Exhibit 10.2

 

EXECUTION VERSION

 

 

SECURITY AGREEMENT

 

made by

 

iSTAR FINANCIAL INC.,

 

and

 

the other parties hereto

 

in favor of

 

BARCLAYS BANK PLC,

 

as Administrative Agent

 

Dated as of March 19, 2012

 

 

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TABLE OF CONTENTS

 

 

 

Page

SECTION I DEFINED TERMS

1

1.1

Definitions

1

1.2

Other Definitional Provisions

4

 

 

 

SECTION II GRANT OF SECURITY INTEREST

4

2.1

Pledge and Grant of Security Interests

4

2.2

Establishment of the Accounts

4

2.3

Procedures for Crediting, Withdrawing Collateral

5

2.4

Review Criteria; Certification by Administrative Agent

7

2.5

Investments of Moneys in the Accounts

7

 

 

 

SECTION III REPRESENTATIONS AND WARRANTIES

7

3.1

Title; No Other Liens

7

3.2

Perfected Security Interests

8

3.3

Jurisdiction of Organization

8

 

 

 

SECTION IV COVENANTS; MANAGEMENT

8

4.1

Payment of Obligations

8

4.2

Maintenance of Perfected Security Interest; Further Documentation

8

4.3

Changes in Name, etc.

9

 

 

 

SECTION V REMEDIAL PROVISIONS

9

5.1

Pledged Investments

9

5.2

Proceeds to be Turned Over to Administrative Agent

10

5.3

Application of Proceeds

10

5.4

Code and Other Remedies

10

5.5

Securities Act, etc.

11

5.6

Deficiency

11

 

 

 

SECTION VI THE ADMINISTRATIVE AGENT

12

6.1

Administrative Agent’s Appointment as Attorney-in-Fact, etc.

12

6.2

Duty of Administrative Agent

13

6.3

Authorization of Financing Statements

13

6.4

Authority of Administrative Agent

13

 

 

 

SECTION VII MISCELLANEOUS

14

7.1

Amendments, Supplements and Waivers

14

7.2

Notices

14

7.3

Copies of Material Transaction Documents Relating to Loan Assets

14

7.4

No Waiver by Course of Conduct; Cumulative Remedies

14

7.5

Successors and Assigns

15

7.6

Counterparts

15

7.7

Severability

15

7.8

Section Headings

15

7.9

Integration

15

7.10

GOVERNING LAW

15

7.11

Submission To Jurisdiction; Waivers

15

 

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7.12

Releases; Termination; Custody

16

7.13

WAIVER OF JURY TRIAL

17

7.14

Inspection by Regulatory Agencies

18

 

SCHEDULES

 

 

 

Schedule 1.1-A

Pledged Loans

Schedule 1.1-B

Pledged Stock

Schedule 3.1

Beneficial Interests of Third Parties in Collateral

Schedule 3.3

Jurisdiction of Organization and Notice Addresses

 

ANNEXES

 

 

 

Annex 1

Officer’s Certificate

Annex 2

Form of Receipt

Annex 3

Acknowledgment and Consent

Annex 4

Form of Request for Release of Documents

Annex 5

Form of Lost Note Affidavit

 

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SECURITY AGREEMENT

 

SECURITY AGREEMENT, dated as of March 19, 2012, made by iSTAR FINANCIAL INC., a
Maryland Corporation (“the Company”), in favor of BARCLAYS BANK PLC, as
administrative agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

 

WHEREAS, pursuant to the $900,000,000 Credit Agreement, dated as of March 19,
2012 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the Company, the banks from time to time parties
thereto (the “Banks”), the agents named therein and Barclays Bank PLC, as
administrative agent, the Banks have severally agreed to make extensions of
credit to the Company thereunder upon the terms and subject to the conditions
set forth therein; and

 

WHEREAS, it is a condition precedent to the obligation of the Banks to make
their respective extensions of credit to the Company under the Credit Agreement
that the Company shall have executed and delivered this Agreement to the
Administrative Agent for the ratable benefit of the Secured Parties.

 

NOW, THEREFORE, in consideration of the foregoing premises and to induce the
Banks to enter into the Credit Agreement and make their respective extensions of
credit to the Company thereunder and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company hereby
agrees with the Administrative Agent, for the ratable benefit of the Secured
Parties, as follows:

 

SECTION I

 

DEFINED TERMS

 

1.1                                 Definitions.  (a)  Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them therein, and the terms “Certificated Security”, “Chattel
Paper”, “Instruments” and “Supporting Obligations” are used herein as defined in
the New York UCC.

 

(b)                                 The following terms shall have the following
meanings:

 

“Accounts”:  as defined in Section 2.2(a).

 

“Agreement”:  this Security Agreement, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Capital Stock”:  any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, membership
and other equivalent ownership interests (whether or not certificated) in a
limited liability company, limited liability partnership or limited partnership,
beneficial interests in a trust and other equivalent ownership interests in any
other Person and any and all warrants, rights or options to purchase any of the
foregoing.

 

“Collateral”:  all rights, privileges and interests of the Company in or with
respect to (a) the Pledged Investments, (b) the Accounts, (c) any related
promissory notes, loan agreements, mortgages, deeds of trust, security
agreements, stock pledges, guaranties, letters of credit, support agreements,
financing statements, opinions, letters, side letters and any other instruments,
agreements and

 

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undertakings (including without limitation all representations, warranties,
Liens, additional advances or investments thereof, registration rights, voting
rights, records, know-how, proprietary and other information and customer and
similar lists with respect thereto and any rights against or in respect of third
parties with respect thereto and any other undertakings of any Person inuring to
the benefit of the Company in respect thereof), and (d) all Proceeds of any or
all of the foregoing, other than, in each of the foregoing clauses (a), (b),
(c), any item referenced therein which has been substituted, replaced, exchanged
or released in accordance with this Agreement.

 

“Collateral Deposit Account”:  as defined in Section 2.2(a).

 

“Collateral Schedule”:  as defined in Section 2.3(b).

 

“Delivery Failure”:  as defined in Section 7.12(g).

 

“Deposit Account”:  as defined in Section 2.2(a).

 

“Enforcement Default”:  any Payment Default, any Default resulting from the
Company’s failure to be in compliance with Section 5.17 of the Credit Agreement
or an Event of Default.

