The Notes were issued pursuant to, and are governed by, an indenture dated as of May 21, 2012 (the “Base Indenture”) between Legg Mason and The Bank of New York Mellon, as trustee (the “Trustee”), as supplemented by the supplemental indenture, dated as of May 21, 2012 (the “Supplemental Indenture”). The Base Indenture, as supplemented by the Supplemental Indenture, is referred to herein as the “Indenture.” Pursuant to the Indenture, Legg Mason will pay interest on the Notes on May 21 and November 21 of each year, beginning on November 21, 2012. The Notes will mature on May 21, 2019. The Notes are unsecured senior obligations of Legg Mason. The Notes will rank equally with Legg Mason’s existing and future unsecured and unsubordinated senior indebtedness. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

The Indenture provides that if Legg Mason or a subsidiary reduces its ownership of a class or series of capital stock of a Designated Subsidiary (as defined in the Indenture) to below 80% and, immediately after giving effect to such disposition, its senior unsecured debt rating is, or is on notice to be downgraded to, below investment grade, Legg Mason, in certain circumstances, will be required to redeem or repay debt secured by such capital stock, repay term loans under any credit agreement otherwise maturing within one year, invest in Additional Assets (as defined in the Indenture) or offer to repay the Notes and other pari passu debt. The Indenture also provides that the interest rate payable on the Notes will be subject to adjustment from time to time if the debt rating assigned to Legg Mason’s senior unsecured debt is downgraded to below investment grade or subsequently upgraded. Additionally, if the Notes are unrated or rated below investment grade within a certain period following the public notice of an arrangement that could result in a Change of Control (as defined in the Indenture), Legg Mason will, in certain circumstances, be required to make an offer to purchase the Notes at a price equal to 101% of their principal amount plus accrued and unpaid interest to the date of repurchase. The Indenture provides for customary events of default, including nonpayment and failure to comply with covenants and other agreements. A copy of the Base Indenture is attached hereto as Exhibit 4.1, a copy of the Supplemental Indenture is attached hereto as Exhibit 4.2 and each is incorporated herein by reference.

In connection with the issuance of the Notes, Legg Mason and the Representatives entered into a registration rights agreement, dated as of May 21, 2012 (the “Notes Registration Rights Agreement”), with respect to the Notes. Pursuant to the Notes Registration Rights Agreement, Legg Mason has agreed to use its reasonable best efforts to (1) file a registration statement with the Securities and Exchange Commission (“SEC”) relating to an exchange offer for the Notes (the “Exchange Offer”) no later than 60 days after the issuance of the Notes, (2) cause the SEC to declare the registration statement effective under the Securities Act no later than 105 days after issuance of the Notes and (3) complete the Exchange Offer no later than 150 days after issuance of the Notes. In the Exchange Offer, holders of the Notes will be permitted to exchange the Notes for a new issue of Notes that are registered with the SEC and do not contain terms restricting the transfer of the Notes (or provide for additional interest) but that are otherwise identical to the Notes. Legg Mason also agreed pursuant to the Notes Registration Rights Agreement to use its reasonable best efforts to file a shelf registration statement with respect to resales of the Notes if Legg Mason is unable or not permitted to effect the Exchange Offer. Upon the occurrence or existence of certain pending corporate developments or other material events, Legg Mason may suspend the availability of any registration statement (and related prospectus) upon notice to the holders of the Notes; provided that such suspension period will not exceed 45 days in any three-month period or 90 days in any twelve-month period. The Notes Registration Rights Agreement provides for Legg Mason to pay additional interest (not to exceed 0.50% per annum) on the Notes if Legg Mason fails to fulfill its obligations with respect to the registration of the Notes. A copy of the Notes Registration Rights Agreement is attached hereto as Exhibit 4.3 and is incorporated herein by reference.