ANNALY CAPITAL MANAGEMENT INC (Form: 8-K, Received: 05/14/2012 16:07:22)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549



	FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported):
	May 9, 2012


	ANNALY CAPITAL MANAGEMENT, INC.

(Exact name of registrant as specified in its charter)


	Maryland		1-13447		22-3479661

(State or Other Jurisdiction		(Commission		(IRS Employer
of Incorporation)		File Number)		Identification No.)


1211 Avenue of the Americas
Suite 2902
	New York, New York		10036

(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 696-0100


	No Change

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

Underwriting Agreement - Public Offering of Convertible Senior Notes

On May 9, 2012, Annaly Capital Management, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and UBS Securities LLC (collectively, the “Underwriters”), to issue and sell $750,000,000 aggregate principal amount of the Company’s 5.00% Convertible Senior Notes due 2015 (“Notes”) in a public offering pursuant to a Registration Statement on Form S-3 (Registration No. 333-164783) (the “Registration Statement”) and a related prospectus, including the related prospectus supplement and pricing term sheet, filed with the Securities and Exchange Commission. Pursuant to the Underwriting Agreement, the Company granted the Underwriters an option to purchase up to an additional $112,500,000 aggregate principal amount of Notes solely to cover over-allotments. The offering closed on May 14, 2012. The Notes were sold to the Underwriters at a price equal to 97% of the aggregate principal amount thereof.

The Company made certain customary representations, warranties and covenants concerning the Company and the Registration Statement in the Underwriting Agreement and also agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.

A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on Form 8-K and incorporated herein by reference. The description of the terms of the Underwriting Agreement in this Item 1.01 is qualified in its entirety by reference to Exhibit 1.1.

Supplemental Indenture

The Notes were issued pursuant to an indenture, dated as of February 12, 2010, between the Company and Wells Fargo Bank, National Association, as trustee (the “Base Indenture”), as supplemented by a first supplemental indenture dated as of February 12, 2010 and a second supplemental indenture dated as of May 14, 2012 (the “Second Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).

The Notes bear interest at a rate of 5.00% per year on the principal amount, accruing from May 14, 2012. Interest is payable semiannually in arrears on November 15 and May 15 of each year, beginning on November 15, 2012. The Notes will mature on May 15, 2015 unless repurchased or converted in accordance with their terms prior to such date.

Holders may convert their Notes prior to the close of business on the business day immediately preceding February 15, 2015, in multiples of $1,000 principal amount, at their option, only under the following circumstances:


	•	during any calendar quarter commencing after June 30, 2012, if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter exceeds 110% of the applicable conversion price on each applicable trading day;

	•	during the five business day period after any five consecutive trading-day period in which the trading price (as defined in the Second Supplemental Indenture) per $1,000 principal amount of notes for each trading day of such five consecutive trading-day period was less than 98% of the product of the last reported sale price of the Company’s common stock and the applicable conversion rate on such trading day; or

	•	upon the occurrence of specified corporate events described in the Second Supplemental Indenture.

On or after February 15, 2015, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at their option, in multiples of $1,000 principal amount, at any time.

The initial conversion rate for the Notes is 52.7969 shares of the Company’s common stock per $1,000 principal amount of Notes, equivalent to a conversion price of approximately $18.94 per share, subject to adjustment upon the occurrence of certain events.

If a noteholder elects to convert its Notes in connection with certain corporate transactions that occur prior to maturity of the Notes, the conversion rate will be increased for such noteholder in certain circumstances.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election.

The ability of a noteholder to convert the Notes into common stock of the Company is restricted by the Company’s charter. Among other things, the charter provides that, subject to certain exceptions, no person may beneficially own shares of the Company’s common stock in excess of 9.8% in value or number of the Company’s outstanding common stock. This limitation is intended to help the Company protect its qualification as a REIT. The Indenture provides that, notwithstanding any other provision of the Indenture or Notes, no noteholder will be entitled to convert such Notes to the extent that receipt of shares of the Company’s common stock would violate the 9.8% limit on share ownership contained in the Company’s charter.

Upon a fundamental change (as defined in the Second Supplemental Indenture), noteholders may require the Company to repurchase all or a portion of their Notes at a price equal to 100% of the principal amount of the Notes to be purchased plus any accrued and unpaid interest up to, but excluding, the repurchase date. The Company will pay for all Notes so repurchased with shares of the Company’s common stock using a price per share equal to the average daily VWAP (as defined in the Second Supplemental Indenture) of the Company’s

common stock for the 20 consecutive trading days ending on the trading day immediately prior to the occurrence of the fundamental change.

The Notes will be the Company’s general unsecured obligations and will rank senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Notes and equally in right of payment with all of the Company’s existing and future indebtedness and liabilities that are not so subordinated. The Notes will be effectively subordinated to any of the Company’s secured indebtedness, which includes the Company’s repurchase agreements, interest rate swaps, and other financing arrangements, to the extent of the value of the assets securing such indebtedness, and will be effectively subordinated to all liabilities of the Company’s subsidiaries.

If there is an event of default under the Notes, the principal amount of the Notes, plus accrued and unpaid interest, may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency or reorganization or certain events related to the repurchase of the Notes upon a fundamental change, liquidation or dissolution of the Company or the delisting of the Company’s common stock occurs. In addition to events specified in the Base Indenture, the following events are considered “Events of Default:”


	•	the Company’s failure to comply with its obligation to convert the Notes in accordance with the Second Supplemental Indenture upon exercise of a noteholder’s conversion right and the default continues for a period of 3 business days after there has been given a notice of default under the Second Supplemental Indenture;

	•	the Company’s failure to comply with its obligation to pay for or deliver any consideration required to be paid for or delivered to a noteholder entitled to receive the change of control make-whole (as defined in the Second Supplemental Indenture), or any other premium required pursuant to the terms of the Second Supplemental Indenture;

	•	the Company’s failure to give a fundamental change notice when due;

	•	a fundamental change occurs and a noteholder, upon exercising its right to require us to purchase any or all of such noteholder’s Notes, or any portion thereof, is not entitled on the fundamental change repurchase date (as defined in the Second Supplemental Indenture) to receive at least the same amount and form of consideration per share of common stock as was received by the existing holders of the Company’s common stock receiving the highest consideration in connection with such fundamental change;

	•	the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; and

	•	the Company’s common stock (or other capital stock into which the Notes are then convertible pursuant to the terms of the Second Supplemental Indenture)


		ceases to be listed on the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or their respective successors).

The summary of the Notes is qualified in its entirety by reference to the text of the Base Indenture, the Second Supplemental Indenture and the form of Note. The Base Indenture, the Second Supplemental Indenture and the form of Note are included as Exhibits 4.1, 4.2 and 4.3, respectively, hereto and are incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(d) Exhibits:


	1.1	Underwriting Agreement, dated May 9, 2012, between the Company and the Underwriters.

	4.1	Indenture, dated as of February 12, 2010, between the Company and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed with the Securities and Exchange Commission on February 12, 2010).

	4.2	Second Supplemental Indenture, dated as of May 14, 2012, between the Company and Wells Fargo Bank, National Association.

	4.3	Form of 5.00% Convertible Senior Note due 2015 (included in Exhibit 4.2 hereto).

	5.1	Opinion of K&L Gates LLP with respect to the legality of the Notes and the underlying shares of common stock.

	8.1	Opinion of K&L Gates LLP, relating to certain tax matters concerning the Notes and the underlying shares of common stock.


	23.1	Consent of K&L Gates LLP (included in Exhibits 5.1 and 8.1 hereto).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	Annaly Capital Management, Inc.

	By:	/s/ Kathryn Fagan

		Name: Kathryn Fagan

		Title: Chief Financial Officer

Date: May 14, 2012

Exhibit 1.1

ANNALY CAPITAL MANAGEMENT, INC.

5.00% Convertible Senior Notes due 2015

UNDERWRITING AGREEMENT

May 9, 2012

UNDERWRITING AGREEMENT

May 9, 2012

Credit Suisse Securities (USA) LLC
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
UBS Securities LLC


	As Representatives of the several Underwriters named in Schedule A

c/o	Credit Suisse Securities (USA) LLC
	Eleven Madison Avenue
	New York, New York 10010-3629

c/o	Morgan Stanley & Co. LLC
	1585 Broadway
	New York, New York 10036

c/o	J.P. Morgan Securities LLC
	383 Madison Avenue, 28 ^th Floor
	New York, New York 10179

c/o	UBS Securities LLC
	299 Park Avenue
	New York, New York 10171

Ladies and Gentlemen:

Annaly Capital Management, Inc., a Maryland corporation (the “ Company ”), proposes to issue and sell to the several underwriters named in Schedule A annexed hereto (the “ Underwriters ”), for whom Credit Suisse Securities (USA) LLC (“ Credit Suisse ”), Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and UBS Securities LLC is acting as representatives, $750,000,000 of its 5.00% Convertible Senior Notes due 2015 (the “ Firm Securities ”). In addition, solely for the purposes of covering over-allotments, the Company proposes to grant to the Underwriters the option to purchase from the Company up to an additional $112,500,000 principal amount of its 5.00% Convertible Senior Notes due 2015 (the “ Additional Securities ”). The Firm Securities and the Additional Securities are hereinafter collectively sometimes referred to as the “ Securities .” The Securities are described in the Prospectus which is referred to below.

The Securities will be convertible into shares (the “ Underlying Securities ” and sometimes referred to collectively with the Securities as the “ Registered Securities ”) of the Company’s common stock, $0.01 par value (the “ Common Stock ”).

The Securities will be issued under the indenture dated as of February 12, 2010 (the “ Original Indenture ”) between the Company and Wells Fargo Bank, National Association, as trustee (the “ Trustee ”), as supplemented by the second supplemental indenture dated as of May 14, 2012 (the “ Second Supplemental Indenture ”), between the Company and the Trustee (the Original Indenture together with the Second Supplemental Indenture, the “ Indenture ”).

The Company has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “ Securities Act ”), with the Securities and Exchange Commission (the “ Commission ”) an automatic shelf registration statement on Form S-3 (File No. 333-164783), as amended, including a base prospectus, with respect to the Registered Securities, and which incorporates by reference documents which the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “ Exchange Act ”), which registration statement became effective upon filing under Rule 462(e) of the Securities Act. Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus supplement (the “ Prospectus Supplement ”) to the base prospectus included as part of such registration statement setting forth the terms of the offering, sale and plan of distribution of the Securities and additional information concerning the Company and its business. The Company has furnished to Credit Suisse, for use by the Underwriters and by dealers, copies of one or more preliminary prospectuses, containing the base prospectus included as part of such registration statement, as supplemented by a preliminary Prospectus Supplement, and including the documents incorporated in such base prospectus by reference (each, a “ Preliminary Prospectus ”), relating to the Registered Securities. Except where the context otherwise requires, such registration statement, as amended when it became effective, including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act (the “ Securities Act Regulations ”), collectively, are herein called the “ Registration Statement .” The base prospectus, including all documents incorporated by reference therein, included in the Registration Statement, as supplemented by the Prospectus Supplement, in the form filed by the Company with the Commission pursuant to Rule 424(b) and Rule 430B under the Securities Act on or before the second Business Day (as defined below) following the date of this Agreement (or on such other day as the parties may mutually agree), is herein called the “ Prospectus .” The Registration Statement at the time it originally became effective is herein called the “ Original Registration Statement .” The information included in such prospectus that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to Rule 430B is referred to as “ Rule 430B Information .” Any reference herein to the Registration Statement, the Prospectus, any Preliminary Prospectus or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by reference therein, and any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Prospectus or any Preliminary Prospectus shall be deemed to refer to and include the filing after

the execution hereof of any document with the Commission deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Registration Statement, the Prospectus, any Preliminary Prospectus or to any amendment or supplement to any of the foregoing shall be deemed to include any copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval System (“ EDGAR ”), and such copy shall be identical in content to any Prospectus or Preliminary Prospectus delivered to the Underwriters for use in connection with the offering of the Registered Securities.

All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” in the Registration Statement, any Preliminary Prospectus or the Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in or otherwise deemed by Securities Act Regulations to be a part of or included in the Registration Statement, any Preliminary Prospectus or the Prospectus, as the case may be; and all references in this Agreement to amendments or supplements to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any document under the Exchange Act which is incorporated by reference in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be.

The Company and the Underwriters agree as follows:

1. Sale and Purchase . Upon the basis of the warranties and representations and subject to the terms and conditions herein set forth, the Company agrees to issue and sell the Firm Securities to the several Underwriters, and each of the Underwriters, severally and not jointly, agrees to purchase from the Company $750,000,000 of the respective aggregate principal amount Firm Securities set forth opposite the name of such Underwriter in Schedule A annexed hereto at a purchase price of 97.0% of the principal amount thereof. The Company is advised by Credit Suisse that the Underwriters intend (i) to make a public offering of the Securities as soon as the Underwriters deem advisable after this Agreement has been executed and delivered and (ii) initially to offer the Firm Securities upon the terms set forth in the Prospectus. The Underwriters may from time to time increase or decrease the public offering price after the initial public offering to such extent as they may determine.

In addition, the Company hereby grants to the several Underwriters the option to purchase, and upon the basis of the warranties and representations and subject to the terms and conditions herein set forth, the Underwriters shall have the right to purchase, severally and not jointly, from the Company ratably in accordance with the amount of Firm Securities to be purchased by each of them, all or a portion of the Additional Securities as may be necessary to cover over-allotments made in connection with the offering of the Firm Securities, at the same purchase price to be paid by the Underwriters to the Company for the Firm Securities. This option may be exercised by Credit Suisse on behalf of the several Underwriters at any time and from time to time on or before the thirtieth day following the date hereof, by written notice to the Company. Each such notice shall set forth the aggregate amount of Additional Securities as to which the option is being exercised and the date and time when Additional Securities are to be delivered (any such date and time being herein referred to as an “ additional time of purchase ”); provided , however , that an additional time of purchase shall not be (i) earlier than the time of purchase (as defined below) or (ii) later than the tenth Business Day after the date on which the

option shall have been exercised. The amount of Additional Securities to be sold to each Underwriter shall be the amount which bears the same proportion to the aggregate principal amount of Additional Securities being purchased as the amount of Firm Securities set forth opposite the name of such Underwriter on Schedule A hereto bears to the aggregate principal amount of Firm Securities. As used herein “ Business Day ” shall mean a day on which the New York Stock Exchange (the “ NYSE ”) is open for trading and commercial banks in the City of New York are open for business.

2. Payment and Delivery . Payment of the purchase price for the Firm Securities shall be made to the Company by federal funds wire transfer against delivery of the Firm Securities to Credit Suisse through the facilities of the Depository Trust Company (“ DTC ”) for the respective accounts of the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York City time, on May 14, 2012 (unless another time shall be agreed to by Credit Suisse and the Company or unless postponed in accordance with the provisions of Section 8 hereof). The time at which such payment and delivery are actually made is herein sometimes called the “ time of purchase .” Delivery of the Firm Securities and Additional Securities shall be made through the facilities of the DTC and shall be in global form, as one or more global notes representing the Securities, unless Credit Suisse shall otherwise instruct. The Firm Securities so to be delivered or evidence of their issuance will be made available for checking at least 24 hours prior to the time of purchase. Payment of the purchase price for Additional Securities shall be made at each additional time of purchase in the same manner and at the same office as the payment for the Firm Securities. The Additional Securities being purchased on each additional time of purchase or evidence of their issuance will be made available for checking at a reasonable time in advance of such additional time of purchase.

3. Representations and Warranties of the Company . The Company represents and warrants to each of the Underwriters as of the date hereof, the Applicable Time referred to in Section 3(c), as of the time of purchase and, if applicable, at each additional time of purchase that:

(a) (1) At the time of filing the Original Registration Statement, (2) at the time of the most recent amendment thereto for the purposes of complying with Section 10(a)(3) of the Securities Act or otherwise (whether such amendment was by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus), (3) at the time the Company or any person acting on its behalf (within the meaning, for this clause only, of Rule 163(c) of the Securities Act) made any offer relating to the Securities in reliance on the exemption of Rule 163 of the Securities Act and (4) at the date hereof, the Company was and is a “well-known seasoned issuer” as defined in Rule 405 of the Securities Act (“ Rule 405 ”), including not having been and not being an “ineligible issuer” as defined in Rule 405. The Registration Statement is an “automatic shelf registration statement,” as defined in Rule 405, and the Registered Securities, since their registration on the Registration Statement, have been and remain eligible for registration by the Company on a Rule 405 “automatic shelf registration statement”. The Company has not received from the Commission any notice pursuant to Rule 401(g)(2) of the Securities Act objecting to the use of the automatic shelf registration statement form.

At the time of filing the Original Registration Statement, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the Securities Act) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405.

(b) The Original Registration Statement became effective upon filing under Rule 462(e) of the Securities Act on February 8, 2010 and any post-effective amendment thereto also became effective upon filing under Rule 462(e). The Registration Statement has been filed with the Commission and has been deemed effective under the Securities Act. The Company has not received, and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement or any post-effective amendment thereto, or threatening or instituting proceedings for that purpose. Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed. The Prospectus has been or will be so prepared and will be filed pursuant to Rule 424(b) of the Securities Act on or before the second Business Day following the date of this Agreement or on such other day as the parties may mutually agree. The Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Securities Act. Copies of the Registration Statement, the Preliminary Prospectus and the Prospectus, any such amendments or supplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement (including one fully executed copy of each of the Registration Statement and of each amendment thereto for the Underwriters) have been delivered to the Underwriters and their counsel. The Company has not distributed any offering material in connection with the offering or sale of the Securities other than the Registration Statement, the Preliminary Prospectus, the Prospectus, Issuer General Use Free Writing Prospectuses (as defined below) or any other materials, if any, permitted by the Securities Act.

(c) Each part of the Registration Statement, and any post-effective amendment thereto, when such part became effective and at each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the Securities Act or was or is filed with the Commission, and the Prospectus and any amendment or supplement thereto, on the date of filing thereof with the Commission and at the time of purchase and, if applicable, at each additional time of purchase, conformed or will conform in all material respects with the requirements of the Securities Act and the Trust Indenture Act of 1939 (the “ Trust Indenture Act ”). Each part of the Registration Statement, and any post-effective amendment thereto, when such part became effective and at each deemed effective date with respect to the Underwriters or when such part was or is filed with the Commission, did not or will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus, any Preliminary Prospectus and any amendment or supplement thereto, at their respective times of issuance and at the time of purchase and, if applicable, at each additional time of purchase, did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the foregoing shall not apply to statements in, or omissions from, any such document in reliance upon, and in conformity with, written information concerning the Underwriters that was furnished in writing to the Company by Credit Suisse on behalf of the several Underwriters, specifically for use in the preparation thereof.

(d) As of the Applicable Time neither (x) the Issuer General Use Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the Term Sheet (as defined herein) and the Statutory Prospectus (as defined below) as of the Applicable Time, all considered together (collectively, the “ General Disclosure Package ”), nor (y) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

As used in this subsection and elsewhere in this Agreement:

“ Applicable Time ” means 9:00 a.m. (New York City time) on May 9, 2012 or such other time as agreed by the Company and Credit Suisse.

“ Issuer Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433 of the Securities Act (“ Rule 433 ”), relating to the Securities that (i) is required to be filed with the Commission by the Company, (ii) is a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

“ Issuer General Use Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by it being specified in Schedule B hereto.

“ Issuer Limited Use Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

“ Statutory Prospectus ” as of any time means the prospectus relating to the Securities that is included in the Registration Statement immediately prior to that time, including any document incorporated by reference therein.

The Company will prepare a final term sheet (the “ Term Sheet ”) containing only a description of the final terms of the Securities and their offering, in a form approved by the Underwriters and attached as Schedule B hereto, and acknowledges that the Term Sheet is an Issuer General Use Free Writing Prospectus and will comply with its related obligations set forth in Section 3(bb) hereof. The Company will furnish to each Underwriter, without charge, copies of the Term Sheet promptly upon its completion.

Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Securities or until any earlier date that the Company notified or notifies Credit Suisse as described in the next sentence, did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified.

The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Credit Suisse expressly for use therein.

(e) The documents incorporated by reference in the Registration Statement, the Preliminary Prospectus, the Prospectus or any amendment or supplement thereto, when they were or are filed with the Commission under the Securities Act or the Exchange Act, as the case may be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable and, when read together with the other information in the Registration Statement, the General Disclosure Package and the Prospectus (as applicable), (i) at the time the Original Registration Statement became effective, (ii) at the earlier of time the Prospectus was first used and the date and time of the first contract of sale of Securities in this offering and (iii) at the Applicable Time, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(f) The consolidated financial statements of the Company, together with the related schedules and notes thereto, set forth or included or incorporated by reference in the Registration Statement, the General Disclosure Package, and the Prospectus are accurate in all material respects and fairly present the financial condition of the Company on a consolidated basis as of the dates indicated and the results of operations, changes in financial position, stockholders’ equity and cash flows for the periods therein specified are in conformity with generally accepted accounting principles consistently applied throughout the periods involved (except as otherwise stated therein). The selected financial and statistical data included or incorporated by reference in the Registration Statement and the Prospectus present fairly the information shown therein and, to the extent based upon or derived from the financial statements, have been compiled on a basis consistent with the financial statements presented therein. No other financial statements are required to be set forth or to be incorporated by reference in the Registration Statement or the Prospectus under the Securities Act. The interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

(g) The Preliminary Prospectus was, and the Prospectus and the General Disclosure Package delivered to the Underwriters for use in connection with this offering will be, identical to the versions of the Preliminary Prospectus, Prospectus and the General Disclosure Package, respectively, created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T.

(h) The Company and each of the subsidiaries has been duly formed and incorporated and is validly existing as a corporation in good standing under the laws of the state of its formation or incorporation, as applicable, is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or lease of property or assets or the conduct of its business requires such qualification, except where the failure to so qualify would not have a material adverse effect on the business, assets, properties, prospects,

financial condition or results of operation of the Company and its subsidiaries taken as a whole (a “ Material Adverse Effect ”), and has full corporate power and authority necessary to own, hold, lease and/or operate its assets and properties, to conduct the business in which it is engaged and as described in the General Disclosure Package and the Prospectus and to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, and the Company and each of the Subsidiaries (as defined below) is in compliance in all material respects with the laws, orders, rules, regulations and directives issued or administered by such jurisdictions.

(i) The Company has no “significant subsidiaries” (as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act) and does not own, directly or indirectly, any shares of stock or any other equity or long-term debt securities of any corporation or have any equity interest in any firm, partnership, joint venture, association or other entity, except for Fixed Income Discount Advisory Company (“ FIDAC ”), Merganser Capital Management, Inc. (“ Merganser ”), RCap Securities Inc. (“ RCap ” and, together with FIDAC and Merganser, the “ Subsidiaries ”), Shannon Funding LLC, FIDAC Housing Cycle Fund LLC, FHC Master Fund, Ltd., FIDAC FSI LLC, FIDAC Europe Limited, Charlesfort Capital Management LLC, Chimera Investment Corporation (and its wholly owned subsidiaries) (“ Chimera ”) and CreXus Investment Corp. (and its wholly owned subsidiaries) (“ CreXus ”), and as set forth in the Registration Statement, the General Disclosure Package or the Prospectus, or as would not be material to the Company and its subsidiaries on a consolidated basis. For the avoidance of doubt, Chimera and CreXus are not subsidiaries of the Company as such term is used in this Agreement. Complete and correct copies of the articles of incorporation and of the bylaws of the Company and all amendments thereto have been delivered to Credit Suisse and, except as set forth in the exhibits to, or incorporated by reference into, the Registration Statement, no changes therein will be made subsequent to the date hereof and prior to the time of purchase or, if applicable, at each additional time of purchase.

