to
the Junior Subordinated Indenture, dated as of June 8, 2007 (the “Indenture”),
among Flagstone Finance S.A.,
a company organized under the laws of Luxembourg (the “Company”), Flagstone Reinsurance Holdings Limited, a
company organized under the laws of Bermuda (the “Guarantor”), and
Wilmington Trust Company, as Trustee. 
Capitalized terms used but not defined herein shall have the meanings
assigned to them pursuant to the Indenture.

This letter relates to U.S.
$_______________ aggregate outstanding principal amount of the Company’s
Floating Rate Deferrable Interest Junior Subordinated Notes due 2037  which
are held in the form of an interest in a Rule 144A Global Security with the
Depository (144A CUSIP NUMBER:[__], ISIN NUMBER.: [__]) in the name of
__________________ [name of transferor] (the “Transferor”) to effect the
transfer of the Securities in exchange for an equivalent beneficial interest in
a Regulation S Global Security in the name of __________________ [name of
transferee] (the “Transferee”).

In connection with such
request, and in respect of such Securities, the Transferee does hereby certify
that such Securities are being transferred (i) in accordance with the transfer
restrictions set forth in the Indenture relating to the Securities, (ii) in
compliance with the transfer restrictions applicable to the Global Securities,
including in accordance with Regulation S and (iii) pursuant to an exemption
from registration under the United States Securities Act of 1933, as amended
(the “Securities Act”), and in accordance with any applicable securities
laws of any state of the United States or any other jurisdiction.

In addition, the Transferee
hereby represents, warrants and covenants for the benefit of the Company and
the Trustee that:

1.             the offer of the Securities was not made to a Person in
the United States;

2.                                       at the time the buy order was originated, the
Transferee was outside the United States and the transfer constitutes an
offshore transaction (within the meaning of Regulation S);

3.                                       no directed selling efforts have been made in
contravention of the requirements of Rule 903(a) or 904(a) of Regulation S, as
applicable;

4.                                       the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act;

5.                                       Neither the Transferee nor any account for
which it is acting is a U.S. Person nor a U.S. Resident (within the meaning of
the Investment Company Act);

 B-1
 

 

6.                                       if the sale is made during a restricted
period and the provisions of Rule 903(b)(2) or (3) or Rule 904(b)(1) of
Regulation S are applicable thereto, the Transferee confirms that such sale has
been made in accordance with the applicable provisions of Rule 903(b)(2) or (3)
or Rule 904(b)(1), as the case may be; and

7.                                       for the duration that it holds any interest
in such Security, either (i) it is not acquiring such Security with the assets
of a Plan or another employee benefit plan subject to applicable law that is
substantially similar to Section 406 of ERISA or Section 4975 of the Code or
(ii) the acquisition, holding or disposition of such Security by the
Transferee, throughout the period that it holds such Security, will not result
in a nonexempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code (or, in the case of another employee benefit plan, any
substantially similar applicable law), because the purchase, holding and
disposition of such Security is and will be eligible for relief under a
prohibited transaction exemption, all of the conditions of which are and will
be satisfied upon its acquisition of, and throughout the term that it holds,
such Security.  The Transferee
represents, warrants and covenants that it will not sell, pledge or otherwise
transfer such Security in violation of the foregoing.

In addition, the Transferee
hereby represents, warrants and agrees with the Company and the Guarantor as to
the provisions set forth in Article III of the Indenture.

The Transferee understands
that the Company, the Guarantor and the Trustee and their respective counsel
will rely upon the accuracy and truth of the foregoing representations, and the
Transferee hereby consents to such reliance. 
Further, the Transferee irrevocably authorizes the Company, the Trustee
and their respective counsel to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

	
     

  	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
  By:

  	
   

  	
   

  
	
     

  	
   

  	
     

  	
   

  	
  Name:

  
	
     

  	
   

  	
     

  	
   

  	
  Title:

  

 

Dated:
___________ __, ____

	
  Taxpayer Identification
  Number:   

  	
  Address for Notices:

  	
   

  
	
  Wire
  Instructions for Payments:

  	
   

  	
   

  

 

	
  Bank:

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
  Bank ABA #:

  	
   

  	
   

  	
   

  
	
  Account No.:

  	
   

  	
   

  	
  Tel:

  
	
   

  	
   

  	
   

  	
   

  
	
  FAO:

  	
   

  	
   

  	
  Fax:

  
	
   

  	
   

  	
   

  	
   

  
	
  Attn.:

  	
   

  	
   

  	
  Attn:

  
	
   

  	
   

  	
   

  	
   

  
						

 

Registered
Name (if Nominee):

 

 B-2

 

Exhibit C

FORM
OF RULE 144A GLOBAL SECURITY TRANSFEREE CERTIFICATE

Wilmington
Trust Company,
      as Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: Flagstone Finance S.A.

