exv4w02



 





EXHIBIT 4.02




FORM OF FLOATING RATE NOTE




[FACE OF NOTE]



[UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE
“DEPOSITARY”) (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER HEREOF OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND
ANY PAYMENT IS MADE TO CEDE & CO., 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.



UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE 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 ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.]1



[IF THIS NOTE IS AN ORIGINAL ISSUE DISCOUNT NOTE, INSERT THE FOLLOWING LANGUAGE: FOR PURPOSES OF
SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT ON THIS NOTE IS % OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS [AND] THE YIELD TO MATURITY
IS %. [THE METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT
ACCRUAL PERIOD OF , 20 TO , 20 , IS % OF THE PRINCIPAL AMOUNT OF THIS NOTE.]]



[IF THIS NOTE IS SUBJECT TO THE CONTINGENT PAYMENT DEBT REGULATIONS, ALSO INSERT THE FOLLOWING
LANGUAGE: IN ADDITION, THIS NOTE IS SUBJECT TO UNITED STATES FEDERAL INCOME TAX REGULATIONS
GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE
UNITED STATES INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH NOTE IS $[ ] PER $1,000 OF PRINCIPAL
AMOUNT AND THE COMPARABLE YIELD IS [ ]%, COMPOUNDED SEMI-ANNUALLY (WHICH WILL BE TREATED AS THE
YIELD FOR UNITED STATES FEDERAL INCOME TAX PURPOSES). THE COMPANY AGREES TO PROVIDE PROMPTLY TO THE
HOLDER OF THIS NOTE, UPON WRITTEN REQUEST, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, YIELD
TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH WRITTEN REQUEST SHOULD BE
SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: [          ].]






 




			
	1	 	This paragraph applies to global Notes only.




 









 









	 	 	 	 	 
	REGISTERED

	 	CUSIP No.:
	 	PRINCIPAL AMOUNT:
	No. FLR-     
	 	 	 	 
	 

	 	 
	 	 





UDR, INC.




MEDIUM-TERM NOTE, SERIES A

DUE NINE MONTHS OR MORE FROM DATE OF ISSUE

(Floating Rate)




	 	 	 	 	 	 	 
	INTEREST RATE BASIS OR BASES:	 	ORIGINAL ISSUE DATE:	 	   STATED MATURITY DATE:
	 
	 	 	 	 	 	 
	IF LIBOR:	 	IF FEDERAL FUNDS	 	IF CMT RATE:
	o Designated LIBOR Currency:	 	     o Federal Funds (Effective) Rate	 	     o Reuters Page FRBCMT
	 	 	     o Federal Funds Open Rate	 	     o Reuters Page FEDCMT:
	 	 	     o Federal Funds Target Rate	 	          o Weekly Average
	 
	 	 	 	 	 	          o Monthly Average
	 
	 	 	 	 	 	 
	INDEX MATURITY:	 	   INITIAL INTEREST RATE:   %	 	     INTEREST PAYMENT DATE(S):
	 
	 	 	 	 	 	 
	SPREAD (PLUS OR MINUS):	 	   SPREAD MULTIPLIER:	 	     INITIAL INTEREST RESET DATE:
	 
	 	 	 	 	 	 
	MINIMUM INTEREST RATE:   %	 	   MAXIMUM INTEREST RATE:   %	 	     INTEREST RESET DATE(S):
	 
	 	 	 	 	 	 
	INITIAL REDEMPTION DATE:	 	   INITIAL REDEMPTION PERCENTAGE:   %	 	     ANNUAL REDEMPTION PERCENTAGE REDUCTION:   %
	 
	 	 	 	 	 	 
	OPTIONAL REPAYMENT DATE(S):	 	   CALCULATION AGENT:	 	     o CHECK IF DISCOUNT NOTE
	 	 	     Issue Price:   %	 	 
	 
	 	 	 	 	 	 
	DEFAULT INTEREST RATE %
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	INTEREST CATEGORY:	 	   DAY COUNT CONVENTION:	 	 
	 
	 	 	 	 	 	 
	o Regular Floating Rate Note	 	   o 30/360 for the period	 	 
	 
	 	 	 	 	 	 
	o Floating Rate/Fixed Rate Note	 	 	 	          from          to          .
	Fixed Rate Commencement Date:	 	 	 	o Actual/360 for the period
	Fixed Interest Rate:   %	 	 	 	          from          to          .
	o Inverse Floating Rate Note	 	 	 	     o Actual/Actual for the period
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Fixed Interest Rate:   %	 	 	 	   from          to          .
	 	 	 	 	Applicable Interest Rate Basis:
	 
	 	 	 	 	 	 
	SPECIFIED CURRENCY:	 	 	 	AUTHORIZED DENOMINATION:
	o United States dollars	 	 	 	o $1,000 and integral multiples thereof
	o Other:	 	 	 	o Other:
	EXCHANGE RATE AGENT:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ADDENDUM ATTACHED
	 	 	 	 	 	 
	o Yes
	 	 	 	 	 	 
	o No
	 	 	 	 	 	 
	OTHER/ADDITIONAL PROVISIONS:
	 	 	 	 	 	 






2









 





     UDR, INC., a Maryland corporation (the “Company”, which term includes any successor
corporation under the Indenture hereinafter referred to), for value received, hereby promises to
pay to      , or registered assigns, the Principal Amount of
        , on the Stated Maturity Date specified above (or any Redemption Date or Repayment Date, each as
defined on the reverse hereof, or any earlier date of acceleration of maturity) (each such date
being hereinafter referred to as the “Maturity Date” with respect to the principal repayable on
such date) and to pay interest thereon (and on any overdue principal, premium and/or interest to
the extent legally enforceable) at a rate per annum equal to the Initial Interest Rate specified
above until the Initial Interest Reset Date specified above and thereafter at a rate determined in
accordance with the provisions specified above and on the reverse hereof or in an Addendum hereto
with respect to one or more Interest Rate Bases specified above until the principal hereof is paid
or duly made available for payment. The Company will pay interest in arrears on each Interest
Payment Date, if any, specified above (each, an “Interest Payment Date”), commencing with the first
Interest Payment Date next succeeding the Original Issue Date specified above, and on the Maturity
Date; provided, however, that if the Original Issue Date occurs between a Record
Date (as defined below) and the next succeeding Interest Payment Date, interest payment will
commence on the Interest Payment Date immediately following the next succeeding Record Date to the
registered holder (the “Holder”) of this Note on the next succeeding Record Date.



     Interest on this Note will accrue from, and including, the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for (or from, and including, the
Original Issue Date if no interest has been paid or duly provided for) to, but excluding, the
applicable Interest Payment Date or the Maturity Date, as the case may be (each, an “Interest
Period”). The interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to the person in whose
name this Note (or one or more predecessor Notes, as defined on the reverse hereof) is registered
at the close of business on the fifteenth calendar day (whether or not a Business Day, as defined
below) immediately preceding such Interest Payment Date (the “Record Date”); provided,
however, that interest payable on the Maturity Date will be payable to the person to whom
the principal hereof and premium, if any, hereon shall be payable. Any such interest not so
punctually paid or duly provided for on any Interest Payment Date other than the Maturity Date
(“Defaulted Interest”) shall forthwith cease to be payable to the Holder on the close of business
on any Record Date and, instead, shall be paid to the person in whose name this Note is registered
at the close of business on a special record date (the “Special Record Date”) for the payment of
such Defaulted Interest to be fixed by the Trustee hereinafter referred to, notice whereof shall be
given to the Holder of this Note by the Trustee not less than 10 calendar days prior to such
Special Record Date or may be paid at any time in any other lawful manner, all as more fully
provided for in the Indenture.



