Document:

Exhibit
4.2

 

PRINCIPAL AMOUNT

$250,000,000

 

REGISTERED NO.:  R-1

 

CUSIP NO.: 756109AL8

ISIN NO.:  US756109AL85

 

REALTY INCOME CORPORATION

5.750% NOTES DUE 2021

 

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 Two Hundred Fifty Million Dollars on January 15,
2021, and to pay interest thereon from June 29, 2010 or from the most
recent date to which interest has been paid or duly provided for, semi-annually
in arrears on January 15 and July 15 of each year (the “Interest
Payment Dates”), commencing January 15, 2011, at the rate of 5.750% 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 January 1 or July 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 5.750% 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 Mellon Trust Company, N.A. (successor trustee to 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 “5.750% Notes due 2021,” 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 $250,000,000. 
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.

 

Prior to October 15, 2020, the Notes may be redeemed at any time
in whole, or from time to time in part, at the option of the Company on any
date 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 40 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.

 

On and after October 15, 2020, the Notes may be redeemed at any
time in whole, or from time to time in part, at the option of the Company on
any date at a Redemption Price equal to 100% of the principal amount of the
Notes to be redeemed, plus 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 are 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 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 January 15, 2021.

 

“Independent Investment Banker” means, with respect to any
Redemption Date for the Notes, Citigroup Global Markets Inc. and its
successors, Banc of America Securities LLC and its successors or Wells Fargo
Securities, LLC and its successors (whichever shall be appointed by the Trustee
after consultation with the Company) or, if all 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, (i) Citigroup Global Markets Inc. and Banc
of America Securities LLC 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), (ii) one other
Primary Treasury Dealer selected by Wells Fargo Securities, LLC or its
successor after consultation with the Company and (iii) one other Primary
Treasury Dealer 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;
provided, however, that, in determining Total Unencumbered Assets as a
percentage of outstanding Unsecured Debt for purposes of the covenant set forth
above under “Maintenance of Total Unencumbered Assets,” all investments in any
Person that is not consolidated with the Company for financial reporting
purposes in accordance with GAAP shall be excluded from Total Unencumbered
Assets to the extent that such investment would otherwise have been
included.  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 indemnity reasonably satisfactory to it 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.

 

 

[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 MELLON TRUST COMPANY, N.A., as Trustee

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: June 29, 2010

  	
   

  

 

 

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)Exhibit 4.3

 

Officers’ Certificate

Pursuant to Sections 201, 301 and 303 of the Indenture

 

Dated:
June 29, 2010

 

The undersigned, Paul M. Meurer, Executive Vice
President, Chief Financial Officer and Treasurer, and Michael R. Pfeiffer,
Executive Vice President, General Counsel and Secretary, of Realty Income
Corporation, a Maryland corporation (the “Company”), hereby certify as follows:

 

The undersigned, having read the appropriate
provisions of the Indenture dated as of October 28, 1998 (the “Indenture”)
between the Company and The Bank of New York Trust Company, N.A., as successor
trustee (the “Trustee”), including Sections 201, 301 and 303 thereof and the
definitions in such Indenture relating thereto, and certain other corporate
documents and records, and having made such examination and investigation as,
in the opinion of the undersigned, each considers necessary to enable the
undersigned to express an informed opinion as to whether or not conditions set
forth in the Indenture relating to the establishment of the title and terms of
the Company’s 5.750% Notes due 2021 (the “Securities”) and the form of
certificate evidencing the Securities have been complied with, and whether the
conditions in the Indenture relating to the authentication and delivery by the
Trustee of the Securities have been complied with, certify that (i) the
title and terms of the Securities were established by the undersigned pursuant
to authority delegated to them by resolutions duly adopted by the Board of
Directors of the Company on June 22, 2010 (the “Resolutions”) and such
terms are set forth in Annex I hereto (it being understood that, in the
event that Securities are ever issued in definitive certificated form, the
legends appearing as the first two paragraphs on the first page of such
form of Securities may be removed), (ii) the form of certificate
evidencing the Securities was established by the undersigned pursuant to
authority delegated to them by the Resolutions and shall be in substantially
the form attached as Annex II hereto, (iii) a true, complete and
correct copy of the Resolutions, which were duly adopted by the Board of
Directors of the Company and are in full force and effect in the form adopted
on the date hereof, are attached as Annex III hereto and are also attached
as an exhibit to the Certificate of the Secretary of the Company of even date
herewith, (iv) the form, title and terms of the Securities have been
established pursuant to and in accordance with Sections 201 and 301 of the
Indenture and comply with the Indenture and, in the opinion of the undersigned,
all conditions provided for in the Indenture (including, without limitation,
those set forth in Sections 201, 301 and 303 of the Indenture) relating to the
establishment of the title and terms of the Securities, the form of certificate
evidencing the Securities and the execution, authentication and delivery of the
Securities have been complied with and (v) to the best knowledge of the
undersigned, no Event of Default (as defined in the Indenture) has occurred and
is continuing with respect to the Securities.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, we have hereunto set our hands
as of the date first written above.