Re:          Floating Rate Deferrable Interest
Junior Subordinated Notes due 2037 (the “Securities”)

Reference is hereby made to the Junior
Subordinated Indenture, dated as of June 8, 2007 (the “Indenture”),
among Flagstone Finance S.A.,
a company organized under the laws of Luxembourg (the “Company”), Flagstone Reinsurance Holdings Limited, a
company organized under the laws of Bermuda (the “Guarantor”), and
Wilmington Trust Company, as Trustee. 
Capitalized terms used but not defined herein shall have the meanings
assigned to them pursuant to the Indenture.

This
letter relates to U.S. $_______________ aggregate outstanding principal amount
of the Company’s Floating Rate Deferrable Interest Junior Subordinated Notes
due 2037 which are held in the form of an interest in a Regulation S Global
Security deposited with the Depository (REG S CUSIP NUMBER: [__] ISIN NUMBER.:
[__]) in the name of __________________ [name of transferor] (the “Transferor”)
and a request by the Transferor to effect the transfer of the Securities in
exchange for an equivalent beneficial interest in a Rule 144A Global Security
in the name of __________________ [name of transferee] (the “Transferee”).

In connection with such request, and in
respect of such Securities, the Transferee does hereby certify that such
Securities are being transferred in accordance with and in a transaction
meeting the requirements of (i) the applicable transfer restrictions set forth
in the Indenture relating to the Securities and (ii) Rule 144A under the United
States Securities Act of 1933, as amended, and any applicable securities laws
of any state of the United States and any other relevant jurisdiction, and that
the Transferee is purchasing the Securities for its own account or one or more
accounts with respect to which the Transferee exercises sole investment
discretion, and the Transferee and any such account (A) are both Qualified
Institutional Buyers within the meaning of Rule 144A and Qualified Purchasers
as defined in the Indenture, (B) is not a dealer of the type described in
paragraph (a)(1)(ii) of Rule 144A unless it owns and invests on a discretionary
basis not less than $25,000,000 in securities of issuers that are not
affiliated to it, (C) is not a participant-directed employee plan, such as a
401(k) plan, or any other type of plan referred to in paragraph (a)(1)(i)(D) or
(a)(1)(i)(E) of Rule 144A, or a trust fund referred to in paragraph
(a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, unless
investment decisions with respect to the plan are made solely by the fiduciary,
trustee or sponsor of such plan, and (D) was not formed for the purpose of
investing in the Company or the Guarantor(unless each of its beneficial owners
is a Qualified Purchaser).

The Transferee hereby  represents, warrants and agrees with the
Company and the Guarantor as to the provisions set forth in Article III of the
Indenture.

Further, the Transferee hereby certifies,
represents and warrants that, for the duration that it holds any interest in
such Securities, either (i) it is not acquiring such Securities with the assets
of a Plan or another employee benefit plan subject to applicable law that is
substantially similar to Section 406 of ERISA or Section 4975 of the Code or
(ii) the acquisition, holding and disposition of such Securities by the
Transferee, throughout the period that it holds such Securities, will not
result in a nonexempt

 C-1
 

 

prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or, in the case of another
employee benefit plan, any substantially similar applicable law), because the
purchase, holding and disposition of such Securities is and will be eligible
for relief under a prohibited transaction exemption, all of the conditions of
which are and will be satisfied upon its acquisition of, and throughout the
term that it holds, such Securities.  The
Transferee represents, warrants and covenants that it will not sell, pledge or
otherwise transfer such Securities in violation of the foregoing.

The Transferee understands that the Company,
the Guarantor, the Trustee and their respective counsels will rely upon the
accuracy and truth of the foregoing representations, and the Transferee hereby
consents to such reliance.  Further, the
Transferee irrevocably authorizes the Company, the Guarantor, the Trustee and
their respective counsel to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

	
     

  	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
  By:

  	
   

  	
   

  
	
     

  	
   

  	
     

  	
   

  	
  Name:

  
	
     

  	
   

  	
     

  	
   

  	
  Title:

  

 

Dated:
___________ __, ____

	
  Taxpayer Identification
  Number:

  	
  Address for Notices:

  	
   

  
	
  Wire
  Instructions for Payments:

  	
   

  	
   

  

 

	
  Bank:

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
  Bank ABA #:

  	
   

  	
   

  	
   

  
	
  Account No.:

  	
   

  	
   

  	
  Tel:

  
	
   

  	
   

  	
   

  	
   

  
	
  FAO:

  	
   

  	
   

  	
  Fax:

  
	
   

  	
   

  	
   

  	
   

  
	
  Attn.:

  	
   

  	
   

  	
  Attn:

  
	
   

  	
   

  	
   

  	
   

  
						

 

Registered
Name (if Nominee):

The Transferor agrees to the foregoing and certifies that it reasonably
believes that such Transferee and its accounts, if any, are both Qualified
Institutional Buyers within the meaning of such Rule 144A and Qualified
Purchasers as defined in the Indenture.