     Payment of principal, premium, if any, and interest in respect of this Note due on the
Maturity Date will be made in immediately available funds upon presentation and surrender of this
Note (and, with respect to any applicable repayment of this Note, upon delivery of [a duly
completed election form]2 [instructions] 3 as contemplated on the reverse
hereof) at the office or





 




			
	2	 	This text applies to certificated Notes only.
	 
	3	 	This texts applies to global Notes only.




3









 








agency maintained by the Company for that purpose in the Borough of Manhattan, The City of New
York, currently the corporate trust office of the Trustee located at 40 Broad Street,
5th Floor, New York, New York 10004, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Company may determine; provided, however,
that if the Specified Currency (as defined below) is other than United States dollars and such
payment is to be made in the Specified Currency in accordance with the provisions set forth below,
such payment will be made by wire transfer of immediately available funds to an account with a bank
designated by the Holder hereof at least 15 calendar days prior to the Maturity Date, provided that
such bank has appropriate facilities therefor and that this Note is presented and surrendered and,
if applicable, [a duly completed repayment election form is]4 [instructions
are]5 delivered at the aforementioned office or agency maintained by the Company in time
for the Trustee to make such payment in such funds in accordance with its normal procedures.
Payment of interest due on any Interest Payment Date other than the Maturity Date will be made at
the aforementioned office of agency maintained by the Company or, at the option of the Company, by
check mailed to the address of the person entitled thereto as such address shall appear in the
Security Register maintained by the Trustee; provided, however, that a Holder of
U.S.$10,000,000 (or, if the Specified Currency is other than United States dollars, the equivalent
thereof in the Specified Currency) or more in aggregate principal amount of Notes (whether having
identical or different terms and provisions) will be entitled to receive interest payments on such
Interest Payment Date by wire transfer of immediately available funds if such Holder has delivered
appropriate wire transfer instructions in writing to the Trustee not less than 15 calendar days
prior to such Interest Payment Date. Any such wire transfer instructions received by the Trustee
shall remain in effect until revoked by such Holder.




     If any Interest Payment Date other than the Maturity Date would otherwise be a day that is not
a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day,
except that if LIBOR is an applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business
Day. If the Maturity Date falls on a day that is not a Business Day, the required payment of
principal, premium, if any, and/or interest shall be made on the next succeeding Business Day with
the same force and effect as if made on the date such payment was due, and no interest shall accrue
with respect to such payment for the period from and after the Maturity Date to the date of such
payment on the next succeeding Business Day.



     As used herein, “Business Day” means any day, other than a Saturday or Sunday, that is neither
a legal holiday nor a day on which commercial banks are authorized or required by law, regulation
or executive order to close in The City of New York; provided, however, that if the
Specified Currency is other than United States dollars, such day must also not be a day on which
commercial banks are authorized or required by law, regulation or executive order to close in the
Principal Financial Center (as defined below) of the country issuing the Specified Currency (or, if
the Specified Currency is Euro, such day must also be a day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open); provided,





 




			
	4	 	This texts applies to certificated Notes only.
	 
	5	 	This texts applies to global Notes only.




4









 








further, that if LIBOR is an applicable Interest Rate Basis, such day must also be a
London Banking Day (as defined below). “London Banking Day” means a day on which commercial banks
are open for business (including dealings in the Designated LIBOR Currency (as defined on the
reverse hereof)) in London. “Principal Financial Center” means (i) the capital city of the country
issuing the Specified Currency or (ii) the capital city of the country to which the Designated
LIBOR Currency relates, as applicable, except, in the case of (i) or (ii), that with respect to
United States dollars, Australian dollars, Canadian dollars, Euros, New Zealand dollars, South
African rands and Swiss francs, the “Principal Financial Center” shall be The City of New York,
Sydney, Toronto, London (solely in the case of the Designated LIBOR Currency), Wellington,
Johannesburg and Zurich, respectively.




     The Company is obligated to make payment of principal, premium, if any, and interest in
respect of this Note in the currency in which this Note is denominated above (or, if such currency
is not at the time of such payment legal tender for the payment of public and private debts in the
country issuing such currency or, if such currency is Euro, in the member states of the European
Union that have adopted the single currency in accordance with the Treaty establishing the European
Community, as amended by the Treaty on European Union, then the currency which is at the time of
such payment legal tender in the related country or in the adopting member states of the European
Union, as the case may be) (the “Specified Currency”). If the Specified Currency is other than
United States dollars, except as otherwise provided below, any such amounts so payable by the
Company will be converted by the Exchange Rate Agent specified above into United States dollars for
payment to the Holder of this Note.



     Any United States dollar amount to be received by the Holder of this Note will be based on the
highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately
11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date
from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent)
selected by the Exchange Rate Agent and approved by the Company for the purchase by the quoting
dealer of the Specified Currency for United States dollars for settlement on such payment date in
the aggregate amount of the Specified Currency payable to all Holders of Notes scheduled to receive
United States dollar payments and at which the applicable dealer commits to execute a contract.
All currency exchange costs will be borne by the Holder of this Note by deductions from such
payments. If three such bid quotations are not available, payments on this Note will be made in
the Specified Currency.



     If the Specified Currency is other than United States dollars, the Holder of this Note may
elect to receive all or a specified portion of any payment of principal, premium, if any, and/or
interest, if any, in respect of this Note in the Specified Currency by submitting a written request
for such payment to the Trustee at its corporate trust office in The City of New York on or prior
to the applicable Record Date or at least 15 calendar days prior to the Maturity Date, as the case
may be. Such written request may be mailed or hand delivered or sent by cable, telex or other form
of facsimile transmission. The Holder of this Note may elect to receive all or a specified portion
of all future payments in the Specified Currency in respect of such principal, premium, if any,
and/or interest, if any, and need not file a separate election for each payment. Such election
will remain in effect until revoked by written notice delivered to the Trustee, but written notice
of any such revocation must be received by the Trustee on or prior to the applicable Record Date or
at least 15 calendar days prior to the Maturity Date, as the case may be.



5









 





     If the Specified Currency is other than United States dollars or a composite currency and the
Holder of this Note shall have duly made an election to receive all or a specified portion of any
payment of principal, premium, if any, and/or interest, if any, in respect of this Note in the
Specified Currency, but the Specified Currency is not available due to the imposition of exchange
controls or other circumstances beyond the control of the Company, the Company will be entitled to
satisfy its obligations to the Holder of this Note by making such payment in United States dollars
on the basis of the Market Exchange Rate (as defined below) determined by the Exchange Rate Agent
on the second Business Day prior to such payment date or, if such Market Exchange Rate is not then
available, on the basis of the most recently available Market Exchange Rate. The “Market Exchange
Rate” for the Specified Currency other than United States dollars means the noon dollar buying rate
in The City of New York for cable transfers for the Specified Currency as certified for customs
purposes (or, if not so certified, as otherwise determined) by the Federal Reserve Bank of New
York. Any payment made in United States dollars under such circumstances shall not constitute an
Event of Default (as defined in the Indenture).



     All determinations referred to above made by the Exchange Rate Agent shall be at its sole
discretion and shall, in the absence of manifest error, be conclusive for all purposes and binding
on the Holder of this Note.