 

“Foreclosure”:  with respect to any Collateral, at any time when an Event of
Default shall have occurred and be continuing, any exercise of remedies under
the Loan Documents, applicable law or any other act or action taken in
preparation for, anticipation of or in connection with any reasonably immediate
taking of physical possession of, realizing upon, exercising dominion and
control over, or otherwise causing the assignment for its benefit of, such
Collateral by the Administrative Agent pursuant to the New York UCC or any other
applicable law (or consensual arrangement in lieu thereof expressly agreed to by
the Administrative Agent and the Company) and otherwise in the manner and at the
times permitted under the Collateral Documents. The term “Foreclose” shall have
a correlative meaning.

 

“Issuers”:  the collective reference to each issuer or obligor under or in
respect of any Pledged Investment.

 

“Lost Note Affidavit”:  as defined in Section 7.12(g).

 

“Mortgage Debt”: the mortgage debt in respect of (and encumbering) the property
of the Real Estate Owners as in effect on the Closing Date.

 

“Mortgage Lender”: a holder of Mortgage Debt.

 

“Mortgage Persons”:  SFI Net Lease Holdings LLC, SFI Acquest Holdings LLC, iStar
100 LLC and iStar 200-300 LLC and their respective successors and assigns.

 

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

 

“Payment Default”:  any Default pursuant to Section 6.1(a) of the Credit
Agreement.

 

“Pledged Investments”:  the collective reference to all Pledged Loans and all
Pledged Stock.

 

“Pledged Loans”:  all Loan Assets listed on Schedule 1.1-A, and all Loan Assets
subsequently issued to or acquired by the Company and specifically made subject
to this Agreement (by

 

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way of supplement to Schedule 1.1A or otherwise) while this Agreement is in
effect, other than any that have been released from Liens granted hereunder.

 

“Pledged Stock”:  (a) the shares of Capital Stock listed on Schedule 1.1-B,
together with any other shares, stock certificates, options, interests or rights
of any nature whatsoever in respect of such Capital Stock that may be issued or
granted to, or held by, the Company while this Agreement is in effect, and (b)
all right, title and interest, now existing or hereafter acquired, of the
Company, to (1) all rights to receive distributions, together with any and all
moneys paid to the Company now or in the future by way of any distribution,
dividend, disbursement or other payment or transfer made by the Mortgage Persons
in respect of the Company’s Capital Stock in the Mortgage Persons, (2) any other
property of the Mortgage Persons distributed, disbursed or transferred to
Company on account of or in connection with the Company’s Capital Stock in the
Mortgage Persons (including, without limitation, any promissory notes or other
instruments or securities given by a Mortgage Person in lieu of a cash
distribution to Company), and (3) to the extent not otherwise described in parts
(b)(1) and (b)(2), any and all Capital Stock issued by the Mortgage Persons (and
any and all warrants, rights or options to purchase the foregoing) to the extent
not prohibited by or constituting a breach or default under the terms of the
Mortgage Debt, except, in the case of each of the foregoing clauses (a) and (b),
to the extent such items have been released from the Liens granted hereunder in
accordance with the terms hereof.

 

“Proceeds”:  all “proceeds” as such term is defined in Section 9-102(a)(64) of
the New York UCC and, in any event, shall include, without limitation, all
dividends or other earnings, income or distribution from or in respect of, the
Pledged Investments, collections thereon or distributions or payments with
respect thereto and all other proceeds of Collateral.

 

“Real Estate Owners”:  iStar 100 Riverview LLC, iStar 200-300 Riverview LLC,
Every Bear Investments LLC, Acquest Government Holdings L.L.C., Acquest
Government Holdings II, L.L.C. and Acquest Holdings FC, LLC.

 

“Real Estate Owner Cash Management Account”:  any account maintained by or on
behalf of a Mortgage Lender into which rents and other property proceeds are
deposited or required to be deposited in connection with the applicable Mortgage
Debt.

 

“Receipt”:  as defined in Section 2.3(f).

 

“Related Pledged Investment Documents”:  documents required to be delivered by
the Company pursuant to Section 2.3 hereof related to the Pledged Investments
identified on the relevant Collateral Schedule or Revised Collateral Schedule,
as the case may be.

 

“Replacement Collateral”: any asset which is received in exchange for Collateral
or otherwise becomes Collateral.

 

“Request for Release of Documents” shall mean a request for release of any
Related Pledged Investment Documents, which request shall be substantially in
the form of Annex 4 hereto.

 

“Responsible Officer”:  as to the Company, the president, any vice-president,
the senior vice president, the executive vice president, the chief operating
officer, the chief executive officer or the chief financial officer.

 

“Revised Collateral Schedule”:  as defined in Section 2.3(c).

 

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“Secured Obligations”:  with respect to the Company, all obligations and
liabilities of the Company which may arise under or in connection with the
Collateral Documents, in each case whether on account of guarantee obligations,
fees, indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative Agent or the Banks
that are required to be paid by the Company pursuant to the terms of the
Collateral Documents); provided, however, that to the extent any payment with
respect to the Secured Obligations (whether by or on behalf of the Company, as
proceeds of Collateral, enforcement of any right of set off or otherwise) is
declared to be fraudulent or preferential in any respect, set aside or required
to be paid to a debtor in possession, trustee, receiver or similar Person, then
the obligation or part thereof originally intended to be satisfied shall be
deemed to be reinstated and outstanding as if such payment had not occurred.

 

“Securities Act”:  the Securities Act of 1933, as amended.

 

1.2                                 Other Definitional Provisions.  (a)  The
words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.

 

(b)                                 The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.

 

(c)                                  Where the context requires, terms relating
to the Collateral or any part thereof, when used in relation the Company, shall
refer to the Company’s Collateral or the relevant part thereof.

 

SECTION II

 

GRANT OF SECURITY INTEREST

 

2.1                                 Pledge and Grant of Security Interests.  The
Company hereby grants to the Administrative Agent, for the benefit of the
Secured Parties, a security interest in the Collateral, whether presently
existing or owned or at any time hereafter arising or acquired by the Company or
in which the Company now has or at any time in the future may acquire any right,
title or interest, and any and all additions, attachments, accessories and
accessions thereto, and any and all substitutions, replacements or exchanges
therefor, and any and all Proceeds, Supporting Obligations and products thereof
and any and all collateral security and guarantees given by any Person with
respect to such Collateral, as collateral security for the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Company’s Secured Obligations.