(j) The Company is not in breach of, or in default under (nor has any event occurred which with notice, lapse of time, or both would result in any breach of, or constitute a default under), (i) its articles of incorporation or bylaws or (ii) any obligation, agreement, covenant or condition contained in any contract, license, repurchase agreement, indenture, mortgage, deed of trust, bank loan or credit agreement, note, lease or other evidence of indebtedness, or any lease, contract or other agreement or instrument to which the Company is a party or by which it or any of its assets or properties may be bound or affected, the effect of which breach or default under this clause (ii) could have a Material Adverse Effect. The execution, delivery and performance of this Agreement and the Indenture, the issuance and sale of the Securities, the issuance of the Underlying Securities and the consummation of the transactions contemplated hereby will not conflict with, or result in any breach of, constitute a default under or a Repayment Event (as defined below) under (nor constitute any event which with notice, lapse of time, or both would result in any breach of, constitute a default under or a Repayment Event under), (i) any provision of the articles of incorporation or bylaws of the Company, (ii) any provision of any contract, license, repurchase agreement, indenture, mortgage, deed of trust, bank loan or credit agreement, note, lease or other evidence of indebtedness, or any lease, contract or other agreement or instrument to which the Company is a party or by which the Company or any of its assets or properties may be bound or affected, the effect of which could have a Material Adverse Effect, or (iii) under any federal, state, local or foreign law, regulation

or rule or any decree, judgment or order applicable to the Company. As used herein, a “ Repayment Event ” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any subsidiary.

(k) All of the issued and outstanding shares of capital stock, including the Common Stock of the Company, have been duly and validly authorized and issued and are fully paid and non-assessable, have been issued in compliance with all federal and state securities laws and were not issued in violation of any preemptive right, resale right, right of first refusal or similar right.

(l) This Agreement has been duly authorized, executed and delivered by the Company.

(m) The Indenture has been duly authorized by the Company and upon effectiveness of the Registration Statement and at the time of purchase and on any additional time of purchase, as the case may be, was or will have been duly qualified under the Trust Indenture Act and, when duly executed and delivered, will (assuming due execution and delivery by the Trustee) constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles; and the Indenture conforms in all material respects to the description thereof contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(n) The Securities will be in the form contemplated by the Indenture, have been duly authorized for issuance and sale pursuant to this Agreement and the Indenture and, at the time of purchase, or any additional time of purchase, as the case may be, will have been duly executed by the Company and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles; and the Securities conform in all material respects to the description thereof contained in the the Registration Statement, the General Disclosure Package and the Prospectus.

(o) The capital stock of the Company, including the Underlying Securities, conforms and will conform in all material respects to the description thereof contained in the Registration Statement, General Disclosure Package and the Prospectus and such description conforms to the rights set forth in the instruments defining the same. The certificates for the Common Stock are in due and proper form and the holders of the Common Stock will not be subject to personal liability by reason of being such holders.

(p) The Underlying Securities have been duly and validly authorized by the Company and reserved for issuance pursuant to this Agreement and, when issued and delivered upon conversion of the Securities as provided in the Indenture, will be duly and validly issued

and fully paid and non-assessable, free and clear of any pledge, lien, encumbrance, security interest or other claim, and will be registered pursuant to Section 12 of the Exchange Act.

(q) No approval, authorization, consent or order of or filing with any national, state or local governmental or regulatory commission, board, body, authority or agency is required in connection with the issuance and sale of the Securities, the execution of the Indenture, the issuance of the Underlying Securities or the consummation by the Company of the transaction contemplated hereby other than (i) registration of the Securities and the Underlying Securities under the Securities Act, (ii) any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the Securities are being offered by the Underwriters, or (iii) such approvals as have been obtained or will be obtained prior to the time of purchase of the Securities in connection with the approval of the listing of the Underlying Securities on NYSE.

(r) No person, as such term is defined in Rule 1-02 of Regulation S-X promulgated under the Securities Act (each, a “ Person ”), has the right, contractual or otherwise, to cause the Company to issue to it any shares of capital stock or other securities of the Company upon the issue and sale of the Securities to the Underwriters hereunder or the issuance of the Underlying Securities, nor does any Person have preemptive rights, co-sale rights, rights of first refusal or other rights to purchase or subscribe for any of the Common Stock or any securities or obligations convertible into or exchangeable for, or any contracts or commitments to issue or sell any of, the Common Stock or any options, rights or convertible securities or obligations, other than those that have been expressly waived prior to the date hereof.

(s) Deloitte & Touche LLP (“ Deloitte ”), whose report on the consolidated financial statements of the Company as of and for the three years in the period ending December 31, 2011 is filed with the Commission as part of the Registration Statement and the Prospectus, were, during the periods covered by their reports, the independent public accountants as required by the Securities Act. Ernst & Young LLP (“ Ernst & Young ”) are the independent public accountants as required by the Securities Act beginning with the period ending March 31, 2012.

(t) Each of the Company and the subsidiaries has all necessary licenses, authorizations, consents and approvals and has made all necessary filings required under any federal, state, local or foreign law, regulation or rule, and has obtained all necessary permits, authorizations, consents and approvals from other Persons, in order to conduct its business as described in the General Disclosure Package and the Prospectus, except as such as could not have a Material Adverse Effect. Neither the Company nor any of the subsidiaries is required by any applicable law to obtain accreditation or certification from any governmental agency or authority in order to provide the products and services which it currently provides or which it proposes to provide as set forth in the General Disclosure Package and the Prospectus except as such could not have a Material Adverse Effect. Neither the Company nor any of its subsidiaries is in violation of, or in default under, any such license, permit, authorization, consent or approval or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to the Company or any of its subsidiaries, the effect of which could have a Material Adverse Effect.

(u) The descriptions in the Registration Statement, the General Disclosure Package and the Prospectus of the legal or governmental proceedings, contracts, leases and other legal documents therein described present fairly the information required to be shown, and there are no legal or governmental proceedings, contracts, leases, or other documents of a character required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement which are not described or filed as required. All agreements between the Company and third parties expressly referenced in the General Disclosure Package and Prospectus are legal, valid and binding obligations of the Company, as applicable, enforceable in accordance with their respective terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles.

(v) Except as set forth in the Registration Statement, General Disclosure Package and the Prospectus, there are no actions, suits, claims, investigations, inquiries or proceedings pending or, to the best of the Company’s knowledge, threatened to which the Company or any of its officers or directors is a party or of which any of its properties or other assets is subject at law or in equity, or before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency which could result in a judgment, decree or order having a Material Adverse Effect.

(w) Subsequent to the respective dates as of which information is given in the Registration Statement, the General Disclosure Package (including as of the Applicable Time), and the Prospectus, there has not been (i) any material adverse change, or any development which would reasonably be expected to cause a material adverse change, in the business, properties or assets described or referred to in the Registration Statement, the General Disclosure Package, or the Prospectus, or the results of operations, condition (financial or otherwise), net worth, business, prospects or operations of the Company and the subsidiaries taken as a whole, (ii) any transaction which is material to the Company and the subsidiaries, taken as a whole, except transactions in the ordinary course of business, (iii) any obligation, direct or contingent, which is material to the Company and the subsidiaries taken as a whole, incurred by the Company or any subsidiary, except obligations incurred in the ordinary course of business, (iv) any change in the capital stock or, except in the ordinary course of business, outstanding indebtedness of the Company or any subsidiary, or (v) except for regular quarterly dividends on the shares of Series A cumulative redeemable preferred stock, the Series B cumulative convertible preferred stock, and Common Stock in amounts per share that are consistent with past practice, any dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. There are no contingent obligations that are material to the Company and its subsidiaries taken as a whole which are not disclosed in the Registration Statement, the General Disclosure Package, or the Prospectus.

(x) Except as set forth in the Registration Statement, General Disclosure Package and the Prospectus, there are no Persons with registration or other similar rights to have any equity or debt securities, including securities which are convertible into or exchangeable for equity securities, registered pursuant to the Registration Statement or otherwise registered by the Company under the Securities Act.

(y) The Company (i) does not have any issued or outstanding preferred stock, other than the Series A cumulative redeemable preferred stock, and (ii) has not defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long term leases, which defaults would have a Material Adverse Effect on the financial position of the Company and the subsidiaries, taken as a whole. The Company has not filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of its last Annual Report on Form 10-K, indicating that it (i) has failed to pay any dividend or sinking fund installment on preferred stock or (ii) has defaulted on any installment on indebtedness for borrowed money or on any rental on one or more long term leases, which defaults would have a Material Adverse Effect.

(z) Neither the Company nor any of its officers, directors and controlling Persons have, directly or indirectly, (i) taken any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Common Stock to facilitate the sale of the Securities, or (ii) since May 8, 2012 (except pursuant to this Agreement, pursuant to an underwriting agreement in connection with the concurrent offering of the Company’s Series C Cumulative Redeemable Preferred Stock (the “ Series C Preferred Stock ”)and shares of the Company’s Common Stock issued pursuant to the Company’s dividend reinvestment and share purchase plan (the “ DRSPP ”)) (A) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, the Securities or (B) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

(aa) The Company has applied to have the Underlying Securities listed on the NYSE, and the Underlying Securities will have been approved for listing on the NYSE as of the time of purchase, subject only to official notice of issuance.

(bb) Neither the Company nor any of its affiliates, except for RCap Securities, Inc., (i) is required to register as a “broker” or “dealer” in accordance with the provisions of the Exchange Act or (ii) directly or indirectly through one or more intermediaries, controls or has any other association with (within the meaning of Article I of the Bylaws of the Financial Industry Regulatory Authority (“ FINRA ”)) any member firm of FINRA.

(cc) Any certificate signed by any officer of the Company delivered to Credit Suisse or to counsel for the Underwriters pursuant to or in connection with this Agreement shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby.

(dd) As of the date of this Agreement, the Company has no plan or intention to materially alter its capital investment policy or investment allocation strategy, both as described in the General Disclosure Package and the Prospectus, and is in compliance with its stated capital investment policy and investment allocation strategy. Each of the Company and the subsidiaries has good and marketable title to all of the properties and assets owned by them, in each case free and clear of any security interests, liens, encumbrances, equities, claims and other defects (except for any security interest, lien, encumbrance or claim that may otherwise exist under any applicable repurchase agreement), except such as do not have a Material Adverse Effect and do not interfere with the use made or proposed to be made of such property or asset by the Company or any subsidiary, and except as described in or contemplated by the Prospectus and the General

Disclosure Package. The Company owns no real property. Any real property and buildings held under lease by the Company are held under valid, existing and enforceable leases, with such exceptions as are disclosed in the General Disclosure Package and the Prospectus or are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Company.

(ee) The Company has filed all federal, state and foreign income and franchise tax returns required to be filed on or prior to the date hereof and has paid taxes shown as due thereon (or that are otherwise due and payable), other than taxes which are being contested in good faith and for which adequate reserves have been established in accordance with generally accepted accounting principles. The Company has no knowledge, after due inquiry, of any tax deficiency which has been asserted or threatened against the Company. To the knowledge of the Company, there are no tax returns of the Company that are currently being audited by federal, state or local taxing authorities or agencies which would have a Material Adverse Effect.

(ff) The Company owns or possesses adequate license or other rights to use all patents, trademarks, service marks, trade names, copyrights, software and design licenses, trade secrets, manufacturing processes, other intangible property rights and know-how (collectively, “ Intangibles ”) necessary to entitle the Company to conduct its business as described in the General Disclosure Package and the Prospectus, and the Company has not received notice of infringement of or conflict with (and the Company knows of no such infringement of or conflict with) asserted rights of others with respect to any Intangibles which could have a Material Adverse Effect.

(gg) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles as applied in the United States and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences and (v) the interactive data in eXtensible Business Reporting Language incorporated by reference in the Registration Statement, the Prospectus and any Permitted Free Writing Prospectus fairly presents the information called for in all material respects and is prepared in accordance with the Commission’s rules and guidelines applicable thereto.

(hh) The Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company is made known to the Company’s Chief Executive Officer and its Chief Financial Officer, and such disclosure controls and procedures are effective to perform the functions for which they were established; any significant material weaknesses in internal controls have been identified for the Company’s Chief Executive Officer and its Chief Financial Officer; and since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls.

(ii) The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the business in which it is engaged. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

(jj) Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the Company is not in violation, and has not received notice of any violation with respect to, any applicable environmental, safety or similar law applicable to the business of the Company. The Company has received all permits, licenses or other approvals required of them under applicable federal and state occupational safety and health and environmental laws and regulations to conduct its business, and the Company is in compliance with all terms and conditions of any such permit, license or approval, except any such violation of law or regulation, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals which could not, singly or in the aggregate, have a Material Adverse Effect.

(kk) Neither the Company nor any of the subsidiaries has incurred any liability for any finder’s fees or similar payments in connection with the transactions herein contemplated (except for the transactions contemplated by the concurrent offering of the Series C Preferred Stock), except as may otherwise exist with respect to the Underwriters pursuant to this Agreement.

(ll) Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there are no existing or threatened labor disputes with the employees of the Company which are likely to have individually or in the aggregate a Material Adverse Effect.

(mm) No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers and stockholders of the Company, on the other hand, which is required by the Securities Act to be described in the Registration Statement and the Prospectus that is not so described.

(nn) The Company, since its date of inception, has been, and upon the sale of the Securities will continue to be, organized and operated in conformity with the requirements for qualification and taxation as a “real estate investment trust” (a “ REIT ”) under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended and the regulations and published interpretations thereunder (collectively, the “ Code ”), for all taxable years commencing with its taxable year ended December 31, 1997. The proposed method of operation of the Company as described in the General Disclosure Package and the Prospectus will enable the Company to continue to meet the requirements for qualification and taxation as a REIT under the Code, and no actions have been taken (or not taken which are required to be taken) which would cause such qualification to be lost. The Company intends to continue to operate in a manner which would permit it to qualify as a REIT under the Code. The Company has no intention of changing its operations or engaging in activities which would cause it to fail to qualify, or make economically undesirable its continued qualification, as a REIT.

(oo) Neither the Company nor any subsidiary is and, after giving effect to the offering and sale of the Securities, will be required to register as an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “ Investment Company Act ”).

(pp) To the Company’s knowledge, no relationship, direct or indirect, exists between or among the Company or any subsidiary, on the one hand, and the officers, 5% stockholders or directors of the Company or any subsidiary, on the other hand, which is required by the rules of FINRA to be described in the Registration Statement and the Prospectus which is not so described.

(qq) The Company has not, directly or indirectly, including through any subsidiary, extended credit, arranged to extend credit, or renewed any extension of credit, in the form of a personal loan, to or for any director or executive officer of the Company, or to or for any family member or affiliate of any director or executive officer of the Company.

(rr) Neither the Company nor any of the subsidiaries nor, to the Company’s knowledge, any employee or agent of the Company or the subsidiaries has made any payment of funds of the Company or the subsidiaries or received or retained any funds in violation of any law, rule or regulation, which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement or the Prospectus.

(ss) The Company is in compliance with all presently applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder (the “ Sarbanes-Oxley Act ”) and is actively taking steps to ensure that it will be in compliance with other applicable provisions of the Sarbanes-Oxley Act upon the effectiveness of such provisions.

(tt) The Company has in place policies and procedures reasonably designed to ensure that its and its Subsidiaries’ operations are, and has no reason to believe said operations are not being conducted, and have been conducted at all times during the past five years in material compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the applicable money laundering statutes of all jurisdictions, the applicable rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”) and, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is, to the knowledge of the Company, pending or threatened.

(uu) The Registration Statement is not the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the Securities Act, and the Company is not the subject of a pending proceeding under Section 8A of the Securities Act in connection with the offering of the Securities.

4. Certain Covenants of the Company . The Company hereby covenants and agrees with each of the Underwriters that:

(a) The Company will furnish such information as may be required and otherwise will cooperate in qualifying the Registered Securities for offering and sale under the securities or blue sky laws of such jurisdictions (both domestic and foreign) as Credit Suisse may designate and to maintain such qualifications in effect so long as required for the distribution of the Registered Securities, provided that the Company shall not be required to qualify as a foreign corporation or to consent to the service of process under the laws of any such jurisdiction (except service of process with respect to the offering and sale of the Securities). The Company will promptly advise Credit Suisse of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registered Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose.

(b) The Company will prepare the Prospectus in a form in compliance with Rule 430B and approved by the Underwriters and file such Prospectus with the Commission pursuant to Rule 424(b) under the Securities Act not later than 10:00 A.M. (New York City time), on or before the second Business Day following the date of this Agreement or on such other day as the parties may mutually agree and to furnish promptly (and with respect to the initial delivery of such Prospectus, not later than 10:00 A.M. (New York City time) on or before the second Business Day following the date of this Agreement or on such other day as the parties may mutually agree) to the Underwriters copies of the Prospectus (or of the Prospectus as amended or supplemented if the Company shall have made any amendments or supplements thereto after the effective date of the Registration Statement) in such quantities and at such locations as the Underwriters may reasonably request for the purposes contemplated by the Securities Act, which the Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the version created to be transmitted to the Commission for filing via EDGAR, except to the extent permitted by Regulation S-T.

(c) The Company will advise Credit Suisse immediately, confirming such advice in writing, of (i) the receipt of any comments from the Commission relating to any filing of the Company under the Securities Act or the Exchange Act, (ii) any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information with respect thereto, (iii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or of any examination pursuant to Section 8(e) of the Securities Act concerning the Registration Statement, (iv) the suspension of the qualification of the Registered Securities for offering or sale in any jurisdiction, (v) the initiation, threatening or contemplation of any proceedings for any of such purposes and, if the Commission or any other governmental agency or authority should issue any such order, the Company will make every reasonable effort to obtain the lifting or removal of such order as soon as possible, in each case until such time that all of the Securities have been resold by the Underwriters as contemplated by the Prospectus. The Company will advise Credit Suisse promptly of any proposal to amend or supplement the Registration Statement or the Prospectus including by filing any documents that would be incorporated by reference therein, and will furnish Credit Suisse with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which Credit Suisse or counsel for the Underwriters shall object in writing, in each case until such time that all of the Securities have been resold by the Underwriters as contemplated by the Prospectus. The Company has given Credit Suisse notice of any filings

made pursuant to the Exchange Act within 48 hours prior to the Applicable Time; the Company will give Credit Suisse notice of its intention to make any such filing from the Applicable Time to the time of purchase and, if applicable, each additional time of purchase, and will furnish Credit Suisse with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which Credit Suisse or counsel for the Underwriters shall object in writing.

(d) The Company will advise Credit Suisse promptly and, if requested by Credit Suisse, will confirm such advice in writing when any post-effective amendment to the Registration Statement becomes effective under the Securities Act until such time that all of the Securities have been resold by the Underwriters as contemplated by the Prospectus.

(e) Between the date hereof and May 14, 2012, the Company will not take or authorize any action that would result in an adjustment of the conversion price of the Securities pursuant to the terms of the Securities described in the Prospectus and the General Disclosure Package under the captions “Description of the Notes—Conversion Rights—Conversion Right Adjustments”.

(f) The Company will furnish to Credit Suisse, and upon request to each of the other Underwriters for a period of five years from the date of this Agreement (i) copies of any reports or other communications which the Company shall send to its stockholders or shall from time to time publish or publicly disseminate, (ii) copies of all annual, quarterly and current reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be designated by the Commission, (iii) copies of documents or reports filed with any national securities exchange on which any class of securities of the Company is listed, and (iv) such other information as Credit Suisse may reasonably request regarding the Company, in each case as soon as such communications, documents or information become available.

(g) The Company will advise Credit Suisse promptly of the happening of any event known to the Company within the time during which a Prospectus relating to the Registered Securities is required to be delivered under the Securities Act which would require the making of any change in the Prospectus then being used, or in the information incorporated by reference therein, so that the Prospectus would not include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the Prospectus to comply with any law. If within the time during which a Prospectus relating to the Registered Securities is required to be delivered under the Securities Act any event shall occur or condition shall exist which, in the reasonable opinion of the Company, Credit Suisse or their respective counsel, would require the making of any change in the Prospectus then being used, or in the information incorporated by reference therein, so that the Prospectus would not include an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the Prospectus to comply with any law, the Company will notify Credit Suisse and promptly prepare and furnish to the Underwriters copies of the proposed amendment or supplement before filing any such amendment or supplement with the Commission and thereafter promptly furnish, at the

Company’s own expense, to the Underwriters and to dealers copies in such quantities and at such locations as Credit Suisse may from time to time reasonably request of an appropriate amendment to the Registration Statement or supplement to the Prospectus so that the Prospectus as so amended or supplemented will not, in the circumstances when it is so delivered, be misleading or so that the Prospectus will comply with the law. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement relating to the Registered Securities or the Statutory Prospectus or any preliminary prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances, prevailing at that subsequent time, not misleading, the Company will promptly notify Credit Suisse and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

(h) The Company will make generally available to its stockholders as soon as practicable, and in the manner contemplated by Rule 158 of the Securities Act but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement (which need not be audited) covering a 12-month period beginning after the date upon which the Prospectus is filed pursuant to Rule 424(b) under the Securities Act that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder and will advise the Underwriters in writing when such statement has been made available.

(i) The Company will furnish to Credit Suisse a signed copy of the Registration Statement, as initially filed with the Commission, and of all amendments thereto (including all exhibits thereto and documents incorporated by reference therein) and such number of conformed copies of the foregoing (other than exhibits) as Credit Suisse may reasonably request.

(j) The Company will apply the net proceeds from the sale of the Securities in the manner set forth under the caption “Use of Proceeds” in the Prospectus.

(k) The Company will furnish to Credit Suisse, not less than two Business Days before a filing with the Commission during the period referred to in subsection (f) above until such time that all of the Securities have been resold by the Underwriters as contemplated by the Prospectus, a copy of any document proposed to be filed pursuant to Section 13, 14 or 15(d) of the Exchange Act and during such period will file all such documents in a manner and within the time periods required by the Exchange Act.

(l) The Company will not sell, offer, contract to sell, pledge, register, grant any option to purchase or otherwise dispose of, directly or indirectly, any shares of capital stock, or any securities convertible into, or exercisable, exchangeable or redeemable for shares of capital stock, except for the sales to the Underwriters pursuant to this Agreement and except for issuances of Common Stock upon the exercise of options outstanding and disclosed in the Company’s Form 10-Q for the quarter ended March 31, 2012, for a period of 30 days after the date hereof, without the prior written consent of Credit Suisse. The foregoing sentence shall not apply to (i) the Underlying Securities pursuant to the conversion of the Securities, (ii) the

issuance of common stock or options pursuant to the Company’s long term stock incentive plans as currently in effect (or the filing of a Form S-8 related to such plans) or pursuant to the exercise of employee stock options or other awards, (iii) the issuance of common stock pursuant to the DRSPP or any successor dividend reinvestment or share purchase plan (or the filing of a Form S-3 related to such a plan) and (iv) the sale of Series C Preferred Stock (or issuance of any Common Stock upon conversion of the Series C Preferred Stock). For the avoidance of doubt, the Company will not be prohibited from issuing Common Stock upon the election by a holder of the Company’s 4% Convertible Senior Notes due 2015 (the “ 2015 Notes ”) to convert the 2015 Notes into Common Stock. Notwithstanding the foregoing, if (1) during the last 17 days of the 30-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the 30-day restricted period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the 30-day restricted period, the restrictions imposed in this subsection (l) shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

(m) The Company will use its best efforts to cause each officer and director of the Company to furnish to Credit Suisse, prior to the time of purchase, a letter or letters, substantially in the form of Exhibit B hereto, pursuant to which each such person shall agree, subject to certain exceptions set forth therein, not to sell, offer, contract to sell, pledge, grant any option to purchase or otherwise dispose of, directly or indirectly, any shares of capital stock, or any securities convertible into, or exercisable, exchangeable or redeemable for shares of capital stock of the Company for a period of 30 days after the date hereof, without the prior written consent of Credit Suisse.

(n) The Company will use its best efforts to cause the Underlying Securities to be listed on the NYSE and to maintain such listing and to file with the NYSE all documents and notices required by the NYSE of companies that have securities that are listed on the NYSE.

(o) The Company will reserve and keep available at all times, free of pre-emptive rights, the full number of Underlying Securities.

(p) The Company will maintain and keep accurate books and records reflecting their assets and maintain internal accounting controls which provide reasonable assurance that (i) transactions are executed in accordance with management’s authorization, (ii) transactions are recorded as necessary to permit the preparation of the Company’s consolidated financial statements and to maintain accountability for the assets of the Company, (iii) access to the assets of the Company is permitted only in accordance with management’s authorization and (iv) the recorded accounts of the assets of the Company are compared with existing assets at reasonable intervals.

(q) The Company will maintain, at its expense, a registrar and transfer agent for the Common Stock.

