Document:

Exhibit 10.1

 

EXECUTION
VERSION

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (the “Agreement”)
is made and entered into as of October 12, 2010, by and among SL Green
Operating Partnership, L.P., a Delaware limited partnership (the “Issuer”),
Reckson Operating Partnership, L.P., a Delaware limited partnership (the “Guarantor”),
SL Green Realty Corp., a Maryland corporation (the “Company”), and
Citigroup Global Markets Inc. (the “Initial Purchaser”) pursuant to that
certain Purchase Agreement, dated October 6, 2010 (the “Purchase
Agreement”), among the Issuer, the Company and the Initial Purchaser.

 

Pursuant to the Purchase Agreement, the Initial
Purchaser has agreed to purchase from the Issuer $345,000,000 in aggregate
principal amount of the Issuer’s 3.00% Exchangeable Senior Notes due 2017,
which are unconditionally guaranteed by the Guarantor (the “Notes”).  The Notes will be exchangeable, subject to
certain conditions set forth in that certain Indenture, dated as of October 12,
2010, among the Company, the Issuer, the Guarantor and the Trustee (the “Indenture”),
for Common Stock (as defined below).

 

In order to induce the Initial Purchaser to enter into
the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement.  The
execution and delivery of this Agreement is a condition to the closing under
the Purchase Agreement.  The terms “herein,”
“hereof,” “hereto,” “hereinafter” and similar terms, as used in this Agreement,
shall in each case refer to this Agreement as a whole and not to any particular
section, paragraph, sentence or other subdivision of this Agreement.

 

The Company, the Issuer and the Guarantor agree with
the Initial Purchaser (i) for its benefit as Initial Purchaser and (ii) for
the benefit of the beneficial owners (including the Initial Purchaser) from
time to time of the Notes and the Covered Securities (as defined herein) (each
of the foregoing a “Holder” and, together, the “Holders”), as
follows:

 

1.             Definitions.  Capitalized terms used herein without
definition shall have the respective meanings set forth in the Purchase
Agreement.  As used in this Agreement,
the following terms shall have the following meanings:

 

(a)           “Additional
Interest” has the meaning set forth in Section 2(e) hereof.

 

(b)           “Additional
Interest Accrual Period” has the meaning set forth in Section 2(e) hereof.

 

(c)           “Additional
Interest Amount” has the meaning set forth in Section 2(e) hereof.

 

(d)           “Additional
Interest Payment Date” means each April 15 and October 15 of each
year.

 

(e)           “Affiliate”
means, with respect to any specified person, an “affiliate,” as defined in Rule 144,
of such person.

 

1

 

(f)            “Amendment
Effectiveness Deadline Date” has the meaning set forth in Section 2(d) hereof.

 

(g)           “Applicable
Exchange Rate” has the meaning ascribed to it in the Indenture.

 

(h)           “Applicable
Observation Period” has the meaning set forth in the Indenture.

 

(i)            “Automatic Shelf
Registration Statement” has the meaning ascribed to it in Rule 405.

 

(j)            “Business Day”
means each day on which the New York Stock Exchange is open for trading.

 

(k)           “Claim” has the
meaning set forth in Section 8(o) hereof.

 

(l)            “Common Stock”
means the shares of common stock, $0.01 par value per share, of the Company and
any other shares of capital stock as may constitute “Common Stock” for purposes
of the Indenture, deliverable upon exchange of the Notes.

 

(m)          “Company Indemnified
Party” has the meaning set forth in Section 6(b) hereof.

 

(n)           “Controlling Person”
has the meaning set forth in Section 6(a) hereof.

 

(o)           “Covered Security”
has the meaning set forth in Section 1(tt) hereof.

 

(p)           “Effectiveness
Deadline Date” has the meaning set forth in Section 2(a) hereof.

 

(q)           “Effectiveness
Period” means a period that begins as of the date the Initial Shelf
Registration Statement becomes effective under the Securities Act, or in the
case that a prospectus supplement to a prospectus contained in an existing
Automatic Shelf Registration Statement is filed pursuant to Section 2(a) hereof,
the date such prospectus supplement is filed pursuant to Rule 424 under
the Securities Act, and terminates (subject to extension pursuant to Section 3(k) hereof)
when there are no Registrable Securities outstanding.

 

(r)            “Event” has
the meaning set forth in Section 2(e) hereof.

 

(s)           “Event Date”
has the meaning set forth in Section 2(e) hereof.

 

(t)            “Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

(u)           “Exchange Price”
has the meaning ascribed to it in the Indenture.

 

(v)           “Filing Deadline
Date” has the meaning set forth in Section 2(a) hereof.

 

2

 

(w)          “FINRA” has the
meaning set forth in Section 3(p) hereof.

 

(x)            “Form S-1”
means Form S-1 under the Securities Act.

 

(y)           “Form S-3”
means Form S-3 under the Securities Act.

 

(z)            “Holder” has
the meaning set forth in the preamble hereto.

 

(aa)         “Holder Indemnified
Party” has the meaning set forth in Section 6(a). hereof.

 

(bb)         “Holder Information”
has the meaning set forth in Section 6(b) hereof.

 

(cc)         “Indemnified Party”
has the meaning set forth in Section 6(c) hereof.

 

(dd)         “Indemnifying Party”
has the meaning set forth in Section 6(c) hereof.

 

(ee)         “Indenture” has
the meaning set forth in the preamble hereto.

 

(ff)           “Initial Purchaser”
has the meaning set forth in the preamble hereto.

 

(gg)         “Initial Shelf
Registration Statement” has the meaning set forth in Section 2(a) hereof.

 

(hh)         “Issue Date”
means October 12, 2010.

 

(ii)           “Material Event”
has the meaning set forth in Section 3(k) hereof.

 

(jj)           “Notes” has
the meaning set forth in the preamble hereto.

 

(kk)         “Notice and
Questionnaire” means a written questionnaire containing substantially the information
called for by the Selling Securityholder Notice and Questionnaire attached as
Annex A to the offering memorandum, dated October 6, 2010, relating to the
offering of the Notes.

 

(ll)           “Notice Holder”
means, on a given date, any Holder that has delivered a Notice and
Questionnaire to the Company on or prior to such date, provided not all of such
Holder’s Registrable Securities that have been registered for resale pursuant
to a Notice and Questionnaire have been sold in accordance with a Shelf Registration
Statement or otherwise disposed of.

 

(mm)       “Proceeding” has
the meaning set forth in Section 6(c) hereof.

 

(nn)         “Prospectus”
means each prospectus relating to any Shelf Registration Statement, including
all supplements and amendments to such prospectus, in each case in the form
furnished pursuant to this Agreement by the Company to Holders or filed by the
Company with the SEC pursuant to Rule 424 or as part of such Shelf
Registration Statement, as the case may be, and in each case including all
materials, if any, incorporated by reference or deemed to be incorporated by
reference in such prospectus.

 

3

 

(oo)         “Purchase Agreement”
has the meaning set forth in the preamble hereof.