 

2.2                                 Establishment of the Accounts.  (a)  The
Company agrees upon the opening by it of any deposit account referred to in
Section 5.8(a) of the Credit Agreement (a “Deposit Account”; all Deposit
Accounts at any time, the “Accounts”), the Administrative Agent shall have
“control” (as defined in Section 9-104 of the UCC) with respect to all cash and
Collateral on deposit therein.  The Company hereby agrees to execute and deliver
any Deposit Account Control Agreement with respect to any Account as may be
requested by the Administrative Agent.

 

(b)                                 With respect to the Accounts, the Company
shall comply, and shall cause the Covered Subsidiaries to enable it to comply,
with the requirements of Section 5.8 of the Credit Agreement.

 

(c)                                  Any amounts held in the Deposit Accounts
maintained by the Company shall be released to or as directed, in writing, by
the Company, on a daily basis, except as provided in Section

 

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5.8(c) of the Credit Agreement (which requires, for avoidance of doubt, any such
amounts constituting Principal Collateral Payments to be applied toward the
prepayment of the Loans).

 

(d)                                 If any Enforcement Default shall have
occurred and be continuing, except as provided in Section 5.8(c) of the Credit
Agreement, the Administrative Agent may cause any cash, cash equivalents and
checks held in the Accounts to be transferred to the Collateral Deposit Account.

 

(e)                                  With respect to each Real Estate Owner Cash
Management Account, Company has caused the applicable Real Estate Owner to
irrevocably direct, in writing each Mortgage Lender (or, if applicable servicer
or bank holding such funds) to transfer to the Collateral Deposit Account all
funds to which the applicable Company, Mortgage Person or Real Estate Owner may
be entitled from the Real Estate Owner Cash Management Account.  Company will
not permit any such direction to be amended or withdrawn without the consent of
the Administrative Agent except with respect to assets sold or otherwise
transferred in compliance with Credit Agreement and Collateral Documents. 
Furthermore, Company has irrevocably directed each Real Estate Owner and
Mortgage Person to immediately cause any cash received by it to be distributed
directly to the Collateral Deposit Account and agrees that it will not permit
any such direction to be amended or withdrawn without the consent of the
Administrative Agent except with respect to assets sold or otherwise transferred
in compliance with the Credit Agreement and Collateral Documents.

 

(f)                                    Company will cause all net proceeds of
sale (for the avoidance of doubt net of payments required to be paid on account
of the related Mortgage Debt and net of closing costs) from the sale or
disposition of assets owned by a Real Estate Owner or a Mortgage Person (or the
membership interests in a Mortgage Person) to be disbursed directly to the
Collateral Deposit Account and Company will cause the buyer (or escrowee, if
any, in connection with such sale or other disposition) providing such net
proceeds to be notified to disburse such net proceeds directly to the Collateral
Deposit Account.

 

(g)                                 The Administrative Agent shall be permitted
to invest and reinvest moneys on deposit in the Collateral Deposit Account at
any time in the investments of the type described in clauses (a) or (b) in the
definition of “Cash or Cash Equivalents” in the Credit Agreement (or any similar
investments, including funds whose assets primarily consist of such
investments).  All such investments and the interest and income received thereon
and the net proceeds realized on the sale or redemption thereof shall be held in
the Collateral Deposit Account as part of the Collateral.

 

(h)                                 At such times as the Company may reasonably
request in writing, but not more than once per year (unless otherwise agreed by
the Administrative Agent), the Administrative Agent shall provide a full
accounting of all funds then standing to the credit of the Collateral Deposit
Account.  The Administrative Agent also shall provide the necessary information
and passwords to enable the Company to electronically access account statements
and data for the Collateral Deposit Account.

 

2.3                                 Procedures for Crediting, Withdrawing
Collateral.  (a)  On the Closing Date, the Company shall deliver to the
Administrative Agent (and its custodian, if applicable) a collateral schedule
(the “Collateral Schedule”), such delivery constituting the Company’s
instruction that the Administrative Agent (or, at the direction of the
Administrative Agent, its custodian) hold certain Related Pledged Investment
Documents identified on such Collateral Schedule as Administrative Agent (or as
custodian, as applicable) for the Secured Parties.  The Company will deliver and
release to the Administrative Agent (or, at the direction of the Administrative
Agent, to its custodian) the Related Pledged Investment Documents pertaining to
each of the Pledged Investments identified in such Collateral Schedule so
delivered.  The Collateral Schedule shall be in written and computer readable
standardized text formats compatible with the Administrative Agent’s (and, if
applicable, its custodian’s data systems (it being understood that WORD and
EXCEL are both compatible), shall identify the loan or asset number or code

 

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assigned to such asset or loan by the Company and otherwise identify Related
Pledged Investment Documents to be delivered to the Administrative Agent (or its
custodian, if applicable) associated with such Pledged Investment.

 

(b)                   The Company may, on any Business Day, withdraw any
Collateral as may be permitted under Section 2.18 of the Credit Agreement and
shall add assets (other than cash which shall be applied in accordance with
Section 2.11 of the Credit Agreement) as Collateral to the extent received as
consideration in any Third Party Sale or upon any other disposition of
Collateral.  Prior to any withdrawal and/or addition, the Company shall deliver
to the Administrative Agent (with a copy to its custodian, if applicable), (i) a
certificate from a Responsible Officer of the Company in the form of Annex 1
hereto, attaching a revised Collateral Schedule (“Revised Collateral Schedule”)
which accounts for the remaining and new Collateral and which shall replace and
supersede the existing Collateral Schedule and (ii) any transfer documents or
such other information required by Section 2.3(c), which transfer documentation
shall be listed on the Revised Collateral Schedule.

 

(c)                    On the Closing Date, with respect to each Loan Asset of
the Company specified on the Collateral Schedule, and on each day after the
Closing Date on which (i) the Company pledges additional Loan Assets or (ii) any
amount payable under or in connection with any of the Collateral becomes
evidenced by any Instrument, Certificated Security or Chattel Paper pursuant to
a Revised Collateral Schedule, whether at its direction, pursuant to
Section 2.3(b) or otherwise, the Company shall promptly deliver to the
Administrative Agent (or, at the direction of the Administrative Agent, to its
custodian) (i) an appropriate transfer power with respect thereto executed in
blank by the Company and (ii) any such Instruments (including any promissory
note and any allonge thereto endorsed in blank), Certificated Security or
Chattel Paper relating to the Company’s Collateral that are in the possession of
the Company.  If at any time as a result of any enforcement action taken by or
on behalf of the Company with respect to any Pledged Loan or in connection with
any compromise thereof, the Company shall receive any Other Real Estate Owned
Assets or any direct or indirect interest therein, the Company shall cause such
Other Real Estate Owned Assets to be transferred to a Pledged Subsidiary, the
Capital Stock of which constitutes Pledged Stock hereunder.