	
     

  	
  [Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
     

  	
  By:

  	
   

  
	
     

  	
  Date:

  	
   

  

 

 C-2

 

Exhibit D

FORM
OF NON-GLOBAL SECURITY TRANSFEREE CERTIFICATE

Wilmington
Trust Company,
       as Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention: Flagstone Finance S.A.

Re:          Floating Rate Deferrable Interest
Junior Subordinated Notes due 2037 (the “Securities”)

Reference is hereby made to the Junior
Subordinated Indenture, dated as of June 8, 2007 (the “Indenture”),
among Flagstone Finance S.A.,
a company organized under the laws of Luxembourg (the “Company”), Flagstone Reinsurance Holdings Limited, a
company organized under the laws of Bermuda (the “Guarantor”), and
Wilmington Trust Company, as Trustee. 
Capitalized terms used but not defined herein shall have the meanings
assigned to them pursuant to the Indenture.

This letter relates to U.S. $_______________
aggregate outstanding principal amount of the Company’s Floating Rate
Deferrable Interest Junior Subordinated Notes due 2037 in the name of
__________________ [name of transferor] (the “Transferor”) and a request
by the Transferor to effect the transfer of the Securities in exchange for an
equivalent beneficial interest in Security in the name of __________________
[name of transferee] (the “Transferee”).

In connection with such request and our
purchase of the Securities, the Transferee does hereby certify that:

1.               We understand that the Securities have not
been registered under the Securities Act and may not be offered or sold except
as permitted in the Indenture and in the following sentence.  We agree on our own behalf and on behalf of
any investor account for which we are purchasing the Securities that, if we
decide to offer, sell or otherwise transfer any such Securities, (i) such
offer, sale or transfer will be made only (a) to the Company or the Guarantor,
(b) pursuant to Rule 144A to a person we reasonably believe is a Qualified
Institutional Buyer that purchases such Securities for its own account or for
the account of a Qualified Institutional Buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, (c) to a person that is
neither a U.S. Person (as defined in Regulation S) nor a U.S. Resident (within
the meaning of the Investment Company Act) in an offshore transaction in
accordance with Rule 903 or Rule 904 of Regulation S, acting for its own
account or for the account of one or more Persons with respect to which it
exercises sole investment discretion, each of which is neither a U.S. Person
(as defined in Regulation S) nor a U.S. Resident (within the meaning of the Investment
Company Act) (a “Regulation S Purchaser”), or (d) pursuant to an
exemption from the registration requirements of the Securities Act to an “accredited
investor” within the meaning of subparagraph (a)(1),(2), (3) or (7) of Rule 501
under the Securities Act (an “Institutional Accredited Investor) that is
acquiring such Securities for its own account, or for the account of such an
Institutional Accredited Investor, for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution in violation of
the Securities Act, subject to the requirements of the Indenture and to the
right of the Company and the Guarantor prior to any such offer, sale or
transfer pursuant to clause (d) above to require the delivery of an opinion of
counsel, certification and/or other information satisfactory to the Company and
the Guarantor.  We understand that the

 D-1
 

 

Certificates for any security that we receive will bear a legend
substantially to the effect of the foregoing and agree to notify each
transferee of the resale restrictions referred to therein.

2.               We acknowledge the matters specified in
paragraph 1 above, represent that we satisfy the conditions specified for
transferees in paragraph 1 above and certify that we are an Institutional Accredited
Investor.  In addition, we represent that
we have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks or our investment in the
Securities, and we and any account for which we are acting are each able to
bear the economic risks of our or its investment for an indefinite period of
time.

3.               We are acquiring the Securities purchased by
us for our own account (or for one or more accounts as to each of which we
exercise sole investment discretion and have authority to make, and do make,
the statements contained in this Certificate) and not with a view to any
distribution of the Securities, subject, nevertheless, to the understanding
that the disposition of our property will, at all times, be and remain within
our control.

4.               In the even that we purchase any Securities,
we will acquire such Securities having an aggregate principal amount not less
than $100,000, for our own account and for each separate account for which we
are acting.

5.               We acknowledge that we are not a fiduciary of
(i) an employee benefit, individual retirement account or other plan or
arrangement subject to Title I of ERISA or section 4975 of the Code; of (ii) an
entity whose underlying assets include “plan assets” by reason of any Plan’s
investment in the entity, and are not purchasing any of the Securities on
behalf of or with “plan assets” by reason of any Plan’s investment in the
entity.