     The Company agrees to indemnify the Holder of any Note against any loss incurred by such
Holder as a result of any judgment or order being given or made against the Company for any amount
due hereunder and such judgment or order requiring payment in a currency (the “Judgment Currency”)
other than the Specified Currency, and as a result of any variation between (i) the rate of
exchange at which the Specified Currency amount is converted into the Judgment Currency for the
purpose of such judgment or order, and (ii) the rate of exchange at which such Holder, on the date
of payment of such judgment or order, is able to purchase the Specified Currency with the amount of
the Judgment Currency actually received by such Holder, as the case may be. The foregoing
indemnity constitutes a separate and independent obligation of the Company and continues in full
force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of
exchange” includes any premiums and costs of exchange payable in connection with the purchase of,
or conversion into, the relevant currency.



     Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof and, if so specified on the face hereof, in an Addendum hereto, which further provisions
shall have the same force and effect as if set forth on the face hereof.



     Notwithstanding the foregoing, if an Addendum is attached hereto or “Other/Additional
Provisions” apply to this Note as specified above, this Note shall be subject to the terms set
forth in such Addendum or such “Other/Additional Provisions”.



     Unless the Certificate of Authentication hereon has been executed by the Trustee by manual
signature, this Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.



6









 





     IN WITNESS WHEREOF, UDR, Inc. has caused this Note to be duly executed by one of its duly
authorized officers.



	 	 	 	 	 	 	 
	 	 	 	 	UDR, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 

	 	 	 	 	 	Title:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ATTEST:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	TRUSTEE’S CERTIFICATE OF AUTHENTICATION:	 	 	 	 
	 
	 	 	 	 	 	 
	This is one of the Debt Securities of
the series designated therein referred
to in the within-mentioned Indenture.	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION, as Trustee	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Authorized Signatory	 	 	 	 






7









 





[REVERSE OF NOTE]




UDR, INC.




MEDIUM-TERM NOTE, SERIES A

DUE NINE MONTHS OR MORE FROM DATE OF ISSUE

(Floating Rate)




     This Note is one of a duly authorized series of Debt Securities (the “Debt Securities”) of the
Company issued and to be issued under an Indenture, dated as of November 1, 1995, as amended,
modified or supplemented from time to time (the “Indenture”), between the Company (successor by
merger to United Dominion Realty Trust, Inc., a Virginia corporation) and U.S. Bank National
Association, successor trustee to Wachovia Bank, National Association (formerly known as First
Union National Bank of Virginia), as trustee (the “Trustee”, which term includes any successor
trustee under the Indenture), 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 Debt Securities, and of
the terms upon which the Debt Securities are, and are to be, authenticated and delivered. This
Note is one of the series of Debt Securities designated as “Medium-Term Notes, Series A Due Nine
Months or More From Date of Issue” (the “Notes”). All terms used but not defined in this Note or
in an Addendum hereto shall have the meanings assigned to such terms in the Indenture or on the
face hereof, as the case may be.



     This Note is issuable only in registered form without coupons in minimum denominations of
U.S.$1,000 and integral multiples thereof or other Authorized Denomination specified on the face
hereof.



     This Note will not be subject to any sinking fund and, unless otherwise specified on the face
hereof in accordance with the provisions of the following two paragraphs, will not be redeemable or
repayable prior to the Stated Maturity Date.



     This Note will be subject to redemption at the option of the Company on any date on or after
the Initial Redemption Date, if any, specified on the face hereof, in whole or from time to time in
part in increments of U.S.$1,000 or other integral multiple of an Authorized Denomination (provided
that any remaining principal amount hereof shall be at least U.S.$1,000 or such other minimum
Authorized Denomination), at the Redemption Price (as defined below), together with unpaid interest
accrued thereon to the date fixed for redemption (the “Redemption Date”), on written notice given
to the Holder hereof (in accordance with the provisions of the Indenture) not more than 60 nor less
than 30 calendar days prior to the Redemption Date. The “Redemption Price” shall be an amount
equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof) multiplied by the unpaid
principal amount of this Note to be redeemed. The Initial Redemption Percentage, if any, shall
decline at each anniversary of the Initial Redemption Date by the Annual Redemption Percentage
Reduction, if any, until the Redemption Price is 100% of unpaid principal amount to be redeemed.
In the event of redemption of this Note in part only, a new Note of like tenor for the unredeemed
portion hereof and otherwise having the same



8









 






terms and provisions as this Note shall be issued by the Company in the name of the Holder
hereof upon the presentation and surrender hereof.



     This Note will be subject to repayment by the Company at the option of the Holder hereof on
the Optional Repayment Date(s), if any, specified on the face hereof, in whole or from time to time
in part in increments of U.S.$1,000 or other integral multiple of an Authorized Denomination
(provided that any remaining principal amount hereof shall be at least U.S.$1,000 or such other
minimum Authorized Denomination), at a repayment price equal to 100% of the unpaid principal amount
to be repaid, together with unpaid interest accrued thereon to the date fixed for repayment (the
“Repayment Date”). For this Note to be repaid, the Trustee must receive at its corporate trust
office in the Borough of Manhattan, the City of New York, not more than 60 nor less than 30
calendar days prior to the Repayment Date, such Note and [the form thereon entitled “Option to
Elect Repayment” duly completed]6 [instructions to such effect forwarded by the Holder
hereof].7 Exercise of such repayment option by the Holder hereof shall be irrevocable.
In the event of repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms and provisions as this Note shall be issued by
the Company in the name of the Holder hereof upon the presentation and surrender hereof.



     If this Note is specified on the face hereof to be a Discount Note, the amount payable to the
Holder of this Note in the event of redemption, repayment or acceleration of maturity of this Note
will be equal to the sum of (1) the Issue Price specified on the face hereof (increased by any
accruals of the Discount, as defined below) and, in the event of any redemption of this Note (if
applicable), multiplied by the Initial Redemption Percentage (as adjusted by the Annual Redemption
Percentage Reduction, if applicable) and (2) any unpaid interest accrued thereon to the Redemption
Date, Repayment Date or date of acceleration of maturity, as the case may be. The difference
between the Issue Price and 100% of the principal amount of this Note is referred to herein as the
“Discount.”



     For purposes of determining the amount of Discount that has accrued as of any Redemption Date,
Repayment Date or date of acceleration of maturity of this Note, such Discount will be accrued so
as to cause an assumed yield on the Note to be constant. The assumed constant yield will be
calculated using a 30-day month, 360-day year convention, a compounding period that, except for the
Initial Period (as defined below), corresponds to the shortest period between Interest Payment
Dates (with ratable accruals within a compounding period), a coupon rate equal to the initial
interest rate applicable to this Note and an assumption that the maturity of this Note will not be
accelerated. If the period from the Original Issue Date to the initial Interest Payment Date (the
“Initial Period”) is shorter than the compounding period for this Note, a proportionate amount of
the yield for an entire compounding period will be accrued. If the Initial Period is longer than
the compounding period, then such period will be divided into a regular compounding period and a
short period, with the short period being treated as provided in the preceding sentence.





 




			
	6	 	This texts applies to certificated Notes only.
	 
	7	 	This text applies to global Notes only.




9









 









     The interest rate borne by this Note will be determined as follows:




     (i) Unless the Interest Category of this Note is specified on the face hereof as a
“Floating Rate/Fixed Rate Note” or an “Inverse Floating Rate Note” or the face hereof
specifies that either “Other/Additional Provisions” or an Addendum hereto applies, in each
case, relating to a different interest rate formula, this Note shall be designated as a
“Regular Floating Rate Note” and, except as set forth below or specified on the face hereof
or in an Addendum hereto, shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b)
multiplied by the Spread Multiplier, if any, in each case as specified on the face hereof.
Commencing on the Initial Interest Reset Date, the rate at which interest on this Note shall
be payable shall be reset as of each Interest Reset Date specified on the face hereof;
provided, however, that the interest rate in effect for the period, if any,
from the Original Issue Date to the Initial Interest Reset Date shall be the Initial
Interest Rate.