 

(d)                   On the Closing Date, with respect to the Capital Stock of
any Pledged Subsidiary specified on the Collateral Schedule, and on each day
after the Closing Date on which the Company pledges equity interests of
additional Pledged Subsidiaries pursuant to a Revised Collateral Schedule,
whether at its direction, pursuant to Section 2.3(b) or otherwise, the Company
shall deliver to the Administrative Agent (or, at the direction of the
Administrative Agent, to its custodian) an appropriate transfer power with
respect to the equity interests of such Pledged Subsidiary, if such equity
interests are certificated, signed by the Company, together with a detailed
description of the Credit Tenant Lease Assets, Other Real Estate Owned Assets or
any other assets held by such Pledged Subsidiary; provided that prior to the
transfer of such equity interests, the by-laws, the limited liability company
agreement or limited partnership agreement of such Pledged Subsidiary, as the
case may be, shall be amended as required under Section 5.9 of the Credit
Agreement.

 

(e)                    The Administrative Agent shall, or shall cause to be
delivered by its custodian, if applicable, an inventory of the Related Pledged
Investment Documents delivered by the Company in respect of the Pledged
Investments identified in the Collateral Schedule or Replacement Collateral
Schedule, as the case may be, in accordance with the inventory procedures set
forth in Section 2.4 below, such inventory to be completed within three
(3) Business Days of delivery of such Related Pledged Investment Documents to
the Administrative Agent.

 

(f)                       The Administrative Agent shall provide, or shall cause
to be provided by its custodian, if applicable, to the Company, a receipt, in
the form of Annex 2 hereto (the “Receipt”), to the

 

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Company (i) within three (3) Business Days of any deposit or withdrawal of
Related Pledged Investment Documents pursuant to this Section 2. 3 hereof.

 

(g)                    The Company shall, on the date of this Agreement, deliver
to the Administrative Agent a certificate as to the incumbency and signature of
each officer of such party authorized to give and receive notices, requests and
instructions and to deliver and receive certificates and documents in connection
with this Agreement and, thereafter, whenever there is a change in such
certificate.

 

(h)                   The Administrative Agent (or its custodian, if applicable)
shall hold all Related Pledged Investment Documents received by it on behalf of
the Secured Parties and shall make disposition thereof only in accordance with
this Agreement and the Credit Agreement.

 

2.4                               Review Criteria; Certification by
Administrative Agent.  (a)  The Administrative Agent shall, within the time
frame determined pursuant to Section 2.3(f) above, confirm that all Related
Pledged Investment Documents required to be delivered to it pursuant to Sections
2.3(b) or (c) are in its possession, subject to release in accordance with the
terms of this Agreement and the Credit Agreement. Such confirmation shall
constitute the Administrative Agent’s inventory of the Related Pledged
Investment Documents delivered by the Company to the Administrative Agent
pursuant to Section 2.3(b) or (c) above.

 

(b)                   If the Administrative Agent is not able to confirm that it
is in receipt of any Related Pledged Investment Documents identified in a
Collateral Schedule, it shall give notice of such fact to the Company not later
than the third Business Day following receipt of the applicable Collateral
Schedule.

 

2.5                               Investments of Moneys in the Accounts.  As
long as no Enforcement Default shall have occurred and be continuing, the
Company may direct the investment and reinvestment by the Administrative Agent
of all cash on deposit from time to time in the Accounts and all interest and
income on such cash, so long as all such cash will be invested solely in
investments of the type described in clauses (a), (b) and (c) of the definition
of “Cash or Cash Equivalents” in the Credit Agreement (or any similar
investments, including funds whose assets primarily consist of such
investments). The Administrative Agent shall not be responsible for
(i) determining whether such investment is permitted pursuant to the terms of
this Section 2.5 or (ii) any diminution in funds resulting from such investments
or any liquidation prior to maturity. In the absence of directions from the
Company, the Administrative Agent shall have no obligation to invest or reinvest
any moneys.

 

SECTION III

 

REPRESENTATIONS AND WARRANTIES

 

The Company hereby each represent and warrant to the Secured Parties that on the
Closing Date and on the date of any inclusion of a new Pledged Investment within
the Collateral:

 

3.1                               Title; No Other Liens.  Except for the
security interest granted to the Secured Parties pursuant to this Agreement and
except for such beneficial interests of third parties as set forth on Schedule
3.1 hereto, the Company owns, of record and beneficially, each item of the
Collateral free and clear of any and all Liens or claims of others, other than
Liens on Collateral permitted under Section 5.16 of the Credit Agreement. 
Subject to Section 4.3 of the Credit Agreement, and except for claims set forth
on Schedule 3.1 (which claims individually and in the aggregate do not impair
the value of Collateral in any material respect) and beneficial interests of
third parties as set forth on Schedule 3.1 hereto, the Company will have the
unrestricted right to pledge each item of Collateral hereafter acquired in

 

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substitution for or in addition to any then existing Collateral, in each case,
(i) free and clear of all Liens, other than Liens on Collateral permitted under
Section 5.16 of the Credit Agreement and (ii) subject to no adverse claims known
to the Company which would impair the value thereof as collateral.  No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Secured Parties pursuant to this Agreement.

 

3.2                               Perfected Security Interests.  The security
interests granted pursuant to this Agreement, upon execution and delivery of any
relevant Deposit Account Control Agreements and UCC-1 financing statements
having been filed against the Company in the jurisdiction described in
Section 3.3 below, (a) will constitute perfected security interests in all of
the Collateral in which a security interest may be perfected by filing or
control in favor of the Secured Parties, as collateral security for the Secured
Obligations, enforceable in accordance with the terms hereof against all
creditors of the Company and any Persons purporting to purchase any Collateral
from the Company and (b) are prior to all other Liens on the Collateral, other
than Liens on Collateral permitted under Section 5.16 of the Credit Agreement.

 

3.3                               Jurisdiction of Organization.  On the date
hereof, the Company’s jurisdiction of organization is specified on Schedule 3.3
hereto. The Company has furnished to the Secured Parties its certified
certificate of incorporation and other organizational documents and long-form
good standing certificate as of a date which is recent to the date hereof.

