Exhibit
4.2


 


PRINCIPAL AMOUNT


$150,000,000


 


REGISTERED NO.:  R-1


 


CUSIP NO.:  756109 AF 1


ISIN NO.:  US756109AF18


 


REALTY INCOME
CORPORATION


5.50% SENIOR NOTES
DUE 2015


 


THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY.  THIS SECURITY
IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND, UNLESS AND UNTIL IT IS EXCHANGED FOR SECURITIES IN
DEFINITIVE FORM AS AFORESAID, MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ITS NOMINEE TO A SUCCESSOR DEPOSITARY OR ITS NOMINEE.


 


UNLESS
THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (“DTC”), 55 WATER STREET, NEW YORK, NEW YORK TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SUCH SECURITY
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.


 


Realty
Income Corporation, a Maryland corporation (the “Company,” which term shall
include any successor under the Indenture hereinafter referred to), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of One Hundred Fifty Million Dollars on November 15, 2015,
and to pay interest thereon from November 24, 2003, or from the most
recent date to which interest has been paid or duly provided for, semi-annually
in arrears on May 15 and November 15 of each year (the “Interest
Payment Dates”), commencing May 15, 2004, at the rate of 5.50% per annum,
until the entire principal amount hereof is paid or made available for
payment.  The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note (or
one or more Predecessor Securities) is registered in the Security Register
applicable to the Notes at the close of business on May 1 or
November 1 (the “Regular Record Dates”), as the case may be, immediately
preceding the applicable Interest Payment Date regardless of whether the
Regular Record Date is a Business Day. 
Any such interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and
may either be paid to the Person in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Notes of this series not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the
Indenture.  Interest


 

















 


will be
computed on the basis of a 360-day year of twelve 30-day months.  If any principal of or premium, if any, or
interest on any of the Notes is not paid when due, then such overdue principal
and, to the extent permitted by law, such overdue premium or interest, as the
case may be, shall bear interest, until paid or until such payment is duly
provided for, at the rate of 5.50% per annum.


 


Payments
of principal, premium, if any, and interest in respect of this Note will be
made by the Company in Dollars. If this Note is a Global Security, all payments
of principal, premium, if any, and interest in respect of this Note will be
made by wire transfer of immediately available funds to an account maintained
by the payee located in the United States. 
If this Note is not a Global Security (a “Certificated Note”), payments
of interest on this Note may, at the Company’s option, be made by mailing a
check to the address of the Person entitled thereto as such address appears in
the Security Register for the Notes or by wire transfer to an account
maintained by the payee located inside the United States, all on the terms set
forth in the Indenture; provided, however, that a Holder of $5 million or more
in aggregate principal amount of Certificated Notes will be entitled to receive
payments of interest due on any Interest Payment Date by wire transfer of
immediately available funds to an account maintained by such Holder in the
United States so long as such Holder has given appropriate wire transfer
instructions to the Trustee or a Paying Agent for the Notes at least 15
calendar days prior to the applicable Interest Payment Date.  Any such wire transfer instruction will
remain in effect until revoked by such Holder or until such Person ceases to be
a Holder of $5 million or more in aggregate principal amount of Certificated
Notes.


 


Payments
of principal of and premium, if any, and interest on Certificated Notes that
are due and payable on the Final Maturity Date, any Redemption Date or any
other date on which principal of such Notes is due and payable will be made by
wire transfer of immediately available funds to accounts maintained by the
Holders thereof in the United States, so long as such Holders have given
appropriate wire transfer instructions to the Trustee or a Paying Agent for the
Notes, against surrender of such Notes to the Trustee or a Paying Agent for the
Notes; provided that installments of interest on Certificated Notes that are
due and payable on any Interest Payment Date falling on or prior to such Final
Maturity Date, Redemption Date or other date on which principal of such Notes
is payable will be paid in the manner described in the preceding paragraph to
the Persons who were the Holders of such Notes (or one or more Predecessor
Securities) registered as such at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of the Indenture.


 


This
Note is one of a duly authorized issue of Securities of the Company (herein
called the “Notes”), issued as a series of Securities under an indenture dated
as of October 28, 1998 (herein called, together with all indentures
supplemental thereto, the “Indenture”), between the Company and The Bank of New
York, as trustee (the “Trustee,” which term includes any successor trustee
under the Indenture with respect to the Notes), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered.  This Note is one of the duly authorized
series designated as the “5.50% Senior Notes due 2015,” limited (subject to
exceptions provided in the Indenture and subject to the right of the Company to
reopen such series for the issuance of additional Securities of such series on
the terms and subject to the conditions specified in the Indenture) in
aggregate principal amount to $150,000,000. 
All terms used in this Note which are defined in the Indenture and not
defined herein shall have the meanings assigned to them in the Indenture.