     (ii) If the Interest Category of this Note is specified on the face hereof as a
“Floating Rate/Fixed Rate Note”, then, except as set forth below or specified on the face
hereof or in an Addendum hereto, this Note shall bear interest at the rate determined by
reference to the applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if
any, and/or (b) multiplied by the Spread Multiplier, if any. Commencing on the Initial
Interest Reset Date, the rate at which interest on this Note shall be payable shall be reset
as of each Interest Reset Date; provided, however, that (y) the interest
rate in effect for the period, if any, from the Original Issue Date to the Initial Interest
Reset Date shall be the Initial Interest Rate and (z) the interest rate in effect for the
period commencing on the Fixed Rate Commencement Date specified on the face hereof to the
Maturity Date shall be the Fixed Interest Rate specified on the face hereof or, if no Fixed
Interest Rate is so specified, the interest rate in effect on the day immediately preceding
the Fixed Rate Commencement Date.




     (iii) If the Interest Category of this Note is specified on the face hereof as an
“Inverse Floating Rate Note”, then, except as set forth below or specified on the face
hereof or in an Addendum hereto, this Note shall bear interest at the Fixed Interest Rate
minus the rate determined by reference to the applicable Interest Rate Basis or Bases (a)
plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any;
provided, however, that, unless otherwise specified on the face hereof or in
an Addendum hereto, the interest rate hereon shall not be less than zero. Commencing on the
Initial Interest Reset Date, the rate at which interest on this Note shall be payable shall
be reset as of each Interest Reset Date; and provided, further, that the interest rate in
effect for the period, if any, from the Original Issue Date to the Initial Interest Reset
Date shall be the Initial Interest Rate.



     Except as set forth above or specified on the face hereof or in an Addendum hereto, the
interest rate in effect on each day shall be based on: (i) if such day is an Interest Reset Date,
the rate determined as of the Interest Determination Date (as defined below) immediately preceding
such Interest Reset Date; or (ii) if such day is not an Interest Reset Date, the rate determined as
of the Interest Determination Date immediately preceding the most recent Interest Reset Date;
provided, however, that the interest rate for the period, if any, from the Original Issue Date to
the



10









 






Initial Interest Reset Date shall be the Initial Interest Rate. If any Interest Reset Date
would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to
the next succeeding Business Day, except that if LIBOR is an applicable Interest Rate Basis and
such Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be
the immediately preceding Business Day. In addition, if the Treasury Rate is an applicable
Interest Rate Basis and the Interest Determination Date would otherwise fall on an Interest Reset
Date, then such Interest Reset Date will be postponed to the next succeeding Business Day.



     The interest rate applicable to each Interest Reset Period commencing on the related Interest
Reset Date will be determined by the Calculation Agent specified on the face hereof as of the
applicable Interest Determination Date and will be calculated by the Calculation Agent on or prior
to the Calculation Date (as defined below), except with respect to LIBOR and the Eleventh District
Cost of Funds Rate, which will be calculated on such Interest Determination Date. The “Interest
Determination Date” with respect to the Federal Funds Rate and the Prime Rate will be the Business
Day immediately preceding the applicable Interest Reset Date; the “Interest Determination Date”
with respect to the CD Rate, the CMT Rate and the Commercial Paper Rate will be the second Business
Day immediately preceding the applicable Interest Reset Date; the “Interest Determination Date”
with respect to the Eleventh District Cost of Funds Rate shall be the last working day of the month
immediately preceding the applicable Interest Reset Date on which the Federal Home Loan Bank of San
Francisco (the “FHLB of San Francisco”) publishes the Index (as defined below); and the “Interest
Determination Date” with respect to LIBOR shall be the second London Banking Day immediately
preceding the applicable Interest Reset Date, unless the Designated LIBOR Currency is British
pounds sterling, in which case the “Interest Determination Date” will be the applicable Interest
Reset Date. The “Interest Determination Date” with respect to the Treasury Rate shall be the day
in the week in which the applicable Interest Reset Date falls on which day Treasury Bills (as
defined below) are normally auctioned (Treasury Bills are normally sold at an auction held on
Monday of each week, unless such Monday is a legal holiday, in which case the auction is normally
held on the immediately succeeding Tuesday, although such auction may be held on the preceding
Friday); provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the “Interest Determination Date” shall be such
preceding Friday. If the interest rate of this Note is determined with reference to two or more
Interest Rate Bases specified on the face hereof, the “Interest Determination Date” pertaining to
this Note shall be the most recent Business Day which is at least two Business Days prior to the
applicable Interest Reset Date on which each Interest Rate Basis is determinable.



     Unless otherwise specified on the face hereof or in an Addendum hereto, the rate with respect
to each Interest Rate Basis will be determined in accordance with the applicable provisions below.



     CD Rate. If an Interest Rate Basis for this Note is specified on the face hereof as
the CD Rate, the CD Rate shall be determined as of the applicable Interest Determination Date (a
“CD Rate Interest Determination Date”) as:



     (1) the rate on such Interest Determination Date for negotiable United States dollar
certificates of deposit having the Index Maturity specified on the face hereof as published in
H.15(519) (as defined below) under the caption “CDs (secondary market)”, or



11









 





     (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such CD Rate Interest Determination Date for
negotiable United States dollar certificates of deposit of the Index Maturity as published in H.15
Daily Update (as defined below), or such other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption “CDs (secondary market)”, or



     (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such CD Rate Interest Determination Date calculated by
the Calculation Agent as the arithmetic mean of the secondary market offered rates as of 10:00
A.M., New York City time, on such CD Rate Interest Determination Date, of three leading nonbank
dealers in negotiable United States dollar certificates of deposit in The City of New York selected
by the Calculation Agent for negotiable United States dollar certificates of deposit of major
United States money market banks for negotiable United States dollar certificates of deposit with a
remaining maturity closest to the Index Maturity in an amount that is representative for a single
transaction in such market at such time, or



     (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause
(3), the CD Rate in effect on such CD Rate Interest Determination Date.



     “H.15(519)” means the weekly statistical release designated as H.15(519), or any successor
publication, published by the Board of Governors of the Federal Reserve System.



     “H.15 Daily Update” means the daily update of H.15(519), available through the world-wide-web
site of the Board of Governors of the Federal Reserve System at
http://www.federalreserve/releases/h15/update, or any successor site or publication.



     CMT Rate. If an Interest Rate Basis for this Note is specified on the face hereof as
the CMT Rate, the CMT Rate shall be determined by the Calculation Agent as of the applicable
Interest Determination Date (a “CMT Rate Interest Determination Date”) in accordance with the
following provisions:



     (1) if “Reuters Page FRBCMT” is specified on the face hereof:




     (a) the percentage equal to the yield for United States Treasury securities at
“constant maturity” having the Index Maturity specified on the face hereof as published in
H.15(519) under the caption “Treasury Constant Maturities”, as such yield is displayed on
Reuters (or any successor service) on page FRBCMT (or any other page as may replace such
page on such service) (“Reuters Page FRBCMT”) or, if not so displayed, on the Bloomberg
service (or any successor service) on page NDX 7 (or any other page as may replace the
specified page on that service) (“Bloomberg Page NDX 7”), for such CMT Rate Interest
Determination Date, or




     (b) if the rate referred to in clause (a) does not so appear on Reuters Page FRBCMT or
Bloomberg Page NDX 7, as the case may be, on the related Calculation Date, the percentage
equal to the yield for United States Treasury securities at “constant maturity” having the
Index Maturity and for such CMT Rate Interest Determination Date as published in H.15(519)
under the caption “Treasury Constant Maturities”, or