 

SECTION IV

 

COVENANTS; MANAGEMENT

 

4.1                               Payment of Obligations.  (a)  The Company will
pay and discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all taxes, assessments and governmental
charges or levies imposed upon the Collateral or in respect of income or profits
therefrom (or, in the case of any Covered Subsidiary, the maintenance or
operations thereof), as well as all claims of any kind (including, without
limitation, claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company and such proceedings could not reasonably
be expected to result in a Material Adverse Effect.

 

(b)                                 The Company will, in the direct or indirect
management of any Loan Assets included in the Collateral or the assets or
operations of any Covered Subsidiaries, use the same care and attention as the
Company uses in the management of similar Loan Assets or assets and operations
that are not Collateral or that are not owned by Covered Subsidiaries (as the
case may be) and will not, directly or indirectly, exercise any right or option,
or otherwise take any action, with respect to any such Loan Assets or any such
assets or operations that the Company, in the exercise of its business judgment,
would not exercise or take in the absence of the inclusion thereof of the
Capital Stock of the relevant Pledged Subsidiary in the Collateral.  The
Administrative Agent shall promptly after request, execute and deliver such
documents, and take such other actions (including pursuant to Section 7.12 of
this Agreement), at the sole cost and expense of the Company, as the Company
reasonably determines to be necessary or customary in connection with the
management of any such Loan Assets or assets and operations, so long as doing so
does not in the opinion of the Administrative Agent adversely affect the
security interests of any Secured Parties or expose the Administrative Agent to
any potential liability or claim.

 

4.2                               Maintenance of Perfected Security Interest;
Further Documentation.  (a)  The Company shall maintain the security interests
created by this Agreement and shall defend such security

 

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interests against the claims and demands of all Persons whomsoever, subject to
the rights of the Company under the Loan Documents to dispose of the
Collateral.  This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the termination of
this Agreement in accordance with Section 7.12.

 

(b)                               At any time and from time to time, upon the
written reasonable request of the Administrative Agent, and at the sole expense
of the Company, the Company will promptly and duly execute and deliver, and have
recorded or authorize the filing of, such further instruments and documents and
take such further actions as the Secured Parties may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, filing or
authorizing the filing of any financing or continuation statements under the
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction
with respect to the security interests created hereby.

 

4.3                               Changes in Name, etc.  The Company will not,
except upon 15 days’ prior written notice to the Administrative Agent and
delivery to the Administrative Agent, of all additional financing statements and
other documents reasonably requested by the Secured Parties to maintain the
validity, perfection and priority of the security interests provided for herein,
which financing statements shall be subsequently filed by the Administrative
Agent, (i) change its jurisdiction of organization or (ii) change its name,
identity or structure to such an extent that any financing statement filed, or
notice given, in connection with this Agreement would become seriously
misleading.

 

SECTION V

 

REMEDIAL PROVISIONS

 

5.1                               Pledged Investments.  (a)  Prior to any
Foreclosure on a Pledged Investment, the Company shall be permitted to exercise
all voting and corporate or other organizational rights with respect to such
Pledged Investment.

 

(b)                               Upon the completion of, or to the extent
necessary to complete, a Foreclosure on a Pledged Investment, the Administrative
Agent (acting in its capacity as such or through its nominee) shall have the
right to (x) exercise such rights, powers and privileges of the Company with
respect to the Company’s Pledged Investment (including all voting and consent
rights comprising part of the Pledged Investments) and (y) transfer all of the
Company’s right, title and interest in and to such Pledged Investment upon or in
aid or preparation of a Foreclosure, and to be substituted for the Company as
the sole owner for all purposes of all of the Company’s right, title and
interest in and to such Pledged Investment, in each case effective immediately
upon written notice to the Company and the issuer of the Pledged Investment. 
Without limiting the foregoing, the Administrative Agent (or its nominee) may
upon Foreclosure on a Pledged Investment exercise (i) all voting, consent,
corporate and other rights pertaining to such Pledged Investment at any meeting
of shareholders, members or partners of the relevant Issuer or Issuers or
otherwise and (ii) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such Pledged
Investment as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion such Pledged Investment upon
the merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate or other organizational structure of any Issuer, or upon
the exercise by the Company or the Administrative Agent of any right, privilege
or option pertaining to such Pledged Investment, and in connection therewith,
the right to deposit and deliver such Pledged Investment with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the

 

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Administrative Agent shall have no duty to the Company to exercise any such
right, privilege or option and shall not be responsible for any failure to do so
or delay in so doing.

 

(c)                                The Company hereby irrevocably authorizes and
instructs each Issuer of any Pledged Stock pledged by the Company hereunder to
comply with any instruction received by it from the Administrative Agent in
writing in accordance with the terms of this Agreement, without any other or
further instructions from, or the consent of, the Company, and the Company
agrees that each Issuer shall be fully protected in so complying.  By executing
and delivering an Acknowledgment and Consent substantially in the form of Annex
3 hereto, each Issuer of any Pledged Stock pledged by the Company agrees that
(x) it will be bound by the terms of this Agreement and comply with such terms
insofar as such terms are applicable to it and (y) the terms of this
Section 5.1(c) shall apply to it, mutatis mutandis, with respect to all actions
that may be required of it.

 

5.2                               Proceeds to be Turned Over to Administrative
Agent.  If an Event of Default shall have occurred and be continuing, all
Proceeds received by the Company consisting of cash, cash equivalents and checks
(other than such Proceeds which are attributable to Collateral beneficially
owned by third parties and other amounts described in Section 5.8 of the Credit
Agreement) shall be held by the Company in trust for the Administrative Agent
and the Secured Parties, segregated from other funds of the Company, and shall,
forthwith upon receipt by the Company be turned over to the Administrative Agent
in the exact form received by the Company (duly indorsed by the Company to the
Administrative Agent, if required).  All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in accordance with the
terms of this Agreement.  All Proceeds while held by the Administrative Agent
(or by the Company in trust for the Administrative Agent and the Secured Parties
pursuant to this Section 5.2) shall continue to be held as collateral security
for all the Secured Obligations and shall not constitute payment thereof until
applied as provided in Section 5.3.

