Exhibit 10.3

 

Execution Version

 

AMENDED AND RESTATED

REGISTRATION RIGHTS AGREEMENT

 

BETWEEN

 

SAFETY, INCOME & GROWTH INC.

 

AND

 

iSTAR INC.

 

Dated as of January 2, 2019

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE 1 DEFINED TERMS

1

 

 

Section 1.1

Defined Terms

1

Section 1.2

Table of Defined Terms

3

 

 

 

ARTICLE 2 REGISTRATION RIGHTS

4

 

 

Section 2.1

Shelf Registration

4

Section 2.2

Demand Registrations

4

Section 2.3

Effectiveness

5

Section 2.4

Notification and Distribution of Materials

5

Section 2.5

Amendments and Supplements

6

Section 2.6

Underwritten Offerings

6

Section 2.7

New York Stock Exchange

6

Section 2.8

Notice of Certain Events

7

 

 

 

ARTICLE 3 SUSPENSION OF REGISTRATION REQUIREMENTS; SALES RESTRICTIONS

7

 

 

Section 3.1

Suspension of Registration Requirements

7

Section 3.2

Restriction on Sales

8

 

 

 

ARTICLE 4 INDEMNIFICATION

9

 

 

Section 4.1

Indemnification by the Company

9

Section 4.2

Indemnification by the Holder

10

Section 4.3

Notices of Claims, etc.

10

Section 4.4

Indemnification Payments

11

Section 4.5

Contribution

11

 

 

 

ARTICLE 5 TERMINATION; SURVIVAL

12

 

 

Section 5.1

Termination; Survival

12

 

 

 

ARTICLE 6 MISCELLANEOUS

12

 

 

Section 6.1

Covenants Relating to Rule 144

12

Section 6.2

No Conflicting Agreements

13

Section 6.3

Additional Shares

13

Section 6.4

Governing Law; Arbitration

13

Section 6.5

Counterparts

14

Section 6.6

Headings

14

Section 6.7

Severability

14

 

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Section 6.8

Entire Agreement; Amendments; Waiver

14

Section 6.9

Notices

15

Section 6.10

Successors and Assigns

15

Section 6.11

No Third Party Beneficiaries

16

Section 6.12

Further Assurances

16

Section 6.13

Specific Performance

16

Section 6.14

Costs and Expenses

16

 

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This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (as the same may be
amended, modified or supplemented from time to time, this “Agreement”), dated as
of January 2, 2019, is made and entered into by and among SAFETY, INCOME &
GROWTH INC., a Maryland corporation (the “Company”), and iSTAR INC., a Maryland
corporation (together with any of its subsidiaries that owns Registrable Shares
from time to time, the “Holder”).

 

WHEREAS, immediately prior to the execution and delivery of the Investor Unit
Purchase Agreement (as defined below), the Holder owns, directly or through
subsidiaries, [7,632,783] shares (the “Owned Shares”) of the Company’s common
stock, par value $0.01 per share (the “Common Stock”), which the Holder has
acquired directly from the Company in one or more transactions not involving a
public offering and in open market or privately negotiated transactions with
third parties;

 

WHEREAS, contemporaneously with its entry into this Agreement, the Holder is
purchasing 12,500,000 newly designated Investor Units issued by Safety Income
and Growth Operating Partnership L.P. (the “Operating Partnership”) pursuant to
an Investor Unit Purchase Agreement, dated the date hereof, among the Company,
the Operating Partnership and the Holder (the “Investor Unit Purchase
Agreement”), which Investor Units will be exchanged for shares of Common Stock
(the “Exchange Shares”) at a future date, subject to the receipt of the approval
of holders of the Common Stock, in accordance with the terms of the Investor
Units;

 

WHEREAS, contemporaneously with its entry into this Agreement, the Holder is
also entering into (i) a Stockholder’s Agreement with the Company (the
“Stockholder’s Agreement”); and (ii) an Agreement Regarding Waiver of Ownership
Limit with the Company (the “Ownership Waiver” and together with the Investor
Unit Purchase Agreement and the Stockholders Agreement, the “Related
Documents”);

 

WHEREAS, the Company and the Holder previously entered into a Registration
Rights Agreement, dated as of June 27, 2017 (the “Prior Registration Rights
Agreement”); and

 

WHEREAS, in connection with the transactions contemplated by the Investor Unit
Purchase Agreement, the Company and the Holder desire to amend and restate the
Prior Registration Rights Agreement as set forth herein.

 

NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Holder hereby agree as follows:

 

ARTICLE 1

 

DEFINED TERMS

 

Section 1.1            Defined Terms.  The following definitions shall be for
all purposes, unless otherwise clearly indicated to the contrary, applied to the
terms used in this Agreement.

 

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“Automatic Shelf Registration Statement” means an “Automatic Shelf Registration
Statement,” as defined in Rule 405 under the Securities Act.

 

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to be
closed.