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Paul M. Meurer

  
	
   

  	
  Executive Vice President,
  Chief Financial Officer

  
	
   

  	
  and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Michael R. Pfeiffer

  
	
   

  	
  Executive Vice President,
  General Counsel and Secretary

  

 

2

 

ANNEX I

 

Capitalized terms used in
this Annex I and not otherwise defined herein have the same definitions as
in the Indenture referred to in the Officers’ Certificate of which this
Annex I constitutes a part.

 

(1)           The Securities of the series established hereby shall be
known and designated as the “5.750% Notes due 2021.”

 

(2)           The aggregate principal amount of the Securities of such
series which may be authenticated and delivered under the Indenture is limited
to $250,000,000, except for Securities of such series authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the same series pursuant to Sections 304, 305, 306,
906 or 1107 of the Indenture.  However,
such series may be re-opened by the Company for the issuance of additional
Securities of such series, so long as any such additional Securities have the
same form and terms (other than the date of issuance and the date from which
interest thereon shall begin to accrue), and carry the same right to receive
accrued and unpaid interest, as the Securities of such series theretofore
issued; provided, however, that, notwithstanding the foregoing, such series may
not be reopened if the Company has effected defeasance or covenant defeasance
with respect to the Securities of such series pursuant to Section 1402 and
1403, respectively, of the Indenture or has effected satisfaction and discharge
with respect to the Securities of such series pursuant to Section 401 of
the Indenture.

 

(3)           The Securities of such series are to be issuable only as
Registered Securities without coupons and may, but need not, bear a corporate
seal.  The Securities of such series
shall initially be issued in book-entry form and represented by one or more
permanent Global Securities of such series, the initial depositary (the “Depositary”)
for the Global Securities of such series shall be The Depository Trust Company
and the depositary arrangements shall be those employed by whoever shall be the
Depositary with respect to the Global Securities of such series from time to
time.  Notwithstanding the foregoing,
certificated Securities of such series in definitive form may be issued in
exchange for Global Securities of such series under the circumstances
contemplated by Section 305 of the Indenture.

 

(4)           The Securities of such series shall be sold by the Company
to the several underwriters named in the Purchase Agreement dated June 24,
2010, for whom Citigroup Global Markets Inc., Banc of America Securities
LLC and Wells Fargo Securities, LLC are acting as representatives, at a price
equal to 98.754% of the principal amount thereof plus accrued interest from
June 29, 2010 if settlement occurs after that date, and the initial price
to public of the Securities of such series shall be 99.404% of the principal
amount thereof plus accrued interest from June 29, 2010 if settlement
occurs after that date, and underwriting discounts and commissions shall be
0.650% of the principal amount of such Securities.

 

(5)           The final maturity date of the Securities of such series
on which the principal thereof is due and payable shall be January 15,
2021.