 

(pp)         “Record Date”
means, (i) April 1, with respect to an Additional Interest Payment
Date that occurs on April 15 and (ii) October 1, with respect to
an Additional Interest Payment Date that occurs on October 15.

 

(qq)         “Record Holder”
means, with respect to an Additional Interest Payment Date relating to the
Notes for which any Additional Interest Amount has accrued, a Holder of Notes
that was the holder of record of such Notes at the close of business on the
Record Date relating to such Additional Interest Payment Date.

 

(rr)           “Redemption”
means the redemption of the Notes pursuant to Article 3 of the Indenture.

 

(ss)         “Redemption Date”
has the meaning ascribed to it in the Indenture.

 

(tt)           “Registrable
Securities” means the Common Stock that may be deliverable by the Issuer
upon exchange for the Notes pursuant to the terms of the Indenture, and any
securities into or for which such Common Stock has been converted or exchanged,
and any security issued with respect thereto upon any stock dividend, split or
similar event (each of the foregoing, a “Covered Security”) until, in
the case of any such security, the earliest of:

 

(i)            the
date on which such security has been effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
relating thereto;

 

(ii)           the
date on which such security may be resold without restriction pursuant to Rule 144
or any successor provision thereto, without regard to volume limitations or
manner of sale;

 

(iii)          the
date on which such security has been sold pursuant to Rule 144 or any
successor provision thereto; or

 

(iv)          the
date on which such security ceases to be outstanding.

 

(uu)         “Registration
Expenses” has the meaning set forth in Section 5 hereof.

 

(vv)         “Registration
Statement” means each registration statement of the Company (including any
Shelf Registration Statement) under the Securities Act that covers any of the
Registrable Securities pursuant to this Agreement, including amendments and
supplements to such registration statement and including all post-effective
amendments to, all exhibits of, and all materials incorporated by reference or
deemed to be incorporated by reference in, such registration statement,
amendment or supplement.

 

(ww)       “Repurchase” means
a repurchase of the Notes pursuant to Article 4 of the Indenture, as
applicable.

 

4

 

(xx)          “Repurchase Date”
means the Designated Event Repurchase Date or the Scheduled Repurchase Date, as
applicable, as those terms are defined in the Indenture.

 

(yy)         “Rule 144”
means Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(zz)          “Rule 144A”
means Rule 144A under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(aaa)       “Rule 405”
means Rule 405 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(bbb)      “Rule 415”
means Rule 415 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(ccc)       “Rule 424”
means Rule 424 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(ddd)      “Rule 430B”
means Rule 430B under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(eee)       “Rule 456”
means Rule 456 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(fff)         “Rule 457”
means Rule 457 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by
the SEC.

 

(ggg)      “SEC” means the
Securities and Exchange Commission.

 

(hhh)      “Securities Act”
means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.

 

(iii)          “Shelf
Registration Statement” means the Initial Shelf Registration Statement
(including any existing Automatic Shelf Registration Statement to the extent
that the prospectus supplement is filed pursuant to Section 2(a) hereof)
and any Subsequent Shelf Registration Statement.

 

(jjj)          “Subsequent Shelf
Registration Statement” has the meaning set forth in Section 2(b) hereof.

 

(kkk)       “Subsequent Shelf
Registration Statement Effectiveness Deadline Date” has the meaning set
forth in Section 2(d) hereof.

 

(lll)          “Suspension Notice”
has the meaning set forth in Section 3(k) hereof.

 

(mmm)    “Suspension Period”
has the meaning set forth in Section 3(k) hereof.

 

(nnn)      “Trading Day” has
the meaning set forth in the Indenture.

 

5

 

(ooo)      “Trustee” means
The Bank of New York Mellon Trust Company, N.A., the trustee under the
Indenture.

 

(ppp)      “Well-Known Seasoned
Issuer” has the meaning ascribed to it in Rule 405.

 

2.             Shelf Registration.

 

(a)           The Company shall
prepare and file, or cause to be prepared and filed, with the SEC, as soon as
practicable but in any event by the date (the “Filing Deadline Date”)
that is ninety (90) days after the Issue Date, a Registration Statement or a
prospectus supplement to a prospectus contained in an existing Automatic Shelf
Registration Statement, if available (in either case, the “Initial Shelf
Registration Statement”) for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 registering the resale from time to time
by Holders thereof of all of the Registrable Securities (or, if registration of
Registrable Securities not held by Notice Holders is not permitted by the rules and
regulations of the SEC, then registering the resale from time to time by Notice
Holders of their Registrable Securities). 
The Initial Shelf Registration Statement shall provide for the
registration of such Registrable Securities for resale by such Holders in
accordance with any reasonable method of distribution elected by the Holders,
provided that in no event may such resales take the form of an underwritten
offering of Registrable Securities without the prior agreement of the Company.
In no event shall the Initial Shelf Registration Statement be filed with the
SEC prior to completion of the offering of the Notes contemplated by the
Purchase Agreement.  If the Initial Shelf
Registration Statement is not an Automatic Shelf Registration Statement or a
prospectus supplement to a prospectus contained in an existing Automatic Shelf
Registration Statement, the Company shall use its commercially reasonable
efforts to cause the Initial Shelf Registration Statement to become effective
under the Securities Act as promptly as practicable but in any event by the
date (the “Effectiveness Deadline Date”) that is one hundred eighty
(180) days after the Issue Date. The Company shall use its commercially
reasonable efforts to keep the Initial Shelf Registration Statement (and any
Subsequent Shelf Registration Statement) continuously effective under the Securities
Act from the date the Shelf Registration Statement is declared effective until
the earlier of (i) the thirty-fifth (35th) Trading Day immediately
following the maturity date of the Notes and (ii) the date upon which
there are no Notes or Registrable Securities outstanding.  At the time the Initial Shelf Registration
Statement becomes effective under the Securities Act, each Holder that became a
Notice Holder on or before the 15th day before the date of such effectiveness
shall be named as a selling securityholder in the Initial Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of Registrable Securities in
accordance with applicable law.

 

(b)           If, for any reason, at
any time during the Effectiveness Period any Shelf Registration Statement
ceases to be effective under the Securities Act, or ceases to be usable for the
purposes contemplated hereunder, the Company shall use its commercially
reasonable efforts to promptly cause such Shelf Registration Statement to
become effective or usable under the Securities Act (including obtaining the
prompt withdrawal of any order suspending the effectiveness of such Shelf
Registration Statement), and in any event shall, within fifteen (15) Business
Days of such cessation of effectiveness or usability, (i) amend such Shelf
Registration Statement in a manner reasonably expected to obtain the withdrawal
of any order suspending the 

 