12









 






     (c) if the rate referred to in clause (b) does not appear in H15(519) on the related
Calculation Date, the rate on such CMT Rate Interest Determination Date for the period of
the Index Maturity as may then be published by either the Federal Reserve System Board of
Governors or the United States Department of the Treasury that the Calculation Agent
determines to be comparable to the rate which would otherwise have been published in
H.15(519), or




     (d) if the rate referred to in clause (c) is not so published on the related
Calculation Date, the rate on such CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date of three leading primary United States government securities dealers in
The City of New York (each, a “Reference Dealer”) selected by the Calculation Agent (from
five such Reference Dealers and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of equality, one of
the lowest)) for United States Treasury securities with an original maturity equal to the
Index Maturity, a remaining term to maturity no more than 1 year shorter than the Index
Maturity and in a principal amount that is representative for a single transaction in such
securities in such market at such time, or




     (e) if fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on such CMT Rate Interest Determination Date calculated by
the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither
the highest nor lowest of such quotations shall be eliminated, or




     (f) if fewer than three prices referred to in clause (d) are provided as requested, the
rate on such CMT Rate Interest Determination Date calculated by the Calculation Agent as a
yield-to-maturity based on the arithmetic mean of the secondary market bid prices as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of
three Reference Dealers selected by the Calculation Agent (from five such Reference Dealers
and eliminating the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)) for United States
Treasury securities with an original maturity greater than the Index Maturity, a remaining
term to maturity closest to the Index Maturity and in a principal amount that is
representative for a single transaction in such securities in such market at such time, or




     (g) if fewer than five but more than two such prices referred to in clause (f) are
provided as requested, the rate on such CMT Rate Interest Determination Date calculated by
the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither
the highest nor the lowest of such quotations shall be eliminated, or




     (h) if fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on such CMT Rate Interest Determination Date. If two such United States
Treasury securities with an original maturity greater than the



13









 






Index Maturity have remaining terms to maturity equally close to the Index Maturity,
the quotes for the Treasury security with the shorter original term to maturity will be
used.



     (2) If “Reuters Page FEDCMT” is specified on the face hereof:




     (a) the percentage equal to the one-week or one-month, as specified on the face hereof,
average yield for United States Treasury securities at “constant maturity” having the Index
Maturity specified on the face hereof as published in H.15(519) opposite the caption
“Treasury Constant Maturities”, as such yield is displayed on Reuters (or any successor
service) on page FEDCMT (or any other page as may replace such page on such service )
(“Reuters Page FEDCMT”) or, if not so displayed, on the Bloomberg service) (or any successor
service) on page NDX 7 (or any other page as may replace the specified page on that service)
(“Bloomberg Page NDX 7”), for the week or month, as applicable, ended immediately preceding
the week or month, as applicable, in which such CMT Rate Interest Determination Date falls,
or




     (b) if the rate referred to in clause (a) does not so appear on the Reuters Page FEDCMT
or Bloomberg Page NDX 7, as the case may be, on the related Calculation Date, the percentage
equal to the one-week or one-month, as specified on the face hereof, average yield for
United States Treasury securities at “constant maturity” having the Index Maturity and for
the week or month, as applicable, preceding such CMT Rate Interest Determination Date as
published in H.15(519) opposite the caption “Treasury Constant Maturities”, or




     (c) if the rate referred to in clause (b) does not appear in H15(519) on the related
Calculation Date, the one-week or one-month, as specified on the face hereof, average yield
for United States Treasury securities at “constant maturity” having the Index Maturity as
otherwise announced by the Federal Reserve Bank of New York for the week or month, as
applicable, ended immediately preceding the week or month, as applicable, in which such CMT
Rate Interest Determination Date falls, or




     (d) if the rate referred to in clause (c) is not so published on the related
Calculation Date, the rate on such CMT Rate Interest Determination Date calculated by the
Calculation Agent as a yield-to-maturity based on the arithmetic mean of the secondary
market bid prices at approximately 3:30 P.M., New York City time, on such CMT Rate Interest
Determination Date of three Reference Dealers selected by the Calculation Agent (from five
such Reference Dealers and eliminating the highest quotation (or, in the event of equality,
one of the highest) and the lowest quotation (or, in the event of equality, one of the
lowest)) for United States Treasury securities with an original maturity equal to the Index
Maturity, a remaining term to maturity of no more than 1 year shorter than the Index
Maturity and in a principal amount that is representative for a single transaction in such
securities in such market at such time, or




     (e) if fewer than five but more than two of the prices referred to in clause (d) are
provided as requested, the rate on such CMT Rate Interest Determination Date calculated by
the Calculation Agent based on the arithmetic mean of the bid prices obtained and neither
the highest nor lowest of such quotations shall be eliminated, or



14









 






     (f) if fewer than three prices referred to in clause (d) are provided as requested, the
rate on such CMT Rate Interest Determination Date calculated by the Calculation Agent as a
yield-to-maturity based on the arithmetic mean of the secondary market bid prices as of
approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of
three Reference Dealers selected by the Calculation Agent (from five such Reference Dealers
and eliminating the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)) for United States
Treasury securities with an original maturity longer than the Index Maturity, a remaining
term to maturity closest to the Index Maturity and in a principal amount that is
representative for a single transaction in such securities in such market at such time, or




     (g) if fewer than five but more than two prices referred to in clause (f) are provided
as requested, the rate on such CMT Rate Interest Determination Date calculated by the
Calculation Agent based on the arithmetic mean of the bid prices obtained and neither the
highest nor lowest of such quotations shall be eliminated, or




     (h) if fewer than three prices referred to in clause (f) are provided as requested, the
CMT Rate in effect on such CMT Rate Interest Determination Date.



     If two United States Treasury securities with an original maturity greater than the Index
Maturity have remaining terms to maturity equally close to the Index Maturity, the quotes for the
Treasury security with the shorter original term to maturity will be used.



     Commercial Paper Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the Commercial Paper Rate, the Commercial Paper Rate shall be determined as of the
applicable Interest Determination Date (a “Commercial Paper Rate Interest Determination Date”) as:



     (1) the Money Market Yield (as defined below) on the Commercial Paper Rate Interest
Determination Date of the rate for commercial paper having the Index Maturity specified on the face
hereof as published in H.15(519) under the caption “Commercial Paper-Nonfinancial”, or



     (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the Money Market Yield of the rate on such Commercial Paper
Rate Interest Determination Date for commercial paper having the Index Maturity as published in
H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption “Commercial Paper-Nonfinancial”, or



     (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Commercial Paper Rate Interest Determination Date
calculated by the Calculation Agent as the Money Market Yield of the arithmetic mean of the offered
rates at approximately 11:00 A.M., New York City time, on such Commercial Paper Rate Interest
Determination Date of three leading dealers of United States dollar commercial paper in The City of
New York selected by the Calculation Agent for



15









 






commercial paper having the Index Maturity placed for industrial issuers whose bond rating is
“Aa”, or the equivalent, from a nationally recognized statistical rating organization, or



     (4) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause
(3), the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date.



     “Money Market Yield” means a yield (expressed as a percentage) calculated in accordance with
the following formula:



	 	 	 	 	 
	Money Market Yield =

	 	D x 360          

360 — (D x M)          

	 	x 100





where “D” refers to the applicable per annum rate for commercial paper quoted on a bank discount
basis and expressed as a decimal, and “M” refers to the actual number of days in the applicable
Interest Reset Period.