 


The
Notes may be redeemed at any time at the option of the Company, in whole at any
time or from time to time in part, at a Redemption Price equal to the greater
of:


 

















 


(a)
100% of the principal amount of the Notes to be redeemed, and


 


(b) the sum of the
present values of the remaining scheduled payments of principal of and interest
on the Notes to be redeemed (exclusive of interest accrued to the applicable
Redemption Date) discounted to such Redemption Date on a semiannual basis,
assuming a 360-day year consisting of twelve 30-day months, at the Treasury
Rate plus 25 basis points,


 


plus, in the case of both clauses (a) and (b) above,
accrued and unpaid interest on the principal amount of the Notes being redeemed
to such Redemption Date. 
Notwithstanding the foregoing, installments of interest on Notes whose
Stated Maturity is on or prior to the relevant Redemption Date will be payable
to the Holders of such Notes (or one or more Predecessor Securities) registered
as such at the close of business on the relevant Regular Record Dates according
to their terms and the provisions of the Indenture.


 


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


 


The
Indenture contains provisions for defeasance at any time of (a) the entire
indebtedness of the Company on the Notes and (b) certain restrictive covenants
and the related defaults and Events of Default applicable to the Company, in
each case, upon compliance by the Company with certain conditions set forth in
the Indenture, which provisions apply to this Note.


 


In
addition to the covenants of the Company contained in the Indenture, the
Company makes the following covenants with respect to, and for the benefit of
the Holders of, the Notes:


 


Limitation on Incurrence of Total
Debt.  The Company
will not, and will not permit any Subsidiary to, incur any Debt, other than
Intercompany Debt, if, immediately after giving effect to the incurrence of
such additional Debt and the application of the proceeds therefrom on a pro
forma basis, the aggregate principal amount of all outstanding Debt of the
Company and its Subsidiaries on a consolidated basis determined in accordance
with GAAP is greater than 60% of the sum of (i) the Company’s Total Assets as
of the end of the latest fiscal quarter covered in the Company’s Annual Report
on Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most
recently filed with the Commission (or, if such filing is not required under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the
Trustee) prior to the incurrence of such additional Debt and (ii) the increase,
if any, in Total Assets from the end of such quarter including, without
limitation, any increase in Total Assets caused by the application of the
proceeds of such additional Debt (such increase together with the Company’s
Total Assets is referred to as the “Adjusted Total Assets”).


 


Limitation on Incurrence of Secured
Debt.  The Company
will not, and will not permit any Subsidiary to, incur any Secured Debt, other
than Intercompany Debt, if, immediately after giving effect to the incurrence
of such additional Secured Debt and the application of the proceeds therefrom
on a pro forma basis, the aggregate principal amount of all outstanding Secured
Debt of the Company and its Subsidiaries on a consolidated basis determined in
accordance with GAAP is greater than 40% of the Company’s Adjusted Total
Assets.


 


Debt Service Coverage.  The Company will not, and
will not permit any Subsidiary to, incur any Debt, other than Intercompany
Debt, if the ratio of Consolidated Income Available for Debt Service to the
Annual Debt Service Charge for the period consisting of the four consecutive
fiscal quarters most recently ended prior to the date on which such additional
Debt is to be incurred is less than 1.5 to 1.0, on a pro forma basis after
giving effect to the incurrence of such Debt and the application of the
proceeds therefrom, and calculated on the assumption that (i) such Debt and any
other Debt incurred


 

















 


by the
Company or any of its Subsidiaries since the first day of such four-quarter
period and the application of the proceeds therefrom (including to refinance
other Debt since the first day of such four-quarter period) had occurred on the
first day of such period, (ii) the repayment or retirement of any other Debt of
the Company or any of its Subsidiaries since the first day of such four-quarter
period had occurred on the first day of such period (except that, in making
such computation, the amount of Debt under any revolving credit facility, line
of credit or similar facility shall be computed based upon the average daily
balance of such Debt during such period), and (iii) in the case of any
acquisition or disposition by the Company or any Subsidiary of any asset or
group of assets since the first day of such four-quarter period, including,
without limitation, by merger, stock purchase or sale, or asset purchase or
sale, such acquisition or disposition had occurred on the first day of such
period with the appropriate adjustments with respect to such acquisition or
disposition being included in such pro forma calculation.  If the Debt giving rise to the need to make
the foregoing calculation or any other Debt incurred after the first day of the
relevant four-quarter period bears interest at a floating rate then, for
purposes of calculating the Annual Debt Service Charge, the interest rate on
such Debt shall be computed on a pro forma basis as if the average interest
rate which would have been in effect during the entire such four-quarter period
had been the applicable rate for the entire such period.