 

“Common Stock” has the meaning given in the Recitals.

 

“Commission” means the U.S. Securities and Exchange Commission.

 

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from
time to time (or any corresponding provision of succeeding law), and the
rules and regulations thereunder.

 

“Exchange Shares” has the meaning given in the Recitals.

 

“Investor Unit Purchase Agreement” has the meaning given in the Recitals.

 

“Management Agreement” means the Management Agreement, dated June 27, 2017,
among the Company, the Manager and the Holder, as the same may be amended or
restated from time to time.

 

“Manager” means SFTY Manager LLC, a Delaware limited liability company.

 

“Operating Partnership” has the meaning given in the Recitals.

 

“Owned Shares” has the meaning given in the Recitals.

 

“Ownership Waiver” has the meaning given in the Recitals.

 

“Person” means any individual, partnership, corporation, limited liability
company, joint venture, association, trust, unincorporated organization or other
governmental or legal entity.

 

“Prospectus” means any prospectus or prospectuses included in, or relating to,
any Registration Statement (including without limitation, any prospectus subject
to completion and a prospectus that includes any information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act and any term sheet
filed pursuant to Rule 434 under the Securities Act), as amended or supplemented
by any prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement and by
all other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus or prospectuses.

 

“Registrable Shares” with respect to the Holder, means at any time (i) the
Holder’s Owned Shares, (ii) shares of Common Stock issued to the Manager under
the Management Agreement from time to time, and (iii) any other shares of Common
Stock or other equity securities acquired by the Holder or any of its
subsidiaries from the Company or an affiliate of

 

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the Company from time to time, including the Exchange Shares, not in excess of
any restriction or limit on such ownership as set forth in any of the Related
Documents, including, in each case, any additional shares of Common Stock or
other equity securities issued as a dividend or distribution on, in exchange
for, or otherwise in respect of, shares of Common Stock or other equity
securities that otherwise constitute Registrable Shares with respect to the
Holder (including as a result of combinations, recapitalizations, mergers,
consolidations, reorganizations or similar event or otherwise); provided,
however, that Registrable Shares shall cease to be Registrable Shares with
respect to the Holder upon the earliest to occur of (A) when such Registrable
Shares shall have been disposed of pursuant to an effective Registration
Statement under the Securities Act, (B) when all of the Holder’s Registrable
Shares may be sold without restriction pursuant to Rule 144(b) under the
Securities Act or any replacement rule or (C) when the Holder’s Registrable
Shares shall have ceased to be outstanding.

 

“Registration Expenses” means any and all fees and expenses incident to the
performance of or compliance with this Agreement, which shall be borne and paid
by the Company as provided below, whether or not any Registration Statement is
filed or becomes effective, including, without limitation: (i) all registration,
qualification and filing fees (including fees and expenses with respect to
(A) filings required to be made with the Commission and the U.S. Financial
Industry Regulatory Authority and (B) compliance with securities or “blue sky”
laws), (ii) typesetting and printing expenses, (iii) internal expenses of the
Company (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), (iv) the fees and
expenses incurred in connection with the listing of the Registrable Shares,
(v) the fees and disbursements of legal counsel for the Company and customary
fees and expenses for independent certified public accountants retained by the
Company, and any transfer agent and registrar fees and (vi) the reasonable fees
and expenses of any special experts retained by the Company; provided, however,
that “Registration Expenses” shall not include, and the Company shall not have
any obligation to pay, any underwriting fees, discounts, commissions, or taxes
(including transfer taxes) attributable to the sale of securities by the Holder,
or any legal fees and expenses of counsel to the Holder and any underwriter
engaged by the Holder or any other expenses incurred in connection with the
performance by the Holder of its obligations under the terms of this Agreement.

 

“Registration Statement” means any registration statement of the Company filed
with the Commission under the Securities Act which permits the public offering
of any of the Registrable Shares pursuant to the provisions of this Agreement,
including any Prospectus, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all materials
incorporated by reference or deemed to be incorporated by reference in such
Registration Statement.

 

“Related Documents” has the meaning given in the Recitals.

 

“Securities Act” means the U.S. Securities Act of 1933, as amended from time to
time (or any corresponding provision of succeeding law), and the rules and
regulations thereunder.

 

Section 1.2            Table of Defined Terms.  Terms that are not defined in
Section 1.1 have the respective meanings set forth in the following Sections:

 

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Defined Term

 

Section No.