     Designated LIBOR Currency means the currency specified on the face hereof as to which
LIBOR shall be calculated or, if no such currency is specified on the face hereof, United States
dollars.



     Eleventh District Cost of Funds Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Eleventh District Cost of Funds Rate, the Eleventh District
Cost of Funds Rate shall be determined as of the applicable Interest Determination Date (an
“Eleventh District Cost of Funds Rate Interest Determination Date”) as:



     (1) the rate equal to the monthly weighted average cost of funds for the calendar month
immediately preceding the month in which such Eleventh District Cost of Funds Rate Interest
Determination Date falls as set forth under the caption “11th District” on the display on Reuters
(or any successor service) on page COFI/ARMS (or any other page as may replace such page on such
service) (“Reuters Page COFI/ARMS”) or, if not so displayed, on the Bloomberg service (or any
successor service) on page ALLX COF (or any other page as may replace the specified page on that
service) (“Bloomberg Page ALLX COF”), as of 11:00 A.M., San Francisco time, on such Eleventh
District Cost of Funds Rate Interest Determination Date, or



     (2) if the rate referred to in clause (1) does not so appear on Reuters Page COFI/ARMS or
Bloomberg Page ALLX COF, as the case may be, the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was most recently
announced (the “Index”) by the FHLB of San Francisco as such cost of funds for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest Determination Date, or



     (3) if the FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month immediately
preceding such Eleventh District Cost of Funds Rate Interest Determination Date, the Eleventh
District Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate Interest
Determination Date.




16










 





     Federal Funds Rate. If an Interest Rate Basis for this Note is specified on the face
hereof as the Federal Funds Rate, the Federal Funds Rate shall be determined as of the applicable
Interest Determination Date (a “Federal Funds Rate Interest Determination Date”) in accordance with
the following provisions:



     (1) if “Federal Funds (Effective) Rate” is specified on the face hereof: (a) Federal Funds
Rate Interest Determination Date for United States dollar federal funds as published in H.15(519)
opposite the caption “Federal funds (effective)”, as such rate is displayed on Reuters on page
FEDFUNDS1 (or any other page as may replace such page on such service) (“Reuters Page REDFUNDS1”)
under the heading “EFFECT”, or, (b) if the rate referred to in clause (a) is not so published by
3:00 P.M., New York City time, on the related Calculation Date, the rate with respect to such
Federal Funds Rate Interest Determination Date for United States dollar federal funds as published
in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying
such rate, under the caption “Federal funds (effective)”, or, (c) if the rate referred to in clause
(b) does not appear on Reuters Page FEDFUNDS1 or is not yet published in H.15(519), H.15 Daily
Update or another recognized electronic source by 3:00 P.M., New York City time, on the related
Calculation Date, then the Federal Funds Rate with respect to such Federal Funds Rate Interest
Determination Date shall be calculated by the Calculation Agent and will be the arithmetic mean of
the rates for the last transaction in overnight United States dollar federal funds arranged by
three leading brokers of U.S. dollar federal funds transactions in The City of New York (which may
include the Agents or their affiliates) selected by the Calculation Agent, prior to 9:00 A.M., New
York City time, on the Business Day following such Federal Funds Rate Interest Determination Date;
provided, however, that if the brokers so selected by the Calculation Agent are not quoting as
mentioned in this clause (c), the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate
Interest Determination Date, or,



     (2) if “Federal Funds Open Rate” is specified on the face hereof: (a) the rate on such
Federal Funds Rate Interest Determination Date under the heading “Federal Funds” for the relevant
Index Maturity and opposite the caption “Open” as such rate is displayed on Reuters on page 5 (or
any other page as may replace such page on such service) (“Reuters Page 5”), or, (b) if the rate
referred to in clause (a) does not appear on Reuters Page 5 by 3:00 P.M., New York City time, on
the Calculation Date, the Federal Funds Rate for the Federal Funds Rate Interest Determination Date
will be the rate for that day displayed on FFPREBON Index page on Bloomberg L.P. (“Bloomberg”),
which is the Fed Funds Opening Rate as reported by Prebon Yamane (or a successor) on Bloomberg, or,
(c) if the rate referred to in clause (b) does not appear on Reuters Page 5 or is not displayed on
FFPREBON Index page on Bloomberg or another recognized electronic source by 3:00 P.M., New York
City time, on the related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate
Interest Determination Date shall be calculated by the Calculation Agent and will be the arithmetic
mean of the rates for the last transaction in overnight United States dollar federal funds arranged
by three leading brokers of United States dollar federal funds transactions in The City of New York
(which may include the Agents or their affiliates) selected by the Calculation Agent prior to 9:00
A.M., New York City time, on such Federal Funds Rate Interest Determination Date; provided,
however, that if the brokers so selected by the Calculation Agent are not quoting as



17









 






mentioned in
this clause (c), the Federal Funds Rate determined as of such Federal Funds Rate Interest
Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate Interest
Determination Date, or,



     (3) if “Federal Funds Target Rate” is specified on the face hereof: (a) the rate on such
Federal Funds Rate Interest Determination Date as displayed on the FDTR Index page on Bloomberg,
or, (b) if the rate referred to in clause (a) does not appear on the FDTR Index page on Bloomberg
by 3:00 P.M., New York City time, on the Calculation Date, the Federal Funds Rate for such Federal
Funds Rate Interest Determination Date will be the rate for that day appearing on Reuters Page
USFFTARGET= (or any other page as may replace such page on such service) (“Reuters Page
USFFTARGET=”), or, (c) if the rate referred to in clause (b) does not appear on the FDTR Index page
on Bloomberg or is not displayed on Reuters Page USFFTARGET= by 3:00 P.M., New York City time, on
the related Calculation Date, then the Federal Funds Rate on such Federal Funds Rate Interest
Determination Date shall be calculated by the Calculation Agent and will be the arithmetic mean of
the rates for the last transaction in overnight United States dollar federal funds arranged by
three leading brokers of United States dollar federal funds transaction in The City of New York
(which may include the Agents or their affiliates) selected by the Calculation Agent prior to 9:00
A.M., New York City time, on such Federal Funds Rate Interest Determination Date. 



     LIBOR. If an Interest Rate Basis for this Note is specified on the face hereof as
LIBOR, LIBOR shall be determined by the Calculation Agent as of the applicable Interest
Determination Date (a “LIBOR Interest Determination Date”) as:



     (1) the rate for deposits in the Designated LIBOR Currency having the Index Maturity specified
on the face hereof as such rate is displayed on Reuters on page LIBOR01 (or any other page as may
replace such page on such service for the purpose of displaying the London interbank rates of major
banks for the Designated LIBOR Currency) (“Reuters Page LIBOR01”) as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date, or,



     (2) with respect to a LIBOR Interest Determination Date on which no rate is displayed on
Reuters Page LIBOR01 as specified in clause (1) above, the Calculation Agent shall request the
principal London offices of each of four major reference banks (which may include affiliates of the
Agents) in the London interbank market, as selected by the Calculation Agent, to provide the
Calculation Agent with its offered quotation for deposits in the Designated LIBOR Currency for the
period of the Index Maturity specified on the face hereof, commencing on the related Interest Reset
Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on
such LIBOR Interest Determination Date and in a principal amount that is representative for a
single transaction in the Designated LIBOR Currency in such market at such time; if at least two
such quotations are so provided, then LIBOR on such LIBOR Interest Determination Date will be the
arithmetic mean calculated by the Calculation Agent of such quotations, or,



     (3) if fewer than two quotations referred to in clause (2) are so provided, then LIBOR on such
LIBOR Interest Determination Date will be the arithmetic mean calculated by the Calculation Agent
of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center (as
defined above), on such LIBOR Interest Determination Date by three major



18









 






banks (which may include affiliates of the Agents) in such Principal Financial Center selected
by the Calculation Agent for loans in the Designated LIBOR Currency to leading European banks,
having the Index Maturity specified on the face hereof and in a principal amount that is
representative for a single transaction in the Designated LIBOR Currency in such market at such
time; provided, however, that if the banks so selected by the Calculation Agent are not quoting as
mentioned in this clause (3), LIBOR determined as of such LIBOR Interest Determination Date shall
be LIBOR in effect on such LIBOR Interest Determination Date.