(r) The Company will pay all expenses, fees and taxes (other than any fees and disbursements of counsel for the Underwriters, except as set forth under Section 5 hereof or

(iv) or (vi) below) in connection with (i) the preparation and filing of the Registration Statement, each Preliminary Prospectus, the Prospectus, any Permitted Free Writing Prospectus and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to the Underwriters and to dealers (including costs of mailing and shipment), (ii) the issuance, sale and delivery of the Securities by the Company, (iii) any fees charged by rating agencies for rating the Securities, if any, (iv) the word processing and/or printing of this Agreement, any agreement among the Underwriters, any dealer agreements, and the reproduction and/or printing and furnishing of copies of each thereof to the Underwriters and to dealers (including costs of mailing and shipment), (v) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of aircraft and other transportation chartered in connection with the road show, except that the lodging, airfare (except if the Company charters a flight in which case employees of the Underwriters ride on such charter without charge), and incidental expenses of employees of the Underwriters shall be the responsibility of the Underwriters, (vi) the qualification of the Securities for offering and sale under state laws and the determination of their eligibility for investment under state law as aforesaid (including the legal fees and filing fees and other disbursements of counsel to the Underwriters) and the preparation, printing and furnishing of copies of any blue sky surveys or legal investment surveys to the Underwriters and to dealers, (vii) any listing of the Underlying Securities on the NYSE and any registration thereof under the Exchange Act and the approval for book-entry transfer by DTC, (viii) the filing, if any, for review of the public offering of the Underlying Securities by FINRA, (ix) the performance of the Company’s other obligations hereunder, (x) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, and (xi) the costs and expenses (including without limitation any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the first paragraph of Section 3(d) .

(s) The Company will not, prior to termination of the underwriting syndicate contemplated by this Agreement, (i) take, directly or indirectly, any action designed to stabilize or manipulate the price of any security of the Company, or which may cause or result in, or which might in the future reasonably be expected to cause or result in, the stabilization or manipulation of the price of any security of the Company, to facilitate the sale or resale of any of the Securities, (ii) sell, bid for, purchase or pay any Person (other than as contemplated by the provisions hereof) any compensation for soliciting purchases of the Securities, or (iii) pay or agree to pay to any Person any compensation for soliciting any order to purchase any other securities of the Company, provided that nothing contained in this Agreement shall prohibit the Company from using the proceeds from the sale of the Securities to retire the Company long-term indebtedness as described in the Prospectus to the extent it would be in compliance with law in all material respects, including pursuant to Regulation M under the Securities Act.

(t) The Company will not invest in futures contracts, options on futures contracts or options on commodities unless the Company is exempt from the registration

requirements of the Commodity Exchange Act, as amended, or otherwise complies with the Commodity Exchange Act, as amended. In addition, the Company will not engage in any activities which might be subject to the Commodity Exchange Act, as amended, unless such activities are exempt from that Act or otherwise comply with that Act or with an applicable no-action letter to the Company from the Commodities Futures Trading Commission.

(u) The Company will comply with all of the provisions of any undertakings in the Registration Statement.

(v) The Company has been organized and operated in conformity with the requirements for qualification and taxation of the Company as a REIT under the Code, and the Company’s proposed methods of operation will enable the Company to continue to meet the requirements for qualification and taxation as a REIT under the Code for subsequent taxable years.

(w) The Company will not be or become, at any time prior to the expiration of three years after the date of the Agreement, required to register as an “investment company,” as such term is defined in the Investment Company Act.

(x) The Company has retained Ernst & Young as its qualified accountants and qualified tax experts beginning with the period ending March 31, 2012, (i) to test procedures and conduct annual compliance reviews designed to determine compliance with the REIT provisions of the Code and the Company’s exempt status under the Investment Company Act and (ii) to otherwise assist the Company in monitoring appropriate accounting systems and procedures designed to determine compliance with the REIT provisions of the Code and the Company’s exempt status under the Investment Company Act.

(y) The Company will comply with all requirements imposed upon it by the Securities Act, Exchange Act and the Trust Indenture Act as from time to time in force, so far as necessary to permit the continuance of sales of, or dealings in, the Securities as contemplated by the provisions hereof and the Prospectus.

(z) The Company will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company is made known to them by others within those entities, particularly during the period in which such periodic reports are being prepared.

(aa) The Company will comply with all effective applicable provisions of the Sarbanes-Oxley Act.

(bb) The Company represents and agrees that, unless it obtains the prior consent of Credit Suisse, and each Underwriter represents and agrees that, unless it obtains the prior consent of the Company and Credit Suisse, it has not made and will not make any offer relating to the Securities that would constitute an “issuer free writing prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission or, in the case of the Company, whether or not required to be filed with the Commission; provided, however, that prior to the preparation of the Prospectus in accordance with Section 4(b), the Underwriters are authorized to use the information with respect to the final terms of the Securities in communications conveying information relating to the offering to investors, including the Term Sheet. Any such free writing prospectus consented to by the Company and Credit Suisse is hereinafter referred to as a “ Permitted Free Writing Prospectus .” The Company represents that it has treated or agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping.

5. Reimbursement of Underwriters’ Expenses . If the Securities are not delivered for any reason other than the termination of this Agreement pursuant to the default by one or more of the Underwriters in its or their respective obligations hereunder, the Company shall, in addition to paying the amounts described in Section 4(r) hereof, reimburse the Underwriters for all of their out-of-pocket expenses, including the fees and disbursements of their counsel.

6. Conditions of Underwriters’ Obligations . The several obligations of the Underwriters hereunder are subject to the accuracy of the representations and warranties on the part of the Company on the date hereof, at the Applicable Time and at the time of purchase (and the several obligations of the Underwriters at each additional time of purchase are subject to the accuracy of the representations and warranties on the part of the Company on the date hereof, at the Applicable Time and at the time of purchase (unless previously waived) and at each additional time of purchase, as the case may be), the performance by the Company of its obligations hereunder and to the following additional conditions precedent:

(a) The Company shall furnish to Credit Suisse at the time of purchase and at each additional time of purchase, as the case may be, opinions of K&L Gates LLP, counsel for the Company, addressed to the Underwriters, and dated the time of purchase or each additional time of purchase, as the case may be, with reproduced copies for each of the other Underwriters and in form satisfactory to Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for the Underwriters, substantially in the form of Exhibit A attached hereto.

(b) Credit Suisse shall have received from each of Deloitte and Ernst & Young, letters dated, respectively, the date of this Agreement and the time of purchase and each additional time of purchase, as the case may be, and addressed to the Underwriters (with reproduced copies for each of the Underwriters) in the forms heretofore approved by Credit

Suisse relating to the financial statements, including any pro forma financial statements of the Company and such other matters customarily covered by comfort letters issued in connection with a registered public offering.

In the event that the letters referred to above set forth any such changes, decreases or increases, it shall be a further condition to the obligations of the Underwriters that (i) such letters shall be accompanied by a written explanation of the Company as to the significance thereof, unless Credit Suisse deems such explanation unnecessary, and (ii) such changes, decreases or increases do not, in the sole judgment of Credit Suisse, make it impractical or inadvisable to proceed with the purchase and delivery of the Securities as contemplated by the Registration Statement and the Prospectus.

(c) Credit Suisse shall have received at the time of purchase and at each additional time of purchase, as the case may be, the favorable opinion of Fried, Frank, Harris, Shriver & Jacobson LLP, counsel for the Underwriters, dated the time of purchase or each additional time of purchase, as the case may be.

(d) No amendment or supplement to the Registration Statement or the Prospectus, including the documents deemed to be incorporated by reference therein, or Issuer Free Writing Prospectus shall be filed to which the Underwriters object in writing.

(e) Prior to the time of purchase or each additional time of purchase, as the case may be, (i) no stop order with respect to the effectiveness of the Registration Statement shall have been issued under the Securities Act or proceedings initiated under Section 8(d) or 8(e) of the Securities Act; (ii) the Registration Statement and all amendments thereto, or modifications thereof, if any, shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (iii) the Prospectus and all amendments or supplements thereto, or modifications thereof, if any, and the General Disclosure Package shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

(f) All filings with the Commission required by Rule 424 under the Securities Act to have been filed by the time of purchase or each additional time of purchase, as the case may be, shall have been made within the applicable time period prescribed for such filing by Rule 424 (without reliance on Rule 424(b)(8)). A prospectus containing the Rule 430B Information shall have been filed with the Commission in accordance with Rule 424(b) (or a post effective amendment providing such information shall have been filed and declared effective in accordance with the requirements of Rule 430B).

(g) Between the time of execution of this Agreement and the time of purchase or each additional time of purchase, as the case may be, (i) no material and unfavorable change, financial or otherwise (other than as referred to in the Registration Statement, and the Prospectus and the General Disclosure Package, in each case as of the Applicable Time), in the business, condition, net worth or prospects of the Company and the subsidiaries, taken as a whole, shall occur or become known and (ii) no transaction which is material and unfavorable to the

Company or any of the subsidiaries, taken as a whole, shall have been entered into by the Company or any of the subsidiaries.

(h) The Company will, at the time of purchase or each additional time of purchase, as the case may be, deliver to Credit Suisse a certificate of two of its executive officers to the effect that the representations and warranties of the Company as set forth in this Agreement are true and correct as of each such date, that the Company shall perform such of its obligations under this Agreement as are to be performed at or before the time of purchase and at or before each additional time of purchase, as the case may be, and that the conditions set forth in subsections (e) and (g) of this Section 6 have been met.

(i) The Company shall have furnished to Credit Suisse such other documents and certificates as to the accuracy and completeness of any statement in the Registration Statement and the Prospectus as of the time of purchase and each additional time of purchase, as the case may be, as Credit Suisse may reasonably request.

(j) The Underlying Securities shall have been approved for listing on the NYSE, subject only to notice of issuance at or prior to the time of purchase or each additional time of purchase, as the case may be.

(k) FINRA shall not have raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements.

(l) Credit Suisse shall have received lock-up agreements from the Company and its officers and directors, in the form of Exhibit B attached hereto, and such letter agreements shall be in full force and effect.

(m) Between the time of execution of this Agreement and the time of purchase or each additional time of purchase, as the case may be, there shall not have occurred any downgrading, nor shall any notice or announcement have been given or made of (i) any intended or potential downgrading or (ii) any review or possible change that does not indicate an improvement, in the rating accorded any securities of or guaranteed by the Company by any “nationally recognized statistical rating organization,” as that term is defined under Section 3(a)(62) of the Exchange Act.

(n) The Company will, at the time of purchase or each additional time of purchase, as the case may be, deliver to Credit Suisse a certificate of its Chief Financial Officer, in form and substance reasonably satisfactory to Credit Suisse, covering certain financial matters of the Company.

7. Termination . The obligations of the several Underwriters hereunder shall be subject to termination in the absolute discretion of Credit Suisse, at any time prior to the time of purchase or, if applicable, each additional time of purchase, (i) if any of the conditions specified in Section 6 shall not have been fulfilled when and as required by this Agreement to be fulfilled, (ii) if any material adverse and unfavorable change occurs (financial or otherwise), or any development involving a material adverse and unfavorable change occurs (financial or otherwise) (in each case, other than as disclosed in, or incorporated by reference into, the Registration Statement, the General Disclosure Package, and the Prospectus as of the Applicable

Time (exclusive of any supplement thereto)), in the operations, business, net worth, condition or prospects of the Company and its subsidiaries, taken as a whole, or a material change in management of the Company occurs, whether or not arising in the ordinary course of business, which would, in the sole judgment of Credit Suisse, make it impracticable to market the Securities, (iii) if (a) the United States shall have declared war in accordance with its constitutional processes or there has occurred an outbreak or escalation of hostilities or other national or international calamity or crisis or change or development in economic, political or other conditions the effect of which on, or (b) any material adverse change in the financial markets of the United States or the international financial markets is such as to make it, in the sole judgment of Credit Suisse, impracticable or inadvisable to market the Securities or enforce contracts for the sale of the Securities, (iv) if trading in any securities of the Company has been suspended or materially limited by the Commission or by the NYSE, or if trading generally on the NYSE, American Stock Exchange or in the Nasdaq National Market has been suspended, materially limited, (including an automatic halt in trading pursuant to market-decline triggers other than those in which solely program trading is temporarily halted), or limitations on or minimum prices for trading (other than limitations on hours or numbers of days of trading) shall have been fixed, or maximum ranges for prices for securities have been required, by such exchange or FINRA or Nasdaq or by order of the Commission or any other governmental authority, (v) if a banking moratorium shall have been declared by New York or United States authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (vi) if there shall have occurred any downgrading, or any notice or announcement shall have been given or made of (a) any intended or potential downgrading or (b) any review or possible change that does not indicate an improvement, in the rating accorded any securities of or guaranteed by the Company by any “nationally recognized statistical rating organization,” as that term is defined under Section 3(a)(62) of the Exchange Act, (vii) if any federal or state statute, regulation, rule or order of any court or other governmental authority has been enacted, published, decreed or otherwise promulgated which, in the reasonable opinion of Credit Suisse, materially adversely affects or will materially adversely affect the business or operations of the Company, or (viii) if any action has been taken by any federal, state or local government or agency in respect of its monetary or fiscal affairs which, in the reasonable opinion of Credit Suisse, has a material adverse effect on the securities markets in the United States.

If Credit Suisse elects to terminate this Agreement as provided in this Section 7 , the Company and each other Underwriter shall be notified promptly by telephone, which shall be promptly confirmed by facsimile.

If the sale to the Underwriters of the Securities, as contemplated by this Agreement, is not carried out by the Underwriters for any reason permitted under this Agreement or if such sale is not carried out because the Company shall be unable to comply with any of the terms of this Agreement, the Company shall not be under any obligation or liability under this Agreement (except to the extent provided in Sections 3, 4(r) , 5 , 9 and 10 hereof), and the Underwriters shall be under no obligation or liability to the Company under this Agreement (except to the extent provided in Sections 9 and 10 hereof) or to one another hereunder.

8. Increase in Underwriters’ Commitments . If any Underwriter shall default in its obligation under this Agreement to take up and pay for the Securities to be

purchased by it under this Agreement (otherwise than for reasons sufficient to justify the termination of this Agreement under the provisions of Section 7 hereof), Credit Suisse shall have the right, within 36 hours after such default, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Securities which such Underwriter shall have agreed but failed to take up and pay for (the “ Defaulted Securities ”). Absent the completion of such arrangements within such 36 hour period, (i) if the total amount of Defaulted Securities does not exceed 10% of the total amount of Securities to be purchased at the time of purchase or each additional time of purchase, as the case may be, each non-defaulting Underwriter shall take up and pay for (in addition to the amount of Securities which it is otherwise obligated to purchase on such date pursuant to this Agreement) the amount of Securities agreed to be purchased by all such defaulting Underwriters in such amount or amounts as Credit Suisse may designate with the consent of each Underwriter so designated or, in the event no such designation is made, such Securities shall be taken up and paid for by all non-defaulting Underwriters pro rata in proportion to the aggregate principal amount of Firm Securities set opposite the names of such non-defaulting Underwriters in Schedule A ; and (ii) if the total amount of Defaulted Securities exceeds 10% of such total amount of Securities to be purchased at the time of purchase or each additional time of purchase, as the case may be, and if neither the non-defaulting Underwriters nor the Company shall make arrangements within the five Business Day period from the date of default for the purchase of such Defaulted Securities, Credit Suisse may terminate this Agreement by notice to the Company, without liability of any party to any other party except that the provisions of Sections 3 , 4(r) , 5 , 9 and 10 shall at all times be effective and shall survive such termination. Nothing in this paragraph, and no action taken hereunder, shall relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

Without relieving any defaulting Underwriter from its obligations hereunder, the Company agrees with the non-defaulting Underwriters that they will not sell any Securities hereunder unless all of the Securities are purchased by the Underwriters (or by substituted Underwriters selected by Credit Suisse with the approval of the Company or selected by the Company with Credit Suisse’s approval).

If a new Underwriter or Underwriters are substituted for a defaulting Underwriter or Underwriters in accordance with the foregoing provisions, the Company or Credit Suisse shall have the right to postpone the time of purchase or each additional time of purchase, as the case may be, for a period not exceeding seven Business Days from the date of substitution in order that any necessary changes in the Registration Statement and the Prospectus and other documents may be effected.

The term Underwriter as used in this Agreement shall refer to and include any Underwriter substituted under this Section 8 with like effect as if such substituted Underwriter had originally been named in Schedule A .

9. Indemnification .

(a) Indemnification of Underwriter . The Company agrees to indemnify and hold harmless the Underwriters, their affiliates, as such term is defined in Rule 501(b) under the

Securities Act (each, an “Affiliate”) and the person, if any, who controls each Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430B Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, any Issuer Free Writing Prospectus, including the Term Sheet, or the Prospectus (or any amendment or supplement thereto or any documents deemed to be incorporated by reference therein), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 9(d) below) any such settlement is effected with the written consent of the Company; and

(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Credit Suisse), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;

provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Credit Suisse expressly for use in the Registration Statement (or any amendment thereto), including the Rule 430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus, including the Term Sheet, or the Prospectus (or any amendment or supplement thereto or any documents deemed to be incorporated by reference therein), it being understand and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below.

(b) Indemnification of Company, Directors and Officers . Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any

amendment thereto), including the Rule 430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus, including the Term Sheet, or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by such Underwriter through Credit Suisse expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Prospectus: the information appearing in the fifth paragraph under the caption “ Underwriting ”.

(c) Actions against Parties; Notification . Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 9(a) above, counsel to the indemnified parties shall be selected by Credit Suisse, and, in the case of parties indemnified pursuant to Section 9(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 9 or Section 10 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) Settlement without Consent if Failure to Reimburse . If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 9(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

10. Contribution . If the indemnification provided for in Section 9 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying

party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Company on the one hand and the Underwriters on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company, relative to the total compensation received by the Underwriters from the sale of Securities on behalf of the Underwriters.

The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 10 . The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 10 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 10 , the Underwriters shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.

No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 10 , the person, if any, who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the

Underwriters’ Affiliates shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Company.

11. Notices . Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if delivered or sent to Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, New York 10010-3629, Attention: LCD-IBD, to Morgan Stanley & Co. LLC, 1585 Broadway, New York, New York 10036, Attention: Equity Syndicate Desk, with a copy the Legal Department, J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, Attention : Equity Syndicate Desk, and UBS Securities LLC, 677 Washington Blvd., Stamford, CT, 06901, Attention: Legal and Compliance Department, Fax No. (203) 719-0680, with a copy for information purposes to Valerie Ford Jacob, Esq. at Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, New York 10004 and if to the Company, shall be sufficient in all respects if delivered or sent to the Company at the offices of the Company at 1211 Avenue of the Americas, Suite 2902, New York, New York 10036, Attention: Michael A.J. Farrell with a copy for information purposes to Phillip Kardis, Esq. at K&L Gates LLP, 1601 K Street NW, Washington, D.C. 20006.

12. Governing Law; Construction . This Agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement (a “ Claim ”), directly or indirectly, shall be governed by, and construed in accordance with, the laws of the State of New York. The Section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this Agreement.

13. Submission to Jurisdiction . Except as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Company consents to the non-exclusive jurisdiction of such courts and personal service with respect thereto. The Company hereby consents to personal jurisdiction, service and venue in any court in which any Claim arising out of or in any way relating to this Agreement is brought by any third party against Credit Suisse or any indemnified party. Each of Credit Suisse and the Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. The Company agrees that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon the Company and may be enforced in any other courts in the jurisdiction of which the Company is or may be subject, by suit upon such judgment.

14. Parties at Interest . The Agreement herein set forth has been and is made solely for the benefit of the Underwriters, the Company and to the extent provided in Section 9 and 10 hereof the controlling Persons, directors and officers referred to in such Section, and their respective successors, assigns, heirs, pursuant representatives and executors and administrators.

No other Person, partnership, association or corporation (including a purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.

15. No Advisory or Fiduciary Relationship . The Company acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the purchase price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the offering contemplated hereby and the process leading to such transaction, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, or its respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) and no Underwriter has any obligation to the Company with respect to the offering contemplated hereby except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each of the Company, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and the Company has consulted its own respective legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

16. USA PATRIOT Act . In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.

17. Tax Disclosure . Notwithstanding any other provision of this Agreement, immediately upon commencement of discussions with respect to the transactions contemplated hereby, the Company (and each employee, representative or other agent of the Company) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed federal income tax treatment of the transactions contemplated hereby, and the term “tax structure” includes any fact that may be relevant to understanding the purported or claimed federal income tax treatment of the transactions contemplated hereby.

18. Representations, Warranties and Agreements to Survive . All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its

officers or directors or any person controlling the Company, and (ii) delivery of and payment for the Securities.

19. Integration . This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.

20. Counterparts . This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties.

21. Successors and Assigns . This Agreement shall be binding upon the Underwriters and the Company and their successors and assigns and any successor or assign of any substantial portion of the Company’s and any of the Underwriters’ respective businesses and/or assets.

22. TIME . TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

If the foregoing correctly sets forth the understanding among the Company and the Underwriters, please so indicate in the space provided below for the purpose, whereupon this letter and your acceptance shall constitute a binding agreement among the Company and the Underwriters, severally.


	Very truly yours,

	ANNALY CAPITAL MANAGEMENT, INC.

	By:	/s/ Kathryn Fagan

		Name: Kathryn Fagan
		Title: Chief Financial Officer

[Signature Page to Underwriting Agreement]


Accepted and agreed to as of the date first above written, on behalf of itself and the other several Underwriters named in Schedule A.

CREDIT SUISSE SECURITIES (USA) LLC

By:	/s/ Steven Winnert

	Name: Steven Winnert
	Title: Managing Director

MORGAN STANLEY & CO. LLC

By:	/s/ Christian Lown

	Name: Christian Lown
	Title: Managing Director

J.P. MORGAN SECURITIES LLC

By:	/s/ Santosh Sreenivasan

	Name: Santosh Sreenivasan
	Title: Managing Director

UBS SECURITIES LLC

By:	/s Christopher Gastelu

	Name: Christopher Gastelu
	Title: Managing Director

By:	/s/ Avinash Patel

	Name: Avinash Patel
	Title: Director

[Signature Page to Underwriting Agreement]

SCHEDULE A


Underwriter	Aggregate Principal Amount of Firm Securities

Credit Suisse Securities (USA) LLC	$	300,000,000
Morgan Stanley & Co. LLC	$	225,000,000
J.P. Morgan Securities LLC	$	112,500,000
UBS Securities LLC	$	112,500,000


Total	$	750,000,000

Sch-A

SCHEDULE B

Issuer General Use Free Writing Prospectus

Pricing Term Sheet dated as of May 9, 2012

Annaly Capital Management, Inc. (NYSE: “NLY”)
Offering of

$750,000,000 aggregate principal amount of
5.00% Convertible Senior Notes due 2015
(the “Convertible Senior Notes Offering”)

The information in this pricing term sheet relates only to the Convertible Senior Notes Offering and should be read together with (i) the preliminary prospectus supplement dated May 8, 2012 (the “Preliminary Prospectus Supplement”), including the documents incorporated by reference therein, and (ii) the related base prospectus dated February 8, 2010, each filed under Registration Statement No. 333-164783.


Issuer:		Annaly Capital Management Inc., a Maryland corporation.

Trade Date:		May 9, 2012.

Settlement Date:		May 14, 2012.

Notes:		5.00% Convertible Senior Notes due 2015.

Aggregate Principal Amount Offered:		$750.0 million aggregate principal amount of Notes (excluding the underwriter’s option to purchase up to $112.5 million of additional aggregate principal amount of Notes to cover over-allotments, if any).

Initial Public Offering Price:		98.0%

Maturity:		The Notes will mature on May 15, 2015, unless earlier repurchased or converted.

Annual Interest Rate:		5.00% per annum.

Interest Payment and Record Dates:		Interest will accrue from May 14, 2012, and will be payable semiannually in arrears on November 15 and May 15 of each year, beginning on November 15, 2012, to the person in whose name a Note is registered at the close of business on November 1 or May 1, as the case may be, immediately preceding the relevant interest payment date.

NYSE Last Reported Sale Price on May 8, 2012:		$16.47 per share of the Issuer’s common stock.