 

(6)           The principal of the Securities of such series shall bear
interest at the rate of 5.750% per annum from June 29, 2010 or from the
most recent date to which interest has been paid or duly provided for, payable
semiannually in arrears on January 15 and July 15 (each, an “Interest
Payment Date”) of each year, commencing January 15, 2011, to the Persons
in whose names such Securities (or one or more Predecessor Securities) are
registered at the close of business on the January 1 or July 1,
respectively, immediately prior to such Interest Payment Dates (each, a “Regular
Record Date”) regardless of whether such Regular Record Date is a Business
Day.  Interest on the Securities of such
series 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 Securities of such series 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 5.750% per annum.

 

3

 

(7)           The Borough of Manhattan, The City of New York is hereby
designated as a Place of Payment for the Securities of such series.  The place where the principal of and premium,
if any, and interest on the Securities of such series shall be payable, where
Securities of such series may be surrendered for the registration of transfer
or exchange, and where notices or demands to or upon the Company in respect of
the Securities of such series and the Indenture may be served shall be the
office or agency maintained by the Company for such purpose in the Borough of
Manhattan, The City of New York, which shall initially be the office of the
Trustee in the Borough of Manhattan, The City of New York, which on the date
hereof is located at The Bank of New York Trust Company, N.A., Attention:
Corporate Trust Administration, 101 Barclay Street, New York, New York 10286.

 

(8)           The Securities of such series are redeemable at any time,
as a whole or from time to time in part, at the option of the Company on the
terms and subject to the conditions set forth in the Indenture and in the form
of Security of such series which appears as Annex II to the Officers’
Certificate of which this Annex I is a part.

 

(9)           The Securities of such series shall not be repayable or
redeemable at the option of the Holders prior to the final maturity date of the
principal thereof (except as provided in Article Five of the Indenture)
and shall not be subject to a sinking fund or analogous provision.

 

(10)         The Securities of such series shall be issued in
denominations of $1,000 and integral multiples of $1,000.

 

(11)         The Trustee shall be the initial trustee, Security
Registrar, transfer agent and Paying Agent for the Securities of such series
and the Trustee is the trustee, Security Registrar, transfer agent and Paying
Agent for all other series of Securities heretofore issued under the Indenture.

 

(12)         The entire outstanding principal amount of the Securities of
such series shall be payable upon declaration of acceleration of the maturity
of the Securities of such series pursuant to Section 502 of the Indenture.

 

(13)         Payment of the principal of and premium, if any, and
interest on the Securities of such series shall be made in Dollars and the
Securities of such series shall be denominated in Dollars.

 

(14)         Other than amounts payable upon redemption of the Securities
of such series at the option of the Company, the amount of payments of
principal of and premium, if any, and interest on the Securities of such series
shall not be determined with reference to an index, formula or other similar
method.

 

(15)         Neither the Company nor the Holders of the Securities of
such series shall have any right to elect the currency in which such payments
are made.

 

(16)         In addition to the covenants of the Company set forth in the
Indenture, the covenants set forth in the form of Security of such series
attached as Annex II to the Officers’ Certificate of which this
Annex I is a part under the captions “Limitation on Incurrence of Total
Debt,” “Limitation on Incurrence of Secured Debt,” “Debt Service Coverage” and “Maintenance
of Total Unencumbered Assets” (collectively, the “Additional Covenants”) shall
be and hereby are added to the Indenture for the benefit of the Securities of
such series and the Holders of the Securities of such series, and the
Additional Covenants, together with the defined terms (the “Additional
Definitions”) set forth in such form of 

 

4

 

Security of such series under the caption “Certain
Definitions,” are hereby incorporated by reference in and made a part of this
Annex I and the Indenture as if set forth in full herein and therein;
provided that the Additional Definitions shall only be applicable with respect
to the Securities of such series and the Additional Definitions and the
Additional Covenants set forth in the Securities of such series shall only be
effective for so long as any of the Securities of such series is Outstanding;
provided, further, that except as set forth in (24) below, the definition of “Subsidiary”
set forth in the form of certificate evidencing the Securities of such series
attached as Annex II to the Officers’ Certificate of which this
Annex I is a part shall only be applicable with respect to the Additional
Covenants and the Additional Definitions set forth in the Securities of such
series; and provided, further, that the definition of “Business Day” set forth
in the form of certificate evidencing the Securities of such series attached as
Annex II to the Officers’ Certificate of which this Annex I is a part
shall supersede, insofar as relates to the Securities of such series, the
definition of “Business Day” appearing in the Indenture.