Agreement

 

Preamble

Common Stock

 

Recitals

Company

 

Preamble

Company Offering

 

Section 3.2(b)

Controlling Person

 

Section 4.1

Demand Registration

 

Section 2.2(a)(i)

Demand Request

 

Section 2.2(a)(i)

Holder

 

Preamble

Liabilities

 

Section 4.1(a)

Offering Blackout Period

 

Section 3.2(b)

Ownership Waiver

 

Recitals

Private Placement Purchase Agreement

 

Recitals

Purchased Shares

 

Recitals

Related Documents

 

Recitals

Required Filing Date

 

Section 2.2(a)(ii)

Suspension Event

 

Section 3.1(b)

 

ARTICLE 2

 

REGISTRATION RIGHTS

 

Section 2.1            Shelf Registration.  The Company agrees to file on or
before the six months anniversary of the date of this Agreement, with the
Commission a Registration Statement on an appropriate form (which shall be, if
the Company is then eligible, an Automatic Shelf Registration Statement)
providing for the registration of, and the sale by the Holder of, all of the
Registrable Shares held by the Holder at the time of such filing on a continuous
or delayed basis by the Holder, from time to time in accordance with the methods
of distribution elected by the Holder, pursuant to Rule 415 under the Securities
Act or any similar rule that may be adopted by the Commission; provided,
however, that the Holder acknowledges and agrees that, pursuant to the
Stockholders Agreement, it is subject to certain restrictions on transfer of the
Registrable Shares.  The Company will use its reasonable best efforts to cause
the Registration Statement to be declared effective by the Commission as soon as
practicable after the filing thereof.  To the extent that the Company has an
effective shelf registration statement on file and it is effective with the
Commission at the time the Company is going to file a Registration Statement
hereunder, the Company may (but will not be required to) instead file a
prospectus or post-effective amendment, as applicable, to include in such shelf
registration statement the Registrable Shares to be registered pursuant to this
Agreement (in such a case, such prospectus or post-effective amendment together
with the previously filed shelf registration statement will be considered the
Registration Statement).

 

Section 2.2            Demand Registrations.

 

(a)           Request for Registration.

 

(i)            From and after the date that is six months after the date hereof
with respect to Registrable Shares that are not Exchange Shares, and 12 months
after the Exchange

 

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Date with respect to the Exchange Shares, the Holder shall have the right to
require the Company to file a Registration Statement under the Securities Act
for a public offering of all or part of such Registrable Shares (a “Demand
Registration”) by delivering to the Company written notice stating that such
right is being exercised by the Holder, specifying the number of Registrable
Shares to be included in such registration and, subject to
Section 2.2(b) hereof, describing the intended method of distribution thereof (a
“Demand Request”). The Holder may exercise its rights under this Section 2.2 in
the Holder’s sole discretion.

 

(ii)           Each Demand Request shall specify the aggregate number of
Registrable Shares proposed to be sold. Subject to Section 3.1, the Company
shall file the Registration Statement in respect of a Demand Registration within
45 days after receiving a Demand Request (the “Required Filing Date”) and shall
use reasonable best efforts to cause the same to be declared effective by the
Commission as promptly as practicable after such filing; provided, however,
that:

 

(A)          the Company shall not be obligated to cause a Registration
Statement with respect to a Demand Registration to be declared effective
pursuant to Section 2.2(a)(ii) unless the Demand Request is for a number of
Registrable Shares with a market value that is equal to at least $10 million as
of the date of such Demand Request; provided, however, that this
Section 2.2(a)(ii)(A) shall not apply if the applicable Demand Request is for
all of the Registrable Shares held by the Holder as of the date of such Demand
Request; and

 

(B)          the Holder shall have the right to withdraw a Demand Request at any
time prior to the relevant Registration Statement being declared effective by
the Commission in which event the Company shall not be obligated to cause a
Registration Statement with respect to a Demand Registration to be declared
effective pursuant to Section 2.2(a)(ii).

 

(b)           Priority on Demand Registrations. The Company shall include in a
Demand Registration only the Registrable Shares requested by the Holder to be
included therein.

 

(c)           Selection of Underwriters. The holder may (i) request that the
offering of Registrable Shares pursuant to a Demand Registration be in the form
of a “firm commitment” underwritten offering and (ii) select the investment
banking firm or firms to manage the underwritten offering.

 

Section 2.3            Effectiveness.  The Company shall use its reasonable best
efforts to keep each Registration Statement continuously effective (or in the
event a Registration Statement expires pursuant to Rule 415(a)(5) under the
Securities Act, file a replacement Registration Statement and keep such
replacement Registration Statement effective) for the period beginning on the
date on which the Registration Statement is declared or becomes effective and
ending on the date that no Registrable Shares registered thereunder remain as
Registrable Shares.

 

Section 2.4            Notification and Distribution of Materials.  The Company
shall notify the Holder of the effectiveness of any Registration Statement
applicable to the Registrable Shares and shall furnish to the Holder such number
of copies of such Registration Statement (including any amendments, supplements
and exhibits), the Prospectus contained therein

 

5

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(including each preliminary prospectus and all related amendments and
supplements, if any) and any documents incorporated by reference in such
Registration Statement or such other documents as the Holder may reasonably
request in order to facilitate the sale of the Registrable Shares in the manner
described in such Registration Statement.