Initial Conversion Premium:		Approximately 15% above the NYSE Last Reported Sale Price on May 8,

Sch-B


		2012.

Initial Conversion Price:		Approximately $18.94 per share of the Issuer’s common stock.

Initial Conversion Rate:		52.7969 shares of the Issuer’s common stock per $1,000 principal amount of Notes.

Use of Proceeds:		The Issuer intends to use substantially all of the net proceeds to purchase mortgage-backed securities. The Issuer then intends to increase its investment assets by borrowing against these mortgage-backed securities and using the proceeds of such borrowings to acquire additional mortgage-backed securities. The Issuer also may use net proceeds from this offering for general corporate purposes, which may include the retirement of its long-term indebtedness, additional investments and repayment of short term indebtedness.

Commissions and Discounts:		After the initial offering of the Notes, the underwriters may from time to time vary the offering prices and other selling terms. The underwriters may offer and sell Notes through certain of their affiliates.

CUSIP / ISIN:		035710 AB8 / US035710AB87

Fundamental change:		Noteholders may require the Issuer to repurchase all or a portion of their notes at a price equal to 100% of the principal amount of notes to be repurchased plus any accrued and unpaid interest up to, but excluding, the repurchase date. Notes will be repurchased in exchange for shares of the Issuer’s common stock using a price per share equal to the average daily VWAP of the Issuer’s common stock for the 20 consecutive trading days ending on the trading day immediately prior to the occurrence of the fundamental change.

Adjustment to Conversion Rate Upon Conversion Upon Certain Events:		If holder elects to convert notes in connection with a change of control make-whole, we will increase the conversion rate for the notes surrendered for conversion by a number of additional shares of our common stock, as described below. The following table sets forth the hypothetical stock price and the number of additional shares to be received per $1,000 principal amount of notes:


	Stock Price

Effective Date	$	16.47	$	16.75	$	17.00	$	17.50	$	18.00	$	18.50	$	18.94	$	20.00	$	21.00	$	22.00

May 14, 2012		7.9196		7.7404		7.5073		6.0970		4.8355		3.7200		2.8581		1.2579		0.0698		0.0667
May 15, 2013		7.9196		7.7255		7.2447		5.8144		4.5383		3.4142		2.5483		0.9146		0.0000		0.0000
May 15, 2014		7.9196		7.4335		6.6238		5.1251		3.7917		2.6287		1.7491		0.1785		0.0000		0.0000
May 15, 2015		7.9196		6.9046		6.0266		4.3460		2.7587		1.2572		0.0014		0.0000		0.0000		0.0000

- 2 -

The exact stock prices and effective dates may not be set forth in the table above, in which case:


	•	If the stock price is between two stock prices in the table or the effective date is between two effective dates in the table, the number of additional shares by which the conversion rate will be increased will be determined by a straight-line interpolation between the number of additional shares set forth for the higher and lower stock prices and the two dates, as applicable, based on a 365-day year.

	•	If the stock price is greater than $22.00 (subject to adjustment), no additional shares will be added to the conversion rate.

	•	If the stock price is less than $16.47 (subject to adjustment), no additional shares will be added to the conversion rate.

Notwithstanding the foregoing, in no event will the total number of shares of common stock issuable upon conversion of the notes exceed 60.7165 per $1,000 principal amount of notes, subject to adjustment in the same manner as the conversion rate as described in “Description of Notes— Conversion Rights—Conversion Rate Adjustments” in the Preliminary Prospectus Supplement

Additional Tax Disclosure

The notes will be issued with original issue discount for U.S. federal income tax purposes. Please see the discussion under “Additional Material U.S. Federal Income Tax Considerations—Tax Treatment of U.S. Holders—Original Issue Discount” in the Preliminary Prospectus Supplement.

The Issuer has filed a registration statement (including a prospectus and a related preliminary prospectus supplement) with the U.S. Securities and Exchange Commission (SEC) for the offering to which this communication relates. Before you invest, you should read the preliminary prospectus supplement, the accompanying prospectus in that registration statement and the other documents the Issuer has filed with the SEC for more complete information about the Issuer and the offering. You may get these documents for free by visiting EDGAR on the SEC’s website at http://www.sec.gov. Alternatively, the issuer or the underwriters will arrange to send you the prospectus if you request it by calling Credit Suisse Securities (USA) LLC toll-free at 1-800-221-1037, Morgan Stanley & Co. LLC toll-free at 1-866-718-1649 , J.P. Morgan Securities LLC toll-free at 1-866-803-9204 or UBS Securities LLC at 1-888-827-7275.

This communication should be read in conjunction with the preliminary prospectus supplement dated May 8, 2012 and the accompanying prospectus. The information in this communication supersedes the information in the preliminary prospectus supplement and the accompanying prospectus to the extent it is inconsistent with the information in such preliminary prospectus supplement or the accompanying prospectus.

ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.

- 3 -

EXHIBIT A

OPINION OF K&L GATES LLP

Ex. A-1

EXHIBIT B

May 8, 2012

Credit Suisse Securities (USA) LLC
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
UBS Securities LLC


	As Representatives of the several Underwriters named in Schedule A

c/o	Credit Suisse Securities (USA) LLC
	Eleven Madison Avenue
	New York, New York 10010-3629

c/o	Morgan Stanley & Co. LLC
	1585 Broadway
	New York, New York 10036

c/o	J.P. Morgan Securities LLC
	383 Madison Avenue, 28 ^th Floor
	New York, New York 10179

c/o	UBS Securities LLC
	299 Park Avenue
	New York, New York 10171

Ladies and Gentlemen:

In consideration of the agreement of Credit Suisse Securities (USA) LLC (“ Credit Suisse ”), Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and UBS Securities LLC, as Representatives of the Underwriters, to underwrite a proposed public offering (the “ Offering ”) of Convertible Senior Notes issued and sold by Annaly Capital Management, Inc., a Maryland corporation (the “ Company ”), as contemplated by an automatic shelf registration statement on Form S-3 (File No. 333-164783), as amended, the undersigned hereby agrees that the undersigned will not, for a period of 30 days after the commencement of the Offering, without the prior written consent of Credit Suisse, offer, sell, contract to sell, pledge, grant any option to purchase or otherwise dispose of, directly or indirectly, any shares of capital stock, or any securities convertible into, or exercisable, exchangeable or redeemable for, shares of capital stock.

The foregoing sentence shall not apply to the payment by any grantee of any shares of restricted stock or other awards pursuant to the Company’s Equity Incentive Plan as exists on the date hereof of any withholding or other taxes relating to such shares through or by means of the cancellation of a portion of such shares.

Ex. B-1

Notwithstanding the foregoing, if (1) during the last 17 days of the 30-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the 30-day restricted period, the Company announces that it will release earnings results or becomes aware that material news or a material event will occur during the 16-day period beginning on the last day of the 30-day restricted period, the restrictions imposed in this agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

The undersigned hereby acknowledges and agrees that written notice of any extension of the lock-up period pursuant to the previous paragraph will be delivered by Credit Suisse, to the Company and that any such notice properly delivered will be deemed to have been given to, and received by, the undersigned. The undersigned further agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this lock-up agreement during the period from the date of this lock-up agreement to and including the 34th day following the expiration of the initial lock-up period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the lock-up period (as may have been extended pursuant to the previous paragraph) has expired.

[ Signature page follows ]

Ex. B-2


	Very truly yours,


	By:

		Name:
		Title:

Ex. B-3

Exhibit 4.2

ANNALY CAPITAL MANAGEMENT, INC.

and

WELLS FARGO BANK, NATIONAL ASSOCIATION

AS TRUSTEE

5.00% Convertible Senior Notes due 2015

SECOND SUPPLEMENTAL INDENTURE

Dated as of May 14, 2012

INDENTURE

Dated as of February 12, 2010

TABLE OF CONTENTS


		Page

ARTICLE I ADDITIONAL DEFINITIONS AND INCORPORATION BY REFERENCE		1

Section 1.01 Definitions		1

ARTICLE II THE NOTES		7

Section 2.01 Title; Amount and Issue of Notes; Principal and Interest		7
Section 2.02 Form of Notes		8
Section 2.03 Legends		9
Section 2.04 Security Registrar, Paying Agent, Withholding Agent, Securities Custodian and Conversion Agent		10
Section 2.05 No Sinking Fund		10
Section 2.06 Redemption of Notes		10
Section 2.07 Discharge of Indenture, Defeasance		10
Section 2.08 Ranking		10
Section 2.09 Repurchase and Cancellation		11

ARTICLE III ADDITIONAL DEFAULTS AND REMEDIES		11

Section 3.01 Additional Events of Default		11
Section 3.02 Acceleration of Maturity; Recission and Annulment		11
Section 3.03 Exception to Remedies		12

ARTICLE IV AMENDMENTS		12

Section 4.01 Amendments		12

ARTICLE V PURCHASE OF NOTES AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE		12

Section 5.01 Purchase of Notes at the Option of the Holder Upon a Fundamental Change		12
Section 5.02 Further Conditions and Procedures for Purchase at the Option of the Holder Upon a Fundamental Change		15
Section 5.03 Ownership Limit		17

ARTICLE VI CONVERSION		17

Section 6.01 Article Seventeen Added		17
Section 6.02 Conversion of Notes		17
Section 6.03 Adjustments to Conversion Rate		22
Section 6.04 Adjustment Upon Certain Fundamental Changes		28
Section 6.05 Effect of Reclassification, Consolidation, Merger or Sale		29


Section 6.06 Responsibility of Trustee		30
Section 6.07 Notice to Holders Prior to Certain Actions		30
Section 6.08 Stockholder Rights Plan		31

ARTICLE VII REPORTS BY THE COMPANY		31

Section 7.01 Section 704 Replaced		31

ARTICLE VIII MISCELLANEOUS		31

Section 8.01 Certain Matters Relating to the Trustee		31
Section 8.02 Withholding Offset		32
Section 8.03 Calculations in Respect of Notes		33
Section 8.04 Application of Supplemental Indenture		33
Section 8.05 Effective Date		33
Section 8.06 Multiple Originals		33
Section 8.07 Governing Law		33
Section 8.08 General		33

SECOND SUPPLEMENTAL INDENTURE, dated as of May 14, 2012, by and between Annaly Capital Management, Inc. (the “Company”), a corporation organized under the laws of the State of Maryland and having its principal executive office located at 1211 Avenue of the Americas, Suite 2902, New York, New York 10036, and Wells Fargo Bank, National Association, a national banking association duly organized and existing under the laws of the United States of America, as trustee (the “Trustee”) to that certain Indenture dated as of February 12, 2010 between the Company and the Trustee.

RECITALS OF THE COMPANY

The Company and the Trustee are parties to an Indenture dated as of February 12, 2010 (the “Original Indenture”), relating to the issuance from time to time by the Company of one or more series of its Securities.

Sections 901 (4), (7) and (13) of the Original Indenture provide that a supplemental indenture may be entered into by the Company and the Trustee, without the consent of any Holders, when authorized by a Board Resolution (a) to establish the form or terms of any series of Securities and to make any deletions from or additions or changes to the Original Indenture (provided that any such deletions, additions and change shall not be applicable to any other series of Securities then Outstanding), (b) to add any additional Events of Default and (c) to amend or supplement any provision contained in the Original Indenture, any supplemental indenture or any Securities, provided that such amendment or supplement does not apply to any Outstanding Security issued prior to the date of such supplemental indenture and entitled to the benefits of such provision.

The Company represents and warrants that all things necessary to make this Supplemental Indenture a valid agreement of the Company and the Trustee, in accordance with the terms of the Original Indenture, and a valid amendment of and supplement to the Original Indenture have been done.

The Company has requested the Trustee to join with it in the execution and delivery of this second supplemental indenture (the “Supplemental Indenture”) in order to supplement and amend the Original Indenture, solely with respect to the establishment and issuance of a new series of Securities to be known as the 5.00% Convertible Senior Notes due 2015 (the “Notes”) issued on the date hereof.

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of Notes on the date hereof by the Holders thereof, it is mutually agreed, for the equal and ratable benefit of all Holders of the Notes, as follows:

ARTICLE I

ADDITIONAL DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions . For all purposes of the Original Indenture and this Supplemental Indenture relating to the series of Securities consisting of the Notes created hereby, except as otherwise expressly provided or unless the context otherwise requires, (i) the terms defined in this Article I shall have the meanings assigned to them in this Article I, (ii) any term that is defined in both the Original Indenture and this Supplemental Indenture shall have the meaning assigned to such term in this Supplemental Indenture, (iii) any capitalized term that is used in this Supplemental Indenture but not defined herein shall have the meaning specified in the Original Indenture and (iii) as used in this Supplemental Indenture, the terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Supplemental Indenture.

For purposes of the Notes and this Supplemental Indenture, the following terms shall have the following definitions:

“ Additional Interest ” means all amounts, if any, payable pursuant to Section 3.03 hereof.

“ Beneficial Owner ” shall mean any person who is considered a beneficial owner of a security in accordance with Rule 13d-3 promulgated by the SEC under the Exchange Act.

“ Bid Solicitation Agent ” means the Trustee or such other Person as may be appointed, from time to time, by the Company to solicit market bid quotations for the Notes in accordance with Section 6.02(a)(ii).

“ Business Day ” means any day other than a Saturday or Sunday that is not a day on which banking institutions are authorized or obligated by law or executive order to close in The City of New York.

“ Cash Settlement Averaging Period ” means, with respect to any Note surrendered for conversion:

(1) if the relevant Conversion Date occurs prior to the 25th Scheduled Trading Day immediately preceding to the Stated Maturity, the 20 consecutive Trading Day period beginning on, and including, the third Trading Day immediately following such Conversion Date; and

(2) if the relevant Conversion Date occurs during the period beginning on, and including, the 25th Scheduled Trading Day prior to the Stated Maturity, and ending at 5:00 p.m., New York City time, on the second Scheduled Trading Day immediately prior to the Stated Maturity, the 20 consecutive Trading Days beginning on, and including, the 22nd Scheduled Trading Day prior to the Stated Maturity.

“ Change of Control Make-Whole ” means the number of Additional Shares that a Holder converting Notes in connection with a Fundamental Change shall be entitled to receive in accordance with Section 6.04(a) of this Supplemental Indenture, which shall be based on the date on which the Fundamental Change occurs or becomes effective and the Stock Price paid or deemed paid per share of Common Stock in the Fundamental Change per $1,000 principal amount of the Notes, determined by reference to the table set forth in Schedule A of this Supplemental Indenture.

“ Charter ” means the Articles of Amendment and Restatement of Articles of Incorporation filed with the Maryland State Department of Assessment and Taxation on February 4, 1997, all amendments thereto and all Articles Supplementary of the Company, as may be further amended, restated or supplemented.

“ Common Stock ” means the common stock, par value $0.01 per share, of the Company or any other shares of capital stock into which such common stock shall be reclassified or changed.

“ Company ” means Annaly Capital Management, Inc. or its successors and assigns.

“ Conversion Agent ” means the office or agency appointed by the Company where Notes may be presented for conversion. The Conversion Agent appointed by the Company shall initially be the Trustee.

“ Conversion Obligation ” means the Company’s obligation to pay or deliver, as the case may be, shares of Common Stock, cash or a combination of cash and shares of Common Stock, determined by the applicable Settlement Method, upon conversion of the Notes.

“ Conversion Price ” means, in respect of each $1,000 principal amount of Notes, $1,000 divided by the Conversion Rate, as may be adjusted from time to time as set forth herein, and initially shall be $18.94051.

“ Conversion Rate ” means, in respect of each $1,000 principal amount of Notes, initially 52.7969 shares of Common Stock, subject to adjustment as set forth herein.

“ Daily Conversion Value ” means, for each of the 20 consecutive Trading Days during the applicable Cash Settlement Averaging Period, 1/20th of the product of (1) the applicable Conversion Rate and (2) the Daily VWAP of Common Stock on such Trading Day.

“ Daily Measurement Value ” has the meaning provided in the definition of Daily Settlement Amount in this Section 1.01.

The “ Daily Settlement Amount ” for each of the 20 consecutive Trading Days during the Cash Settlement Averaging Period, shall consist of:

(1) cash equal to the lesser of (i) the maximum dollar amount per $1,000 principal amount of Notes to be received upon conversion as specified in the notice specifying the Company’s chosen Settlement Method (the “ Specified Dollar Amount ”), if any, divided by 20 (such quotient, the “ Daily Measurement Value ”) and (ii) the Daily Conversion Value; and

(2) if the Daily Conversion Value exceeds the Daily Measurement Value, a number of shares of Common Stock equal to (i) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (ii) the Daily VWAP for such Trading Day.

“ Daily VWAP ” means the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “NLY.N <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of Common Stock on such Trading Day, determined using a volume weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). Daily VWAP will be determined without regard to after hours trading or any other trading outside of the regular trading session trading hours.

“ Default ” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“ Definitive Notes ” means certificated Notes that are not Global Notes.

“ DTC ” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depository institution hereinafter appointed by the Company pursuant to the terms of this Supplemental Indenture.

“ Ex-Dividend Date ” means the first date upon which the Common Stock trades on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance or distribution in question.

“ Fair Market Value ” means the amount that a willing buyer would pay a willing seller in an arm’s length transaction.

A “ Fundamental Change ” shall be deemed to have occurred at the time after the Notes are originally issued that any of the following occurs:

(1) a “person” or “group” within the meaning of Section 13(d) of the Exchange Act other than the Company, any Subsidiary of the Company or any employee benefit plans of the Company or a Subsidiary of the Company files a Schedule 13D or Schedule TO (or any successor schedule, form or report) pursuant to the Exchange Act disclosing that such person has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s common equity representing more than 50% of the voting power of all shares of the Company’s common equity entitled to vote generally in the election of directors of the Company, unless such beneficial ownership arises as a result of a revocable proxy delivered in response to a public proxy or consent solicitation made pursuant to the applicable rules and regulations under the Exchange Act; provided, that no person or group shall be deemed to be the beneficial owner of any securities tendered pursuant to a tender or exchange offer made by or on behalf of such person or group until such tendered securities are accepted for purchase or exchange under such offer; or

(2) consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets or (B) any statutory share exchange, consolidation or merger involving the Company pursuant to which the Common Stock will be converted into cash, securities or other property or any sale, lease or other transfer in one transaction or a series of related transactions of

all or substantially all of the consolidated assets of the Company and the Company’s Subsidiaries, taken as a whole, to any person other than one or more of the Company’s Subsidiaries, other than any transaction:


	(I) involving a consolidation or merger that does not result in a reclassification, conversion, exchange or cancellation of the outstanding Common Stock;

	(II) where the holders of all classes of the Company’s common equity immediately prior to such transaction that is a statutory share exchange, consolidation or merger own, directly or indirectly, more than 50% of all classes of common equity of the continuing or surviving entity or transferee or the parent entity thereof immediately after such transaction; or

	(III) that is effected solely to change the Company’s jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of the Common Stock solely into shares of common stock of the surviving entity;

provided , however , that a Fundamental Change as a result of clause (2) will not be deemed to have occurred if 90% or more of the consideration received or to be received by the holders of Common Stock (excluding cash payments for fractional shares and cash payments made pursuant to dissenters’ appraisal rights) in connection with the transaction or transactions constituting the Fundamental Change consists of shares of capital stock traded on the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or their respective successors) or which will be so traded when issued or exchanged in connection with the transaction that would otherwise be a Fundamental Change (these securities being referred to as “Publicly Traded Securities”) and as a result of this transaction or transactions the Notes become convertible into such consideration or a unit of such consideration received by a holder of one share of Common Stock in the relevant transaction used to calculate the Daily VWAP, as the case may be.

“ Global Notes ” means certificated Notes in global form, without interest coupons, substantially in the form of Exhibit A hereto and registered in the name of DTC or a nominee of DTC.

“ Holder ” or “ Noteholder ” means the Person in whose name a Note is registered in the Security Register.

“ Interest Payment Date ” means November 15 and May 15 of each year. The first Interest Payment Date shall be November 15, 2012.

“ Issue Date ” means May 14, 2012.

The “ Last Reported Sale Price ” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the Last Reported Sale Price will be the average of the last quoted bid and ask prices for the Common Stock in the over-the-counter market on the relevant date as reported by Pink OTC Markets Inc. or a similar organization. If the Common Stock is not so quoted, the Last Reported Sale Price will be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.

“ Market Disruption Event ” means (i) a failure by the primary United States national or regional securities exchange or market on which the Common Stock is listed or admitted to trading to open for trading during its regular trading session or (ii) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options, contracts or futures contracts relating to the Common Stock.

“ Original Indenture ” is as defined in the introductory paragraphs of this Supplemental Indenture.

“ Outstanding ” shall have the meaning set forth in Section 101 of the Original Indenture other than any Notes repurchased by the Company as set forth in Section 2.09 of this Supplemental Indenture.

“ Publicly Traded Securities ” has the meaning provided in the definition of Fundamental Change in this Section 1.01.

“ Record Date ” means, in respect of a dividend or distribution to holders of Common Stock, the date fixed for determination of holders of Common Stock entitled to receive such dividend or distribution.

“ Regular Record Date ” for the payment of interest on the Notes (including Additional Interest, if any), means the close of business on November 1 (whether or not a Business Day) next preceding the Interest Payment Date on November 15 and the close of business on May 1 (whether or not a Business Day) next preceding the Interest Payment Date on May 15.

“ Scheduled Trading Day ” means a day that is scheduled to be a Trading Day on the primary United States securities exchange or market on which the Common Stock is listed or admitted to trading. If the Common Stock is not so listed or admitted to trading, “Scheduled Trading Day” means a “Business Day”.

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

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

“ Securities Custodian ” means the custodian with respect to the Global Notes (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee.

“ Specified Dollar Amount ” has the meaning provided in the definition of “Daily Settlement Amount” in this Section 1.01.

“ Stock Price ” means, with respect to a Fundamental Change, the price per share of Common Stock paid or deemed paid in connection with such Fundamental Change, provided that (a) if holders of the Common Stock receive only cash as a result of such Fundamental Change, the Stock Price shall be the cash amount paid per share of Common Stock, and (b) otherwise, the Stock Price shall be the average of the Daily VWAP of the Common Stock for the 10 consecutive Trading-Day period ending on the Trading Day immediately preceding the Effective Date (excluding such Effective Date).

“ Supplemental Indenture ” means this Supplemental Indenture, as amended or supplemented from time to time.

“ Trading Day ” means, except as otherwise provided in Section 6.02(c)(iv), a day on which (i) trading in the Common Stock generally occurs on The New York Stock Exchange or, if the Common Stock is not then listed on The New York Stock Exchange, on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, on the principal other market on which the Common Stock is then traded, and (ii) a Last Reported Sale Price for the Common Stock is available on such securities exchange or market. If the Common Stock (or other security for which a closing sale price must be determined) is not so listed or traded, “Trading Day” means a “Business Day.”

“ Trading Price ” of the Notes on any date of determination means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $5,000,000 principal amount of the Notes at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company; provided that, if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such bids are obtained, then the average of the two bids shall be used, and if only one

such bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall be used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $5,000,000 principal amount of the Notes from a nationally recognized securities dealer, then the trading price per $1,000 principal amount of Notes will be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate.

“ Trustee ” means Wells Fargo Bank, National Association, a national banking association duly organized and existing under the laws of the United States of America, and its successors and assigns.

Other Definitions.


Term		Defined in Section


“Additional Notes”		2.01(g)

“Additional Shares”		6.04(a)

“Adjustment Event”		6.03(l)

“Cash Settlement”		6.02(c)

“Clearstream”		5.02(a)

“Combination Settlement”		6.02(c)

“Company Notice”		5.01(b)

“Company Notice Date”		5.01(b)

“Conversion Date”		6.02(b)

“Determination Date”		6.03 (l)

“Dividend Threshold”		6.03(d)

“Effective Date”		6.04(c)

“Euroclear”		5.02(a)

“Expiration Time”		6.03(e)

“Fundamental Change Purchase Date”		5.01(a)

“Fundamental Change Purchase Notice”		5.01(c)

“Fundamental Change Purchase Price”		5.01(a)

“Indemnitees”		7.01(a)

“Losses”		7.01(a)


Term		Defined in Section


“Measurement Period”		6.02(a)

“Physical Settlement”		6.02(c)

“Reorganization Event”		6.05(a)

“Reference Property”		6.05(a)

“Settlement Date”		6.02(c)

“Settlement Method”		6.02(c)

“Spin-Off”		6.03(c)

“Trading Price Condition”		6.02(a)

“Withholding Agent”		2.04

ARTICLE II

THE NOTES

Section 2.01 Title; Amount and Issue of Notes; Principal and Interest .