6.               We acknowledge that the Company and the
Guarantor and others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations, warranties and agreements and agree that if
any of the acknowledgments, representations, warranties and agreements deemed
to have been made by our purchase of any of the Securities are no longer
accurate, we shall promptly notify the Company and the Guarantor.  If we are acquiring any Securities as a
fiduciary or agent for one or more investor accounts, we represent that we have
sole discretion with respect to each such investor account and that we have
full power to make the foregoing acknowledgments, representations, warranties
and agreements on behalf of each such investor account.

	
     

  	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
     

  	
   

  	
  By:

  	
   

  	
   

  
	
     

  	
   

  	
     

  	
   

  	
  Name:

  
	
     

  	
   

  	
     

  	
   

  	
  Title:

  

 

Dated:
___________ __, ____

 D-2
 

 

Upon
transfer, the Securities (having a principal amount of $[______________]) shall
be registered in the name of the new beneficial owner as follows:

Name:  _______________________________________

Address:  ________________________________________

  
________________________________________

Taxpayer
ID Number: 
______________________________

 

 D-3

 

Exhibit E

FORM OF

OFFICERS’ CERTIFICATE 

UNDER

SECTION 10.3

Pursuant to
Section 10.3 of the Junior Subordinated Indenture, dated as of June 8, 2007 (as
amended or supplemented from time to time, the “Indenture”), among Flagstone
Finance S.A., as issuer (the “Company”), Flagstone Reinsurance Holdings
Limited, as guarantor (the “Guarantor”), and Wilmington Trust Company, as
trustee, each of the undersigned hereby certifies in such capacity listed and
not individually that, to the knowledge of the undersigned, neither the Company
nor the Guarantor is in default in the performance or observance of any of the
terms, provisions or conditions contained in the Indenture (without regard to
any period of grace or requirement of notice provided under the Indenture) for
the fiscal year ending on _________, 20__ [,except as follows: specify each such default and the nature and status thereof].

Capitalized terms
used herein, and not otherwise defined herein, have the respective meanings
assigned thereto in the Indenture

IN WITNESS
WHEREOF, the undersigned have executed this Officers’ Certificate as of
_____________, 20__

	
     

  	
   

  	
   

  
	
     

  	
   

  	
  Name:

  	
   

  	
   

  
	
     

  	
   

  	
  Title:

  	
   

  	
  [Must be the Chairman of the Board, a Vice
  Chairman of the Board, a Deputy Chairman, the Chief Executive Officer, the
  President, General Counsel or a Vice President] of
  Flagstone Reinsurance Holdings Limited

  

 

 E-1
 

	
     

  	
   

  	
   

  
	
     

  	
   

  	
  Name:

  	
   

  	
   

  
	
     

  	
   

  	
  Title:

  	
   

  	
  [Must be the Chief
  Financial Officer, a Manager, a Director, the Treasurer, a Vice Treasurer,
  the Secretary or an Assistant Secretary] of Flagstone Reinsurance
  Holdings Limited

  

 

 

 E-2Exhibit 4.1

JANUS CAPITAL
GROUP INC.

OFFICERS’
CERTIFICATE PURSUANT TO

SECTION 201, SECTION 203 AND SECTION 301 OF THE INDENTURE

ESTABLISHING TERMS AND PROVISIONS OF

6.250% NOTES DUE 2012

June 14, 2007

 

1.             Each of the undersigned, Gregory A. Frost, being the
duly appointed Chief Financial Officer and Senior Vice President of Janus
Capital Group Inc., a Delaware corporation (the “Company”), and Curt R. Foust,
being the Assistant General Counsel and Assistant Secretary of the Company,
does hereby certify pursuant to the authority delegated to the undersigned
pursuant to resolutions adopted on May 1, 2007 by the Board of Directors of the
Company (the “Board”) (a copy of such resolutions which is attached hereto as
Exhibit I), that, pursuant to Section 301 of the Indenture, dated as of
November 6, 2001 (the “Indenture”), between the Company and The Bank of New
York Trust Company, N.A. (as successor to The Chase Manhattan Bank), a national
banking association, as trustee (the “Trustee”), a series of debt securities of
the Company is hereby established with the terms and provisions set forth
below.  Unless otherwise defined herein,
capitalized terms used herein have the meanings given thereto in the Indenture.

(1)           The title of such series of debt
securities is the “6.250% Notes due 2012” (the “Notes”).

(2)           The aggregate principal amount that
may be authenticated and delivered under the Indenture is unlimited.  The Notes need not all be issued at the same
time and such series of Notes may be reopened, without the consent of the
Holders, for issuances of additional Notes of such series.