 

Section 2.5            Amendments and Supplements.  During the period that a
Registration Statement is effective, the Company shall prepare and file with the
Commission from time to time such amendments and supplements to such
Registration Statement and Prospectus used in connection therewith as may be
necessary to keep such Registration Statement (or a successor Registration
Statement filed with respect to such Registrable Shares) effective and to comply
with the provisions of the Securities Act with respect to the disposition of the
Registrable Shares covered thereby.  The Company shall file, as promptly as
practicable (and within fifteen (15) Business Days), any supplement or
post-effective amendment to a Registration Statement, to add Registrable Shares
to any shelf Registration Statement as a result of the issuance of Common Stock
pursuant to the Management Agreement, or as is otherwise reasonably necessary to
permit the sale of the Holder’s Registrable Shares pursuant to such Registration
Statement.  The Company shall furnish to and afford the Holder a reasonable
opportunity to review and comment on all amendments and supplements proposed to
be filed to a Registration Statement (in each case at least five (5) Business
Days prior to such filing).  The Company shall use its reasonable best efforts
to have such supplements and amendments declared effective, if required, as soon
as practicable after filing.  The Holder agrees to deliver such notices,
questionnaires and other information as the Company may reasonably request in
writing, if any, to the Company within ten (10) Business Days after such
request.

 

Section 2.6            Underwritten Offerings.  The Holder may request, by
written notice to the Company, that the Company cooperate with the Holder in any
underwritten offering of Registrable Shares initiated by the Holder under a
Registration Statement.  The Company agrees to reasonably cooperate with any
such request for an underwritten offering and to take all such other reasonable
actions in connection therewith, including entering into such agreements
(including an underwriting agreement in form, scope and substance as is
customary for similar underwritten offerings) and taking all such other
reasonable actions in connection therewith in order to expedite or facilitate
the disposition of Registrable Shares included in such underwritten offering,
including (i) making such representations and warranties to the underwriters
with respect to the business of the Company and the Registration Statement and
documents, if any, incorporated or deemed to be incorporated by reference
therein, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings by selling stockholders;
(ii) obtaining customary opinions and negative assurance letters of counsel to
the Company; and (iii) obtaining customary “cold comfort” letters and updates
thereof from the independent registered public accountants of the Company (to
the extent permitted by applicable accounting rules and guidelines).

 

Section 2.7            New York Stock Exchange.  The Company shall file any
necessary listing applications or amendments to the existing applications to
cause the Registrable Shares registered under any Registration Statement to be
then listed or quoted on the New York Stock Exchange or such other primary
exchange or quotation system on which the Common Stock is then listed or quoted.

 

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Section 2.8            Notice of Certain Events.

 

(a)           The Company shall promptly notify the Holder in writing of the
filing of any Registration Statement or Prospectus, amendment or supplement
related thereto or any post-effective amendment to a Registration Statement and
the effectiveness of any post-effective amendment; provided, however, that this
Section 2.8(a) shall not apply to (i) an amendment or supplement relating solely
to securities other than the Registrable Shares, and (ii) an amendment or
supplement by means of an Annual Report on Form 10-K, a Quarterly Report on
Form 10-Q, a Proxy Statement on Schedule 14A, a Current Report on Form 8-K or a
Registration Statement on Form 8-A or any amendments thereto filed with the
Commission under the Exchange Act and incorporated or deemed to be incorporated
by reference into a Registration Statement or Prospectus.

 

(b)           At any time when a Prospectus relating to a Registration Statement
is required to be delivered under the Securities Act by the Holder to a
transferee, the Company shall immediately notify the Holder of the happening of
any event as a result of which the Company believes the Prospectus included in
such Registration Statement, as then in effect, includes an untrue statement of
a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.  In such event, the
Company shall promptly prepare and, if applicable, furnish to the Holder a
reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of Registrable Shares sold under the Prospectus, such Prospectus
shall not include 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 light of the circumstances under which they are made, not
misleading.  The Company shall, if necessary, promptly amend the Registration
Statement of which such Prospectus is a part to reflect such amendment or
supplement.  The Holder agrees that, upon receipt of any notice from the Company
of the occurrence of an event as set forth above, the Holder will forthwith
discontinue disposition of Registrable Shares pursuant to any Registration
Statement covering such Registrable Shares until the Holder’s receipt of written
notice from the Company that the use of the Registration Statement may be
resumed.  The Holder also agrees that it will treat as confidential the receipt
of any notice from the Company of the occurrence of an event as set forth above
and shall not disclose or use the information contained in such notice without
the prior written consent of the Company until such time as the information
contained therein is or becomes available to the public generally, other than as
a result of disclosure by the Holder in breach of the terms of this Agreement.

 

ARTICLE 3

 

SUSPENSION OF REGISTRATION
REQUIREMENTS; SALES RESTRICTIONS

 

Section 3.1            Suspension of Registration Requirements.