 


Maintenance of Total Unencumbered
Assets.  The Company
will maintain at all times Total Unencumbered Assets of not less than 150% of
the aggregate outstanding principal amount of the Unsecured Debt of the Company
and its Subsidiaries, computed on a consolidated basis in accordance with GAAP.


 


Certain Definitions.  As used herein, the following terms will
have the meanings set forth below:


 


“Annual Debt Service Charge”
as of any date means the amount which is expensed in any 12-month period for
interest on Debt of the Company and its Subsidiaries.


 


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


 


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


 


“Comparable Treasury Price” means, with
respect to any Redemption Date for the Notes:


 


(a)           the average of four Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or


 


(b)           if the Trustee obtains fewer than
four but more than one such Reference Treasury Dealer Quotations for such
Redemption Date, the average of all such quotations, or


 


(c)           if the Trustee obtains only one such
Reference Treasury Dealer Quotation for such Redemption Date, that Reference
Treasury Dealer Quotation.


 

















 


“Consolidated Income Available for
Debt Service” for any period means Consolidated Net Income
plus, without duplication, amounts which have been deducted in determining
Consolidated Net Income during such period for (i) Consolidated Interest
Expense, (ii) provisions for taxes of the Company and its Subsidiaries based on
income, (iii) amortization (other than amortization of debt discount) and
depreciation, (iv) provisions for losses from sales or joint ventures,
(v) provisions for impairment losses, (vi) increases in deferred taxes and
other non-cash charges, (vii) charges resulting from a change in accounting
principles, and (viii) charges for early extinguishment of debt, and less,
without duplication, amounts which have been added in determining Consolidated
Net Income during such period for (a) provisions for gains from sales or joint
ventures, and (b) decreases in deferred taxes and other non-cash items.


 


“Consolidated Interest Expense”
for any period, and without duplication, means all interest (including the
interest component of rentals on capitalized leases, letter of credit fees,
commitment fees and other like financial charges) and all amortization of debt
discount on all Debt (including, without limitation, payment-in-kind, zero
coupon and other like securities) but excluding legal fees, title insurance
charges, other out-of-pocket fees and expenses incurred in connection with the
issuance of Debt and the amortization of any such debt issuance costs that are
capitalized, all determined for the Company and its Subsidiaries on a
consolidated basis in accordance with GAAP.


 


“Consolidated Net Income”
for any period means the amount of consolidated net income (or loss) of the
Company and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.


 


“Debt” means any
indebtedness of the Company or any Subsidiary, whether or not contingent, in
respect of (i) money borrowed or evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance, trust deed, deed of trust, deed to secure debt, security
agreement or any security interest existing on property owned by the Company or
any Subsidiary, (iii) letters of credit or amounts representing the balance
deferred and unpaid of the purchase price of any property except any such
balance that constitutes an accrued expense or trade payable or (iv) any lease
of property by the Company or any Subsidiary as lessee that is reflected on the
Company’s consolidated balance sheet as a capitalized lease in accordance with
GAAP, in the case of items of indebtedness under (i) through (iii) above to the
extent that any such items (other than letters of credit) would appear as
liabilities on the Company’s consolidated balance sheet in accordance with
GAAP, and also includes, to the extent not otherwise included, any obligation
of the Company or any Subsidiary to be liable for, or to pay, as obligor,
guarantor or otherwise (other than for purposes of collection in the ordinary
course of business), indebtedness of another person (other than the Company or
any Subsidiary) of the type referred to in (i), (ii), (iii) or (iv) above (it
being understood that Debt shall be deemed to be incurred by the Company or any
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).


 


“Executive Group”
means, collectively, those individuals holding the offices of Chairman,
Vice-Chairman, Chief Executive Officer, President, Chief Operating Officer or
any Vice President of the Company.


 


“Final Maturity Date” means
November 15, 2015.