(a) Pursuant to the terms hereof and Section 301 of the Original Indenture, the Company hereby creates a series of Securities designated as the “5.00% Convertible Senior Notes due 2015” of the Company (the “Notes”) which Notes shall be deemed “Securities” for all purposes under the Original Indenture. The aggregate principal amount of Notes which may be authenticated and delivered under this Supplemental Indenture is initially $862,500,000, not inclusive of Notes to be authenticated and delivered upon registration of transfer of or in exchange for, or in lieu of such Notes pursuant to the terms of this Supplemental Indenture and the Original Indenture. The Notes shall be issuable in registered form and in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(b) The Notes shall mature on May 15, 2015.

(c) Interest on the Notes shall accrue at a rate of 5.00% per annum, from and including the date specified on the face of such Notes until the principal thereof is paid, deemed paid, or made available for payment. Interest shall be payable semi-annually in arrears on November 15 and May 15 in each year, commencing November 15, 2012. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. If any Interest Payment Date falls on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day and no interest on such payment shall accrue for such intervening period. If the Stated Maturity would fall on a day that is not a Business Day, the required payment of interest, if any, and principal (and Additional Interest, if any), will be made on the next succeeding Business Day and no interest on

such payment will accrue for the period from and after the Stated Maturity to such next succeeding Business Day. If a Fundamental Change Purchase Date would fall on a day that is not a Business Day, the Company will purchase the Notes tendered for purchase on the next succeeding Business Day and no interest or Additional Interest on such Notes will accrue for the period from and after the earlier Fundamental Change Purchase Date to such next succeeding Business Day. The Company will pay the Fundamental Change Purchase Price promptly following the later of (i) such next succeeding Business Day or (ii) the time of book entry transfer or the delivery of the Notes.

(d) A Holder of any Notes after 5:00 p.m., New York City time, on a Regular Record Date shall be entitled to receive interest (including any Additional Interest), on such Notes on the corresponding Interest Payment Date. Holders of Notes at 5:00 p.m., New York City time, on a Regular Record Date will receive payment of interest (including any Additional Interest) payable on the corresponding Interest Payment Date notwithstanding the conversion of such Notes at any time after 5:00 p.m., New York City time on such Regular Record Date. Notes surrendered for conversion during the period after 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest (including any Additional Interest) that the Holder is to receive on the Notes on such Interest Payment Date.

Notwithstanding the foregoing, no such payment of interest (including any Additional Interest) need be made by any converting Holder (i) for conversions following the Regular Record Date immediately preceding the Stated Maturity, (ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date, or (iii) to the extent of any overdue interest (including any overdue Additional Interest) existing at the time of conversion of such Note. Except where Notes surrendered for conversion must be accompanied by payment as described above, no interest or Additional Interest on converted Notes will be payable by the Company on any Interest Payment Date subsequent to the Conversion Date. The Company’s delivery to the Holder of Common Stock, cash or a combination of cash and Common Stock, as applicable, together with any cash payment for any fractional share of Common Stock, into which a Note is convertible upon conversion will be deemed to satisfy the Company’s obligation to pay the principal amount of the Notes and accrued and unpaid interest and Additional Interest, if any, to, but not including, the related Conversion Date.

(e) Principal of and interest (including Additional Interest, if any) on, Global Notes shall be payable in immediately available funds.

(f) Principal on Definitive Notes shall be payable at the office or agency of the Company maintained for such purpose, initially the principal office of the Trustee in New York, New York. Interest (including Additional Interest, if any), on Definitive Notes shall be payable (i) to each Holder of Notes having an aggregate principal amount of $5,000,000 or less, by check mailed to such Holder and (ii) to each Holder of Notes having an aggregate principal amount of more than $5,000,000, either by check mailed to such Holder or, upon application by such Holder to the Security Registrar not later than the relevant Regular Record Date, by wire transfer in immediately available funds to that Holder’s account within the United States, which application shall remain in effect until the Holder notifies, in writing, the Security Registrar to the contrary.

(g) The aggregate principal amount of Notes that may be issued on the date of this Supplemental Indenture is $862,500,000, but shall be at least $750,000,000. The Company may from time to time, without notice to, or consent of, the Holders of the Notes, create and issue additional Notes under this Supplemental Indenture equal in rank in all respects to the Notes initially issued (or in all respects except for the issue date, conversion price, conversion rate and public offering price of such additional Notes, the payment of interest accruing before the issue date on such Notes, or the first payment of interest following the issue date of such Notes) under this Supplemental Indenture in an unlimited principal amount (“Additional Notes”); provided that any such Additional Notes must be part of the same issue as the Notes initially issued under this Supplemental Indenture for U.S. federal income tax purposes.

Section 2.02 Form of Notes .

(a) Except as otherwise provided pursuant to this Section 2.02, the Notes shall be issued as Registered Securities without coupons in substantially the form of Exhibit A hereto, with such applicable legends as

are provided for in Section 2.03. The Notes are not issuable in bearer form. The terms and provisions contained in the form of Note shall constitute, and are hereby expressly made, a part of this Supplemental Indenture and to the extent applicable, the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends and endorsements as the Officer executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, or to conform to usage.

(b) The Notes shall be issued initially in the form of one or more permanent Global Notes, with such applicable legends as are provided for in Section 2.03. Each Global Note shall be duly executed by the Company and authenticated and delivered by the Trustee, and shall be registered in the name of DTC or its nominee and retained by the Trustee, as Securities Custodian, at its Corporate Trust Office, for credit to the accounts of the members of, or participants in, DTC, holding the Notes evidenced thereby. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee, as Securities Custodian, and of DTC or its nominee, as hereinafter provided.

Section 2.03 Legends .

(a) Global Note Legend.

Each Global Note shall bear the following legend (the “Global Note Legend”) on the face thereof:

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE SUPPLEMENTAL INDENTURE AND THE ORIGINAL INDENTURE.

THIS GLOBAL NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE PRICE, ISSUE DATE, TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT AND YIELD TO MATURITY OF THIS GLOBAL NOTE MAY BE OBTAINED BY CONTACTING THE CHIEF FINANCIAL OFFICER AT C/O ANNALY CAPITAL MANAGEMENT, INC., 1211 AVENUE OF THE AMERICAS, SUITE 2902, NEW YORK, NEW YORK 10036.”

(b) Legend for Definitive Notes.

Definitive Notes will bear a legend substantially in the following form:

“THIS NOTE WILL NOT BE ACCEPTED IN EXCHANGE FOR A BENEFICIAL INTEREST IN A GLOBAL NOTE UNLESS THE HOLDER OF THIS NOTE, SUBSEQUENT TO SUCH EXCHANGE, WILL HOLD NO NOTES.

THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE PRICE, ISSUE DATE, TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED BY CONTACTING THE CHIEF FINANCIAL OFFICER AT C/O ANNALY CAPITAL MANAGEMENT, INC., 1211 AVENUE OF THE AMERICAS, SUITE 2902, NEW YORK, NEW YORK 10036.”

Section 2.04 Security Registrar, Paying Agent, Withholding Agent, Securities Custodian and Conversion Agent . The Company initially appoints the Trustee as Security Registrar, Paying Agent, Securities Custodian and Conversion Agent for the Notes. The Company may remove any Security Registrar, Paying Agent, Securities Custodian or Conversion Agent upon written notice to such Security Registrar, Paying Agent, Securities Custodian or Conversion Agent and to the Trustee and without prior notice to the Holders; provided , however , that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Security Registrar, successor Paying Agent, successor Securities Custodian or successor Conversion Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee or the Company shall serve as Security Registrar, Paying Agent, Securities Custodian or Conversion Agent until the appointment of a successor in accordance with clause (i) above. The Security Registrar, Paying Agent, Securities Custodian and Conversion Agent may resign at any time upon written notice to the Company and the Trustee. Any corporation into which any Security Registrar, Paying Agent, Securities Custodian or Conversion Agent appointed hereunder may be merged or with which it may be consolidated or to which the assets of such entity may be sold or otherwise transferred as a whole or substantially as a whole, or any corporation resulting from any merger, consolidation or transfer to which any Security Registrar, Paying Agent, Securities Custodian or Conversion Agent hereunder shall be a party, shall be the successor Security Registrar, successor Paying Agent, successor Securities Custodian and successor Conversion Agent, as applicable, under this Supplemental Indenture, without the execution or filing of any paper or any further act on the part of the parties hereto, anything herein to the contrary notwithstanding.

If withholding or backup withholding applies to any payments made or deemed made by the Company to a Holder in respect of the Notes, the Paying Agent shall also act as withholding agent (“Withholding Agent”) to withhold the appropriate amount from any such payments to a Holder.

The Company shall enter into an appropriate agency agreement with any Security Registrar, Paying Agent, Securities Custodian, Conversion Agent or co-registrar not a party to this Supplemental Indenture, which shall incorporate the terms of the Trust Indenture Act, except in the case of a Paying Agent that acts as Paying Agent solely in connection with an offer to purchase the Notes pursuant to Article V of this Supplemental Indenture. The agreement shall implement the provisions of this Supplemental Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Security Registrar, Paying Agent, Securities Custodian or Conversion Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor. The Company or any of its domestically organized, wholly-owned Subsidiaries may act as Paying Agent, Security Registrar, Securities Custodian, Conversion Agent co-registrar or transfer agent.

Section 2.05 No Sinking Fund . No sinking fund will be provided with respect to the Notes issued under this Supplemental Indenture.

Section 2.06 Redemption of Notes . The Notes issued under this Supplemental Indenture shall not be redeemable at the election of the Company prior to their Stated Maturity.

Section 2.07 Discharge of Indenture, Defeasance . The Notes issued under this Supplemental Indenture shall not be subject to the provisions of Article Four of the Original Indenture.

Section 2.08 Ranking . The Notes are general unsecured obligations and rank senior in right of payment to indebtedness of the Company that is expressly subordinated in right of payment to the Notes and equally in right of payment with its existing and future unsecured indebtedness and liabilities that are not so subordinated.

Section 2.09 Repurchase and Cancellation . To the extent permitted by law, the Company may repurchase any Notes in the open-market purchases or negotiated transactions without prior notice to the Holders. The Company shall surrender any Notes repurchased by the Company to the Trustee for cancellation as provided by Section 309 of the Original Indenture and any such Notes repurchased by the Company shall be deemed to be no longer Outstanding. Any Notes surrendered for cancellation by the Company shall not be reissued or resold.

ARTICLE III

ADDITIONAL DEFAULTS AND REMEDIES

Section 3.01 Additional Events of Default . For purposes only of this Supplemental Indenture in respect of the Notes issued hereunder, the provisions of Section 501 of Article Five of the Original Indenture are hereby amended by replacing the period at the end of subparagraph (11) thereof with “; or” and adding the following subparagraphs thereafter:


	(12) the Company shall fail to comply with its obligation to convert the Notes in accordance with the provisions of this Supplemental Indenture upon exercise of a Holder’s conversion right which default shall continue for a period of three Business Days after there has been given to the Company, by registered or certified mail, by the Trustee or by such Holder, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” under the Original Indenture; or

	(13) the Company shall fail to comply with its obligation to pay for or deliver any consideration required to be paid for or delivered to a Holder entitled to receive the Change of Control Make-Whole, or any other premium required pursuant to the terms of this Supplemental Indenture; or

	(14) the Company shall fail to deliver a notice of Fundamental Change in accordance with Section 5.01(b) of this Supplemental Indenture when due; or

	(15) a Fundamental Change occurs and a Holder, upon exercising its right to require the Company to purchase any or all of such Holder’s notes, or any portion thereof in accordance with Section 5.01 of this Supplemental Indenture, is not entitled on the Fundamental Change Purchase Date to receive at least the same amount and form of consideration per share of Common Stock as was received by the existing holders of the Common Stock receiving the highest consideration in connection with such Fundamental Change; or

	(16) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or

	(17) the Common Stock (or other capital stock into which the Notes are then convertible pursuant to the terms of this Supplemental Indenture) ceases to be listed on the New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market (or their respective successors).

	Section 3.02 Acceleration of Maturity; Recission and Annulment .

(a) For purposes only of this Supplemental Indenture in respect of the Notes issued hereunder, Section 502 of the Original Indenture is hereby amended by adding the following sentence to the end of the first paragraph:

In addition, if an Event of Default specified in clause (15), (16) or (17) of Section 501 with respect to the Company occurs with respect to the Notes, then the principal and any accrued an unpaid interest, including Additional Interest, if any, thereon shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of the Notes.

(b) For the avoidance of doubt, the second paragraph of Section 502 of the Original Indenture shall apply to the sentence added pursuant to Section 3.02(a) of this Supplemental Indenture above.

Section 3.03 Exception to Remedies . Notwithstanding anything in this Supplemental Indenture or the Original Indenture to the contrary, to the extent elected by the Company, the sole remedy for an Event of Default relating to the failure by the Company to comply with the reporting obligations set forth in Section 704 of the Original Indenture as further supplemented by this Supplemental Indenture and for any failure to comply with § 314(a)(1) of the Trust Indenture Act, will for the first 120 days after the occurrence of such an Event of Default, consist exclusively of the right of Holders to receive Additional Interest on the Notes at an annual rate equal to 0.25% of the principal amount of the Notes. If the Company so elects, such Additional Interest will be payable in the same manner and on the same dates as the stated interest payable on the Notes. The Additional Interest will accrue on all outstanding Notes from and including the date on which such Event of Default first occurs to but not including the 120th day thereafter (or such earlier date on which such Event of Default shall have been cured or waived). On such 120th day after such Event of Default (if the Event of Default relating to such obligation is not cured or waived prior to such 120th day), such Additional Interest will cease to accrue and the Notes will be subject to acceleration as provided in the Original Indenture. The provisions of this Section 3.03 shall not affect the rights of Holders in the event of the occurrence of any other Event of Default. In the event the Company does not elect to pay the Additional Interest upon such Event of Default in accordance with this Section 3.03, the Notes shall be subject to acceleration as provided in the Original Indenture. In order to elect such Additional Interest remedy pursuant to this Section 3.03, the Company must notify all Holders, the Trustee and the Paying Agent of such election on or before the close of business on the date on which such Event of Default first occurs, stating (i) the amount of such Additional Interest that is payable and (ii) the date on which such Additional Interest is payable.

ARTICLE IV

AMENDMENTS

Section 4.01 Amendments .

(a) For purposes only of this Supplemental Indenture in respect of the Notes issued hereunder, Section 902 of the Original Indenture is hereby amended by replacing subparagraph (3) with the following:


	(3) make any change that adversely affects the conversion rights of any Notes;

(b) For purposes only of this Supplemental Indenture in respect of the Notes issued hereunder, Section 902 of the Original Indenture is hereby amended by replacing the period at the end of subparagraph (4) with “; or” and adding the following thereafter:


	(5) reduce the Fundamental Change Purchase Price of any Note, amend or modify the Change of Control Make-Whole amounts set forth in Schedule A to this Supplemental Indenture, or amend or modify in any manner adverse to Holders the Company’s obligation to make such payment, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise.

ARTICLE V

PURCHASE OF NOTES AT THE OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE

Section 5.01 Purchase of Notes at the Option of the Holder Upon a Fundamental Change .

(a) Purchase of Notes at the Option of the Holder . If a Fundamental Change occurs at any time, each Holder shall have the right, at such Holder’s option, to require the Company to purchase any or all of the

Holder’s Notes, or any portion of the principal amount thereof, that is equal to $1,000 or an integral multiple thereof at a purchase price equal to 100% of the principal amount of the Notes to be purchased from such Holder plus accrued and unpaid interest thereon, including Additional Interest, if any, to but excluding the Fundamental Change Purchase Date (the “Fundamental Change Purchase Price”); provided , that , if the Fundamental Change Purchase Date occurs after a Regular Record Date and on or prior to the corresponding Interest Payment Date, the Company shall pay such accrued and unpaid interest plus Additional Interest, if any, to but excluding the Fundamental Change Purchase Date to the record Holder on the Regular Record Date corresponding to such Interest Payment Date and the Fundamental Change Purchase Price payable to the Holder who presents the Note for repurchase will be 100% of the principal amount of such Note. The Fundamental Change Purchase Date shall be a date specified by the Company that is no later than the 35th calendar day following the date of the Company Notice (excluding such date of the Company Notice) delivered in connection with such Fundamental Change pursuant to Section 5.01(b) (subject to extension to comply with applicable law, as provided in Section 5.02(d)) (the “Fundamental Change Purchase Date”). Any Notes purchased by the Company shall be paid for in Common Stock.

(b) Notice of Fundamental Change . The Company shall deliver, or cause to be delivered in accordance with the last paragraph of this Section 5.01(b), notices of the occurrence of a Fundamental Change and of the purchase rights arising as a result thereof (each, a “Company Notice”) to the Holders at their addresses shown in the Security Register maintained by the Security Registrar, and to the Trustee and the Paying Agent, on or before the 20th calendar day after the occurrence of the Fundamental Change (each such date of delivery, a “Company Notice Date”). Each Company Notice shall include a form of Fundamental Change Purchase Notice to be completed by a Holder and shall state:

(i) the events causing the Fundamental Change;

(ii) the date of the Fundamental Change;

(iii) the last date on which a Holder may exercise its repurchase rights under Section 5.01;

(iv) the Fundamental Change Purchase Price;

(v) the Fundamental Change Purchase Date;

(vi) whether the consummation of the Fundamental Change and the resulting repurchase right resulted or will result in an Event of Default under Section 501(15);

(vii) the name and address of the Paying Agent and the Conversion Agent;

(viii) the applicable Conversion Rate and, if applicable, any adjustments to the applicable Conversion Rate;

(ix) that the Notes with respect to which a Fundamental Change Purchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Purchase Notice in accordance with the terms of this Supplemental Indenture; and

(x) the procedures the Holder must follow to require the Company to purchase its Notes pursuant to Section 5.01.

The Company shall deliver to the Paying Agent on or prior to the Fundamental Change Purchase Date, a number of shares of Common Stock equal to the aggregate Fundamental Change Purchase Price to be paid in Common Stock divided by the average of the Daily VWAP of the Common Stock for the twenty consecutive Trading Days ending on the Trading Day immediately prior to the occurrence of the Fundamental Change. The Company shall not issue fractional shares of Common Stock upon repurchase of the Notes. Instead, the Company shall pay cash in lieu of fractional shares based on the Daily VWAP of the Common Stock on the Trading Day immediately prior to the occurrence of the Fundamental Change. If the Common Stock has been replaced by

Reference Property prior to the Fundamental Change Purchase Date, the number of shares of Common Stock otherwise deliverable on such date will instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have received in the relevant Reorganization Event. The Company shall use its reasonable best efforts to cause a shelf registration statement to be declared effective prior to the Fundamental Change Purchase Date for the sale of such shares of Common Stock (or Reference Property, if applicable).

Simultaneously with providing such Company Notice, the Company will publish a notice containing the information in such Company Notice in a newspaper of general circulation in The City of New York or publish such information on its then existing website or through such other public medium as it may use at the time.

At the Company’s request, made at least three Business Days (or such lesser period as agreed to by the Trustee) prior to the date upon which such notice is to be mailed, and at the Company’s expense, the Trustee shall give the Company Notice in the Company’s name; provided , however , that, in all cases, the text of the Company Notice shall be prepared by the Company.

(c) Exercise of Option . For a Note to be so purchased at the option of the Holder, the Holder must deliver, on or before the Business Day immediately preceding the Fundamental Change Purchase Date (excluding such Fundamental Change Purchase Date), subject to extension to comply with applicable law, the Notes to be purchased, duly endorsed for transfer, together with a written purchase notice (a “Fundamental Change Purchase Notice”) in the form entitled “Form of Fundamental Change Purchase Notice” on the reverse side of the Notes duly completed, to the Paying Agent. The Fundamental Change Purchase Notice shall state:

(i) if the Notes are certificated, the certificate numbers of the Holder’s Notes to be delivered for purchase;

(ii) the portion of the principal amount of the Notes to be purchased, which portion must be $1,000 or an integral multiple thereof; and

(iii) that such Notes shall be purchased as of the Fundamental Change Purchase Date pursuant to the terms and conditions specified in the Notes and this Supplemental Indenture.

(d) Procedures . The Company shall purchase from a Holder on the Fundamental Change Purchase Date, subject to extension to comply with applicable law, pursuant to this Section 5.01, Notes if the principal amount of such Notes is $1,000 or an integral multiple thereof if so requested by such Holder.

Any purchase by the Company contemplated pursuant to the provisions of this Section 5.01 shall be consummated by the delivery of the Fundamental Change Purchase Price, to be received by the Holder, to the Paying Agent as provided in Section 5.02(a), promptly following the later of the Fundamental Change Purchase Date or the time of book-entry transfer or delivery of the Notes.

The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all shares of Common Stock (or cash in lieu of fractional shares, if any) held by the Paying Agent for the payment of the Fundamental Change Purchase Price and shall notify the Trustee of any Default by the Company in making any such payment. The Company at any time may require a Paying Agent to deliver all shares of Common Stock held by it to the Trustee and to account for any shares disbursed by the Paying Agent. Upon doing so, the Paying Agent shall have no further liability for the shares of Common Stock delivered to the Trustee.

The Company shall not be required to make an offer to purchase the Notes in accordance with this Section 5.01 upon a Fundamental Change if a third party makes the offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Article V applicable to an offer by the Company to purchase the Notes upon a Fundamental Change and such third party purchases all Notes validly tendered and not withdrawn upon such offer.

Section 5.02 Further Conditions and Procedures for Purchase at the Option of the Holder Upon a Fundamental Change .

(a) Effect of Fundamental Change Purchase Notice; Withdrawal; Effect of Event of Default . Upon receipt by the Company of the Fundamental Change Purchase Notice specified in, and the Notes to be purchased as provided in, Section 5.01(c), the Holder of the Notes in respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn as specified in this Section 5.02(a)) thereafter be entitled to receive solely the Fundamental Change Purchase Price with respect to such Notes. Such Fundamental Change Purchase Price shall be delivered by the Paying Agent, solely from shares of Common Stock received from the Company for such purpose (and any cash in lieu of fractional shares), to such Holder promptly following the later of (x) the Fundamental Change Purchase Date with respect to such Notes (provided the conditions in this Article V have been satisfied) and (y) the time of delivery or book-entry transfer of such Notes to the Paying Agent by the Holder thereof in the manner required by Section 5.01. Notes in respect of which a Fundamental Change Purchase Notice has been given by the Holder thereof may not be converted on or after the date of the delivery of such Fundamental Change Purchase Notice unless such Fundamental Change Purchase Notice has first been validly withdrawn as specified in this Section 5.02(a). Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Purchase Notice contemplated by Section 5.01(c), shall have the right at any time prior to the close of business on the Business Day prior to the Fundamental Change Purchase Date to withdraw such Fundamental Change Purchase Notice (in whole or in part) by delivery of a written notice of withdrawal to the Paying Agent in accordance with this Section 5.02(a).

The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Purchase Notice or written notice of withdrawal thereof.

On or before 10:00 a.m. (New York City time) on the Fundamental Change Purchase Date, the Company shall deliver to the Paying Agent (or if the Company or an Affiliate of the Company is acting as the Paying Agent, shall segregate and hold in trust) a number of shares of Common Stock sufficient to satisfy the aggregate Fundamental Change Purchase Price of the Notes to be purchased pursuant to Section 5.01 (plus any cash in lieu of fractional shares). If the Paying Agent holds, in accordance with the terms of this Supplemental Indenture, a number of shares of Common Stock sufficient to pay the Fundamental Change Purchase Price of such Notes on the second Business Day after the Fundamental Change Purchase Date, then (i) the Notes tendered for purchase and not withdrawn shall cease to be outstanding and interest, including Additional Interest, if any, shall cease to accrue (whether or not book-entry transfer of such Notes is made or whether or not the Note is delivered to the Paying Agent) on the Fundamental Change Purchase Date; and (ii) all other rights of the Holders with respect to Notes tendered for purchase will terminate (other than the right to receive the Fundamental Change Purchase Price upon delivery or transfer of the Notes). Nothing herein shall preclude any withholding of tax required by law.