(3)           The Stated Maturity of the Notes is
June 15, 2012.

(4)           The Notes shall bear interest at
6.250% per annum (the “Original Interest Rate”) from June 14, 2007, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, payable semiannually on June 15 and December 15 of each year
(each, an “Interest Payment Date”), commencing December 15, 2007, to the
Persons in whose names the Notes are registered at the close of business on the
Regular Record Date for such interest, which shall be the June 1 or December 1
(as the case may be), whether or not a Business Day, immediately preceding such
Interest Payment Date.  Interest on the
Notes shall be calculated on the basis of a 360-day year of twelve 30-day
months and, for any period shorter than a full six-month interest period, on
the basis of the actual number of days elapsed in such period.

(5)           The Company hereby designates as
Places of Payment for the Notes the office or agency of the Company in the
Borough of Manhattan, The City of New York, and initially appoints the Trustee
at its Corporate Trust Office as Paying Agent in such city and as its agent to
receive all such presentations, surrenders, notices and demands.

 1
 

(6)           The Notes will be redeemable as a
whole or in part, at the option of the Company at any time, at a Redemption
Price equal to the greater of (i) 100% of the principal amount of the Notes and
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon (exclusive of interest accrued to Redemption
Date), discounted to the redemption date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis
points, plus in each case accrued interest thereon to the Redemption Date.

For purposes of the
Notes:

“Treasury Rate” means,
with respect to any Redemption Date, the rate per annum equal to the semiannual
equivalent yield to maturity or interpolated (on a day count basis) of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date.

“Comparable Treasury
Issue” means the United States Treasury security or securities selected by an
Independent Investment Banker as having an actual or interpolated maturity
comparable to the remaining term of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of a comparable
maturity to the remaining term of the Notes.

“Independent Investment
Banker” means one of the Reference Treasury Dealers appointed by the Trustee
after consultation with the Company.

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

“Reference Treasury
Dealer Quotations” means, with respect to each Reference Treasury Dealer and
any redemption date, the average, as determined by the trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 3:30 p.m. New York time on the third business day
preceding such redemption date.

“Reference Treasury
Dealer” means each of Citigroup Global Markets Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Banc of America Securities LLC, J.P. Morgan
Securities Inc. and UBS Securities LLC, or their affiliates which are primary
U.S. Government securities dealers, and their respective successors; provided,
however, that if any of the foregoing or their affiliates shall cease to be a
primary U.S. Government securities dealer in The City of New York (a “Primary
Treasury Dealer”), the Company shall substitute therefor another Primary
Treasury Dealer.

 2
 

Notice of any redemption
will be mailed at least 30 days but not more than 60 days before the Redemption
Date to each Holder of the Notes to be redeemed.

Unless the Company
defaults in payment of the Redemption Price, on and after the Redemption Date
interest will cease to accrue on the Notes or portions thereof called for
redemption.

(7)           The Company shall have no obligation
to redeem, repay or purchase the Notes pursuant to any sinking fund or
analogous provision.

If a Change of Control Repurchase Event (defined
below) occurs, the Company will make an offer to each Holder of Notes to
repurchase all or any part (in multiples of $1,000 principal amount) of that
Holder’s Notes at a repurchase price in cash equal to 101% of the aggregate
principal amount of Notes repurchased plus any accrued and unpaid interest on
the Notes repurchased to the date of purchase. 
Within 30 days following any Change of Control Repurchase Event or, at
the Company’s option, prior to any Change of Control, but after the public
announcement of the Change of Control, the Company will mail a notice to each
Holder describing the transaction or transactions that constitute or may
constitute the Change of Control Repurchase Event and offering to repurchase
Notes on the payment date specified in the notice, which date will be no
earlier than 30 days and no later than 60 days from the date such notice is mailed.  The notice shall, if mailed prior to the date
of consummation of the Change of Control, state that the offer to purchase is
conditioned on the Change of Control Repurchase Event occurring on or prior to
the payment date specified in the notice. 
The Company will comply with the requirements of Rule 14e-1 under the
Securities Exchange Act of 1934 (the “Exchange Act”) and any other securities
laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control Repurchase Event.  To
the extent that the provisions of any securities laws or regulations conflict
with the Change of Control Repurchase Event provisions of the Notes, the
Company will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under the Change of Control
Repurchase Event provisions of the Notes by virtue of such conflict.