 

(a)           The Company shall promptly notify the Holder in writing of the
issuance by the Commission or any state instrumentality of any stop order
suspending the effectiveness of a Registration Statement with respect to the
Holder’s Registrable Shares or the initiation of any

 

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proceedings for that purpose.  The Company shall use its reasonable best efforts
to obtain the withdrawal of any order suspending the effectiveness of such a
Registration Statement as promptly as practicable after the issuance thereof.

 

(b)           Notwithstanding anything to the contrary set forth in this
Agreement, the Company’s obligation under this Agreement to file, amend or
supplement a Registration Statement, or to cause a Registration Statement, or
any filings under any state securities laws, to become or remain effective shall
be suspended, as the Company may reasonably determine necessary and advisable
(but in no event more than twice in any rolling 12-month period commencing on
the date of this Agreement or more than 60 consecutive days, except as a result
of a refusal by the Commission to declare any post-effective amendment to the
Registration Statement effective after the Company has used its reasonable best
efforts to cause the post-effective amendment to be declared effective by the
Commission, in which case, the Company must terminate the black-out period
immediately following the effective date of the post-effective amendment) in the
event of pending negotiations relating to, or consummation of, a material
transaction or the occurrence of a material event that, in the good faith
judgment of the board of directors of the Company, (i) would require additional
disclosure of material non-public information by the Company in the Registration
Statement or such filing, as to which the Company has a bona fide business
purpose for preserving confidentiality, and the premature disclosure of which
would adversely affect the Company, or (ii) render the Company unable to comply
with Commission requirements (any such circumstances being hereinafter referred
to as a “Suspension Event”).  The Company shall notify the Holder of the
existence of any Suspension Event by promptly delivering to the Holder a
certificate signed by an executive officer of the Company stating that a
Suspension Event has occurred and is continuing.  The Holder agrees that it will
treat as confidential the receipt of any notice from the Company of the
occurrence of an event as set forth above and shall not disclose or use the
information contained in such notice without the prior written consent of the
Company until such time as the information contained therein is or becomes
available to the public generally, other than as a result of disclosure by the
Holder in breach of the terms of this Agreement.

 

Section 3.2            Restriction on Sales.

 

(a)           The Holder agrees that, following the effectiveness of any
Registration Statement relating to its Registrable Shares, the Holder will not
effect any dispositions of any of its Registrable Shares pursuant to such
Registration Statement or any filings under any state securities laws at any
time after the Holder has received notice from the Company to suspend
dispositions as a result of the occurrence or existence of any Suspension Event
or so that the Company may correct or update the Registration Statement or such
filing.  The Holder will maintain the confidentiality of any information
included in the written notice delivered by the Company unless otherwise
required by law or subpoena.  The Holder may recommence effecting dispositions
of the Registrable Shares pursuant to the Registration Statement or such
filings, and all other obligations which are suspended as a result of a
Suspension Event shall no longer be so suspended, following further notice to
such effect from the Company, which notice shall be given by the Company
promptly after the conclusion of any such Suspension Event.

 

(b)           The Holder further agrees, if requested by the managing
underwriter or underwriters in a Company-initiated underwritten offering (each,
a “Company Offering”), not

 

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to effect any disposition of any of the Registrable Shares during the period
(the “Offering Blackout Period”) beginning upon receipt by the Holder of written
notice from the Company, but in any event no earlier than the fifteenth (15th)
day preceding the anticipated date of pricing of such Company Offering, and
ending no later than ninety (90) days after the closing date of such Company
Offering, and in no event for any longer period of time than is applicable to
iStar Inc. in connection with such Company Offering.  Such Offering Blackout
Period notice shall be in writing in a form reasonably satisfactory to the
Company and the managing underwriter or underwriters.  The Holder will maintain
the confidentiality of any information included in such notice delivered by the
Company unless otherwise required by law or subpoena.

 

(c)           The Holder confirms its agreements to the restrictions on sales of
Registrable Shares, including the Exchange Shares, set forth in the Stockholders
Agreement.

 

ARTICLE 4

 

INDEMNIFICATION

 

Section 4.1            Indemnification by the Company.  The Company agrees to
indemnify and hold harmless the Holder, and the officers, directors,
stockholders, members, managers, partners, affiliates, accountants, attorneys,
trustees, employees, representatives and agents of the Holder, and each Person
(a “Controlling Person”), if any, who controls (within the meaning of
Section 15(a) of the Securities Act or Section 20(a) of the Exchange Act) any of
the foregoing Persons, as follows (to the fullest extent permitted by applicable
law):

 

(a)           from and against any and all costs, losses, liabilities,
obligations, claims, damages, judgments, fines, penalties, awards, actions,
other liabilities and expenses whatsoever (the “Liabilities”), as incurred by
any of them, arising out of or in connection with (A) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment or supplement thereto) pursuant to which Registrable
Shares were registered under the Securities Act, including all documents
incorporated therein by reference, 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 (B) any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom at such date
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;

 

(b)           from and against any and all Liabilities, 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 4.4 below) any such settlement is effected with the prior
written consent of the Company; and

 

(c)           from and against any and all legal or other expenses whatsoever,
as incurred (including the reasonable fees and disbursements of one counsel
chosen by any indemnified party) in investigating, preparing or defending
against any litigation, or any

 

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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 subparagraph (a) or (b) above;

 

provided, however, that this indemnity agreement shall not apply to any
Liabilities to the Holder or its Controlling Persons 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 the Holder expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto).