A Fundamental Change Purchase Notice may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent prior to the close of business on the Business Day prior to the Fundamental Change Purchase Date (excluding such Fundamental Change Purchase Date). The notice of withdrawal shall state:

(i) the principal amount of the withdrawn Notes;

(ii) if Definitive Notes have been issued, the certificate numbers of the withdrawn Notes, or if not certificated, the written notice of withdrawal must comply with appropriate procedures of DTC, and if applicable, Clearstream Banking Luxembourg S.A. (“ Clearstream ”) and Euroclear Bank S.A./N.A. (“ Euroclear ”); and

(iii) the principal amount, if any, of such Notes which remains subject to the original Fundamental Change Purchase Notice.

If the Notes are Definitive Notes, the Paying Agent shall promptly return to the respective Holders thereof any Notes with respect to which a Fundamental Change Purchase Notice has been withdrawn in compliance with this Indenture.

(b) Notes Purchased in Part . Any Notes that are to be purchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and the Company shall execute and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder of such Notes, without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Notes so surrendered which is not purchased.

(c) Covenant to Comply with Securities Laws Upon Purchase of Notes . In connection with any offer to purchase, or purchase of, Notes under Section 5.01, the Company shall, to the extent applicable, (a) comply with Rules 13e-4 and 14e-1 (and any successor provisions thereto) under the Exchange Act, if applicable; (b) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, if applicable; and (c) otherwise comply with all applicable federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Supplemental Indenture as described in this Article V, compliance by the Company with such laws and regulations shall not in and of itself cause a breach of the Company’s obligations described in this Article V.

(d) Repayment to the Company . The Trustee and the Paying Agent shall return to the Company any cash or property that remains unclaimed, together with interest that the Trustee or Paying Agent, as the case may be, has expressly agreed in writing to pay, if any, that is held by them for the payment of a Fundamental Change Purchase Price; provided , however , that to the extent that the aggregate amount of property deposited by the Company pursuant to Section 5.02(b), as applicable, exceeds the aggregate Fundamental Change Purchase Price of the Notes or portions thereof which the Company is obligated to purchase as of the Fundamental Change Purchase Date, then promptly on and after the second Business Day following the Fundamental Change Purchase Date, the Trustee and the Paying Agent shall return any such excess to the Company together with interest that the Trustee or Paying Agent, as the case may be, has expressly agreed in writing to pay, if any.

(e) Officers’ Certificate . At least three Business Days (or such lesser period as agreed to by the Trustee) before the Company Notice Date, the Company shall deliver an Officers’ Certificate to the Trustee specifying whether the Company desires the Trustee to give the Company Notice required by Section 5.02(a) hereof.

(f) Taxes on Repurchase . If a Holder exercises its right to require the Company to repurchase the Notes pursuant to this Section 5.02, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issuance of shares of Common Stock upon such repurchase. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name. The Paying Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Paying Agent receives a sum sufficient to pay any tax which shall be due because the shares are to be issued in a name other than the Holder’s name, but the Paying Agent shall have no duty to determine if any such tax is due. Nothing herein shall preclude any withholding of tax required by law.

(g) Certain Covenants of the Company .

(i) The Company shall, prior to issuance of any Notes hereunder, and from time to time as may be necessary, reserve out of its authorized but unissued Common Stock or shares of Common Stock held in treasury, sufficient number of shares of Common Stock, free of preemptive rights, to permit the repurchase of the Notes pursuant to this Section 5.02.

(ii) All shares of Common Stock delivered upon repurchase of the Notes shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim.

(iii) The Company shall endeavor to comply promptly with all applicable federal and state securities laws regulating the issuance and delivery of shares of Common Stock upon the repurchase of Notes.

(iv) The Company shall use its reasonable best efforts to ensure that at all times it has shares of its Common Stock deliverable upon a conversion or repurchase of the Notes approved for listing with the New York Stock Exchange, or if the Company’s Common Stock is no longer so listed on the New York Stock Exchange, Nasdaq Global Select Market or the Nasdaq Global Market (or their respective successors). Following any repurchase or conversion of the Notes, to the extent the listing of the shares of Common Stock delivered upon such repurchase or conversion has not been so approved, the Company shall promptly comply with the listing requirements of the applicable securities exchange.

Section 5.03 Ownership Limit . Notwithstanding any other provision of the Original Indenture, this Supplemental Indenture or the Notes, no Holder of Notes shall be entitled to convert such Notes for Common Stock to the extent that the receipt of such Common Stock would violate any of the limitations on ownership of Common Stock contained in the Charter. Any attempted conversion of Notes that would result in the issuance of Common Stock in excess of such ownership limit in the absence of an exemption shall be void to the extent of the number of shares of Common Stock that would cause such violation and the related Note or portion thereof shall be returned to the Holder as promptly as practicable. The Company shall have no further obligation to the Holder with respect to such voided conversion and such Notes shall be treated as if they had not been submitted for conversion. A Holder of returned Notes may resubmit such Notes for conversion at a later date subject to compliance with the terms hereof and the ownership limits set forth in the Charter.

ARTICLE VI

CONVERSION

Section 6.01 Article Seventeen Added . The following is hereby added as Article Seventeen of the Original Indenture in respect of the Notes established and issued under this Supplemental Indenture.

Section 6.02 Conversion of Notes .

(a) Right to Convert . Subject to the restrictions on ownership of Common Stock as set forth in Section 5.03 of this Supplemental Indenture and to the procedures for conversion set forth in this Article VI, a Holder may convert its Notes at their full principal amount, or any portion of their principal amount that is equal to $1,000 or an integral multiple thereof, at the Conversion Rate in effect at the time of conversion, (1) prior to the close of business on the Business Day immediately preceding February 15, 2015, only upon satisfaction of one or more of the conditions described in clauses (i) through (iv) below and (2) on or after February 15, 2015, at any time prior to the close of business on the second Scheduled Trading Day immediately preceding the Stated Maturity (excluding the date of such Stated Maturity), regardless of whether any of the conditions described in clauses (i) through (iv) below has been met. No payment or adjustment shall be made for dividends on, or other distributions with respect to, any Common Stock except as expressly provided in this Article VI.

(i) Prior to the close of business on the Business Day immediately preceding February 15, 2015, a Holder may surrender its Notes for conversion during any calendar quarter commencing after June 30, 2012 (and only during such calendar quarter), if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the preceding calendar quarter exceeds 110% of the applicable Conversion Price in effect on each applicable Trading Day. The Company shall notify the Trustee and the Conversion Agent if the Notes become convertible in accordance with this Section 6.02(a)(i).

(ii) Prior to the close of business on the Business Day immediately preceding February 15, 2015, a Holder may surrender its Notes for conversion during the five Business Day period after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder in accordance with the procedures set forth in this Section 6.02(a)(ii), for each Trading Day of such Measurement Period was less than 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate on such Trading Day (the “Trading Price Condition”). The Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes in

accordance with this Section 6.02(a)(ii) unless requested by the Company, and the Company shall have no obligation to make such request unless a Holder of Notes provides the Company with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. The Company shall instruct the Bid Solicitation Agent to determine (or, if the Company is then acting as Bid Solicitation Agent, the Company shall determine) the Trading Price of the Notes beginning on the next Trading Day promptly following the receipt of such evidence and on each successive Trading Day until such Trading Day on which the Trading Price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate. If the Company does not so instruct the Bid Solicitation Agent to obtain (or, if the Company is then acting as Bid Solicitation Agent, the Company does not obtain) bids when required, the Trading Price per $1,000 principal amount of the Notes shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate on each day the Company fails to do so. If the Trading Price Condition has been met, the Company shall so notify Holders, the Trustee and the Conversion Agent. If, at any time after the Trading Price Condition has been met, the Trading Price per $1,000 principal amount of Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the Common Stock and the Conversion Rate for such date, the Company shall so notify Holders, the Trustee and the Conversion Agent.

(iii) Prior to the close of business on the Business Day immediately preceding February 15, 2015, if the Company elects to:

(A) issue to all or substantially all holders of Common Stock any rights, options or warrants entitling them for a period of not more than 45 calendar days after the announcement date of such issuance to subscribe for or purchase shares of Common Stock at less than the average of the Last Reported Sale Prices of a share of Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance; or

(B) distribute to all, or substantially all, holders of Common Stock assets, debt securities or rights to purchase securities of the Company, which distribution has a per share value, as reasonably determined by the Company’s Board of Directors, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day preceding the date of announcement for such distribution,

then, in either case, the Company shall notify the Holders of the Notes at least 35 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. Once the Company has given such notice, Holders may surrender Notes for conversion at any time until the earlier of (1) 5:00 P.M., New York City time, on the Business Day immediately preceding the Ex-Dividend Date and (2) the Company’s announcement that such issuance or distribution will not take place, even if the Notes are not otherwise convertible at such time. A Holder of the Notes may not exercise this conversion right if it will participate (as a result of holding the Notes, and at the same time on the same terms as Common Stock holders participate) in any of the transactions described above as if such Holder held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount of Notes held by such Holder divided by $1,000 without having to convert its Notes.

(iv) Prior to the close of business on the Business Day immediately preceding February 15, 2015, if a transaction or event that constitutes a Fundamental Change or a Change of Control Make-Whole occurs, regardless of whether a Holder has the right to require the Company to purchase the Notes pursuant to Article V hereof, or if the Company is a party to a consolidation, merger, binding share exchange, sale, conveyance, transfer or lease of all or substantially all of the Company’s assets, pursuant to which the Common Stock would be converted into cash, securities or other assets, Holders may surrender Notes for conversion at any time from or after the date which is 35 Scheduled Trading Days prior to the anticipated effective date of such transaction (or, if later, the Business Day after the Company gives notice of such transaction) until 35 Trading Days after the actual effective date of such transaction (or, if such transaction also constitutes a Fundamental Change, until the related Fundamental Change Purchase Date). The Company shall notify Holders and the Trustee: (1) as promptly as practicable following the date the Company publicly announces such transaction, but in no event less than 35 Scheduled Trading Days prior to the anticipated effective date of such transaction or (2) if the Company does not have knowledge of such transaction at least 35 Scheduled Trading Days prior to the anticipated effective

date of such transaction, within one Business Day of the date upon which the Company receives notice, or otherwise becomes aware, of such transaction but in no event later than the actual effective date of such transaction.

Failure by the Company to give any notice required by Section 6.02(a), or any defect therein, shall not affect the legality or validity of the relevant transaction or event.

(b) Conversion Procedures . The following procedures shall apply to convert Notes:

(i) In respect of a Definitive Note, a Holder must (A) complete and manually sign the conversion notice on the back of the Note, or a facsimile of such conversion notice; (B) deliver such conversion notice, which is irrevocable, and the Note to the Conversion Agent; (C) if required, furnish appropriate endorsements and transfer documents as may be required by the Conversion Agent and, if required pursuant to Section 6.02(d), pay all transfer or similar taxes; and (D) if required pursuant to Section 2.01(d) of this Supplemental Indenture, pay funds equal to interest payable on the next Interest Payment Date to which such Holder is not entitled.

(ii) In respect of a beneficial interest in a Global Note, a Beneficial Owner must comply with the procedures of DTC and, if applicable, Euroclear and Clearstream, for converting a beneficial interest in a Global Note and, if required pursuant to Section 2.01(d) of this Supplemental Indenture, pay funds equal to interest payable on the next Interest Payment Date to which such Beneficial Owner is not entitled, and if required, pay all taxes or duties required pursuant to Section 6.02(d), if any.

(iii) The date a Holder complies with the foregoing requirements is the “Conversion Date” hereunder, at which time the rights of the Holders of such converted Notes as Holders shall cease. Each conversion shall be deemed to have been effected as to any Notes (or portion thereof) surrendered for conversion on the relevant Conversion Date, and with respect to any shares of Common Stock that are issuable upon such conversion: (i) if such conversion was subject to a Physical Settlement, the Person in whose name the certificate or certificates for such shares of Common Stock will be registered, shall become the holder of record of such shares as of the close of business on the Conversion Date; and (ii) if such conversion was subject to a Combination Settlement, the Person in whose name the certificate or certificates for such shares of Common Stock will be registered, shall become the holder of record of such shares as of the close of business on the last Trading Day of the relevant Cash Settlement Averaging Period.

(iv) In the case of any Note which is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to the Holder thereof, at the expense of the Company, a new Note or Notes of authorized denominations in aggregate principal amount equal to the unconverted portion of the principal amount of such Note.

(v) If a Holder has already delivered a Fundamental Change Purchase Notice in connection with a Fundamental Change, with respect to a Note, the Holder may not surrender that Note for conversion until the Holder has validly withdrawn the Fundamental Change Purchase Notice in accordance with this Supplemental Indenture. Upon surrender of a Note that is converted in part, the Company shall execute, and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder, a new Note in an authorized denomination equal in principal amount to the unconverted portion of the Note surrendered.

(vi) If more than one Note shall be surrendered for conversion at one time by the same Holder, the number of full shares of Common Stock, cash or a combination of shares of Common Stock and cash, as applicable, which shall be issuable upon conversion thereof shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof) so surrendered.

(vii) If Notes are converted after 5:00 p.m., New York City time, on a Regular Record Date for the payment of interest, Holders of such Notes at 5:00 p.m., New York City time, on such Regular Record Date will receive the interest and Additional Interest, if any, payable on such Notes on the corresponding Interest Payment Date notwithstanding the conversion. Notes, upon surrender for conversion during the period from 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the immediately

following Interest Payment Date, must be accompanied by funds equal to the amount of interest and Additional Interest, if any, payable on such Interest Payment Date on the Notes so converted; provided , that no such payment need be made (i) for conversions following the Regular Record Date immediately preceding Stated Maturity; (ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date; or (iii) to the extent of any overdue interest (including any overdue Additional Interest), if any overdue interest exists at the time of conversion with respect to such Note.

(c) Settlement upon Conversion . Upon any conversion of any Note, the Company shall deliver to converting Holders, in respect of each $1,000 principal amount of Notes being converted, at the Company’s election, in full satisfaction of the Company’s Conversion Obligation, (1) shares of Common Stock, together with cash in lieu of fractional shares, if any (a “Physical Settlement”), (2) a cash payment without any delivery of shares of Common Stock (a “Cash Settlement”) or (3) a combination of cash and shares of Common Stock, together with cash in lieu of fractional shares, if any (a “Combination Settlement” and, together with “Physical Settlement” and “Cash Settlement”, each a “Settlement Method”), in each case, as set forth below:

(i) Conversions that occur on or after the 25th Scheduled Trading Day immediately preceding the Stated Maturity will be settled using the same Settlement Method. If the Company has not delivered a notice of election of settlement method prior to the 26th Scheduled Trading Day immediately preceding the Stated Maturity in respect of conversions occurring on or after the 25th Scheduled Trading Day prior to the Stated Maturity, the Company will be deemed to have elected Combination Settlement and the Specified Dollar Amount will be equal to $1,000.

(ii) Conversions that occur prior to the 25th Scheduled Trading Day prior to the Stated Maturity, will be settled using the same Settlement Method for all conversions occurring on any given Conversion Date. Except for any conversions that occur on or after the 25th Scheduled Trading Day prior to the Maturity Date, however, the Company will not have any obligation to use the same Settlement Method with respect to conversions that occur on different Conversion Dates. If the Company elects a Settlement Method, the Company will inform Holders so converting through the Trustee of such Settlement Method that has been selected no later than the second Trading Day immediately following the related Conversion Date (or, in the case of any conversions occurring on or after the 25th Scheduled Trading Day prior to the Stated Maturity, no later than the 26th Scheduled Trading Day prior to the Stated Maturity). If the Company does not timely elect a Settlement Method in respect of a particular Conversion Date, the Company will be deemed to have elected Combination Settlement in respect of the Company’s Conversion Obligation and the Specified Dollar Amount will be equal to $1,000. If the Company has timely elected Combination Settlement in respect of any conversion, but fails to notify the converting Holders of the Specified Dollar Amount, the Company will be deemed to have elected that the Specified Dollar Amount be $1,000.

(iii) The type and amount of consideration due upon conversion will be computed as follows:

(A) If the Company has elected a Physical Settlement with respect to any Notes tendered for conversion, the Company shall deliver to the converting Holder a number of shares of Common Stock equal to the product of (1) the aggregate principal amount of Notes to be converted, divided by $1,000, and (2) the applicable Conversion Rate, together with cash in lieu of fractional shares.

(B) If the Company has elected a Cash Settlement with respect to any Notes tendered for conversion, the Company shall deliver, for each $1,000 principal amount of Notes being converted, cash in an amount equal to the sum of the Daily Conversion Values for each of the twenty (20) consecutive Trading Days during the relevant Cash Settlement Averaging Period.

(C) If the Company has elected or is deemed to have elected a Combination Settlement with respect to any Notes tendered for conversion, the Company shall pay or deliver, as the case may be, to the converting Holder for each $1,000 principal amount of Notes being converted, the sum of the Daily Settlement Amounts for each of the twenty (20) consecutive Trading Days during the relevant Cash Settlement Averaging Period.

Except for conversions upon a Fundamental Change as provided in Section 6.04, (1) in the case of a Physical Settlement, the Company shall deliver the consideration due in respect of conversion no later than the third Business Day immediately following the relevant Conversion Date and (2) in the case of any other Settlement Method, the Company shall deliver the consideration due in respect of the conversion no later than the third Business Day immediately following the last Trading Day of the relevant Cash Settlement Averaging Period (each, the “Settlement Date”).

(iv) Solely for purposes of determining the payments and deliveries due upon conversion under this Section 6.02(c), and notwithstanding the definition of “Trading Day” contained in Section 1.01, “Trading Day” means a day on which (i) there is no Market Disruption Event and (ii) trading in the Common Stock generally occurs on The New York Stock Exchange or, if the Common Stock is not then listed on The New York Stock Exchange, on the principal other United States national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a United States national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading. If the Common Stock (or other security for which a Daily VWAP must be determined) is not so listed or admitted for trading, “Trading Day” means a “Business Day.”

(v) The Company shall not issue fractional shares of Common Stock upon conversion of Notes. If multiple Notes shall be surrendered for conversion at one time by the same Holder, the number of full shares of Common Stock which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional share of Common Stock would be issuable upon the conversion of any Notes, the Company shall make payment therefor in cash in lieu of fractional shares of Common Stock based on:


	(1)	if Physical Settlement applies, on the Daily VWAP of the Common Stock on the relevant Conversion Date, and

	(2)	if Combination Settlement applies, the Daily VWAP of the Common Stock on the last Trading Day of the relevant Cash Settlement Averaging Period.

(d) Taxes on Conversion . If a Holder converts Notes the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issuance of shares of Common Stock upon such conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder’s name. The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Conversion Agent receives a sum sufficient to pay any tax which shall be due because the shares are to be issued in a name other than the Holder’s name, but the Conversion Agent shall have no duty to determine if any such tax is due. Nothing herein shall preclude any withholding of tax required by law.

(e) Certain Covenants of the Company .

(i) The Company shall, prior to issuance of any Notes hereunder, and from time to time as may be necessary, reserve out of its authorized but unissued Common Stock or shares of Common Stock held in treasury, sufficient number of shares of Common Stock, free of preemptive rights, to permit the conversion of the Notes pursuant to Section 6.02(a).

(ii) All shares of Common Stock delivered upon conversion of the Notes shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim.

(iii) The Company shall endeavor to comply promptly with all applicable federal and state securities laws regulating the issuance and delivery of shares of Common Stock upon the conversion of Notes.

(iv) Before taking any action which would cause an adjustment increasing the Conversion Rate to an amount that would cause the Conversion Price to be reduced below the then par value per share of the Common Stock, if any, of the shares of Common Stock issuable upon conversion of the Notes, the

Company will take all corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue shares of such Common Stock at such adjusted Conversion Rate.

Section 6.03 Adjustments to Conversion Rate . The Conversion Rate shall be adjusted from time to time by the Company, as described below, except that the Company will not make any adjustments to the Conversion Rate if Holders of the Notes participate (as a result of holding the Notes, and at the same time as holders of the Common Stock participate) in any of the transactions described in this Section 6.03 as if such Holders of the Notes held a number of shares of the Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holders, without having to convert their Notes.

(a) If the Company issues shares of Common Stock as a dividend or distribution on shares of the Common Stock, or effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:


	CR ₁ =CR ₀ x	OS ₁

		OS ₀

where,


	CR ₀ =	the Conversion Rate in effect immediately prior to the Ex-Dividend Date of such dividend or distribution, or the effective date of such share split or share combination, as applicable

	CR ₁ =	the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date or effective date, as applicable

	OS ₀ =	the number of shares of Common Stock outstanding immediately prior to the open of business on such Ex-Dividend Date or effective date, as applicable

	OS ₁ =	the number of shares of Common Stock outstanding immediately after giving pro forma effect to such dividend, distribution, share split or share combination

Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution, or immediately after the open of business on the effective date for such share split or share combination. The Company will not pay any dividend or make any distribution on shares of Common Stock held in treasury by the Company. If any dividend or distribution of the type described in this Section 6.03(a) is declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(b) If the Company distributes to holders of all or substantially all the Common Stock any rights or warrants entitling them for a period of not more than 60 calendar days to subscribe for or purchase shares of Common Stock at a price per share less than the average of the Daily VWAP of the Common Stock for the 10 consecutive Trading-Day period ending on the Trading Day immediately preceding the date of announcement of such distribution (excluding such date of announcement), the Conversion Rate will be adjusted based on the following formula:


	CR ₁ =CR ₀ x	OS ₀ +X

		OS ₀ +Y

where,


	CR ₀ =	the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such distribution


	CR ₁ =	the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date

	OS ₀ =	the number of shares of Common Stock outstanding immediately prior to such Ex-Dividend Date

	X =	the total number of shares of Common Stock issuable pursuant to such rights or warrants

	Y =	the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the average of the Daily VWAP of the Common Stock over the 10 consecutive Trading-Day period ending on the Trading Day immediately preceding the date of announcement of the distribution of such rights or warrants (excluding such date of announcement)

Such adjustment shall be successively made whenever any such rights or warrants are issued and shall become effective immediately after the open of business on the Ex-Dividend Date for such issuance. The Company shall not issue any such rights, options or warrants in respect of shares of Common Stock held in treasury by the Company. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, or such rights or warrants are not exercised prior to their expiration, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such Ex-Dividend Date for such issuance had not occurred.

In determining whether any rights or warrants entitle the Holders to subscribe for or purchase shares of Common Stock at less than such Daily VWAP, and in determining the aggregate offering price of such shares of Common Stock, there shall be taken into account any consideration received by the Company for such rights or warrants and any amount payable on exercise or conversion thereof, the value of such consideration, if other than cash, to be determined by the Company’s Board of Directors.

(c) If the Company distributes shares of its capital stock, evidences of its indebtedness or other assets or property of the Company to holders of all or substantially all the Common Stock, excluding:

(i) dividends or distributions and rights or warrants referred to in Section 6.03(a) or (b) above;

(ii) dividends or distributions paid exclusively in cash; and

(iii) as described below in this Section 6.03(c) with respect to Spin-Offs, then the Conversion Rate will be adjusted based on the following formula:


	CR ₁ =CR ₀ x	SP ₀

		SP ₀ -FMV

where,


	CR ₀ =	the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such distribution

	CR ₁ =	the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date

	SP ₀ =	the average of the Daily VWAP of the Common Stock over the 10 consecutive Trading-Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution

	FMV =	the Fair Market Value (as determined by the Company’s Board of Directors) of the shares of capital stock, evidences of indebtedness, assets or property distributed with respect to each outstanding share of Common Stock on the Ex-Dividend Date for such distribution.