On the Change of Control Repurchase Event payment date,
the Company will, to the extent lawful:

(a)                                  accept
for payment all Notes or portions of Notes properly tendered pursuant to the
Company’s offer;

(b)                                 deposit
with the paying agent an amount equal to the aggregate purchase price in
respect of all Notes or portions of Notes properly tendered; and

(c)                                  deliver
or cause to be delivered to the trustee the Notes properly accepted, together
with an officers’ certificate stating the aggregate principal amount of Notes
being purchased by the Company.

 3
 

The paying agent will promptly mail to each Holder of
Notes properly tendered the purchase price for the Notes, and the trustee will
promptly authenticate and mail (or cause to be transferred by book-entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
any Notes surrendered; provided that each new Note will be in a principal
amount of $1,000 or an integral multiple of $1,000.

The Company will not be required to make an offer to
repurchase the Notes upon a Change of Control Repurchase Event if a third party
makes an offer in the manner, at the times and otherwise in compliance with the
requirements for an offer made by the Company and such third party purchases
all Notes properly tendered and not withdrawn under its offer.

The source of funds that will be required to
repurchase the Notes in the event of a Change of Control Repurchase Event will
be the Company’s available cash or cash generated from its subsidiaries’
operations or other potential sources, including borrowings, sales of assets or
sales of equity.  The Company cannot
assure Holders of the Notes that sufficient funds from such sources will be
available at the time of any Change of Control Repurchase Event to make
required repurchases of Notes tendered. 
The terms of the Company’s senior secured credit facility provide that
certain change of control events will constitute an event of default thereunder
entitling the lenders to accelerate any indebtedness outstanding under the
credit facility at that time and to terminate the credit facility.  The Company’s future debt instruments may
contain similar restrictions and provisions. 
If the Holders of the Notes exercise their right to require the Company
to repurchase all the Notes upon a change of control repurchase event, the
financial effect of this repurchase could cause a default under the Company’s
future debt instruments, even if the change of control repurchase event itself
would not cause a default.  It is
possible that the Company will not have sufficient funds at the time of the
change of control repurchase event to make the required repurchase of its other
debt and the Notes.

The definition of Change of Control includes a phrase
relating to the direct or indirect sale, lease, transfer, conveyance or other
disposition of “all or substantially all” of the Company’s properties or assets
and those of its Subsidiaries taken as a whole. 
Although there is a limited body of case law interpreting the phrase “substantially
all”, there is no precise established definition of the phrase under applicable
law.  Accordingly, the ability of a
Holder of Notes to require the Company to repurchase the Notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
Company’s assets and the assets of its Subsidiaries taken as a whole to another
person or group may be uncertain.

For purposes of the Notes:

“Below Investment Grade Rating Event” means the Notes
are rated below Investment Grade by both Rating Agencies on any date from the
date of the public notice of an arrangement that could result in a Change of
Control until the end of the 60-day period following public notice of the
occurrence of a Change of Control (which period shall be extended so long as
the rating of the Notes is under publicly announced consideration for possible
downgrade by either of the Rating Agencies); provided that a 

 4
 

Below Investment Grade Rating Event otherwise arising
by virtue of a particular reduction in rating shall not be deemed to have
occurred in respect of a particular Change of Control (and thus shall not be
deemed a Below Investment Grade Rating Event for purposes of the definition of
Change of Control Repurchase Event hereunder) if the Rating Agencies making the
reduction in rating to which this definition would otherwise apply do not
announce or publicly confirm or inform the trustee in writing at its request
that the reduction was the result, in whole or in part, of any event or
circumstance comprised of or arising as a result of, or in respect of, the
applicable Change of Control (whether or not the applicable Change of Control
shall have occurred at the time of the Below Investment Grade Rating Event).

“Capital Stock” means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.

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

(a)                                  the
direct or indirect sale, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the Company’s properties or assets and those of
its Subsidiaries, taken as a whole, to any “person” (as that term is used in
Section 13(d)(3) of the Exchange Act), other than the Company or a Subsidiary
Guarantor that is one of its wholly owned Subsidiaries;

(b)                                 the
adoption of a plan relating to the Company’s liquidation or dissolution;

(c)                                  the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any “person” (as that term is used
in Section 13(d)(3) of the Exchange Act), other than the Company or a Subsidiary
Guarantor that is one of its wholly owned Subsidiaries, becomes the beneficial
owner, directly or indirectly, of more than 50% of the Company’s Voting Stock,
measured by voting power rather than number of shares; or

(d)                                 the
first day on which a majority of the members of the Company’s Board of
Directors are not Continuing Directors.

Notwithstanding the foregoing, a transaction effected
to create a holding company for the Company will not be deemed to involve a
Change of Control if (1) pursuant to such transaction the Company becomes a
wholly owned Subsidiary of such holding company and (2) the holders of the
Voting Stock of such holding company immediately following such transaction are
the same as the holders of the Company’s Voting Stock immediately prior to such
transaction.