 

Section 4.2            Indemnification by the Holder.  The Holder agrees to
indemnify and hold harmless the Company, and the officers, directors,
stockholders, members, partners, managers, employees, trustees, executors,
representatives and agents of the Company, and each of their respective
Controlling Persons, to the fullest extent permitted by applicable law, from and
against any and all Liabilities described in the indemnity contained in
Section 4.1 hereof, 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) or any Prospectus included therein (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information with respect to the Holder furnished to the Company by the Holder
expressly for use in the Registration Statement (or any amendment thereto) or
such Prospectus (or any amendment or supplement thereto); provided, however,
that the Holder shall not be liable for any claims hereunder in excess of the
amount of net proceeds (after deducting underwriters’ discounts and commissions)
received by the Holder from the sale of Registrable Shares pursuant to such
Registration Statement, and provided further, that the obligations of the Holder
hereunder shall not apply to amounts paid in settlement of any such Liabilities
if such settlement is effected without the prior written consent of the Holder
to the extent such consent is required under Section 4.3.

 

Section 4.3            Notices of Claims, etc.  Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action or proceeding 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 unless the
indemnifying party is actually materially prejudiced as a result thereof, and in
such case, only to the extent of such prejudice, and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement.  An indemnifying party may participate therein at its
own expense and, to the extent that it shall wish, assume the defense of 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.  Notwithstanding the indemnifying party’s rights in the
immediately preceding sentence, the indemnified party shall have the right to
employ its own counsel (in addition to any local counsel), and the indemnifying
party shall bear the reasonable fees, costs, and expenses of such separate
counsel if (a) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of interest;
(b) actual or potential defendants in, or targets of, any such proceeding
include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be

 

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a legal defense available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party;
(c) the indemnifying party shall not have employed counsel to represent the
indemnified party within a reasonable time after notice of the institution of
such proceeding; or (d) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party.  In
no event shall the indemnifying party or parties be liable for the 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 whosoever in respect of which
indemnification or contribution could be sought under this Article 4 (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.

 

Section 4.4            Indemnification Payments.  If at any time an indemnified
party shall have requested an indemnifying party consent to any settlement of
the nature contemplated by Section 4.1(b), such indemnifying party agrees that
it shall be liable for such settlement, including any such related fees and
expenses of counsel, 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 responded to such
indemnified party in accordance with such request prior to the date of such
settlement.

 

Section 4.5            Contribution.

 

(a)           If the indemnification provided for in this Article 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any Liabilities referred to therein, then each indemnifying party
shall contribute to the aggregate amount of such Liabilities incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the applicable Holder on
the other hand in connection with the statements or omissions which resulted in
such Liabilities, as well as any other relevant equitable considerations.

 

(b)           The relative fault of the Company on the one hand and the Holder
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 the Holder and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

 

(c)           The Company and the Holder agree that it would not be just and
equitable if contribution pursuant to this Section 4.5 were determined by pro
rata allocation or by any

 

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other method of allocation which does not take account of the equitable
considerations referred to above in this Article 4.  The aggregate amount of
Liabilities incurred by an indemnified party and referred to above in this
Article 4 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.

 

(d)           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.

 

ARTICLE 5

 

TERMINATION; SURVIVAL

 

Section 5.1            Termination; Survival.  The rights of the Holder under
this Agreement shall terminate upon the date that the Holder ceases to hold
Registrable Shares. Notwithstanding the foregoing, the rights and obligations of
the parties under Article 4 and Article 6 of this Agreement shall remain in full
force and effect following such time.

 

ARTICLE 6

 

MISCELLANEOUS

 

Section 6.1            Covenants Relating to Rule 144.  For so long as the
Company is subject to the reporting requirements of Section 13 or 15 of the
Exchange Act, the Company covenants that it will file the reports required to be
filed by it under the Securities Act and Section 13(a) or 15(d) of the Exchange
Act and the rules and regulations adopted by the Commission thereunder.  If the
Company ceases to be so required to file such reports, the Company covenants
that it will upon the request of the Holder of Registrable Shares (a) make
publicly available such information as is necessary to permit sales pursuant to
Rule 144 under the Securities Act, (b) deliver such information to a prospective
purchaser as is necessary to permit sales pursuant to Rule 144A under the
Securities Act and it will take such further action as the Holder of Registrable
Shares may reasonably request, and (c) take such further action that is
reasonable in the circumstances, in each case to the extent required from time
to time to enable the Holder to sell its Registrable Shares without registration
under the Securities Act within the limitation of the exemptions provided by
(i) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, (ii) Rule 144A under the Securities Act, as such rule may be amended from
time to time, or (iii) any similar rules or regulations hereafter adopted by the
Commission.  Upon the request of the Holder of Registrable Shares, the Company
will deliver to the Holder a written statement as to whether it has complied
with such requirements and of the Securities Act and the Exchange Act, a copy of
the most recent annual and quarterly report(s) of the Company, and such other
reports, documents or stockholder communications of the Company, and take such
further actions consistent with this Section 6.1, as the Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
the Holder to sell any such Registrable Shares without registration.