Such adjustment shall become effective immediately after the open of business on the Ex-Dividend Date for such distribution. With respect to an adjustment pursuant to this clause (c) where there has been a payment of a dividend or other distribution on the Common Stock in shares of capital stock of any class or series, or similar equity interest, of or relating to a Subsidiary or other business unit (a “Spin-Off”), the Conversion Rate in effect immediately prior to 5:00 p.m., New York City time, on the effective date of such Spin-Off will be increased based on the following formula:


	CR ₁ =CR ₀ x	FMV ₀ +MP ₀

		MP ₀

where,


CR ₀ =	the Conversion Rate in effect immediately prior to 5:00 p.m., New York City time, on the effective date of the Spin-Off

CR ₁ =	the Conversion Rate in effect immediately after the effective date of the Spin-Off

FMV ₀ =	the average of the Daily VWAP of the capital stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading-Day period from, and including, the effective date of the Spin-Off

MP ₀ =	the average of the Daily VWAP of Common Stock over the first 10 consecutive Trading-Day period from, and including, the effective date of the Spin-Off.

Such adjustment shall occur on the tenth Trading Day from, and including, the effective date of the Spin-Off and shall be applied on a retroactive basis from, and including, the effective date of the Spin-Off; provided that in respect of any conversion occurring prior to the effective date of the Spin-Off with respect to which the Settlement Date would occur during the 10 Trading Days from, and including, the effective date of any Spin-Off, references with respect to the Spin-Off to the 10 consecutive Trading-Day period shall be deemed replaced with such lesser number of Trading Days as have elapsed between the effective date of such Spin-Off and the Settlement Date in determining the applicable Conversion Rate; provided , further , that in respect of any conversion occurring prior to the effective date of the Spin-Off with respect to which the Settlement Date would occur during the three Trading Days from, and including, the effective date of such Spin-Off, references to the 10 consecutive Trading-Day period shall be deemed replaced with a three consecutive Trading-Day period with such adjustment to the Conversion Rate being applied on a retroactive basis from, and including, the effective date of the Spin-Off. In addition, if the effective date for the Spin-Off is less than 10 Trading Days prior to, and including, the end of the Cash Settlement Averaging Period in respect of any conversion, references in the portion of this Section 6.03(c) related to Spin-Offs to 10 Trading Days shall be deemed replaced, for purposes of calculating the affected daily Conversion Rates in respect of that conversion, with such lesser number of Trading Days as have elapsed from, and including, the effective date for such Spin-Off to, and including, the last Trading Day of such Cash Settlement Averaging Period.

(d) If the Company makes any dividend or any other distribution of cash to the holders of all or substantially all of the Common Stock, other than a regular quarterly dividend that does not exceed $0.55 per share, as subject to adjustment as provided below (the “Dividend Threshold”), in which case, immediately prior to the opening of business on the Ex-Dividend Date for such dividend or distribution the Conversion Rate will be increased based on the following formula:


	CR ₁ =CR ₀ x	SP ₀ - DTA

		SP ₀ -C

where,


CR ₀ =	the Conversion Rate in effect immediately prior to the Ex-Dividend Date for such dividend or distribution

CR ₁ =	the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend or distribution

SP ₀ =	the average of the Daily VWAP of the Common Stock for each Trading Day in the five consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution

C =	the amount in cash per share the Company distributes to holders of Common Stock.

DTA =	the initial Dividend Threshold amount, provided that if the dividend is not a regular quarterly dividend, the Dividend Threshold will be zero

In connection with any adjustment to the Conversion Rate based on this Section 6.03(d), the Company must issue a press release for publication through Dow Jones & Company, Inc., Bloomberg Business News, BusinessWire, or PR Newswire or a substantially equivalent financial news organization within five Business Days following the Record Date for such dividend or distribution (excluding such record date), announcing such an adjustment. Such increase to the Conversion Rate will become effective immediately after the open of business on the Ex-Dividend Date for such dividend or distribution. If any dividend or distribution of the type described in this Section 6.03(d) is declared but not so paid or made, the Conversion Rate will again be adjusted to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

The Dividend Threshold will be adjusted, in a manner inversely proportional to adjustments to the Conversion Rate; provided that no adjustment will be made to the Dividend Threshold for any adjustment to the Conversion Rate under this Section 6.03(d). If an adjustment is required to be made as set forth in this Section 6.03(d) as a result of a distribution that is not a regular quarterly dividend, the Dividend Threshold amount will be deemed to be zero. Notwithstanding the foregoing, if at any time regular dividends are distributed other than on a quarterly basis, the Dividend Threshold amount shall be appropriately adjusted and shall apply to such regular dividends.

If “C” (as defined above) is equal to or greater than “SP ₀ ” (as defined above), or if the difference between “SP ₀ ” and “C” is less than $0.01, in lieu of the foregoing increase, each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of shares of Common Stock, the amount of cash that such Holder would have received if such holder owned a number of shares of Common Stock equal to the Conversion Rate on the Record Date for such cash dividend or distribution.

If the Company makes a dividend or distribution to all or substantially all holders of Common Stock that consists in the aggregate of both cash and shares of Common Stock that is deductible for U.S. federal income tax purposes, the adjustment to the Conversion Rate shall be determined pursuant to this Section 6.03(d) only, with the value of Common Stock, as determined by the Company’s Board of Directors, constituting “cash” for purposes hereof.

(e) If the Company or any of its Subsidiaries makes a payment in respect of a tender or exchange offer for Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceeds the Daily VWAP of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (such last date, the “Expiration Time”), the Conversion Rate will be increased based on the following formula:


	CR ₁ =CR ₀ x	AC+(SP ₁ xOS ₁ )

		OS ₀ xSP ₁

where,


CR ₀ =	the Conversion Rate in effect immediately prior to the effective date of the adjustment

CR ₁ =	the Conversion Rate in effect immediately after the effective date of the adjustment

AC =	the aggregate value of all cash and any other consideration (as determined by the Company’s Board of Directors) paid or payable for shares accepted for purchase or exchange in such tender or exchange offer

OS ₀ =	the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires

OS ₁ =	the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the reduction of shares accepted for purchase or exchange in such tender or exchange offer)

SP ₁ =	the average of the Daily VWAP of the Common Stock over the 10 consecutive Trading-Day period commencing on the Trading Day next succeeding the date such tender or exchange offer expires.

Such adjustment will occur on the tenth Trading Day from, and including, the Trading Day next succeeding the date such tender or exchange offer expires and shall be applied on a retroactive basis from, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that in respect of any conversion occurring prior to the date such tender or exchange offer expires with respect to which the Settlement Date would occur during the 10 Trading Days from, and including, the Trading Day next succeeding the date such tender or exchange offer expires, references with respect to the tender or exchange offer to the 10 consecutive Trading-Day period shall be deemed replaced with such lesser number of Trading Days as have elapsed between the Trading Day next succeeding the date such tender or exchange offer expires and the Settlement Date in determining the applicable Conversion Rate. If the Trading Day next succeeding the date such tender or exchange offer expires is less than 10 Trading Days prior to, and including, the end of the Cash Settlement Averaging Period in respect of any conversion, references in this Section 6.03(e) to 10 Trading Days shall be deemed replaced, for purposes of calculating the affected daily Conversion Rates in respect of that conversion, with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date such tender or exchange offer expires to, and including, the last Trading Day of such Cash Settlement Averaging Period.

If the Company is obligated to purchase shares pursuant to any such tender or exchange offer, but the Company is permanently prevented by applicable law from effecting any such purchases or all such purchases are rescinded, the Conversion Rate shall again be adjusted to be the Conversion Rate that would then be in effect if such tender or exchange offer had not been made.

(f) Notwithstanding the foregoing provisions of this Section 6.03, if a Conversion Rate adjustment becomes effective on any date as described above, and a Holder that has converted its Notes on or after such date and on or prior to the related Record Date would be treated as the record holder of shares of Common Stock as of the related Conversion Date as set forth in Section 6.02(b) based on an adjusted Conversion Rate for such Ex-Dividend Date, then, notwithstanding the foregoing Conversion Rate adjustment provisions set forth in this Section 6.03, the Conversion Rate adjustment relating to such Ex-Dividend Date shall not be made for such converting Holder. Instead, such Holder shall be treated as if such Holder were the record owner of a number of shares of Common Stock based on an unadjusted Conversion Rate and participate in the related dividend, distribution or other event giving rise to such adjustment.

(g) The Company may (but is not required to) increase the Conversion Rate to avoid or diminish income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or any similar event treated as such for income tax purposes.

(h) To the extent permitted by applicable law and the rules of any stock exchange or market upon which the Common Stock is listed or admitted for trading, the Company may increase the Conversion Rate by

any amount for a period of at least 20 days if the Company’s Board of Directors determines that such increase would be in the best interest of the Company, which determination shall be conclusive.

(i) Notwithstanding the foregoing provisions of this Section 6.03, the applicable Conversion Rate need not be adjusted:

(i) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan;

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

(iii) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security not described in clause (ii) above and outstanding as of the Issue Date;

(iv) for a change in the par value of the Common Stock; or

(v) for accrued and unpaid Interest (including any Additional Interest).

(j) All calculations under this Section 6.03 shall be made by the Company and shall be made to the one-ten thousandth ( ¹ /10,000) of a share.

(k) Notwithstanding the adjustments in this Section 6.03, the Company shall not make an adjustment which would result in a decrease in the Conversion Rate (other than as a result of a share split or combination). The Company shall not make an adjustment which would result in the reduction of the Conversion Price below $0.01.

(l) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent other than the Trustee an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which such adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Rate to the Holder of each Note at such Holder’s last address appearing on the Security Register. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(m) Any case in which this Section 6.03 provides that an adjustment shall become effective immediately after (i) a Record Date for an event, (ii) the date fixed for the determination of a share split or combination pursuant to Section 6.03(a), or (iii) the Expiration Time for any tender or exchange offer pursuant to Section 6.03(e), (each a “Determination Date”), the Company may elect to defer until the occurrence of the applicable Adjustment Event (x) issuing to the Holder of any Note converted after such Determination Date and before the occurrence of such Adjustment Event, the additional shares of Common Stock or other securities issuable upon such conversion by reason of the adjustment required by such Adjustment Event over and above the Common Stock issuable upon such conversion before giving effect to such adjustment and (y) paying to such Holder any amount in cash in lieu of such additional shares of Common Stock or other securities or in lieu of any fraction pursuant to Section 6.02(c). For purposes of this Section 6.03(l), the term “Adjustment Event” shall mean:

(1) in any case referred to in clause (i) above, the occurrence of such event,

(2) in any case referred to in clause (ii) above, the date any such dividend or distribution is paid or made, and

(3) in any case referred to in clause (iii) above, the date a sale or exchange of Common Stock pursuant to such tender or exchange offer is consummated and becomes irrevocable.

(n) For purposes of this Section 6.03, the number of shares of Common Stock at any time Outstanding shall not include shares held in the treasury of the Company but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company.

(o) Whenever any provision of this Article VI requires a calculation of the Daily VWAP, Daily Conversion Values or Daily Settlement Amounts over a span of multiple days, the Company will make appropriate adjustments (determined in good faith by the Company’s Board of Directors) to account for any adjustment to the Conversion Rate that becomes effective at any time during the period from which such Daily VWAPs, Daily Conversion Values or Daily Settlement Amounts are to be calculated. Such adjustments shall be effective as of the effective date of the adjustment to the Conversion Rate.

Section 6.04 Adjustment Upon Certain Fundamental Changes .

(a) If a Holder elects to convert Notes at a time when a Fundamental Change has occurred, then the Conversion Rate applicable to the Notes so converted will be increased by an additional number of shares of Common Stock (the “Additional Shares”) as described below, which is also referred to as the Change of Control Make-Whole. Any conversion of Notes will be deemed to have occurred in connection with a Fundamental Change giving rise to an adjustment only if (i) in the case of a Fundamental Change described in clause (2) of the definition thereof, such Notes are surrendered for conversion from and after the date that is 35 Scheduled Trading Days prior to the anticipated Effective Date of such Fundamental Change through and including the Business Day immediately preceding the related Fundamental Change Purchase Date, or (ii) in the case of a Fundamental Change described in clause (1) of the definition thereof, such Notes are surrendered for conversion from and after the Effective Date of such Fundamental Change through and including the Business Day immediately preceding the related Fundamental Change Purchase Date. The Company will notify Noteholders of any Fundamental Change described in clause (2) of the definition thereof not later than 35 Scheduled Trading Days prior to the anticipated Effective Date (excluding such anticipated Effective Date) of such Fundamental Change.

(b) Upon surrender of Notes for conversion in connection with a Fundamental Change, the Company shall have the right to deliver, in lieu of shares of Common Stock, including the Additional Shares, cash or a combination of cash and shares of Common Stock as provided under Section 6.02(c); provided, however, that if the consideration for the Common Stock in any Fundamental Change described in clause (2) of the definition of Fundamental Change is comprised entirely of cash, then, for any conversion of Notes following the Effective Date of such Fundamental Change, the amounts deliverable by the Company shall be calculated based solely on the Stock Price for the Fundamental Change and shall be deemed to be an amount equal to the applicable Conversion Rate (including any adjustment for Additional Shares described in this Section) multiplied by such Stock Price. In such event, the amounts deliverable by the Company shall be determined as of the Conversion Date and paid to Holders in cash on the third Business Day following the Conversion Date.

(c) The number of Additional Shares by which the Conversion Rate will be increased pursuant to Section 6.04(a) shall be determined by reference to the table attached as Schedule A hereto, based on the date on which the Fundamental Change occurs or becomes effective (the “Effective Date”) and the Stock Price paid or deemed paid per share of Common Stock in the Fundamental Change. If a Holder elects to convert its Notes prior to the Effective Date of any Fundamental Change, and the Fundamental Change does not occur, such Holder will not be entitled to an increased Conversion Rate in connection with such conversion.

The Stock Prices set forth in the column headings of the table attached as Schedule A will be adjusted as of any date on which the Conversion Rate of the Notes is adjusted pursuant to Section 6.03. The adjusted Stock Prices will equal the Stock Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment and the denominator of which is the Conversion Rate as so

adjusted. The number of Additional Shares set forth in such table will be adjusted in the same manner as the Conversion Rate as set forth in Section 6.03.

The exact Stock Prices and Effective Dates may not be set forth in the table in Schedule A, in which case:

(i) if the Stock Price is between two Stock Prices in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares by which the Conversion Rate will be increased will be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Prices and the two dates, as applicable, based on a 365-day year.

(ii) if the Stock Price is greater than $22.00 (subject to adjustment), no Additional Shares will be added to the Conversion Rate.

(iii) if the Stock Price is less than $16.47 (subject to adjustment), no Additional Shares will be added to the Conversion Rate.

Notwithstanding the foregoing, in no event will the total number of shares of Common Stock issuable upon conversion of the Notes exceed 60.7165 per $1,000 principal amount of Notes, subject to adjustment in the same manner as the Conversion Rate as set forth above in Section 6.03.

Section 6.05 Effect of Reclassification, Consolidation, Merger or Sale .

(a) If any of the following events occur: (i) any recapitalization, reclassification or change of Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, or other property or assets (or any combination thereof), or (ii) any statutory share exchange, consolidation or merger involving the Company pursuant to which the Common Stock will be converted into cash, securities or other property (or any combination thereof), or (iii) any sale, lease or other transfer in one transaction or a series of related transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person (other than one or more of the Subsidiaries) as a result of which the Common Stock will be converted into cash, securities or other property (or any combination thereof) (any such event or transaction, a “Reorganization Event”), then the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture) providing that at the effective time of the Reorganization Event each Note shall be convertible into, with respect to each $1,000 in principal amount of such Note, the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Reorganization Event would have owned or been entitled to receive upon such Reorganization Event (the “Reference Property”).

Provided, however, that at and after the effective time of the Reorganization Event (i) the Company will continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion of the Notes, as set forth under Section 6.02(c) and (ii) (x) the amount payable in cash upon conversion of the Notes as set forth under Section 6.02(c) will continue to be payable in cash, (y) the number of shares of Common Stock that the Company (if the Company elects Physical Settlement or Combination Settlement) would have been required to deliver upon conversion of the Notes under Section 6.02(c) will be instead deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have been entitled to receive in such Reorganization Event and (z) the Daily VWAP will be calculated based on the value of a unit of Reference Property. For purposes of the foregoing, the type and amount of consideration that a holder of Common Stock would have been entitled to receive in the case of any such Reorganization Event that causes the Common Stock to be converted into the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the Reference Property into which the Notes will be convertible or used to calculate the Daily VWAP, as the case may be, will be deemed to be the weighted average of the types and amounts of consideration received by the holders of Common Stock that affirmatively make such an election. Such supplemental indenture shall provide for provisions and adjustments which shall be as nearly equivalent as may be practicable to the provisions and adjustments provided for in this Article VI and in Article V of this Supplemental Indenture and in the definition of Fundamental Change, as appropriate, as determined in good faith by the Company

(which determination shall be conclusive and binding), to make such provisions apply to such other Person if different from the original issuer of the Notes. If, in the case of any Reorganization Event, the cash, securities or other property receivable thereupon by a holder of Common Stock includes cash, securities or other property of a Person other than the successor or purchasing Person, as the case may be, in such Reorganization Event, then such supplemental indenture shall also be executed by such successor or purchasing Person, as the case may be, and shall contain such additional provisions to protect the interests of the Holders of the Notes as the Board of Directors of the Company shall reasonably consider necessary by reason of the foregoing.

(b) The Company shall cause notice of the execution of any supplemental indenture required by this Section 6.05 to be mailed to each Holder of Notes, at its address appearing on the Security Register, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

(d) None of the foregoing provisions shall affect the right of a Holder of Notes to convert the Notes into shares of Common Stock as set forth in Section 6.02 prior to the effective time of such Reorganization Event.

Section 6.06 Responsibility of Trustee . The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to the Company or any Holder of Notes to determine the Conversion Rate, or whether any facts exist which may require any adjustment of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any cash or shares of Common Stock or stock certificates or other securities or property upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article VI. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine whether a supplemental indenture needs to be entered into pursuant to Section 6.05 or the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 6.05 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Notes after any Reorganization Event or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 6.02, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

Section 6.07 Notice to Holders Prior to Certain Actions . In case:

(a) the Company shall declare a dividend (or any other distribution) on the Common Stock that would require an adjustment in the Conversion Rate pursuant to Section 6.03; or

(b) the Company shall authorize the grant to the holders of all or substantially all of the Common Stock of rights or warrants to subscribe for or purchase any shares of Common Stock; or

(c) of any reclassification or reorganization of the Common Stock of the Company (other than a subdivision or combination of its outstanding Common Stock, or a change in par value, or from par value to no par value, or from no par value to par value), or of any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or

(d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company;

in addition to any press release required under Section 6.03, the Company shall cause to be filed with the Trustee and to be mailed to each Holder of Notes at his address appearing on the Security Register, as promptly as possible but in any event at least three (3) calendar days prior to the applicable date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined, or (y) the date on which such reclassification, reorganization, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reclassification, reorganization, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such dividend, distribution, reclassification, reorganization, consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

Section 6.08 Stockholder Rights Plan . To the extent that the Company has a rights plan in effect upon conversion of the Notes into Common Stock, Holders that convert their Notes will receive, in addition to the Common Stock (if any), the rights under the rights plan, unless prior to any conversion, the rights have separated from the Common Stock, in which case, and only in such case, the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of Common Stock shares of the Company’s capital stock, evidences of indebtedness or assets as described in Section 6.03(b) above, subject to readjustment in the event of the expiration, termination or redemption of such rights. In lieu of any such adjustment, the Company may amend such applicable stockholder rights agreement to provide that upon conversion of the Notes the Holders will receive, in addition to the Common Stock (if any) issuable upon such conversion, the rights which would have attached to such Common Stock if the rights had not become separated from the Common Stock under such applicable stockholder rights agreement.

ARTICLE VII

REPORTS BY THE COMPANY

Section 7.01 Section 704 Replaced . Section 704 of the Original Indenture is hereby superseded and replaced in its entirety by the following in respect of the Notes established and issued under this Supplemental Indenture:

The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Certain Matters Relating to the Trustee .

(a) The Company hereby confirms Article Six of the Original Indenture and agrees to protect, exonerate, defend, indemnify and save the Trustee and its officers, directors, employees and agents

(collectively, the “Indemnitees”) harmless from and against any and all liabilities, losses, damages, fines, suits, actions, demands, penalties, costs and expenses, including out-of-pocket, incidental expenses, legal fees and expenses, the allocated costs and expenses of counsel and legal staff and the costs and expenses of defending or preparing to defend against any claim (“Losses”) that may be imposed on, incurred by, or assessed against, the Indemnitees or any of them for following any instruction or other direction upon which the Trustee is authorized to rely pursuant to the terms of this Supplemental Indenture, whether acting in its capacity as Trustee, Conversion Agent, Paying Agent, Securities Custodian or Security Registrar. In addition to and not in limitation of the immediately preceding sentence, the Company also covenants and agrees to indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by, or asserted against the Indemnitees or any of them in connection with or arising out of the Trustee’s performance, as applicable, under this Supplemental Indenture provided that such party has not acted with negligence or engaged in willful misconduct. The provisions of this Section 8.01 shall survive the termination of this Supplemental Indenture and the resignation or removal of the Trustee.

(b) Except for information provided by the Trustee, in writing, specifically concerning the Trustee, the Trustee shall not have any responsibility with respect to any information included in any prospectus or other disclosure material distributed with respect to the Notes, and the Trustee shall have no responsibility for compliance with securities laws in connection with the issuance and sale of the Notes.

(c) The Trustee, whether in its capacity as Trustee, Conversion Agent, Paying Agent, Securities Custodian or Security Registrar, agrees to accept and act upon instructions or directions pursuant to this Supplemental Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods, provided, however, that (i) the Company, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, (ii) such originally executed instructions or directions shall be signed by an authorized officer of the Company, and (iii) the Company shall provide to the Trustee an incumbency certificate listing such authorized officer, which incumbency certificate shall be amended whenever a person is to be added or deleted from the listing. If the Company elects to give the Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee in its discretion elects to act upon such instructions, such instructions shall be deemed to constitute authorized instructions of the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The Company agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including without limitation, the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

No provision of this Supplemental 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.

(d) The recitals contained in this Supplemental Indenture shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity of this Supplemental Indenture. The Original Indenture, as supplemented and amended by this Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed in respect of the Notes.

Section 8.02 Withholding Offset .

(a) The Company (through the Withholding Agent or otherwise) shall be entitled to reduce or otherwise set-off against any payments made or deemed made by the Company to Holders in respect of the Notes or the Common Stock for any amounts the Company believes it is required to withhold by law. For the avoidance of doubt, if the Company pays any withholding taxes on behalf of Holders as a result of an adjustment to the Conversion Rate of the Notes, the Company may, at its option, set-off such payments against payments of cash and Common Stock in respect of the Notes. Any amounts withheld pursuant to this Section 8.02 shall be paid over by the Company (through the Withholding Agent or otherwise) to the appropriate taxing authority.

(b) Prior to or upon the occurrence of any event that results in an actual or deemed payment by the Company to Holders in respect of the Notes or the Common Stock, the Company (through the Trustee, Paying Agent, Withholding Agent, or otherwise) may request a Holder to furnish any appropriate documentation that may be required in order to determine the Company’s withholding obligations under applicable law (including, without limitation, a United States Internal Revenue Service Form W-9, Form W-8BEN, Form W-8ECI, or any certifications prepared by the Company or on its behalf in order to enable the Company to attempt to comply with its potential withholding obligations under the “Foreign Investment in Real Property Tax Act,” as appropriate). Upon the receipt of any such documentation, or in the event no such documentation is provided, the Company (through the Trustee, Paying Agent, Withholding Agent, or otherwise) will withhold pursuant to Section 8.02(a) to the extent required by applicable law.

Section 8.03 Calculations in Respect of Notes . Except as otherwise provided herein, the Company shall make all calculations called for in respect of the Notes. These calculations include, but are not limited to, determinations of the Daily VWAP, accrued interest payable on the Notes and the Conversion Rate. The Company shall make all calculations in good faith and, absent manifest error, such calculations shall be final and binding on the Holders. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of such calculations without independent verification. The Trustee shall forward the Company’s calculations to any Holder upon such Holder’s request.

Section 8.04 Application of Supplemental Indenture . Each and every term and condition contained in this Supplemental Indenture that modifies, amends or supplements the terms and conditions of the Original Indenture shall apply only to the Notes created by this Supplemental Indenture and not to any past or future series of Securities established under the Original Indenture. Except as specifically amended and supplemented by, or to the extent inconsistent with, this Supplemental Indenture, the Original Indenture shall remain in full force and effect and is hereby ratified and confirmed.