6

 

effectiveness
of such Shelf Registration Statement or (ii) file an additional
Registration Statement or prospectus supplement to a prospectus contained in an
existing Automatic Shelf Registration Statement, as applicable (a “Subsequent
Shelf Registration Statement”), for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 registering the resale from time to
time by Holders thereof of all securities that are Registrable Securities as of
the time of such filing (or, if registration of Registrable Securities not held
by Notice Holders is not permitted by the rules and regulations of the
SEC, then registering the resale from time to time by Notice Holders of their
securities that are Registrable Securities as of the time of such filing).  If a Subsequent Shelf Registration Statement
is filed and such Subsequent Shelf Registration Statement is not an Automatic
Shelf Registration Statement or a prospectus supplement to a prospectus
contained in an existing Automatic Shelf Registration Statement, the Company
shall use its commercially reasonable efforts to cause such Subsequent Shelf
Registration Statement to become effective under the Securities Act as promptly
as practicable after such filing, but in no event later than the Subsequent
Shelf Registration Statement Effectiveness Deadline Date.  The Company shall use its commercially
reasonable efforts to keep such Subsequent Shelf Registration Statement (or
another Subsequent Shelf Registration Statement) continuously effective under
the Securities Act from the date the Subsequent Shelf Registration Statement is
declared effective until the earlier of (i) the thirty-fifth (35th)
Trading Day immediately following the maturity date of the Notes and (ii) the
date upon which there are no Notes or Registrable Securities outstanding.  Each such Subsequent Shelf Registration
Statement, if any, shall provide for the registration of such Registrable
Securities for resale by such Holders in accordance with any reasonable method
of distribution elected by the Holders.

 

(c)           The Company shall
supplement and amend any Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement, if required by the Securities
Act or, if necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, as reasonably
requested by the Initial Purchaser or the Trustee on behalf of the Holders of
the Registrable Securities covered by such Shelf Registration Statement.

 

(d)

 

(i)            Each
Holder of Registrable Securities agrees that, if such Holder wishes to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(d) and
Section 3(k).  Each Holder of
Registrable Securities wishing to sell Registrable Securities pursuant to a
Shelf Registration Statement and related Prospectus agrees to deliver a
completed and executed Notice and Questionnaire to the Company, together with
any other information the Company may reasonably request, prior to any
attempted or actual distribution of Registrable Securities under a Shelf
Registration Statement.  If a Holder
becomes a Notice Holder after the 15th day before the date the Initial Shelf
Registration Statement becomes effective under the Securities Act or is filed
in the case of a prospectus supplement to a prospectus contained in an existing
Automatic Shelf Registration Statement, the Company shall use its commercially
reasonable best efforts to, after the date such Holder became a Notice Holder,
and in any event, subject to clause (B) below, within the later of (x) twenty
(20) Business Days after such date 

 

7

 

or (y) twenty (20) Business Days after the expiration of any
Suspension Period that either (I) is in effect when such Holder became a
Notice Holder or (II) is put into effect within twenty (20) Business Days
after the date such Holder became a Notice Holder:

 

(A)          file with the SEC a supplement to the
related Prospectus (or, if required by applicable law, a post-effective
amendment to the Shelf Registration Statement or a Subsequent Shelf
Registration Statement), and all other document(s), in each case as is required
so that such Notice Holder is named as a selling securityholder in a Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Notice Holder to deliver a Prospectus to purchasers of the Registrable
Securities in accordance with the Securities Act; provided, however, that, if a
post-effective amendment or a Subsequent Shelf Registration Statement is
required by the rules and regulations of the SEC in order to permit
resales by such Notice Holder, the Company shall not be required to file more
than one (1) post-effective amendment or Subsequent Shelf Registration
Statement for such purpose in any ninety (90) day period;

 

(B)           if, pursuant to Section 2(d)(i)(A),
the Company shall have filed a post-effective amendment to the Shelf
Registration Statement or filed a Subsequent Shelf Registration Statement, the
Company shall use its commercially reasonable efforts to cause such
post-effective amendment or Subsequent Shelf Registration Statement, as the
case may be, to become effective under the Securities Act as promptly as
practicable, but in any event by the date (the “Amendment Effectiveness
Deadline Date,” in the case of a post-effective amendment, and the “Subsequent
Shelf Registration Statement Effectiveness Deadline Date,” in the case of a
Subsequent Shelf Registration Statement) that is ninety (90) days after the
date such post-effective amendment or Subsequent Shelf Registration Statement,
as the case may be, is required by this Section 2(d) to be filed with
the SEC;

 

(C)           the Company shall provide such Notice
Holder a reasonable number of copies of any documents filed pursuant to clause (A) above
(excluding any exhibits filed with the SEC), if requested by such Notice
Holder;

 

(D)          the Company shall notify such Notice Holder
as promptly as practicable after the effectiveness under the Securities Act of
any post-effective amendment or Subsequent Shelf Registration Statement filed
pursuant to clause (A) above;

 

(E)           if such Holder became a Notice Holder
during a Suspension Period, or a Suspension Period is put into effect within
twenty (20) Business Days after the date such Holder became a Notice Holder,
the Company shall so inform such Notice Holder and shall take the actions 

 

8

 

set forth in clauses (A), (B), (C) and (D) above
within twenty (20) Business Days after expiration of such Suspension Period in
accordance with Section 3(k);

 

(F)           if (A) the Notes are called for
redemption and the then prevailing market price of the Common Stock is above
the Exchange Price or (B) the Notes are exchanged as provided for in
Sections 15.01(a)(i), 15.01(a)(ii) or 15.01(a)(iv) of the Indenture,
then the Company shall use its reasonable best efforts to take the actions set
forth in clauses (A), (B), (C) and (D) above within five (5) Business
Days of the Redemption Date or the end of the Applicable Observation Period, as
applicable, or if such Notice and Questionnaire is delivered during a
Suspension Period, upon expiration of the Suspension Period in accordance with Section 3(k);
and

 

(G)           if, under applicable law, the Company
has more than one option as to the type or manner of making any such filing,
the Company shall make the required filing or filings in the manner or of a
type that is reasonably expected to result in the earliest availability of a
Prospectus for effecting resales of Registrable Securities under the Securities
Act.

 

(ii)           Notwithstanding
anything contained herein to the contrary, the Company shall be under no
obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Shelf Registration Statement or related Prospectus; provided,
however, that any Holder that becomes a Notice Holder (regardless of
when such Holder became a Notice Holder) shall be named as a selling
securityholder in a Shelf Registration Statement or related Prospectus in
accordance with the requirements of this Section 2(d) or Section 2(a),
as applicable.