 

5.3                               Application of Proceeds.  If an Event of
Default shall have occurred and be continuing, the Administrative Agent shall,
apply all or any part of cash dividends, payments or other Proceeds paid in
respect of Pledged Investments, or any other Proceeds constituting Collateral,
whether or not held in the Collateral Deposit Account and other funds on deposit
in the Collateral Deposit Account in payment of the Secured Obligations in the
following order of priority:

 

First:  to the Administrative Agent for any unpaid expenses payable to it
pursuant to the Loan Documents to the extent the same constitute Secured
Obligations;

 

Second:  to the holders of Secured Obligations in an amount equal to the unpaid
Secured Obligations, and, if such moneys shall be insufficient to pay such
amounts in full, then ratably to such holders in proportion to the unpaid
amounts thereof; and

 

Third:  any surplus then remaining shall be paid to the Company or its
successors or assigns or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.

 

5.4                               Code and Other Remedies.  In connection with
any Foreclosure on Collateral, the Administrative Agent, on behalf of the
Secured Parties, may exercise, in addition to all other rights and remedies
granted to them in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the New York UCC or any other applicable law. 
Without limiting the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice referred to below or
otherwise required by law) to or upon the Company or any other Person (all and
each of which demands, defenses, advertisements and

 

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notices are hereby waived to the extent not prohibited by law), may in such
circumstances forthwith, with notice to the Company, collect, receive,
appropriate and realize upon the applicable Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver such Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker’s board or office of the
Administrative Agent or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk.  The Administrative
Agent, its nominee or any Secured Party shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of such Collateral so sold,
free of any right or equity of redemption in the Company, which right or equity
is hereby waived and released to the extent not prohibited by applicable law. 
The Company further agrees, at the Administrative Agent’s request, to assemble
such Collateral and make it available to the Administrative Agent at places
which the Administrative Agent shall reasonably select, whether at the Company’s
premises or elsewhere.  The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 5.4, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any such Collateral or in any way
relating to such Collateral or the rights of the Administrative Agent and the
Secured Parties hereunder, including, without limitation, reasonable attorneys’
fees and disbursements, to the payment in whole or in part of the Secured
Obligations, in such order provided for in this Agreement, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation,
Section 9-615(a)(3) of the New York UCC, need the Administrative Agent account
for the surplus, if any, to the Company.  To the extent permitted by applicable
law, the Company waives all claims, damages and demands it may acquire against
the Administrative Agent or any other Secured Party arising out of the exercise
by them of any rights hereunder except any such claims, damages and demands
arising as a result of the gross negligence or willful misconduct of the
Administrative Agent or any other Secured Party.  If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 Business Days before
such sale or other disposition.  Notwithstanding anything to the contrary in
this Agreement, the Administrative Agent shall not turn over possession of any
Collateral delivered to it hereunder (other than Collateral that is released to
the Company in accordance with Section 7.12 of this Agreement) to any Secured
Party or any other Person except upon completion of, or to the extent necessary
to complete, a Foreclosure on such Collateral.

 

5.5                               Securities Act, etc.  The Company recognizes
that the Administrative Agent may be unable to effect a public sale of any or
all the Pledged Stock owned or issued by it, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof.  The Company acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner.  The Administrative Agent shall be
under no obligation to delay a sale of any of the Pledged Stock for the period
of time necessary to permit the Company to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if the Company would agree to do so.

 

5.6                               Deficiency.  The Company shall remain liable
for any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Secured Obligations and the reasonable
fees and disbursements of any attorneys employed by the Administrative Agent to
collect such deficiency.

 

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SECTION VI

 

THE ADMINISTRATIVE AGENT

 

6.1                               Administrative Agent’s Appointment as
Attorney-in-Fact, etc.  (a)  The Company appoints the Administrative Agent and
any officer or agent thereof (including, without limitation, any custodian
appointed by it), with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Company and in the name of the Company or in its own name, for the
purpose of carrying out the terms of this Agreement in connection with any
Foreclosure on Collateral, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement upon and in connection with such
Foreclosure, and, without limiting the generality of the foregoing, the Company
hereby gives the Administrative Agent the power and right, on behalf of the
Company, with notice to the Company, to do any or all of the following upon and
in connection with such Foreclosure:

 

(i)                                   in the name of the Company or its own
name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
with respect to the applicable Collateral and file any claim or take any action
or proceeding in any court of law or equity or otherwise deemed appropriate by
the Administrative Agent for the purpose of collecting any and all such moneys
due with respect to such Collateral whenever payable;

 

(ii)                                pay or discharge taxes and Liens levied or
placed on or threatened against such Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any part of
the premiums therefore and the costs thereof;

 

(iii)                             execute, in connection with any sale provided
for in Section 5.4, any indorsements, assignments or other instruments of
conveyance or transfer with respect to such Collateral; and

 

(iv)                            (1)  direct any party liable for any payment
under such Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Collateral Deposit Account or as the Administrative
Agent shall direct;  (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of such Collateral;  (3)  sign and
indorse any assignments, verifications, notices and other documents in
connection with such Collateral;  (4) commence and prosecute any suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect such Collateral or any portion thereof and to enforce any other right in
respect of such Collateral; (5) defend any suit, action or proceeding brought
against the Company with respect to such Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem appropriate;
and (7) generally, sell, transfer, pledge and make any agreement with respect to
or otherwise deal with such Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do,
at the Administrative Agent’s option and the Company’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon such Collateral and the
Administrative Agent’s and the Secured Parties’ security interests therein and
to effect the intent of this Agreement, all as fully and effectively as the
Company might do.

 

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(b)                               Upon any Foreclosure on Collateral, if the
Company fails to perform or comply with any of its agreements contained herein,
the Administrative Agent, at its option, but without any obligation so to do,
may perform or comply, or otherwise cause performance or compliance, with such
agreement.

 

(c)                                The expenses of the Administrative Agent
incurred in connection with actions undertaken as provided in this Section 6.1,
together with interest thereon at a rate per annum equal to the highest rate per
annum at which interest would then be payable on any category of past due Base
Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the Company, shall be payable by
the Company to the Administrative Agent on demand.

 

(d)                               The Company hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.  All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the security
interests created hereby are released.

 

6.2                               Duty of Administrative Agent.  The
Administrative Agent shall use reasonable care with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the New York UCC, including preserving rights against other
parties claiming an interest in the Collateral.  Neither the Administrative
Agent, any Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Company or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof.  The powers conferred on the
Administrative Agent and the Secured Parties hereunder are solely to protect the
Administrative Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any Secured Party to
exercise any such powers.  The Administrative Agent and the Secured Parties
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Company for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.