 


“Independent Investment Banker” means, with
respect to any Redemption Date for the Notes, Banc of America Securities LLC
and its successors or Citigroup Global Markets Inc. and its successors
(whichever shall be appointed by the Trustee after consultation with the
Company)


 

















 


or, if both such firms or the respective successors,
if any, to such firms, as the case may be, are unwilling or unable to select
the Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Trustee after consultation with the Company.


 


“Intercompany Debt”
means indebtedness owed by the Company or any Subsidiary solely to the Company
or any Subsidiary.


 


 “Reference
Treasury Dealer” means with respect to any Redemption Date for the
Notes, Banc of America Securities LLC and Citigroup Global Markets Inc. and
their respective successors (provided, however, that if any such firm or any
such successor, as the case may be, ceases to be a primary U.S. Government
securities dealer in The City of New York (a “Primary Treasury Dealer”), the
Trustee, after consultation with the Company, shall substitute therefor another
Primary Treasury Dealer) and two other Primary Treasury Dealers selected by the
Trustee after consultation with the Company.


 


“Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any Redemption Date
for the Notes, the average, as determined by the Trustee, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third
Business Day preceding such Redemption Date.


 


“Secured Debt”
means Debt secured by any mortgage, lien, charge, encumbrance, trust deed, deed
of trust, deed to secure debt, security agreement, pledge, conditional sale or
other title retention agreement, capitalized lease, or other security interest
or agreement granting or conveying security title to or a security interest in
real property or other tangible assets.


 


“Subsidiary” means
(i) any corporation, partnership, joint venture, limited liability company or
other entity the majority of the shares, if any, of the non-voting capital
stock or other equivalent ownership interests of which (except directors’
qualifying shares) are at the time directly or indirectly owned by the Company,
and the majority of the shares of the voting capital stock or other equivalent
ownership interests of which (except for directors’ qualifying shares) are at
the time directly or indirectly owned by the Company, any other Subsidiary or
Subsidiaries, and/or one or more individuals of the Executive Group (or, in the
event of death or disability of any of such individuals, his/her respective
legal representative(s), or such individuals’ successors in office as an
officer of the Company), and (ii) any other entity the accounts of which are
consolidated with the accounts of the Company. 
This definition shall apply only for purposes of the covenants set forth
above under the captions “Limitation on Incurrence of Total Debt,” “Limitation
on Incurrence of Secured Debt,” “Debt Service Coverage,” and “Maintenance of
Total Unencumbered Assets,” the other definitions set forth herein under this
caption “Certain Definitions,” and, insofar as Section 801 of the
Indenture is applicable to the Notes, the term “Subsidiary,” as used in
Section 801(2) of the Indenture, shall have the meaning set forth in this
definition (instead of the meaning set forth in Section 101 of the
Indenture).


 


“Treasury Rate” means, with respect to any
Redemption Date for the Notes:


 


(a)           the yield, under the heading that
represents the average for the immediately preceding week, appearing in the
most recently published statistical release designated “H.15(519)” or any
successor publication which is published weekly by the Board of Governors of
the Federal Reserve System and which establishes yields on actively traded
United States Treasury securities adjusted to constant maturity under the
caption “Treasury Constant Maturities,” for the maturity corresponding to


 

















 


the Comparable Treasury
Issue (if no maturity is within three months before or after the Final Maturity
Date of the Notes, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue shall be determined and the
Treasury Rate shall be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month), or


 


(b)           if such release (or any successor
release) is not published during the week preceding the calculation date or
does not contain such yields, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, calculated using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such Redemption
Date.


 


The Treasury Rate shall be calculated on the third
Business Day preceding the applicable Redemption Date.


 


“Total Assets” as
of any date means the sum of (i) Undepreciated Real Estate Assets and (ii) all
other assets of the Company and its Subsidiaries determined on a consolidated basis
in accordance with GAAP (but excluding accounts receivable and intangibles).


 


“Total Unencumbered Assets”
as of any date means Total Assets minus the value of any properties of the
Company and its Subsidiaries that are encumbered by any mortgage, charge,
pledge, lien, security interest, trust deed, deed of trust, deed to secure
debt, security agreement, or other encumbrance of any kind (other than those
relating to Intercompany Debt), including the value of any stock of any
Subsidiary that is so encumbered determined on a consolidated basis in
accordance with GAAP.  For purposes of
this definition, the value of each property shall be equal to the purchase
price or cost of each such property and the value of any stock subject to any
encumbrance shall be determined by reference to the value of the properties
owned by the issuer of such stock as aforesaid.