 

(e)           The parties hereto
agree that the Holders of Registrable Securities will suffer damages, and that
it would not be feasible to ascertain the extent of such damages with
precision, if:

 

(i)            the
Initial Shelf Registration Statement (which shall be an Automatic Shelf
Registration Statement or a prospectus supplement to a prospectus contained in
an existing Automatic Shelf Registration Statement if the Company is a
Well-Known Seasoned Issuer) has not been filed with the SEC on or prior to the
Filing Deadline Date;

 

(ii)           if
the Company is not a Well Known Seasoned Issuer on the Filing Deadline Date,
the Initial Shelf Registration Statement has not been declared or become
effective under the Securities Act on or prior to the Effectiveness Deadline
Date;

 

(iii)          the
Initial Shelf Registration Statement or any Subsequent Registration Statement
is filed with the SEC and is declared or becomes effective under the Securities
Act but shall thereafter cease to be effective (without being 

 

9

 

succeeded immediately by a new Registration Statement that is filed and
immediately becomes effective under the Securities Act) or usable under the
Securities Act for the offer and sale of Registrable Securities in the manner
contemplated by this Agreement and (I) other than in connection with (A) a
Suspension Period or (B) a suspension of the Registration Statement as a
result of the filing of a post-effective amendment solely to add additional
selling securityholders, the Company does not cure the lapse of effectiveness
or usability within fifteen (15) Business Days by a post-effective amendment,
supplement to the Prospectus or report filed under the Exchange Act or (II) the
Suspension Period, when aggregated with other Suspension Periods, shall exceed
the number of days permitted in Section 3(k); or

 

(iv)          any
Registration Statement or amendment thereto, at the time it becomes effective
under the Securities Act, or any Prospectus relating thereto, at the time it is
filed with the SEC or, if later, at the time the Registration Statement to
which such Prospectus relates becomes effective under the Securities Act, shall
fail to name each Holder as a selling securityholder within the time periods
specified in Section 2(d)(i) in such a manner as to permit such
Holder to sell its Registrable Securities pursuant to such Registration
Statement and Prospectus in accordance with the Securities Act, which Holder
was required, pursuant to the terms of this Agreement, to be so named (it being
understood that, without limitation, naming such Holder in a manner that permits
such Holder to sell only a portion of such Holder’s Registrable Securities
referenced in such Holder’s Notice and Questionnaire shall be deemed to be an “Event”
(as defined below) for purposes of this clause (iv)).

 

Each of the events of a type described in any of the
foregoing clauses (i) through (iv) are individually referred to
herein as an “Event,” and

 

(W)         the Filing Deadline Date, in the case of clause (i) above,

 

(X)          the Effectiveness Deadline Date, in the case of clause (ii) above,

 

(Y)           the date on which the duration of the ineffectiveness or
unusability of the Shelf Registration Statement exceeds the number of days
permitted by clause (iii) above, in the case of clause (iii) above,
and

 

(Z)           the date the applicable Registration Statement or
amendment thereto shall become effective under the Securities Act, or the date
the applicable Prospectus is filed with the SEC or, if later, the time the
Registration Statement to which such Prospectus relates becomes effective under
the Securities Act, as the case may be, in the case of clause (iv) above,

 

are each herein referred to as an “Event Date.”Events
shall be deemed to continue until the following dates with respect to the
respective types of Events:

 

10

 

(A)          the date the Initial Shelf
Registration Statement is filed with the SEC, in the case of an Event of the
type described in clause (i) above;

 

(B)           the date the Initial Shelf
Registration Statement is declared or becomes effective under the Securities Act,
in the case of an Event of the type described in clause (ii) above;

 

(C)           the date the Initial Shelf
Registration Statement or the Subsequent Shelf Registration Statement, as the
case may be, becomes effective and usable again, or the date another Subsequent
Shelf Registration Statement is filed with the SEC pursuant to Section 2(b) and
becomes effective, in the case of an Event of the type described in clause (iii) above;
or

 

(D)          the date a supplement to the
Prospectus is filed with the SEC, or the date a post-effective amendment to the
Registration Statement becomes effective under the Securities Act, or the date
a Subsequent Shelf Registration Statement becomes effective under the
Securities Act, which supplement, post-effective amendment or Subsequent Shelf
Registration Statement, as the case may be, names as selling securityholders,
in such a manner as to permit them to sell their Registrable Securities
pursuant to the Registration Statement and Prospectus in accordance with the
Securities Act, all Holders required as herein provided to be so named, in the
case of an Event of the type described in clause (iv) above.

 

Accordingly, commencing on the day immediately
following any Event Date and ending on (but excluding) the earlier of (i) the
next date on which there are no Events that have occurred and are continuing
and (ii) the date the Registration Statement is no longer required to be
kept in effect (an “Additional Interest Accrual Period”), the Issuer
agrees to pay, as additional interest (“Additional Interest”) and not as
a penalty, an amount (the “Additional Interest Amount”) at the rate
described below, payable periodically on each Additional Interest Payment Date
to Record Holders, to the extent of, for each such Additional Interest Payment
Date, the unpaid Additional Interest Amount that has accrued to (but excluding)
such Additional Interest Payment Date (or, if the Additional Interest Accrual
Period shall have ended prior to such Additional Interest Payment Date, to, but
excluding, the day immediately after, the last day of such Additional Interest
Accrual Period); provided, however, that any unpaid Additional
Interest Amount that has accrued with respect to any Note, or portion thereof,
called for Redemption on a Redemption Date, or purchased by the Issuer pursuant
to a Repurchase on a Repurchase Date, as the case may be, that is after the
close of business on the Record Date relating to such Additional Interest
Payment Date and before such Additional Interest Payment Date, shall, in each
case, be instead paid, on such Redemption Date or Repurchase Date, as the case
may be, to the Holder of such Notes on such Record Date.

 

The Additional Interest Amount shall accrue at a rate
per annum equal to one quarter of one percent (0.25%) for the ninety (90) day
period beginning on the day immediately following the Event Date and thereafter
at a rate per annum equal to one half of one percent (0.50%) of the 

 

11

 

aggregate principal amount of the Notes of which such
Record Holders were holders of record at the close of business on the
applicable Record Date; provided, however, that:

 

(I)            unless there shall be a default in the payment of any
Additional Interest Amount, no Additional Interest Amounts shall accrue as to
any Note from and after the earlier of (x) the date such Note is no longer
outstanding, (y) the date, and to the extent, such Note is exchanged for
cash and, if applicable, shares of Common Stock in accordance with the
Indenture and (z) the expiration of the Effectiveness Period;

 

(II)           only those Holders failing to be named as selling
securityholders in the manner prescribed in Section 2(e)(iv) above
shall be entitled to receive any Additional Interest Amounts that have accrued
solely with respect to an Event of the type described in Section 2(e)(iv) above
(it being understood that this clause (II) shall not impair any right of
any Holder to receive Additional Interest Amounts that have accrued with
respect to an Event other than an Event of the type described in Section 2(e)(iv) above);
and

 

(III)         if a Note ceases to be outstanding during an Additional
Interest Accrual Period for which an Additional Interest Amount would be
payable with respect to such Note, then the Additional Interest Amount payable
hereunder with respect to such Note shall be prorated on the basis of the
number of full days such Note is outstanding during such Additional Interest
Accrual Period.

 

Except as provided in the final paragraph of this Section 2(e),
(i) the rate of accrual of the Additional Interest Amount with respect to
any period shall not exceed 0.50% per annum notwithstanding the occurrence of
multiple concurrent Events and (ii) following the cure of all Events
requiring the payment by the Issuer of Additional Interest Amounts to the
Holders pursuant to this Section or following the date the Registration
Statement is no longer required to be kept in effect, the accrual of Additional
Interest Amounts shall cease (without in any way limiting the effect of any
subsequent Event requiring the payment of Additional Interest Amounts by the
Company).  All Additional Interest
Amounts shall be payable in the same manner as interest under the Indenture.

 

All of the Company’s obligations set forth in this Section 2(e) that
are outstanding with respect to any Registrable Security shall cease at the
time such Registrable Security ceases to be a Registrable Security.