 

6.3                               Authorization of Financing Statements. 
Pursuant to any applicable law, the Company authorizes the Administrative Agent
to file or record financing statements with respect to the Collateral
(describing the Collateral as specified in this Agreement) without the signature
of the Company in such form and in such offices of the jurisdiction of
organization of the Company as the Administrative Agent determines appropriate
to perfect the security interests of the Administrative Agent under this
Agreement; provided, however, that notwithstanding anything to the contrary
contained herein or in any Collateral Document, the Company shall not be
required to perfect the security interests granted by it in any Collateral by
any means other than by (i) executing and delivering a copy of any Deposit
Account Control Agreement, (ii) executing filings pursuant to the Uniform
Commercial Code of the relevant State(s) and (iii) such additional actions as
may be required pursuant to any Loan Document.

 

6.4                               Authority of Administrative Agent.  The
Company acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the Secured Parties, be governed by this Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Administrative Agent and the Company, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act

 

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or refrain from acting, and the Company shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.

 

SECTION VII

 

MISCELLANEOUS

 

7.1                               Amendments, Supplements and Waivers.  None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except in accordance with Section 9.5 of the Credit
Agreement.

 

(a)                                 Solely with the consent of the
Administrative Agent (and without the consent of any other Secured Party), the
Administrative Agent and the Company, at any time and from time to time, may
enter into one or more agreements supplemental hereto or to any Collateral
Document, (i) to add to the covenants of the Company for the benefit of the
Secured Parties or to surrender any right or power herein conferred upon the
Company; or (ii) to cure any ambiguity, to correct or supplement any provision
herein or in any Collateral Document which may be defective or inconsistent with
any other provision herein or therein, or to make any other provision with
respect to matters or questions arising hereunder which shall not be
inconsistent with any provision hereof; provided that any such action
contemplated by this clause (ii) shall not adversely affect the interests of any
of the Secured Parties.

 

7.2                               Notices.  All notices, requests and demands to
or upon the Administrative Agent or the Company hereunder shall be effected in
the manner provided for in Section 9.1 of the Credit Agreement.

 

7.3                               Copies of Material Transaction Documents
Relating to Loan Assets.  On the Closing Date with respect to each Loan Asset
specified on the Collateral Schedule, and within 10 Business Days following the
date on which the Company pledges any additional Loan Asset pursuant to a
Revised Collateral Schedule, the Company will use commercially reasonable
efforts to provide to the Administrative Agent copies on CD-ROM (or other
readily accessed electronic medium) of any material transaction documents
relating to such Loan Asset; provided that (i) the delivery of such copies shall
not constitute any representation or warranty by the Company that such copies
(a) are true, correct and complete or (b) constitute all transaction documents
relating to the Loan Assets that the Administrative Agent would necessarily
determine to be material, and (ii) not later than three (3) Business Days
following the date on which any Loan Asset is withdrawn from the Collateral (as
may be permitted under Section 2.18 of the Credit Agreement), the Administrative
Agent agrees to use commercially reasonable efforts to return to the Company the
applicable CD-ROM (or other electronic medium), and any other paper or
electronic copies (or if not capable of physical delivery, to permanently erase
any such electronic copies) of the transaction documents, related to such
withdrawn Loan Asset.

 

7.4                               No Waiver by Course of Conduct; Cumulative
Remedies.  Neither the Administrative Agent nor any Secured Party shall by any
act (except in accordance with Section 7.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default.  No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  A waiver by the Administrative Agent or
any Secured Party of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Party would otherwise have on any future occasion.  The rights and
remedies herein provided are

 

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cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

 

7.5                               Successors and Assigns.  This Agreement shall
be binding upon the successors and assigns of the Company and shall inure to the
benefit of the Administrative Agent and the Secured Parties and their successors
and permitted assigns; provided that the Company may not assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent.

 

7.6                               Counterparts.  This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy or pdf), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.

 

7.7                               Severability.  Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

7.8                               Section Headings.  The Section headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.

 

7.9                               Integration.  This Agreement and the Loan
Documents represent the agreement of the Company, the Administrative Agent and
the Secured Parties with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Company, the Administrative Agent or any Secured Party relative to subject
matter hereof and thereof not expressly set forth or referred to herein or in
the Loan Documents.

 

7.10                        GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.

 

7.11                        Submission To Jurisdiction; Waivers.  The Company,
and by its acceptance hereof, the Administrative Agent, hereby irrevocably and
unconditionally:

 

(a)                               submits for itself and its property in any
legal action or proceeding relating to this Agreement and the Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;

 

(b)                               consents that any such action or proceeding
may be brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same; and

 

(c)                                waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary, punitive or
consequential damages.

 

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7.12                        Releases; Termination; Custody.

 

(a)                               Upon the termination of, and satisfaction in
full of all of the Secured Obligations under the Loan Documents, the security
interests created by this Agreement and the Collateral Documents shall terminate
forthwith and all right, title and interest of the Administrative Agent in and
to the Collateral shall revert to the Company, their successors and assigns.

 

(b)                               Upon the termination of the Administrative
Agent’s security interest and the release of the Collateral in accordance with
Section 7.12(a), the Administrative Agent will promptly, at the Company’s
written request and expense (but, in any event, not later than three
(3) Business Days following such request), (i) execute and deliver to the
Company such documents (in form and substance reasonably satisfactory to the
Administrative Agent and the Company) as the Company shall reasonably request to
evidence the termination of such security interest or the release of the
Collateral and (ii) deliver or cause to be delivered to the Company all property
of the Company then held by the Administrative Agent or any agent thereof.

 

(c)                                Except as set forth in Sections (d), (e), and
(f) below, upon the withdrawal of any Collateral as permitted by the Loan
Documents, the security interests and Liens created by the Collateral Documents
in such Collateral shall terminate and such Collateral shall be automatically
released from the Lien created by the Collateral Documents (subject to any
requirement therein with respect to the retention of the Proceeds of a
disposition of Collateral subject to this Agreement or any Collateral Document
or the application thereof in accordance with the Credit Agreement).  Upon
receipt by the Administrative Agent of a certificate from the Company stating
that such withdrawal is permitted by (or the relevant consent has been received
under) the Loan Documents, the Administrative Agent shall be authorized to, and
shall promptly at the Company’s request and expense, (i) execute and deliver
such documents (in form and substance reasonably satisfactory to the
Administrative Agent and the Company) as the Company shall reasonably request to
evidence the termination of such security interest and Lien and the release of
such Collateral (subject to any requirement with respect to the retention of the
Proceeds of a disposition of Collateral subject to this Agreement or any
Collateral Document or the application of such Proceeds in accordance with the
Credit Agreement) and (ii) deliver or cause to be delivered to the Company all
property (including any promissory notes and related transfer documents), if
any, constituting part of such withdrawn Collateral then held by the
Administrative Agent or any agent thereof.