     Prime Rate. If an Interest Rate Basis for this Note is specified on the face hereof
as the Prime Rate, the Prime Rate shall be determined as of the applicable Interest Determination
Date (a “Prime Rate Interest Determination Date”) as:



     (1) the rate on such Prime Rate Interest Determination Date as published in H.15(519) under
the caption “Bank Prime Loan”, or



     (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on such Prime Rate Interest Determination Date as
published in H.15 Daily Update, or such other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption “Bank Prime Loan”, or



     (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Prime Rate Interest Determination Date calculated
by the Calculation Agent as the arithmetic mean of the rates of interest publicly announced by each
bank that appears on Reuters on page USPRIME1 (or any other page as may replace such page on such
service for the purpose of displaying prime rates or base lending rates of major United States
banks) as such bank’s prime rate or base lending rate as of 11:00 A.M., New York City time, on such
Prime Rate Interest Determination Date, or



     (4) if fewer than four rates referred to in clause (3) are so published by 3:00 P.M., New York
City time, on such Calculation Date, the rate on such Prime Rate Interest Determination Date
calculated by the Calculation Agent as the arithmetic mean of the prime rates or base lending rates
quoted on the basis of the actual number of days in the year divided by a 360-day year as of the
close of business on such Prime Rate Interest Determination Date by three major banks in The City
of New York selected by the Calculation Agent, or



     (5) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause
(4), the Prime Rate in effect on such Prime Rate Interest Determination Date.



     Treasury Rate. If an Interest Rate Basis for this Note is specified on the face
hereof as the Treasury Rate, the Treasury Rate shall be determined as of the applicable Interest
Determination Date (a “Treasury Rate Interest Determination Date”) as:



     (1) the rate from the auction held on such Treasury Rate Interest Determination Date (the
“Auction”) of direct obligations of the United States (“Treasury Bills”) having the Index Maturity
specified on the face hereof under the caption “INVEST RATE” on the display on Reuters (or any
successor service) on page USAUCTION10 (or any other page as may replace such page on such service)
(“Reuters Page USAUCTION10”) or page USAUCTION11 (or any other page as may replace such page on
such service) (“Reuters Page USAUCTION11”), or, if



19









 






not so displayed, on the Bloomberg service (or any successor service) on page AUCK 18 (or any
other page as may replace the specified page on that service (“Bloomberg Page AUCK 18”), or



     (2) if the rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the Bond Equivalent Yield (as defined below) of the rate for
such Treasury Bills as published in H.15 Daily Update, or such other recognized electronic source
used for the purpose of displaying the applicable rate, under the caption “U.S. Government
Securities/Treasury Bills/Auction High”, or



     (3) if the rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the Bond Equivalent Yield of the auction rate of such Treasury
Bills as announced by the United States Department of the Treasury, or



     (4) if the rate referred to in clause (3) is not so announced by the United States Department
of Treasury or if the Auction is not held, the Bond Equivalent Yield of the rate on such Treasury
Rate Interest Determination Date of such Treasury Bills as published in H.15(519) under the caption
“U.S. Government Securities/Treasury Bills/Secondary Market”, or



     (5) if the rate referred to in clause (4) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Treasury Rate Interest Determination Date of such
Treasury Bills as published in H.15 Daily Update, or such other recognized electronic source used
for the purpose of displaying the applicable rate, under the caption “U.S. Government
Securities/Treasury Bills/Secondary Market”, or



     (6) if the rate referred to in clause (5) is not so published by 3:00 P.M., New York City
time, on such Calculation Date, the rate on such Treasury Rate Interest Determination Date
calculated by the Calculation Agent as the Bond Equivalent Yield of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time, on such Treasury
Rate Interest Determination Date, of three primary United States government securities dealers
selected by the Calculation Agent for the issue of Treasury Bills with a remaining maturity closest
to the Index Maturity, or



     (7) if the dealers so selected by the Calculation Agent are not quoting as mentioned in clause
(6), the Treasury Rate in effect on such Treasury Rate Interest Determination Date.



     “Bond Equivalent Yield” means a yield (expressed as a percentage) calculated in accordance
with the following formula:



	 	 	 	 	 	 	 
	 

	 	Bond Equivalent Yield =
	 	D x N

 

360 — (D x M)
	 	x 100





where “D” refers to the applicable per annum rate for Treasury Bills quoted on a bank discount
basis and expressed as a decimal, “N” to 365 or 366, as the case may be, and “M” refers to the
actual number of days in the applicable Interest Reset Period.




     Notwithstanding the foregoing, the interest rate that may accrue hereon during any Interest
Reset Period shall not be greater than the Maximum Interest Rate, if any, or less than the



20









 






Minimum Interest Rate, if any, in each case as specified on the face hereof. The interest
rate on this Note will in no event be higher than the maximum rate permitted by New York law, as
the same may be modified by United States law of general application.



     The “Calculation Date”, if applicable, pertaining to any Interest Determination Date shall be
the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is
not a Business Day, the next succeeding Business Day or (ii) the Business Day immediately preceding
the applicable Interest Payment Date or the Maturity Date, as the case may be. At the request of
the Holder hereof, the Calculation Agent will provide to the Holder hereof the interest rate hereon
then in effect and, if determined, the interest rate that will become effective as a result of a
determination made for the next succeeding Interest Reset Date.



     Accrued interest hereon shall be an amount calculated by multiplying the principal amount
hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the
interest factor calculated for each day in the applicable Interest Period. Unless otherwise
specified as the Day Count Convention on the face hereof, the interest factor for each such date
shall be computed by dividing the interest rate applicable to such day by 360 if the CD Rate, the
Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR or
the Prime Rate is an applicable Interest Rate Basis or by the actual number of days in the year if
the CMT Rate or the Treasury Rate is an applicable Interest Rate Basis. Unless otherwise specified
as the Day Count Convention on the face hereof, the interest factor for this Note, if the interest
rate is calculated with reference to two or more Interest Rate Bases, shall be calculated in each
period in the same manner as if only the Applicable Interest Rate Basis specified on the face
hereof applied.



     All percentages resulting from any calculation on this Note shall be rounded to the nearest
one hundred-thousandth of a percentage point, with five one-millionths of a percentage point
rounded upwards, and all amounts used in or resulting from such calculation on this Note shall be
rounded, in the case of United States dollars, to the nearest cent or, in the case of a Specified
Currency other than United States dollars, to the nearest unit (with one-half cent or unit being
rounded upwards).



     The covenant set forth in Section 1004(a) of the Indenture shall not apply to this Note, and
the following covenant shall instead apply to this Note in place of the covenant set forth in
Section 1004(a) of the Indenture:



The Trust will not, and will not permit any Subsidiary to, incur any Debt if,
immediately after giving effect to the incurrence of such additional Debt and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Debt of the Trust and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 65% of the sum of (without
duplication) (i) the Trust’s Total Assets as of the end of the calendar quarter
covered in the Trust’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 permitted under the Exchange Act, with the Trustee) prior to the incurrence of
such additional Debt and (ii) the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any securities offering proceeds
received (to the extent such proceeds were not used to acquire real estate



21









 





assets or mortgages receivable or used to reduce Debt), by the Trust or any
Subsidiary since the end of such calendar quarter, including those proceeds obtained
in connection with the incurrence of such additional Debt.