 

The parties hereto agree that the Additional Interest
provided for in this Section 2(e) constitutes a reasonable estimate
of the damages that may be incurred by Holders by reason of an Event,
including, without limitation, the failure of a Shelf Registration Statement to
be filed, become effective under the Securities Act, amended or replaced to
include the names of all Notice Holders or available for effecting resales of
Registrable Securities in accordance with the provisions hereof.

 

12

 

If any Additional Interest Amounts are not paid when
due, then, to the extent permitted by law, such overdue Additional Interest
Amounts, if any, shall bear interest, compounded semi-annually, until paid at
the rate of interest payable with respect to overdue amounts on the Notes
pursuant to the Indenture.

 

Notwithstanding any provision in this Agreement,
unless there shall be a default in the payment of any Additional Interest
Amount, in no event shall an Additional Interest Amount accrue to Holder of
Common Stock issued upon exchange of Notes. 
In lieu thereof, if during an Additional Interest Accrual Period a
Holder shall exchange its Notes for Common Stock, the Company shall increase
the Applicable Exchange Rate by 3% for each $1,000 principal amount of Notes
exchanged.

 

(f)            The Trustee shall be
entitled, on behalf of Holders, to seek any available remedy for the
enforcement of this Agreement, including for the payment of any Additional
Interest Amount.

 

3.             Registration
Procedures.  In connection with the
registration obligations of the Company under Section 2 hereof, the
Company shall:

 

(a)           Prepare and file with
the SEC a Shelf Registration Statement, Shelf Registration Statements,
prospectus supplement or prospectus supplements, as applicable, in the manner
provided in this Agreement and use its commercially reasonable efforts to cause
each such Shelf Registration Statement to become effective under the Securities
Act and remain effective under the Securities Act as provided herein; provided,
that, before filing any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto with the SEC, the Company shall furnish to
the Initial Purchaser and counsel for the Holders and for the Initial Purchaser
(or, if applicable, a single separate counsel for the Holders) copies of all
such documents proposed to be filed with the SEC and shall use reasonable
efforts to reflect in such documents, when filed with the SEC, such comments as
the Initial Purchaser or such counsel reasonably shall propose within three (3) Business
Days of the delivery of such copies to the Initial Purchaser and such
counsel.  Each Registration Statement
that is or is required by this Agreement to be filed with the SEC shall be
filed on Form S-3 (or a prospectus supplement to a Form S-3) if the
Company is then eligible to use Form S-3 for the purposes contemplated by
this Agreement, or, if the Company is not then so eligible to use Form S-3,
shall be on Form S-11 or another appropriate form that is then available
to the Company for the purposes contemplated by this Agreement.  Each such Registration Statement that is
filed on Form S-3 shall constitute an Automatic Shelf Registration
Statement (or a prospectus supplement to an Automatic Shelf Registration
Statement) if the Company is then eligible to file an Automatic Shelf
Registration Statement on Form S-3 for the purposes contemplated by this
Agreement.  If, at the time any
Registration Statement is filed with the SEC, the Company is eligible, pursuant
to Rule 430B(b), to omit, from the prospectus that is filed as part of
such Registration Statement, the identities of selling securityholders and
amounts of securities to be registered on their behalf, then the Company shall
prepare and file such Registration Statement in a manner as to permit such
omission and to allow for the subsequent filing of such information in a
prospectus pursuant to Rule 424(b) in the manner contemplated by Rule 430B(d).

 

13

 

(b)           Prepare and file with
the SEC such amendments and post-effective amendments to each Shelf
Registration Statement as may be necessary to keep such Shelf Registration
Statement or Subsequent Shelf Registration Statement continuously effective
until the expiration of the Effectiveness Period; cause the related Prospectus
to be supplemented by any required Prospectus supplement and, as so
supplemented, to be filed with the SEC pursuant to Rule 424; and comply
with the provisions of the Securities Act applicable to it with respect to the
disposition of all securities covered by each Shelf Registration Statement
during the Effectiveness Period in accordance with the intended methods of
disposition by the sellers thereof set forth in the applicable Notice and
Questionnaires, the information from which is included in such Shelf
Registration Statement as so amended or such Prospectus as so supplemented.

 

(c)           If the third
anniversary of the initial effective date of any Registration Statement (within
the meaning of Rule 415(a)(5) under the Securities Act) shall occur
at any time during the Effectiveness Period, to the extent required pursuant to
Rule 415(a)(5) under the Securities Act in order to permit the
Registrable Securities to continue to be offered, file with the SEC, prior to
such third anniversary, a new Registration Statement or prospectus supplement
covering the Registrable Securities, in the manner contemplated by, and in
compliance with, Rule 415(a)(6), and use its commercially reasonable
efforts to cause such new Registration Statement to become effective or
prospectus supplement to be filed under the Act on or prior to such third
anniversary.  No later than twenty (20)
business days prior to the filing of such new Registration Statement or
prospectus supplement, the Company shall provide notice of the filing to Notice
Holders and request that each such Notice Holder deliver an updated Notice and
Questionnaire if such Notice Holder wants to be named as a Notice Holder in
such new Registration Statement or prospectus supplement.  Each such new Registration Statement or
prospectus supplement, if any, shall be deemed, for purposes of this Agreement,
to be a Subsequent Shelf Registration Statement.

 

(d)           If, at any time during
the Effectiveness Period, any Registration Statement shall cease to comply with
the requirements of the Securities Act with respect to eligibility for the use
of the form on which such Registration Statement was filed with the SEC (or if
such Registration Statement constituted an Automatic Shelf Registration
Statement at the time it was filed with the SEC and shall thereafter cease to
constitute an Automatic Shelf Registration Statement, or if the Company shall
have received, from the SEC, a notice, pursuant to Rule 401(g)(2) under
the Securities Act, of objection to the use of the form on which such
Registration Statement was filed with the SEC), (i) promptly give notice
to the Notice Holders and counsel for the Holders and for the Initial Purchaser
(or, if applicable, a single separate counsel for the Holders) and to the
Initial Purchaser and (ii) promptly file with the SEC a new Registration
Statement under the Securities Act, or a post-effective amendment to such
Registration Statement, to effect compliance with the Securities Act.  The Company shall use its commercially
reasonable efforts to cause such new Registration Statement or post-effective
amendment to become effective under the Securities Act as soon as practicable,
but subject to compliance with Section 3(a) hereof, and shall
promptly give notice of such effectiveness to the Notice Holders and counsel
for the Holders and for the Initial Purchaser (or, if applicable, a single
separate counsel for the Holders) and to the Initial Purchaser.  Each such new Registration Statement, if any,
shall be deemed, for purposes of this Agreement, to be a Subsequent Shelf
Registration Statement.

 

14

 

(e)           As promptly as
practicable during the Effectiveness Period, give notice to the Notice Holders,
the Initial Purchaser and counsel for the Holders and for the Initial Purchaser
(or, if applicable, a single separate counsel for the Holders):

 

(i)            when
any Prospectus, Prospectus supplement, Shelf Registration Statement or
post-effective amendment to a Shelf Registration Statement has been filed with
the SEC and, with respect to a Shelf Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act.