“Change of Control Repurchase Event” means the
occurrence of a Change of Control and a Below Investment Grade Rating Event.

 5
 

“Continuing Directors” means, as of any date of
determination, any member of the Company’s Board of Directors who:

(a)                                  was
a member of such Board of Directors on the first date that any of the Notes
were issued; or 

(b)                                 was
nominated for election or elected to the Company’s Board of Directors with the
approval of a majority of the Continuing Directors who were members of the
Company’s Board at the time of such nomination or election. 

“Investment Grade” means a rating of Baa3 or better by
Moody’s (or its equivalent under any successor rating categories of Moody’s)
and BBB- or better by S&P (or its equivalent under any successor rating
categories of S&P) (or, in each case, if such Rating Agency ceases to rate
the Notes for reasons outside of the Company’s control, the equivalent
investment grade credit rating from any Rating Agency selected by the Company
as a replacement Rating Agency).

“Moody’s” means Moody’s Investor Services Inc., or any
successor thereto.

“Rating Agency” means:

(a)                                  each
of Moody’s and S&P; and 

(b)                                 if
either of Moody’s or S&P ceases to rate the Notes or fails to make a rating
of the Notes publicly available for reasons outside of the Company’s control, a
“nationally recognized statistical rating organization” within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a
replacement agency for Moody’s or S&P, or both, as the case may be. 

“S&P” means Standard
& Poor’s Ratings Services, a division of McGraw-Hill, Inc., or any
successor thereto.

“Voting Stock” as applied
to stock of any person, means shares, interests, participations or other
equivalents in the equity interest (however designated) in such person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.

(8)           The Notes are issuable in
denominations of $1,000 and any integral multiples of $1,000.

(9)           The Trustee, at its Corporate Trust
Office, is hereby initially appointed Security Registrar and Paying Agent for the
Notes.

(10)         The aggregate principal amount of the
Notes then Outstanding shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502 under the Indenture.

 6
 

(11)         Payment of principal of and interest on
the Notes will be made in Dollars.

(12)         NOT APPLICABLE.

(13)         Holders of the Notes shall not have the
option to receive payments of principal of or interest on the Notes in
Currencies other than the Dollar.

(14)         Other than as set forth in this
Officers’ Certificate, there are no other provisions granting special rights to the Holders of the Notes.

(15)         The Events of Default set forth in
Section 501 of the Indenture (other than the Event of Default set forth in
Section 501(3) of the Indenture, which shall not be applicable to the Notes)
and the covenants set forth in Article Ten of the Indenture will apply to the
Notes.

In addition,
solely with respect to the Notes (and not with respect to any other series of
Securities that may be issued under the Indenture), the following covenants
shall be added to, and shall be deemed a part of, Article Ten of the Indenture:

“SECTION 1007.  Limitation on Liens.  The Company will not, and it will not cause or permit
any of its subsidiaries to, create, assume, incur or guarantee any indebtedness
for money borrowed that is secured by a pledge, mortgage or other lien on any
voting stock or profit participating equity interests of Janus Capital
Management LLC (“Janus”) or any entity that succeeds (whether by merger,
consolidation, sale of assets or otherwise) to all or any substantial part of
the business of Janus, without providing that the Notes (together with, if the
Company shall so determine, any other indebtedness of, or guarantee by, the
Company ranking equally with the Notes and existing as of the closing of the
offering of the Notes or thereafter created) will be secured equally and
ratably with or prior to all other indebtedness secured by such pledge,
mortgage or other lien on the voting stock or profit participating equity
interests of Janus; provided  that this Section 1007 shall not limit the
Company’s ability or the ability of the Company’s subsidiaries to incur
indebtedness or other obligations secured by liens on assets
other than the voting stock or profit participating equity interests of Janus.

SECTION 1008. Interest Rate Adjustment. The interest rate payable on the Notes
shall be subject to adjustments from time to time if either Moody’s or S&P
downgrades (or subsequently upgrades) the debt rating assigned to the Notes, as
set forth below.