 

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Section 6.2            No Conflicting Agreements.  The Company hereby represents
and warrants that the Company has not entered into and the Company will not
after the date of this Agreement enter into any agreement which conflicts with
the rights granted to the Holder of Registrable Shares pursuant to this
Agreement or otherwise conflicts with the provisions of this Agreement.  The
Company hereby represents and warrants that the rights granted to the Holder
hereunder do not and will not for the term of this Agreement in any way conflict
with the rights granted to the holders of the Company’s other issued and
outstanding securities under any such agreements.

 

Section 6.3            Additional Shares.  The Company, at its option, may
register, under any Registration Statement and any filings under any state
securities laws filed pursuant to this Agreement, any number of unissued,
treasury or other Common Stock of or owned by the Company and any of its
subsidiaries or any Common Stock or other securities of the Company owned by any
other security holder or security holders of the Company.

 

Section 6.4            Governing Law; Arbitration.         (a)  All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by, and shall be construed and interpreted in
accordance with, the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdiction other than the State of New York.  Subject to
paragraph (b), the Company and the Holder hereby agree that (a) any and all
litigation arising out of this Agreement shall be conducted only in state or
Federal courts located in the State of New York and (b) such courts shall have
the exclusive jurisdiction to hear and decide such matters.  The Holder accepts,
for itself and in respect of the Holder’s property, expressly and
unconditionally, the nonexclusive jurisdiction of such courts and hereby waives
any objection that the Holder may now or hereafter have to the laying of venue
of such actions or proceedings in such courts.  Insofar as is permitted under
applicable law, this consent to personal jurisdiction shall be self-operative
and no further instrument or action, other than service of process in the manner
set forth in Section 6.9 hereof or as otherwise permitted by law, shall be
necessary in order to confer jurisdiction upon the Holder in any such courts. 
The Company and the Holder hereby agree that the provisions of this Section 6.4
for service of process are intended to constitute a “special arrangement for
service” in accordance with the provisions of the Foreign Sovereign Immunities
Act of 1976, 28.  U.S.C. Section 1608(a)(1) et seq.  Nothing contained herein
shall affect the right serve process in any manner permitted by law or to
commence any legal action or proceeding in any other jurisdiction.  The Company
and the Holder hereby (i) expressly waive any right to a trial by jury in any
action or proceeding to enforce or defend any right, power or remedy under or in
connection with this Agreement or arising from any relationship existing in
connection with this Agreement, and (ii) agree that any such action shall be
tried before a court and not before a jury.

 

(b)           Notwithstanding anything to the contrary contained in
Section 6.4(a) the Company and the Holder hereby agrees that the Company and the
Holder shall have the right to elect to arbitrate and compel arbitration of any
dispute hereunder through final and binding arbitration before JAMS (or its
successor) (“JAMS”).  Any party hereto may commence the arbitration process by
filing a written demand for arbitration with JAMS, with a copy to the other
parties; provided, however, that any party may, without inconsistency with this
arbitration provision, apply to any court in accordance with Section 6.4(a) and
seek injunctive relief until

 

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the arbitration award is rendered or the controversy is otherwise resolved.  Any
arbitration to be conducted pursuant to this Section 6.4(b) will be conducted in
New York, New York by a three-member Arbitration Panel operating in accordance
with the provisions of JAMS Streamlined Arbitration Rules and Procedures in
effect at the time the demand for arbitration is filed.  Each of the Company and
the Holder shall nominate one neutral arbitrator from the JAMS panel of
neutrals, and the two arbitrators thus nominated shall select the Chair of the
Arbitration Panel, also from the JAMS panel of neutrals.  The arbitrators shall
have the authority to award any remedy or relief that a court of competent
jurisdiction could order or grant, including, but not limited to, the issuance
of an injunction; provided, however, that the arbitration award shall not
include factual findings or conclusions of law and no punitive damages shall be
awarded.  The fees and expenses of such arbitration shall be borne by the
non-prevailing party, as determined by such arbitration.  The provisions of this
Section 6.4(b) with respect to the arbitration conducted pursuant to this
Section 6.4(b) before JAMS may be enforced by any court of competent
jurisdiction, and the parties seeking enforcement shall be entitled to an award
of all costs, fees and expenses, including reasonable out-of-pocket attorney’s
fees, to be paid by the party (or parties) against whom enforcement is ordered. 
The parties agree that this Section 6.4(b) has been included to rapidly and
inexpensively resolve any disputes between them with respect to the matters
described herein, and that this Section 6.4(b) shall be grounds for dismissal of
any court action commenced by any party with respect to a dispute arising out of
such matters, in the event the Company or the Holder elects to compel
arbitration.