 

(ii)           of
any request, following the effectiveness of a Shelf Registration Statement
under the Securities Act, by the SEC or any other governmental authority for
amendments or supplements to such Shelf Registration Statement or the related
Prospectus or for additional information,

 

(iii)          of
the issuance by the SEC or any other governmental authority of any stop order
suspending the effectiveness of any Shelf Registration Statement or the
initiation or threatening of any proceedings for that purpose,

 

(iv)          of
the receipt by the Company or its legal counsel of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose,

 

(v)           after
the effective date of any Shelf Registration Statement filed with the SEC
pursuant to this Agreement, of the occurrence of (but not the nature of or
details concerning) a Material Event, and

 

(vi)          of
the determination by the Company that a post-effective amendment to a Shelf
Registration Statement or a Subsequent Shelf Registration Statement will be
filed with the SEC, which notice may, at the discretion of the Company (or as
required pursuant to Section 3(k)), state that it constitutes a Suspension
Notice, in which event the provisions of Section 3(k) shall apply.

 

(f)            Use its commercially
reasonable efforts to (i) prevent the issuance of, and, if issued, to
obtain the withdrawal of, any order suspending the effectiveness of a Shelf
Registration Statement and (ii) obtain the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction in which they have been qualified for
sale, in either case at the earliest practicable moment, and provide prompt
notice to each Notice Holder and the Initial Purchaser, and counsel for the
Holders and for the Initial Purchaser (or, if applicable, a single separate
counsel for the Holders), of the withdrawal or lifting of any such order or
suspension.

 

(g)           If requested in
writing by the Initial Purchaser or any Notice Holder, as promptly as
practicable incorporate in a Prospectus supplement or a post-effective
amendment to a Shelf Registration Statement such information as counsel for the
Holders and for the Initial Purchaser (or, if applicable, a single separate
counsel for the Holders) shall determine to be required to be included therein
by applicable law and make any required filings of such 

 

15

 

Prospectus
supplement or such post-effective amendment; provided, however, that the
Company shall not be required to take any actions under this Section 3(g) that,
in the written opinion of counsel for the Company, are not required to be
included therein by applicable law.

 

(h)           As promptly as
practicable, furnish to each Notice Holder (but only upon such Notice Holder’s
request), counsel for the Holders (but only upon such counsel’s request) and
for the Initial Purchaser (or, if applicable, a single separate counsel for the
Holders) and the Initial Purchaser, without charge, at least one (1) conformed
copy of each Shelf Registration Statement and each amendment thereto, including
financial statements but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits (unless
requested in writing to the Company by such Notice Holder, such counsel or the
Initial Purchaser).

 

(i)            During the
Effectiveness Period, deliver to each Notice Holder, counsel for the Holders
and for the Initial Purchaser (or, if applicable, a single separate counsel for
the Holders) and the Initial Purchaser, in connection with any sale of
Registrable Securities pursuant to a Shelf Registration Statement, without
charge, as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such Notice Holder or the Initial Purchaser may
reasonably request; and the Company hereby consents (except during such periods
that a Suspension Notice is outstanding and has not been revoked) to the use of
such Prospectus and each amendment or supplement thereto by each Notice Holder,
in connection with any offering and sale of the Registrable Securities covered
by such Prospectus or any amendment or supplement thereto in the manner set
forth therein.

 

(j)            Prior to any public
offering of the Registrable Securities pursuant to a Shelf Registration
Statement, use its commercially reasonable efforts to register or qualify or
cooperate with the Notice Holders in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Notice Holder reasonably
requests in writing (which request may be included in the Notice and
Questionnaire); use its commercially reasonable efforts to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period in connection with such Notice Holder’s offer and sale of
Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant Shelf
Registration Statement and the related Prospectus; provided, however, that the
Company will not be required to (i) qualify generally to do business in
any jurisdiction where it is not then so qualified; (ii) take any action
that would subject it to general service of process in suits, other than those
arising out of the offering or sale of Registrable Securities or arising in
connection with this Agreement, in any jurisdiction where it is not now so
subject; or (iii) take any action that would subject it to taxation in any
jurisdiction where it is not then so subject.

 

(k)           Upon the occurrence or
existence of any pending corporate development, public filings with the SEC or
any other material event (a “Material Event”) that, in the 

 

16

 

reasonable
discretion of the Company, makes it appropriate to suspend the availability of
any Shelf Registration Statement and the related Prospectus:

 

(i)            subject
to the next sentence, as promptly as practicable, prepare and file, if
necessary pursuant to applicable law, a post-effective amendment to such Shelf
Registration Statement or a supplement to such Prospectus or any document
incorporated therein by reference or file any other required document that
would be incorporated by reference into such Shelf Registration Statement and
Prospectus so that such Shelf Registration Statement does not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, and so that such Prospectus does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Shelf Registration Statement, subject to the next
sentence, use its commercially reasonable efforts to cause it to become
effective under the Securities Act as promptly as practicable, and

 

(ii)           give
notice (without notice of the nature or details of such events) to the Notice
Holders and counsel for the Holders and for the Initial Purchaser (or, if
applicable, a single separate counsel for the Holders) and to the Initial
Purchaser that the availability of the Shelf Registration Statement is
suspended (a “Suspension Notice”) (and, upon receipt of any Suspension
Notice, each Notice Holder agrees (x) not to sell any Registrable
Securities pursuant to such Shelf Registration Statement until such Notice
Holder’s receipt of copies of the supplemented or amended Prospectus provided
for in clause (i) above or until such Notice Holder is advised in writing
by the Company that the Prospectus may be used and (y) to hold such
Suspension Notice in confidence).

 

The Company will use its commercially reasonable
efforts to ensure that the use of the Prospectus may be resumed as soon as, in
the reasonable discretion of the Company, such suspension is no longer
appropriate.  Except in the case of a
suspension of the availability of the Shelf Registration Statement and the
related Prospectus solely as the result of the filing of a post-effective
amendment or supplement to the Prospectus to add additional selling
securityholders therein, the period during which the availability of the Shelf
Registration Statement and any Prospectus may be suspended (the “Suspension
Period”) without the Company incurring any obligation to pay Additional
Interest pursuant to Section 2(e) shall not exceed forty-five (45)
days in the aggregate in any ninety (90) day period or ninety (90) days in the
aggregate in any three hundred and sixty (360) day period, provided, that, if
the event triggering the Suspension Period relates to a proposed or pending
material business transaction, the disclosure of which the board of directors
of the Company determines in good faith would be reasonably likely to impede the
ability to consummate the transaction or would otherwise be seriously
detrimental to the Company and its subsidiaries taken a whole, the Company may
extend the Suspension Period from forty-five (45) days to sixty (60) days in
any ninety (90) day period or from ninety (90) days to one hundred and twenty
(120) days in any three hundred and sixty (360) day period.  The 

 

17

 

Effectiveness Period shall be extended by the number
of days from and including the date of the giving of the Suspension Notice to
and including the date on which the Notice Holder received copies of the
supplemented or amended Prospectus provided in clause (i) above, or the
date on which it is advised in writing by the Company that the Prospectus may
be used and has received copies of any additional or supplemental filings that
are incorporated or deemed incorporated by reference in such Prospectus.