Section 8.05 Effective Date . This Supplemental Indenture shall be effective as of the date first written above and upon the execution and delivery hereof by the parties hereto.

Section 8.06 Multiple Originals . The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Supplemental Indenture.

Section 8.07 Governing Law . This Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

Section 8.08 General . The Company hereby certifies that this Supplemental Indenture conforms to the current requirements of the Trust Indenture Act.

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


	ANNALY CAPITAL MANAGEMENT, INC.

	By:	/s/ Kathryn Fagan

		Name: Kathryn Fagan
		Title: Chief Financial Officer

	WELLS FARGO BANK, NATIONAL
	ASSOCIATION, as Trustee

	By:	/s/ Yana Kisienko

		Name: Yana Kisienko
		Title: Vice President

SCHEDULE A

The following table sets forth the hypothetical Stock Price and the number of Additional Shares to be received per $1,000 principal amount of Notes pursuant to Section 6.04 of this Supplemental Indenture:


Stock Price

Effective Date	$16.47	$16.75	$17.00	$17.50	$18.00	$18.50	$18.94	$20.00	$21.00	$22.00


May 14, 2012	7.9196	7.7404	7.5073	6.0970	4.8355	3.7200	2.8581	1.2579	0.0698	0.0667

May 15, 2013	7.9196	7.7255	7.2447	5.8144	4.5383	3.4142	2.5483	0.9146	0.0000	0.0000

May 15, 2014	7.9196	7.4335	6.6238	5.1251	3.7917	2.6287	1.7491	0.1785	0.0000	0.0000

May 15, 2015	7.9196	6.9046	6.0266	4.3460	2.7587	1.2572	0.0014	0.0000	0.0000	0.0000

EXHIBIT A

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

This Note is a Book-Entry Note within the meaning of the Original Indenture and every Note authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, this Note shall be a Book-Entry Note except in the limited circumstances described in the Original Indenture.


No. R-___	Principal Amount (US) $______________
CUSIP # 035710AB8	as revised by the Schedule of Increases and
ISIN # US035710AB87	Decreases in Global Note attached hereto
Euroclear and Clearstream Common Code: #[•]

5.00% Convertible Senior Notes due 2015

Annaly Capital Management, Inc., a corporation duly organized and existing under the laws of Maryland (herein called the “Company”, which term includes any successor Person under the Supplemental Indenture referred to on the reverse hereof), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of (United States) Dollars (US$ ), as revised by the Schedule of Increases and Decreases in Global Note attached hereto, on May 15, 2015, and to pay interest thereon from May 14, 2012, or from the most recent November 15 or May 15 (each, an “Interest Payment Date”) to which interest has been paid, deemed paid or duly provided for, semi-annually in arrears on November 15 and May 15 in each year, commencing November 15, 2012, at the rate of 5.00% per annum, until the principal hereof is converted into shares of common stock of the Company, paid, deemed paid or made available for payment.

The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Supplemental Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the November 1 or May 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Interest will be paid on the basis of a 360-day year consisting of twelve 30-day months. Except as otherwise provided in the Supplemental Indenture, any such interest not so punctually paid or duly provided for will 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 Note (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 Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Original Indenture. Payment of the principal of and any premium and interest on this Note will be made (a) at the Corporate Trust Office of the Trustee in 45 Broadway, 14th Floor, New York, New York 10006, Attention: Corporate Trust Services, or such other office or agency of the Company as may be designated by it for such purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts or (b) subject to any laws or regulations applicable thereto and to the right of the Company (limited as provided in the Supplemental Indenture) to rescind the designation of any such Paying Agent, at the main offices of the Company in the Borough of Manhattan, The City of New York, or at such other offices or agencies as the Company may designate, by United States dollar check drawn on, or transfer to a United States dollar account maintained by the payee with, a bank in The City of New York; provided, however, that at the option of the Company payment of interest may be made by United States dollar check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register.

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

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

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

Dated: May 14, 2012


	ANNALY CAPITAL MANAGEMENT, INC.

	By:

		Name:
		Title:

	By:

		Name:
		Title:

CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated
therein referred to in the within-mentioned Second
Supplemental Indenture and the Original Indenture.

WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee


By:

	Authorized Signatory

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This Note is one of a duly authorized issue of securities of the Company (herein called the “ Notes ”), issued under a Second Supplemental Indenture dated as of May 14, 2012 (the “ Supplemental Indenture ”) to an indenture dated as of February 12, 2010 (as supplemented, and as it may be further amended or supplemented from time to time in accordance with the terms thereof, the “ Original Indenture ”), between the Company and Wells Fargo Bank, National Association, as Trustee (herein called the “ Trustee ”, which term includes any successor trustee under the Original Indenture), to which the Supplemental Indenture and the Original Indenture reference is hereby made for a statement of the respective rights, limitations of rights, obligations duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof, initially limited to the aggregate principal amount of (U.S.) $750,000,000 (or $862,500,000 if the underwriter’s over-allotment option with respect to this series is exercised in full) issued under and pursuant to the Supplemental Indenture and Original Indenture.

No reference herein to the Supplemental Indenture and the Original Indenture, and no provision of this Note or of the Supplemental Indenture or the Original Indenture, shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Note at the times, place(s) and rate, and in the coin or currency, herein prescribed. In the event of any conflict or inconsistency between the terms and provisions of this Note and the terms and provisions of the Supplemental Indenture and the Original Indenture, the terms and provisions of the Supplemental Indenture and the Original Indenture shall control. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Supplemental Indenture and the Original Indenture.

The Notes of this series are not subject to redemption at the election of the Company.

If any Interest Payment Date falls on a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day and no interest on such payment will accrue for the period from the Interest Payment Date to such next succeeding Business Day. If the Stated Maturity date would fall on a day that is not a Business Day, the required payment of interest, if any, and principal (and Additional Interest, if any), will be made on the next succeeding Business Day and no interest on such payment will accrue for the period from and after the Stated Maturity date to such next succeeding Business Day. If a Fundamental Change Purchase Date would fall on a day that is not a Business Day, the Company will purchase the Notes tendered for purchase on the next succeeding Business Day and no interest or Additional Interest on such Notes will accrue for the period from and after the earlier Fundamental Change Purchase Date to such next succeeding Business Day. The Company will pay the Fundamental Change Purchase Price promptly following the later of (i) such next succeeding Business Day or (ii) the time of book entry transfer or the delivery of the Note.

The Holder of this Note after 5:00 p.m., New York City time, on a Regular Record Date shall be entitled to receive interest (including any Additional Interest), on this Note on the corresponding Interest Payment Date. Holders of this Note at 5:00 p.m., New York City time, on a Regular Record Date will receive payment of interest (including any Additional Interest) payable on the corresponding Interest Payment Date notwithstanding the conversion of this Note at any time after 5:00 p.m., New York City time on such Regular Record Date. If this Note is surrendered for conversion during the period after 5:00 p.m., New York City time, on any Regular Record Date to 9:00 a.m., New York City time, on the corresponding Interest Payment Date it must be accompanied by payment of an amount equal to the interest (including any Additional Interest) that the Holder is to receive on this Note on such Interest Payment Date.

Notwithstanding the foregoing, no such payment of interest (including any Additional Interest) need be made by the converting Holder (i) for conversions following the Regular Record Date immediately preceding the Stated Maturity, (ii) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date, or (iii) to the extent of any overdue interest (including any overdue Additional Interest) existing at the time of conversion of this Note. Except where this Note surrendered for conversion must be accompanied by payment as described above, no interest or Additional Interest on converted portions of this Note will be payable by the Company on any Interest Payment Date subsequent to the Conversion Date. The Company’s delivery to the Holder of Common Stock, cash or a combination of cash and Common Stock, as applicable, together with any cash payment for any fractional share of Common Stock, into

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which a Note is convertible upon conversion will be deemed to satisfy the Company’s obligation to pay the principal amount of this Note and accrued and unpaid interest and Additional Interest, if any, to, but not including, the related Conversion Date.

Whenever in this Note there is a reference, in any context, to the payment of the principal of, premium, if any, or interest on, or in respect of, this Note, such mention shall be deemed to include mention of the payment of Additional Interest as provided for in the Supplemental Indenture to the extent that, in such context, the Additional Interest is, was or would be payable in respect of this Note and express mention of the payment of Additional Interest (if applicable) in any provisions of this Note shall not be construed as excluding Additional Interest in those provisions of this Note where such express mention is not made.

If a Fundamental Change occurs at any time, subject to the provisions set forth in the Supplemental Indenture, the Holder of this Note shall have the right, at such Holder’s option, to require the Company to purchase all of such Note, or any portion of the principal amount thereof, that is equal to $1,000 or an integral multiple thereof, at the Fundamental Change Purchase Price specified in the Supplemental Indenture plus accrued and unpaid interest, including Additional Interest, if any, to but excluding the Fundamental Change Purchase Date. Any Notes purchased by the Company shall be paid for in Common Stock. Article V of the Supplemental Indenture sets forth the procedures, obligations, conditions and other terms of such repurchase option upon the occurrence of a Fundamental Change. In the event the Holder converts this Note in connection with a Fundamental Change, such Holder shall be entitled to receive the Change of Control Make-Whole in accordance with the provisions of Section 6.04 of the Supplemental Indenture.

Subject to certain conditions applicable to certain periods specified in the Supplemental Indenture, at any time until the close of business on the second Scheduled Trading Day immediately preceding the Stated Maturity of this Note (excluding the date of such Stated Maturity), the Holder hereof has the right, at its option, to convert each $1,000 principal amount of this Note into cash, shares of Common Stock or a combination of cash and shares of Common Stock, at the Company’s election, determined as set forth in the Supplemental Indenture, based on the applicable Conversion Rate, as the same may be adjusted from time to time pursuant to the terms of the Indenture.

The initial Conversion Rate is, in respect of each $1,000 principal amount of this Note, 52.7969 shares of Common Stock, subject to adjustments as set forth in the Supplemental Indenture.

A Holder may convert a portion of this Note only if the principal amount of such portion is $1,000 or an integral multiple thereof. No payment or adjustment shall be made for dividends on the Common Stock except as provided in the Supplemental Indenture.

This Note is in registered form without coupons in denominations of principal amount of $2,000 and integral multiples of $1,000 in excess thereof. The Holder may transfer or exchange this Note in accordance with the Supplemental Indenture. The Security Registrar may require the Holder, among other things, to furnish appropriate endorsements or transfer documents. No service charge shall be made for any registration of transfer or exchange of this Note, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection with any such transfer or exchange. Neither the Company nor the Security Registrar shall be required to exchange or register a transfer of any Notes surrendered for conversion or, if a portion of this Note is surrendered for conversion, the portion thereof surrendered for conversion.

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

The registered Holder of this Note may be treated as the absolute owner of such Note for all purposes whatsoever.

The Supplemental Indenture and the Original Indenture permit, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the

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Noteholders at any time by the Company and the Trustee with the consent of the holders of 50% in principal amount of Notes at the time Outstanding. The Supplemental Indenture and the Original Indenture also contain provisions permitting the holders of specified percentages in principal amount of the Notes Outstanding, on behalf of all Noteholders, to waive compliance by the Company with certain provisions of the Supplemental Indenture and the Original Indenture and certain past defaults under the Supplemental Indenture and the Original Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

If an Event of Default with respect to this Note shall occur and be continuing, the principal of this Note may be declared due and payable in the manner and with the effect provided in the Supplemental Indenture and the Original Indenture. The provisions relating to discharge set forth in Section 401 of the Original Indenture and defeasance and covenant defeasance set forth in Section 402 of the Original Indenture are not applicable to this Note.

To the extent elected by the Company, the sole remedy for an Event of Default relating to the failure by the Company to comply with the obligation to furnish reports required under Section 704 of the Original Indenture as further supplemented by the Supplemental Indenture and for any failure to comply with §314(a)(1) of the Trust Indenture Act, will for the first 120 days after the occurrence of such an Event of Default, consist exclusively of the right for the Holder to receive Additional Interest on this Note equal to 0.25% per annum of the principal amount of this Note (“ Additional Interest ”). If the Company so elects, such Additional Interest will be payable in the same manner and on the same dates as the stated interest payable on this Note. The Additional Interest will accrue from and including the date on which such Event of Default first occurs to but not including the 120th day thereafter (or such earlier date on which such Event of Default shall have been cured or waived). On such 120th day after such Event of Default (if the Event of Default relating to such obligation is not cured or waived prior to such 120th day), such Additional Interest will cease to accrue and this Note will be subject to acceleration as provided in the Original Indenture. In the event the Company does not elect to pay the Additional Interest upon such Event of Default in accordance with the Supplemental Indenture, this Note will be subject to acceleration as provided in the Original Indenture.

As set forth in, and subject to, the provisions of the Supplemental Indenture and the Original Indenture, no Noteholder will have any right to institute any proceeding with respect to the Supplemental Indenture or the Original Indenture or for any remedy thereunder, unless such Holder shall have previously given to the Trustee written notice of a continuing Event of Default with respect to this series, the Holders of not less than 25% in principal amount of the Outstanding Notes of this series shall have made written request, and offered indemnity reasonably satisfactory, to the Trustee to institute such proceeding as trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of the Outstanding Notes a direction inconsistent with such request and shall have failed to institute such proceeding within 60 days; provided, however, that such limitations do not apply to a suit instituted by the Holder for the enforcement of payment of the principal of and any premium or interest on this Note on or after the respective due dates expressed herein. The Supplemental Indenture provides that the principal and any accrued and unpaid interest, including Additional Interest, if any, of this Note shall become immediately due and payable without declaration or other act on the part of the Trustee or the Holder if an Event of Default specified in clauses (15), (16) or (17) of Section 501 occurs.

This Note shall be governed by, and construed in accordance with, the laws of the State of New York.

The Company will furnish to the Holder upon written request and without charge a copy of the Supplemental Indenture and the Original Indenture which has in it the text of this Note. Requests may be made to:

Annaly Capital Management, Inc.
1211 Avenue of the Americas, Suite 2902
New York, New York 10036

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

(Print or type assignee’s name, address and zip code)

(Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint agent to transfer this Note on the books of the Company. The agent may substitute another to act for him.


Date:		Your Signature:

Sign exactly as your name appears on the other side of this Note.


Signature Guarantee:

(Signature must be guaranteed)

Signature must be guaranteed by a participant in a recognized signature guarantee medallion program or other signature guarantor acceptable to the Trustee.

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SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:


Amount of decrease in Principal Amount of this Global Note	Amount of increase in Principal Amount of this Global Note	Principal Amount of this Global Note following such decrease or increase	Signature of authorized signatory of Trustee	Date

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FORM OF CONVERSION NOTICE

To: Annaly Capital Management, Inc.

The undersigned registered Holder of this Note hereby exercises the option to convert this Note, or portion hereof (which is $1,000 principal amount or an integral multiple thereof) designated below, into cash, shares of Common Stock of Annaly Capital Management, Inc., or a combination thereof, at Annaly Capital Management Inc.’s election in accordance with the terms of the Supplemental Indenture and the Original Indenture referred to in this Note, and directs that any cash payable and any shares issuable and deliverable upon such conversion, cash in lieu of fractional shares and any portion of this Note representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. If shares or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect thereto. Any amount required to be paid by the undersigned on account of interest accompanies this Note. The undersigned acknowledges that the conversion of the specified Notes is subject to the requirements established by the Company in the Supplemental Indenture and the Original Indenture, as applicable, as well as the procedures of any Depositary, each as in effect from time to time.

This notice shall be deemed to be an irrevocable exercise of the option to convert this Note.

Dated:



		Signature(s)



		Signature(s) must be guaranteed by a participant in a recognized signature guarantee medallion program or other signature guarantor acceptable to the Trustee.


		Signature Guarantee
Fill in for registration of shares if to be delivered, and Notes if to be issued other than to and in the name of registered holder:

		Principal amount to be converted (if less than all):

		$

(Name)

(Street Address)


(City state and zip code)		Social Security or Other Taxpayer Number

Please print name and address:

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FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

To: Annaly Capital Management, Inc.

The undersigned registered holder of this Note hereby acknowledges receipt of a notice from Annaly Capital Management, Inc. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to repurchase this Note, or the portion hereof (which is $1,000 or an integral multiple thereof) designated below, in accordance with the terms of the Supplemental Indenture and the Original Indenture referred to in this Note and directs that the check of the Company in payment for this Note or the portion thereof and any portion of this Note representing any unrepurchased principal amount hereof, be issued and delivered to the registered holder hereof unless a different name has been indicated below. If any portion of this Note not repurchased is to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect thereto.

Dated:



		Signature(s)

		Signature must be guaranteed by a participant in a recognized signature guarantee medallion program or other signature guarantor acceptable to the Trustee.


		Signature Guarantee

Fill in for registration of shares if to be delivered, and any portion of this Note if to be issued other than to and in the name of registered holder:

		Principal amount to be purchased (if less than all):

		$

(Name)

		(if certificated, state the certificate number for each Note to be delivered for purchase)



(Street Address)


(City state and zip code)		Social Security or Other Taxpayer Number

Please print name and address:

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Exhibit 5.1

Opinion of K&L Gates LLP

May 14, 2012

Annaly Capital Management, Inc.
1211 Avenue of the Americas, Suite 2902
New York, New York 10036

Ladies and Gentlemen:

We have acted as counsel to Annaly Capital Management, Inc., a Maryland corporation (the “Company”), in connection with the preparation of (i) the Registration Statement (File No. 333-164783) on Form S-3 (the “Registration Statement”), filed by the Company with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Act”) on February 8, 2010, and (ii) the prospectus dated February 8, 2010 included in the Registration Statement, as supplemented by the prospectus supplement dated May 9, 2012 (the “Notes Prospectus Supplement”), filed by the Company with the Commission under Rule 424(b) on May 11, 2012, relating to the issuance by the Company of $750,000,000 aggregate principal amount of the Company’s 5.00% Convertible Senior Notes due 2015 (the “Notes”), which are convertible into shares (the “Underlying Shares”) of the Company’s common stock, par value $0.01 per share (“Common Stock”).

The Notes are being offered, issued and sold in an underwritten public offering pursuant to an underwriting agreement (the “Notes Underwriting Agreement”) by and among the Company and the representatives of the underwriters named therein (the “Underwriters”).

The Notes are to be issued under an indenture (the “Base Indenture”) dated as of February 12, 2010 between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented and amended by the First Supplemental Indenture dated as of February 12, 2010 and the Second Supplemental Indenture dated as of May 14, 2012 (together with the Base Indenture, the “Indenture”).

In connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of:

(i) the Registration Statement;

(ii) the Notes Prospectus Supplement;

(iii) the Articles of Incorporation of the Company, as amended and supplemented, as certified by the Secretary of the Company to be currently in effect;

(iv) the Bylaws of the Company, as certified by the Secretary of the Company to be currently in effect;

(v) the Indenture and the form of note included therein;

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(vi) the corporate actions (including resolutions of the board of directors of the Company) that provide for, among other things, the issuance and sale of the Notes and the issuance of the Underlying Shares upon conversion of the Notes; and

(vii) a specimen certificate representing the Underlying Shares.

We have also examined originals or copies, certified or otherwise identified to our satisfaction, of corporate records of the Company, and certificates of public officials and of officers or other representatives of the Company and others and such other documents, certificates and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein.

In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified, conformed or photostatic copies, and the authenticity of the originals of such copies. In making our examination of executed documents or documents to be executed, we have assumed that the parties thereto, other than the Company, had or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents, and the validity and binding effect thereof on such parties. We have also assumed that the Company will at all times have a sufficient number of authorized and unissued or treasury shares of Common Stock reserved for issuance upon the conversion of the Notes.

Our opinions set forth herein are limited to the Maryland General Corporation Law, including the applicable provisions of the Maryland Constitution and reported judicial decisions interpreting those laws and the laws of the State of New York that, in our experience, are normally applicable to transactions of the type contemplated by the Registration Statement (all of the foregoing being referred to as “Opined on Law”). We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-Opined on Law on the opinions herein stated. This opinion is limited to the laws, including the rules and regulations, as in effect on the date hereof, which laws are subject to change with possible retroactive effect.

Based upon and subject to the foregoing and to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that:

1. The Company is a corporation duly incorporated and existing and in good standing under the laws of the State of Maryland.

2. When the Notes have been duly executed and authenticated in accordance with the provisions of the Indenture and paid for by the Underwriters in accordance with the terms of the Notes Underwriting Agreement, the Notes will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (a) the effect of bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether enforcement is

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sought in a proceeding in equity or at law), including concepts of materiality, reasonableness, good faith and fair dealing; and (b) public policy considerations which may limit the rights of parties to obtain remedies.

3. The Underlying Shares have been duly authorized for issuance by the Company and, when and if issued and delivered by the Company upon conversion of Notes in accordance with the Indenture, will be validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also hereby consent to the use of our name under the heading “Legal Matters” in the prospectus which forms a part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws.


	Yours truly,

	/s/ K&L Gates LLP

Exhibit 8.1

Opinion of K&L Gates LLP

May 14, 2012

Annaly Capital Management, Inc.
1211 Avenue of the Americas
Suite 2902
New York, New York 10036


Re:	Information in the Prospectus Supplement under the heading
	“Additional Material U.S. Federal Income Tax Considerations”

Dear Sir or Madam:

In connection with the offering by Annaly Capital Management, Inc., a Maryland corporation (the “Company”) of $750,000,000 aggregate principal amount of the Company’s 5.00% Convertible Senior Notes due 2015 (the “Notes”) pursuant to the Company’s Registration Statement on Form S-3, dated February 8, 2010, (the “Registration Statement”), and the Prospectus dated February 8, 2010 included in the Registration Statement, as supplemented by the accompanying Prospectus Supplement dated May 9, 2012 (the “Prospectus Supplement”), filed by the Company with the Securities Exchange Commission under Rule 424(b) on May 11, 2012, you have requested our opinion concerning the information in the Prospectus Supplement under the heading “Additional Material U.S. Federal Income Tax Considerations.”

In formulating our opinions, we have reviewed and relied upon the charter of the Company and the Registration Statement. In addition, we have relied upon the Company’s certificate (the “Officer’s Certificate”), executed by a duly appointed officer of the Company, setting forth certain factual representations relating to the organization and proposed operation of the Company. Where such factual representations in the Officer’s Certificate involve terms defined in the Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated by the Department of the Treasury (the “Regulations”), published rulings of the Internal Revenue Service (the “Service”), or other relevant authority, we have explained such terms to the Company’s representatives and we are satisfied that the Company’s representatives understand such terms and are capable of making such factual representations. We have also relied upon representations that the information presented in the Registration Statement accurately and completely describes all material facts. We have not verified any of those assumptions.

In rendering these opinions, we have assumed that the Company will be operated in the manner described in its organizational documents and in the Registration Statement.

Based upon and subject to the foregoing, it is our opinion that the statements in the Prospectus Supplement under the heading “Additional Material U.S. Federal Income Tax Considerations”, to the extent that such statements constitute matters of law, summaries of legal matters, or legal conclusions, have been reviewed by us and are correct in all material respects and accurately describe the federal income tax considerations that are likely to be material to a holder of the Notes.

Our opinion is based on the Code, the Regulations, and the interpretations of the Code and such Regulations by the courts and the Service, all as they are in effect and exist at the date of this letter. It

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should be noted that statutes, regulations, judicial decisions, and administrative interpretations are subject to change at any time and, in some circumstances, with retroactive effect. A material change that is made after the date hereof in any of the foregoing bases for our opinions could affect our conclusions. Other than as expressly stated above, we express no opinion on any issue relating to the Company or any investment therein.

Notwithstanding any express or implied agreement, arrangement, or understanding to the contrary, the Company (and any employee, representative, or other agent of the Company) may disclose this opinion to any and all persons.

We consent to the reference to our firm under the caption “Material Federal Income Tax Considerations” in the Registration Statement and to the reproduction and filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, nor do we admit we are experts with respect to any part of the Registration Statement within the meaning of the term “expert” as used in the Securities Act of 1933, as amended.


	Very truly yours,

	/s/ K&L Gates LLP

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