If the rating from Moody’s of the Notes is decreased
to a rating set forth in the immediately following table, the interest rate on
the Notes shall increase from the Original Interest Rate by the percentage set
forth opposite that rating: 

 7
 

 

	
  Rating

  	
   

  	
  Percentage

  	
   

  
	
  Ba1

  	
   

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ba2

  	
   

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Ba3

  	
   

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  B1 or below

  	
   

  	
  1.00

  	
  %

  

 

If the rating from
S&P of the Notes is decreased to a rating set forth in the immediately
following table, the interest rate on the Notes shall increase from the
Original Interest Rate by the percentage set forth opposite that rating: 

	
  Rating

  	
   

  	
  Percentage

  	
   

  
	
  BB+

  	
   

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BB

  	
   

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  BB-

  	
   

  	
  0.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  B+ or below

  	
   

  	
  1.00

  	
  %

  

 

Notwithstanding the
foregoing, if at any time the interest rate on the Notes has been adjusted
upward and either Moody’s or S&P, as the case may be, subsequently
increases its rating of the Notes to any of the threshold ratings set forth in
the tables above, the interest rate on the Notes shall be decreased such that
the interest rate for the Notes equals the Original Interest Rate plus the
percentages set forth opposite the ratings from the tables above in effect
immediately following the increase. If Moody’s subsequently increases its rating
of the Notes to Baa3 or higher and S&P increases its rating to BBB- or
higher the interest rate on the Notes shall be decreased to the Original
Interest Rate.

Each adjustment required
by any decrease or increase in a rating set forth above, whether occasioned by
the action of Moody’s or S&P, shall be made independent of any and all
other adjustments. In no event shall (1) the interest rate for the Notes be
reduced to below the Original Interest Rate or (2) the total increase in the
interest rate on the Notes exceed 2.00% above the Original Interest Rate.

If either Moody’s or
S&P ceases to provide a rating of the Notes, any subsequent increase or
decrease in the interest rate of the Notes necessitated by a reduction or
increase in the rating by the agency continuing to provide the rating shall be
twice the percentage set forth in the applicable table above. No adjustments in
the interest rate of the Notes shall be made solely as a result of either Moody’s
or S&P ceasing to provide a rating. If both Moody’s and S&P cease to
provide a rating of the Notes, the interest rate on the Notes shall increase
to, or remain at, as the case may be, 2.00% above the Original Interest Rate.

 8
 

Any interest rate
increase or decrease described above shall take effect from the first day of
the interest period during which a rating change requires an adjustment in the
interest rate.

The interest rate on the
Notes shall permanently cease to be subject to any adjustment described above
(notwithstanding any subsequent decrease in the ratings by either or both
rating agencies) and, if applicable, shall be decreased to the Original
Interest Rate, if the Notes become rated Baa2 and BBB or higher by Moody’s and
S&P, respectively (or one of these ratings if only rated by one rating
agency), with a stable or positive outlook by each of the rating agencies.

(16)         The Notes shall be issued as one or
more Registered Securities in permanent global form without coupons.  The Company initially appoints The Depository
Trust Company, New York, New York (“DTC”), to act as the depositary with respect to the
Notes.

(17)         NOT APPLICABLE.

(18)         Interest on the Notes that is payable
on any Interest Payment Date shall be paid to the Person in whose name the Note
is registered at the close of business on the Regular  Record Date
for such interest, which shall be the June 1 or December 1 (as the case may
be), whether or not a Business Day, immediately preceding such Interest Payment
Date.

(19)         Section 1402 (Defeasance and Discharge)
and Section 1403 (Covenant Defeasance) shall apply to the Notes, in accordance
with the provisions, terms and conditions set forth in Article Fourteen.

(20)         NOT APPLICABLE.

(21)         The Notes do not provide for the
payment of any Additional Amounts.

(22)         NOT APPLICABLE.

(23)         NOT APPLICABLE.

(24)         With respect to any action or consent
to be taken pursuant to the terms of the Indenture, Holders of the Notes shall
vote as one class with Holders of Securities of all other series issued or to
be issued under the Indenture.

2.             The Notes will be evidenced by a Security in global form
in substantially the form attached hereto as Exhibit II, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by the Indenture and may have imprinted or otherwise
reproduced thereon such legend or legends or endorsements, not inconsistent
with the provisions of the Indenture, as may be required to comply with any law
or with any rules or regulations pursuant thereto, or with any rules of any
securities exchange or to conform to general usage, all as may be determined by
the Officer executing such global Security on behalf of the Company, as
evidenced by the execution of such global Security by such Officer.  In the event that certificated Notes (the “Certificated
Notes”) are issued in exchange for the global Security, the form of
certificate evidencing each Certificated Note shall be in substantially the
form of the 

 9
 

attached global Security, with such changes as are
necessary to evidence the Notes in definitive form rather than as a global
Security.

 10
 

IN
WITNESS WHEREOF,
we have executed this certificate this 14th day of June, 2007.

	
  

  	
  /s/ Gregory A. Frost

  
	
   

  	
  Name:

  	
  Gregory A. Frost

  
	
   

  	
  Title:

  	
  Chief Financial Officer and Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Curt R. Foust

  
	
   

  	
  Name:

  	
  Curt R. Foust

  
	
   

  	
  Title:

  	
  Assistant General Counsel and Assistant Secretary

  

 

 11

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