 

(l)            Make reasonably
available for inspection during normal business hours by Initial Purchasers for
the Notice Holders and any underwriters participating in any disposition
pursuant to any Shelf Registration Statement and any broker-dealers, attorneys
and accountants retained by such Notice Holders or any such underwriters, all
relevant financial and other records and pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
officers, directors and employees of the Company and its subsidiaries to make
available for inspection during normal business hours all relevant information
reasonably requested by such Initial Purchasers for the Notice Holders, or any
such underwriters, broker-dealers, attorneys or accountants in connection with
such disposition, in each case as is customary for similar “due diligence”
examinations; provided, however, that such persons shall, at the Company’s
request, first agree in writing with the Company that such person will not
engage in any transaction involving securities of the Company in violation of
applicable law (including, without limitation, federal securities laws
prohibiting trading on the basis of material non-public information) and that
any information that is reasonably and in good faith designated by the Company
in writing as confidential at the time of delivery of such information shall be
kept confidential by such persons and shall be used solely for the purposes of
exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of governmental or regulatory authorities, (ii) disclosure
of such information is required in the reasonable opinion of counsel by law
(including any disclosure requirements pursuant to federal securities laws in
connection with the filing of any Shelf Registration Statement or the use of
any Prospectus referred to in this Agreement) or necessary in the reasonable
opinion of counsel to defend or prosecute a claim brought against or by any
such persons (e.g., to establish a “due diligence” defense), (iii) such
information becomes generally available to the public other than as a result of
a disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other than the
Company and such source is not bound by a confidentiality agreement or is not
otherwise under a duty of trust to the Company; provided further, that the
foregoing inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of all the Notice Holders and the other
parties entitled thereto by the counsel, referred to in Section 5, for the
Holders in connection with Shelf Registration Statements.

 

In the event that an Initial Purchaser or Holder has been requested
pursuant to, or required by, applicable law, regulation, or valid legal process
to disclose any such information, such person will not disclose any information
to the extent permitted by applicable law until such person first notifies the
Company promptly so that the Company may (i) seek a protective order or
other appropriate remedy, (ii) consult with the party receiving such
request with respect to taking steps to resist or narrow the scope of such
request or (iii) in its sole discretion, waive compliance with the terms
of this paragraph (l) (and if the Company seeks such an order, such person
will use its commercially reasonable efforts to provide such cooperation as the
Company

 

18

 

shall
reasonably request); thereafter, disclosure of information may occur only as
allowed herein.  In the event that no
such protective order or other remedy is obtained, or that the Company waives
compliance with the terms of this Agreement, and that such person is
nonetheless legally compelled to disclose such information, such person will
furnish only that portion of the information that is legally required, based on
the advice of counsel, and will give the Company notice of the information to
be disclosed as far in advance of its disclosure as practicable in light of the
circumstances and exercise all reasonable efforts at the Company’s request and
expense to obtain reliable assurance that confidential treatment will be
accorded such information.

 

(m)          Comply in all material
respects with all applicable rules and regulations of the SEC; and make
generally available to its securityholders earnings statements (which need not
be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act), which statements shall cover a period of twelve (12)
months commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of each Shelf Registration Statement (within
the meaning of Rule 158(c) under the Securities Act), and which
statements shall be so made generally available to the Company’s
securityholders as follows: (i) with respect to an earnings statement
which will be contained in a report on Form 10-K (or any other form as may
then be available for such purpose), such earnings statement shall be made so
generally available no later than the due date by which the Company is
required, pursuant to the Exchange Act (subject to any applicable extensions
under Rule 12b-25 thereunder), to file such report with the SEC; and (ii) with
respect to an earnings statement which will be contained in any combination of
reports on Form 10-K or Form 10-Q (or any other form(s) as may
then be available for such purpose), such earnings statement shall be made so
generally available no later than the due date by which the Company is
required, pursuant to the Exchange Act (subject to any applicable extensions
under Rule 12b-25 thereunder), to file the last of such reports which
together constitute such earnings statement.

 

(n)           Cooperate with each
Notice Holder to facilitate the timely preparation and delivery of certificates
representing Registrable Securities sold pursuant to a Shelf Registration
Statement, which certificates shall not bear any restrictive legends, and cause
such Registrable Securities to be in such denominations as are permitted by the
Indenture and registered in such names as such Notice Holder may request in
writing at least three (3) Business Days prior to any sale of such
Registrable Securities.

 

(o)           Provide a CUSIP number
for all Registrable Securities covered by a Shelf Registration Statement not
later than the effective date of the Initial Shelf Registration Statement and
provide the Trustee and the transfer agent for the Common Stock with
certificates for the Registrable Securities that are in a form eligible for
deposit with The Depository Trust Company.

 

(p)           Cooperate and assist
in any filings required to be made with the Financial Industry Regulatory
Authority, Inc. (“FINRA”).

 

(q)           To the extent
reasonable and customary, cooperate with the requests, if any, of Holders of a
majority of the Registrable Securities being sold in order to expedite or
facilitate the disposition of such Registrable Securities.

 

19

 

(r)            Cause the Covered
Security to be listed on the New York Stock Exchange.

 

4.             Holder’s
Obligations.  Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities
pursuant to a Shelf Registration Statement or to receive a Prospectus relating
thereto, unless such Holder has furnished the Company with a Notice and
Questionnaire as required pursuant to Section 2(d) hereof (including
the information required to be included in such Notice and Questionnaire) and
the information set forth in the next sentence. Each Notice Holder agrees
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such
Notice Holder not misleading and any other information regarding such Notice
Holder and the distribution of such Registrable Securities as the Company may
from time to time reasonably request. Any sale of any Registrable Securities by
any Holder shall constitute a representation and warranty by such Holder that
the Holder Information of such Holder furnished in writing by or on behalf of
such Holder to the Company does not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
in such Holder Information, in the light of the circumstances under which they
were made, not misleading.  Furthermore,
if the Company is required to file a Subsequent Registration Statement upon
expiration of effectiveness of the Registration Statement naming a Notice
Holder, it shall be under no obligation to include such Notice Holder if such
Notice Holder does not deliver an updated Notice and Questionnaire upon request
by the Company therefore pursuant to Section 3(c) hereof.