 

(d)                               Upon receipt by the Administrative Agent of a
completed Request for Release of Documents certifying that physical possession
of any of the Company’s property then held by the Administrative Agent or any
agent thereof (including any promissory notes and related transfer documents, if
any, constituting part of any Collateral) is necessary or customary to enforce
(or would otherwise facilitate enforcement of) the Company’s remedies (or
actions in lieu of the exercise of enforcement) against counterparties, or for
the purpose of correction of defects, if any, under or in relation to any
Collateral, the Administrative Agent shall, within three Business Days of the
Administrative Agent’s receipt of such Request for Release of Documents, at the
Company’s expense (i) cause to be delivered such property to the Company or its
agents pending any enforcement action, exercise of rights or other customary
actions in lieu of enforcement or for the purpose of correction of defects, if
any, or loan (or other asset) administration and servicing, in each case in
respect of any such promissory notes and related Collateral, and (ii) execute
and deliver such documents (in form and substance reasonably satisfactory to the
Administrative Agent and the Company), and take such other actions in connection
with such escrowed release as the Company may reasonably request in writing; it
being understood that the delivery of any such property shall not constitute a
release of the Collateral and any Proceeds received by the Company upon any such
enforcement shall be subject to this Agreement and the Collateral Documents. 
The Company hereby agrees to hold in escrow any Collateral delivered to the
Company by the Administrative Agent pursuant to this Section 7.12(d).

 

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(e)           Upon receipt by the Administrative Agent of a completed Request
for Release of Documents certifying that the Company has entered into a binding
contract for a Third Party Sale permitted by the Loan Documents, the
Administrative Agent shall, within three Business Days of the Administrative
Agent’s receipt of such Request for Release of Documents, at the Company’s
expense (i) execute and deliver, for release only upon completion of such Third
Party Sale, such documents (in form and substance reasonably satisfactory to the
Administrative Agent and the Company) as such the Company shall reasonably
request to evidence the termination of the security interest and Lien in, and
release of, such Collateral upon completion of such Third Party Sale (subject to
any requirement with respect to retention of the Proceeds of such Third Party
Sale subject to this Agreement or any Collateral Document) and (ii) deliver, or
cause to be delivered, for release only upon completion of such Third Party
Sale, to the Company all property (including any promissory notes and related
transfer documents), if any, constituting part of such Collateral (and any
related collateral) then held by the Administrative Agent or any agent thereof. 
If no Enforcement Default has occurred and is continuing when the Company shall
have entered into a binding contract for a Third Party Sale, but the Company
shall not have completed such Third Party Sale prior to a Foreclosure on such
Collateral or any other intervening Material Default or Event of Default, the
Administrative Agent shall provide the releases, and otherwise act in accordance
with the provisions of, this Section 7.12 in respect of such Third Party Sale
notwithstanding such intervening Foreclosure or other Enforcement Default.  The
Company and the Company hereby agree to hold in escrow any Collateral delivered
to the Company by the Administrative Agent pursuant to this Section 7.12(e).

 

(f)            Upon receipt by the Administrative Agent of a completed Request
for Release of Documents certifying that the Company has received, or has
received notice that it will receive, a payment or prepayment in satisfaction or
settlement in respect of any portion of the Collateral, the Administrative Agent
shall, within three Business Days of the Administrative Agent’s receipt of such
Request for Release of Documents, at the Company’s expense (i) execute and
deliver, for release only upon receipt by the Company of such payment or
prepayment in satisfaction or settlement, such documents (in form and substance
reasonably satisfactory to the Administrative Agent and the Company) as the
Company shall reasonably request to evidence termination of the security
interest and Lien in, and release of, such Collateral (subject to any
requirement with respect to retention of the Proceeds of such payment or
prepayment under this Agreement or any Collateral Documents) and (ii) deliver,
or cause to be delivered, for release only upon receipt of such payment or
prepayment in satisfaction or settlement, to the Company all property (including
any promissory notes and related transfer documents), if any, constituting part
of such Collateral (and any related collateral) then held by the Administrative
Agent or any agent thereof.  The Company hereby agrees to hold in escrow any
Collateral delivered to the Company by the Administrative Agent pursuant to this
Section 7.12(f).

 

(g)           In the event that the Administrative Agent fails to produce a
Related Pledged Investment Document that was in its possession within three (3)
Business Days following receipt of a Request for Release of Documents (a
“Custodial Delivery Failure”), then the Administrative Agent shall with respect
to any missing Related Pledged Investment Document, promptly deliver to the
Company upon request, a lost note affidavit in the form of Annex 5 hereto (“Lost
Note Affidavit”).  In the event that such original Related Pledged Investment
Document is subsequently found and delivered to the Company, the Company shall
return the Lost Note Affidavit to the Administrative Agent.

 

7.13         WAIVER OF JURY TRIAL.  EACH OF THE COMPANY, AND BY ACCEPTANCE OF
THE BENEFITS HEREOF, THE ADMINISTRATIVE AGENT, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

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7.14         Inspection by Regulatory Agencies.  The Administrative Agent shall
make available, and shall cause each custodian and agent acting on its behalf in
connection with this Agreement to make available, all Collateral in such
Person’s possession upon prior written notice and during regular business hours
for inspection by any regulatory agency in its discretion.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly
executed and delivered as of the date first above written.

 

 

 

iSTAR FINANCIAL INC.,

 

a Maryland corporation

 

 

 

 

 

 

By:

/s/ Michelle MacKay

 

 

Name:

Michelle MacKay

 

 

Title:

Executive Vice President

 

 

[Security Agreement]

 

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BARCLAYS BANK PLC,

 

as Administrative Agent

 

 

 

 

By:

/s/ Diane Rolfe

 

 

Name:

Diane Rolfe

 

 

Title:

Director

 

 

[Security Agreement]

 

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