 


“Undepreciated Real Estate Assets”
as of any date means the amount of real estate assets of the Company and its
Subsidiaries on such date, before depreciation and amortization, determined on
a consolidated basis in accordance with GAAP.


 


“Unsecured Debt”
means Debt of the Company or any Subsidiary that is not Secured Debt.


 


If an
Event of Default with respect to the Notes shall occur and be continuing, the
principal of the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.


 


As
provided in and subject to the provisions of the Indenture, the Holder of this
Note shall not have the right to institute any proceeding with respect to the
Indenture or for the appointment of a receiver or trustee or for any other
remedy thereunder, unless such Holder shall have previously given the Trustee
written notice of a continuing Event of Default with respect to the Notes, the
Holders of not less than 25% in principal amount of the Notes at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity and the Trustee shall not have received from the
Holders of a majority in principal amount of the Notes at the time Outstanding
a direction inconsistent with such request, and shall have failed to institute
any such proceeding, for 60 days after receipt of such notice, request and
offer of indemnity.  The foregoing shall
not apply to any suit instituted by the Holder of this Note for the


 

















 


enforcement
of any payment of principal of, or premium, if any, or interest on, this Note
on or after the respective due dates therefor.


 


The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Notes under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes.  The Indenture also contains provisions
permitting the Holders of not less than a majority in principal amount of the Notes
at the time Outstanding, on behalf of the Holders of all Notes, to waive
compliance by the Company with certain provisions of the Indenture.  Furthermore, provisions in the Indenture
permit the Holders of not less than a majority of the aggregate principal
amount of the Outstanding Notes to waive, in certain circumstances, on behalf
of all Holders of the Notes, certain past defaults under the Indenture and
their consequences.  Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.


 


No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and premium, if any, and
interest on, this Note at the times, places and rate, and in the coin or
currency, herein prescribed.


 


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


 


As
provided in the Indenture and subject to certain limitations therein set forth,
Notes of this series are exchangeable for a like aggregate principal amount of
Notes of this series of different authorized denominations, as requested by the
Holder surrendering the same.


 


The
Notes of this series are issuable only in registered form without interest
coupons in denominations of $1,000 and any integral multiple thereof.  No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.


 


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


 


No
recourse shall be had for the payment of the principal of, or premium, if any,
or the interest on this Note, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against any past, present or future stockholder,
employee, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, whether by virtue of
any constitution, statute or rule of law or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and
as part of the consideration for the issue hereof, expressly waived and
released.


 

















 


THE
INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


Pursuant
to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed
on the Notes as a convenience to the Holders of the Notes.  No representation is made as to the
correctness or accuracy of such CUSIP numbers as printed on the Notes, and
reliance may be placed only on the other identification numbers printed hereon.


 


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


 


The
headings included in this Note are for convenience only and shall not affect
the construction hereof.


 

















 


IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.


 


 


	
   

  	
  REALTY INCOME
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Thomas A. Lewis

  
	
   

  	
   

  	
  Vice Chairman of the
  Board and

  
	
   

  	
   

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Michael R. Pfeiffer

  	
   

  	
   

  	
   

  
	
   

  	
  Executive Vice
  President, General Counsel

  	
   

  	
   

  
	
   

  	
  and Secretary

  	
   

  	
   

  	
   

  
						



 

















 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION:


 


This
is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.


 


THE BANK OF NEW YORK, as
Trustee


 


 


	
  By:

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  
	
   

  



 


 


Dated:  November 24, 2003


 

















 


ASSIGNMENT FORM


 


FOR VALUE RECEIVED, the undersigned
hereby


sells, assigns and transfers to


 


PLEASE INSERT SOCIAL


SECURITY OR OTHER
IDENTIFYING


NUMBER OF ASSIGNEE


 


 


 


 


 


(Please Print or
Typewrite Name and Address


including Zip Code
of Assignee)


 


the within Note of REALTY
INCOME CORPORATION, and


hereby does irrevocably
constitute and appoint 


 


 


 


 


Attorney to transfer said
Note on the books of the within-named Company with full power of substitution
in the premises.


 


Dated:


 


 


NOTICE:  The signature to this assignment must
correspond with the name as it appears on the first page of the within Note in
every particular, without alteration or enlargement or any change whatever.


 


	
  Signature Guaranty

  	
   

  	
   

  
	
   

  	
  (Signature must be
  guaranteed by

  	
   

  
	
   

  	
  a participant in a
  signature

  	
   

  
	
   

  	
  guarantee medallion
  program)