 

(17)         The Securities of such series will not be issuable as Bearer
Securities, and a temporary global certificate will not be issued.

 

(18)         Except as otherwise provided in the Indenture with respect
to the payment of Defaulted Interest, interest on any Security of such series
shall be payable only to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.

 

(19)         Sections 1402 and 1403 of the Indenture shall apply to
the Securities of such series, provided that (i) the Company may effect
defeasance and covenant defeasance pursuant to Section 1402 and 1403,
respectively, only with respect to all (and not less than all) of the Outstanding
Securities of such series and (ii) in addition to the covenants
specifically referred to by section number in Section 1403 of the
Indenture, the Additional Covenants shall also be subject to covenant
defeasance pursuant to Section 1403.

 

(20)         The Securities of such series will be authenticated and
delivered as provided in Section 303 of the Indenture.

 

(21)         The Company shall not be required to pay Additional Amounts
with respect to the Securities of such series as contemplated by
Section 1010 of the Indenture.

 

(22)         The Securities of such series shall not be convertible or
exchangeable into Common Stock or Preferred Stock.

 

(23)         The Securities of such series will be senior obligations of
the Company.

 

(24)         Insofar as Section 801 of the Indenture is applicable
to the Securities of such series, the term “Subsidiary,” as used in
Section 801(2) of the Indenture, shall have the meaning set forth in
the form of Security of such series attached as Annex II to the Officers’
Certificate of which this Annex I is a part (instead of the meaning set
forth in Section 101 of the Indenture), and the term “indebtedness,” as
used in Section 801(2) of the Indenture, shall be deemed to include,
without limitation, “Debt” and “Secured Debt” (as such terms are defined in the
form of Security of such series attached as Annex II to the Officers’
Certificate of which this Annex I is a part ).

 

(25)         The provisions of Section 1011 of the Indenture shall
be applicable with respect to any term, provision or condition set forth in the
Additional Covenants, in addition to any term, provision and condition set
forth in Sections 1004 to 1008, inclusive, of the Indenture.

 

5

 

(26)         The Securities of such series shall have such other terms
and provisions as are set forth in the form of certificate evidencing the
Securities of such series attached as Annex II to the Officers’
Certificate of which this Annex I is a part, all of which terms and
provisions are incorporated by reference in and made a part of this
Annex I and the Indenture as if set forth in full herein and therein.

 

(27)         As used in the Indenture with respect to the Securities of
such series and in the certificates evidencing the Securities of such series,
all references to “premium” on the Securities of such series shall mean any
amounts (other than accrued interest) payable upon the redemption of any
Securities of such series in excess of 100% of the principal amount of such
Securities.

 

(28)         Payments of principal of and premium, if any, and interest
on Global Securities of such series will be made by the Company by wire
transfer of immediately available funds to an account maintained by the payee
located in the United States.  In the
event that any Securities of such series are issued in the form of Certificated
Notes (as defined in the form of Security of such series which appears as
Annex II to the Officers’ Certificate of which this Annex I is a
part) payments of principal of and premium, if any, and interest on such
Certificated Notes shall be made in the manner set forth in the form of
Security of such series which appears as Annex II to the Officers’
Certificate of which this Annex I is a part and in the Indenture.

 

6

 

ANNEX II

 

Form of 5.750% Note due 2021

 

7

 

ANNEX III

 

Resolutions

 

8

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