 

Section 6.5            Counterparts.  This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a signature delivered by
facsimile, email pdf or other electronic form shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect
as if the signature were an original.

 

Section 6.6            Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

Section 6.7            Severability.  If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

Section 6.8            Entire Agreement; Amendments; Waiver.  This Agreement and
the Related Documents supersede all other prior oral or written agreements
between the Holder, the Company, their respective affiliates and Persons acting
on their behalf with respect to the matters discussed herein, and this Agreement
and the Related Documents contain the entire understanding of the parties with
respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor the Holder makes any
representation, warranty, covenant or undertaking with respect to such matters. 
No provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Holder.  No provision hereof may be waived
other than by an instrument in writing signed by the party against whom
enforcement is sought.

 

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Section 6.9            Notices.  Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: 
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same.  The addresses and
facsimile numbers for such communications shall be:

 

If to the Company:

 

Safety Income & Growth Inc.
1114 Avenue of the Americas
39th Floor
New York, New York 10036
Attention:  Nina B. Matis, Chief Investment and Legal Officer

Facsimile: 212-930-9494

 

with a copy (for informational purposes only) to:

 

Clifford Chance US LLP
31 W. 52nd Street
New York, New York 10019
Attention:  Kathleen L. Werner
Facsimile:  212-878-8375

 

If to the Holder:

 

iStar Inc.

1114 Avenue of the Americas
39th Floor
New York, New York 10036
Attention:  Nina B. Matis, Chief Investment and Legal Officer

Facsimile: 212-930-9494

 

with a copy (for informational purposes only) to:

 

Clifford Chance US LLP
31 W. 52nd Street
New York, New York 10019
Attention:  Kathleen L. Werner
Facsimile:  212-878-8375

 

Section 6.10          Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the parties and their respective permitted
successors and assigns.  The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
Holder.  The Holder may assign this Agreement or any rights hereunder without
the prior written consent of the Company, only in connection with any
assignment, transfer or other disposition of Registrable Shares in compliance
with the terms of the Subscription

 

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Agreement and the other Related Documents.  If any transferee of the Holder
shall acquire Registrable Shares, in any manner, whether by operation of law or
otherwise, such Registrable Shares shall be held subject to all of the terms of
this Agreement, and by taking and holding such Registrable Shares such Person
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement, including the restrictions on resale
set forth in this Agreement and, if applicable, the Related Documents, and such
Person shall be entitled to receive the benefits hereof.

 

Section 6.11          No Third Party Beneficiaries.  This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person other than as expressly set forth in Article 4 and
this Section 6.11.

 

Section 6.12          Further Assurances.  Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as any other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

Section 6.13          Specific Performance.  The parties acknowledge and agree
that in the event of a breach or threatened breach of its covenants hereunder,
the harm suffered would not be compensable by monetary damages alone and,
accordingly, in addition to other available legal or equitable remedies, each
non-breaching party shall be entitled to apply for an injunction or specific
performance with respect to such breach or threatened breach, without proof of
actual damages (and without the requirement of posting a bond, undertaking or
other security), and the Holder and the Company agree not to plead sufficiency
of damages as a defense in such circumstances.

 

Section 6.14          Costs and Expenses.  The Company shall bear all
Registration Expenses incurred in connection with the registration of the
Registrable Shares pursuant to this Agreement and the Company’s performance of
its other obligations under the terms of this Agreement; provided, however, that
the Holder shall bear all underwriting fees, discounts, commissions, or taxes
(including transfer taxes) attributable to the sale of securities by the Holder,
or any legal fees and expenses of counsel to the Holder and any underwriter
engaged by the Holder and all other expenses incurred in connection with the
performance by the Holder of its obligations under the terms of this Agreement. 
All other costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring such costs
and expenses, whether or not any of the transactions contemplated hereby are
consummated.

 

[Signature Page Follows.]

 

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IN WITNESS WHEREOF, the Holder and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.

 

 

SAFETY INCOME & GROWTH INC.

 

 

 

 

 

 

By:

/s/ Jay Sugarman

 

 

Name: Jay Sugarman

 

 

Title: Chairman and Chief Executive Officer

 

 

 

 

 

iSTAR INC.

 

 

 

 

 

 

By:

/s/ Marcos Alvarado

 

 

Name: Marcos Alvarado

 

 

Title: President and Chief Investment Officer

 

[Signature Page to Registration Rights Agreement]

 

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