     In addition to the covenants set forth in the Indenture, the Company is required to maintain
Total Unencumbered Assets (as defined below) of not less than 150% of the aggregate outstanding
principal amount of the Company’s Unsecured Debt (as defined below). For purposes of this
requirement, the following capitalized terms shall be defined as follows:



     “Total Unencumbered Assets” means the sum of (i) those Undepreciated Real Estate Assets (as
defined below) not subject to an encumbrance and (ii) all other assets of the Company and its
Subsidiaries (as defined below) not subject to encumbrance determined in accordance with generally
accepted accounting principles (but excluding accounts receivable and intangibles).



     “Subsidiaries” means a corporation, a limited liability company or a partnership a majority of
the outstanding voting stock, limited liability company or partnership interests, as the case may
be, of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries
of the Company. For purposes of this definition, “voting stock” means stock having voting power
for the election of directors, managing members or trustees, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.



     “Undepreciated Real Estate Assets” as of any date means the original cost plus capital
improvements of real estate assets of the Company and its Subsidiaries determined in accordance
with generally accepted accounting principles.



     “Unsecured Debt” means debt of the Company or any Subsidiary which is not secured by any
mortgage, lien, charge, pledge or security interest of any kind upon any of their properties.



     If an Event of Default shall occur and be continuing, the principal of the Notes may, and in
certain cases shall, be accelerated in the manner and with the effect provided in the Indenture.



     The Indenture contains provisions for defeasance of (i) the entire indebtedness of the Notes
or (ii) certain covenants and Events of Default with respect to the Notes, in each case upon
compliance with certain conditions set forth therein, which provisions apply to the Notes.



     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
Debt Securities at any time by the Company and the Trustee with the consent of the Holders of a
majority of the aggregate principal amount of all Debt Securities at the time outstanding and
affected thereby. The Indenture also contains provisions permitting the Holders of a majority of
the aggregate principal amount of the outstanding Debt Securities of any series, on behalf of the
Holders of all such Debt Securities, to waive compliance by the Company with certain provisions of
the Indenture. Furthermore, provisions in the Indenture permit the Holders of a majority of the
aggregate principal amount of the outstanding Debt Securities of any series, in certain instances,
to waive, on behalf of all of the Holders of Debt Securities of such series,



22









 






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 other Notes 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
principal, premium, if any, and interest in respect of this Note at the times, places and rate or
formula, and in the coin or currency, herein prescribed.



     As provided in the Indenture and subject to certain limitations therein [and
herein]8 set forth, the transfer of this Note is registrable in the Security Register of
the Company upon surrender of this Note for registration of transfer at the office or agency of the
Company in any place where the principal hereof and any premium or interest hereon are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or by his attorney duly
authorized in writing, and thereupon one or more new Notes having the same terms and provisions, of
Authorized Denominations and for the same aggregate principal amount, will be issued by the Company
to the designated transferee or transferees.



     As provided in the Indenture and subject to certain limitations therein [and
herein]9 set forth, this Note is exchangeable for a like aggregate principal amount of
Notes of different Authorized Denominations but otherwise having the same terms and provisions, as
requested by the Holder hereof surrendering the same.



     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 Holder 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, except as required by law.



     THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE COMMONWEALTH OF VIRGINIA.





 




			
	8	 	This text applies to global Notes only.
	 
	9	 	This text applies to global Notes only.




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ABBREVIATIONS




     The following abbreviations, when used in the inscription on the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TEN COM	 	—	 	as tenants in common	 	 	 	UNIF GIFT MIN ACT –	 	                                        	 	Custodian	 	                                        
	TEN ENT	 	—	 	as tenants by the entireties	 	 	 	 	 	(Cust)
	 	 	 	(Minor)
	JT TEN	 	—	 	as joint tenants with right of survivorship and not as tenants in common	 	 	 	 	 	under Uniform Gifts to Minors Act	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	(State)
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





Additional abbreviations may also be used though not in the above list.




 







ASSIGNMENT



FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto




	 	 	 	 	 	 	 
	 	PLEASE INSERT SOCIAL SECURITY OR
	 	 	 	 	 
	 	OTHER
	 	 	 	 	 
	 	IDENTIFYING NUMBER OF ASSIGNEE
	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	(Please print or typewrite name and address including postal zip code of assignee)
	 	 

	 	 	 	 	 
	 	 	 	 	 
	 	this Note and all rights thereunder hereby irrevocably constituting and appointing
	 	 

	 	 	 	 	 
	 	 

	 	 	 	 	Attorney
	 	 	 	 	 	 	 
	 	to transfer this Note on the books of the Company, with full power of substitution in the premises.






	 	 	 	 	 	 	 	 	 
	Dated:

	 	 
	 	 
	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Notice: The signature(s) on this
Assignment must correspond with the
name(s) as written upon the face of
this Note in every particular, without
alteration or enlargement or any
change whatsoever.






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[OPTION TO ELECT REPAYMENT




     The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note
(or portion hereof specified below) pursuant to its terms at a price equal to 100% of the principal
amount to be repaid, together with unpaid interest accrued hereon to the Repayment Date, to the
undersigned, at


 



 



(Please print or typewrite name and address of the undersigned)




     For this Note to be repaid, the Trustee must receive at its corporate trust office in the
Borough of Manhattan, The City of New York, currently located at 40 Broad Street, 5th
Floor, New York, New York 10004, not more than 60 nor less than 30 calendar days prior to the
Repayment Date, this Note with this “Option to Elect Repayment” form duly completed.



     If less than the entire principal amount of this Note is to be repaid, specify the portion
hereof (which shall be increments of U.S.$1,000 (or other integral multiple of an Authorized
Denomination) (provided that any remaining principal amount shall be at least U.S.$1,000 or the
minimum Authorized Denomination) which the Holder elects to have repaid and specify the
denomination or denominations (which shall be U.S.$1,000 or the minimum Authorized Denomination) of
the Notes to be issued to the Holder for the portion of this Note not being repaid (in the absence
of any such specification, one such Note will be issued for the portion not being repaid).



	 	 	 	 	 
	Name:

	 	 	 	 
	 	 	 	 	 
	Capacity:
	 	 	 	 
	 	 	 	 	 
	Address:
	 	 	 	 
	 	 	 	 	 
	Telephone No.:
	 	 	 	 
	 	 	 	 	 
	Tax Identification

     or Social Security No.:
	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 
	Principal Amount

to be Repaid: $
	 	 	 	 
	 	 	 	 	 
	Date:

	 	 	 	Notice: The signature(s) on
this Option to Elect Repayment must correspond with the name(s) as
written upon the face of this Note in
every particular, without alteration
or enlargement or any change
whatsoever.]10
	 
	 
	 	 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Medallion Signature Guarantee








 




			
	10	 	This form applies to certificated Notes only.




25









 









	 	 	 	 	 
	Principal Amount

to be Repaid: $
	 	 	 	 
	 	 	 	 	 
	Date:

	 	 	 	Notice: The signature(s) on
this Option to Elect Repayment
must correspond with the name(s) as
written upon the face of this Note in
every particular, without alteration
or enlargement or any change
whatsoever.]11
	 
	 
	 	 	 	 
	 

	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Medallion Signature Guarantee








 




			
	11	 	This form applies to certificated Notes only.






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