 

5.             Registration
Expenses.  The Company shall bear all
fees and expenses incurred in connection with the performance by the Company of
its obligations under Section 2 and Section 3 of this Agreement
whether or not any of the Shelf Registration Statements are filed or declared
effective under the Securities Act. Such fees and expenses (“Registration
Expenses”) shall include, without limitation, (i) all registration and
filing fees and expenses (including, without limitation, fees and expenses (x) with
respect to filings required to be made with FINRA and (y) of compliance
with federal securities laws and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of counsel for the
Holders in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the Notice Holders of a
majority of the Registrable Securities being sold pursuant to a Shelf
Registration Statement may designate, subject to Section 3(j) hereof)),
(ii) all printing expenses (including, without limitation, expenses of
printing Prospectuses), (iii) all duplication and mailing expenses
relating to copies of any Shelf Registration Statement or Prospectus delivered
to any Holders hereunder, (iv) all fees and disbursements of counsel for
the Company, (v) all fees and disbursements of the Trustee and its counsel
and of the registrar and transfer agent for the Common Stock and (vi) Securities
Act liability insurance obtained by the Company in its sole discretion. In
addition, the Company shall pay the internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the fees and expenses incurred in connection with
the listing by the Company of the Registrable Securities on any securities
exchange or quotation system on which similar securities of the Company are
then listed and the fees and expenses of any person, including, without
limitation, special experts, retained by the Company.  If the Company shall, pursuant to Rule 456(b),
defer payment of any registration fees due under the Securities Act with
respect to any Registration Statement, the Company agrees that it shall pay the
fees applicable to such Registration Statement within the

 

20

 

time
required by Rule 456(b)(1)(i) (without reliance on the proviso to Rule 456(b)(1)(i))
and in compliance with Rule 456(b) and Rule 457(r).  In addition and notwithstanding the
foregoing, the Company shall pay the reasonable fees and disbursements of only
one counsel for the Holders in connection with the Shelf Registration
Statement.

 

6.             Indemnification,
Contribution.

 

(a)           The Company and the
Issuer agree to indemnify, defend and hold harmless the Initial Purchaser, each
Holder, each person (a “Controlling Person”), if any, who controls the
Initial Purchaser or any Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the respective
officers, directors, partners, employees, representatives and agents of the Initial
Purchaser, the Holders or any Controlling Person (each, a “Holder
Indemnified Party”), from and against any loss, damage, expense, liability,
claim or any actions in respect thereof (including the reasonable cost of
investigation) which such Holder Indemnified Party may incur or become subject
to under the Securities Act, the Exchange Act or otherwise, insofar as such
loss, damage, expense, liability, claim or action arises out of or is based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement or Prospectus, including any
document incorporated by reference therein, or in any amendment or supplement
thereto or in any preliminary prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
any Shelf Registration Statement or in any amendment or supplement thereto or
necessary to make the statements therein not misleading, or arises out of or is
based upon any omission or alleged omission to state a material fact necessary
in order to make the statements made in any Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, in the light of the
circumstances under which such statements were made, not misleading, and the
Company and the Issuer shall reimburse, as incurred, the Holder Indemnified
Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, damage, expense,
liability, claim or action in respect thereof; provided, however,
that the Company and the Issuer shall not be required to provide any
indemnification pursuant to this Section 6(a) in any such case
insofar as any such loss, damage, expense, liability, claim or action arises
out of or is based upon (i) any untrue statement or omission or alleged
untrue statement or omission of a material fact contained in, or omitted from,
and in conformity with information furnished in writing by or on behalf of an
Initial Purchaser or a Holder to the Company expressly for use in, any Shelf
Registration Statement or any Prospectus or (ii) a disposition, pursuant
to a Shelf Registration Statement, of Registrable Securities by a Holder
Indemnified Party during a Suspension Period, provided such Holder Indemnified
Party received, prior to such disposition, a Suspension Notice with respect to
such Suspension Period; provided further, however, that this indemnity
agreement will be in addition to any liability which the Company and the Issuer
may otherwise have to such Holder Indemnified Party.

 

(b)           Each Holder, severally
and not jointly, agrees to indemnify, defend and hold harmless the Company, the
Issuer, each of their respective directors, officers, employees,
representatives, agents and any person who controls the Company or the Issuer
within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (each, a “Company Indemnified Party”) from and
against any loss, damage, expense, liability, claim or any actions in respect
thereof (including the reasonable cost of investigation) which such 

 

21

 

Company
Indemnified Party may incur or become subject to under the Securities Act, the
Exchange Act or otherwise, insofar as such loss, damage, expense, liability,
claim or action arises out of or is based upon (A) any untrue statement or
alleged untrue statement of a material fact contained in, and in conformity
with information (the “Holder Information”) furnished in writing by or
on behalf of such Holder to the Company expressly for use in, any Shelf
Registration Statement or Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
Holder Information, which material fact was not contained in such Holder
Information, and which material fact was either required to be stated in any
Shelf Registration Statement or Prospectus or necessary to make such Holder
Information not misleading, (B) a sale, by such Holder pursuant to a Shelf
Registration Statement in or with respect to which such Holder is named as a
selling securityholder, of Registrable Securities during a Suspension Period,
provided that the Company shall have theretofore provided such Holder a Suspension
Notice in accordance with Section 3(k), or (C) a public sale of
Registrable Securities by such Holder without delivery, if required by the
Securities Act, of the most recent applicable Prospectus provided to such
Holder by the Company pursuant to Section 3(i) or Section 2(d)(i)(C),
provided the Company shall have theretofore provided such Holder with copies of
such Prospectus in a timely manner so as to permit such delivery; and, subject
to the limitation set forth in the immediately preceding clause, each Holder
shall reimburse, as incurred, the Company and the Issuer for any legal or other
expenses reasonably incurred by the Company and the Issuer or any such
controlling person in connection with investigating or defending any loss,
damage, expense, liability, claim or action in respect thereof.  This indemnity agreement will be in addition
to any liability which such Holder may otherwise have to the Company and the
Issuer or any of its controlling persons. 
In no event shall the liability of any selling Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the
proceeds received by such Holder upon the sale, pursuant to the Shelf
Registration Statement, of the Registrable Securities giving rise to such
indemnification obligation.

 

(c)           If any action, suit or
proceeding (each, a “Proceeding”) is brought against any person in
respect of which indemnity may be sought pursuant to either Section 6(a) or
Section 6(b), such person (the “Indemnified Party”) shall promptly
notify the person against whom such indemnity may be sought (the “Indemnifying
Party”) in writing of the institution of such Proceeding and the
Indemnifying Party shall assume the defense of such Proceeding; provided,
however, that the omission to so notify such Indemnifying Party shall
not relieve such Indemnifying Party from any liability which it may have to
such Indemnified Party or otherwise unless and to the extent such failure to
give notice results in the loss or compromise of any material rights or defenses
of the Indemnifying Party.  The
Indemnifying Party shall be entitled to appoint counsel (including local
counsel) of the Indemnifying Party’s choice at the Indemnifying Party’s expense
to represent the Indemnified Party in any action for which indemnification is
sought (in which case the Indemnifying Party shall not thereafter be
responsible for the fees and expenses of any separate counsel, other than local
counsel if not appointed by the Indemnifying Party, retained by the Indemnified
Party or parties except as set forth below); provided, however,
that such counsel shall be reasonably satisfactory to the Indemnified Party.
Notwithstanding the Indemnifying Party’s election to appoint counsel (including
local counsel) to represent the Indemnified Party in an action, the Indemnified
Party shall have the right to employ separate counsel (including local
counsel), and the Indemnifying Party shall bear the reasonable fees, costs and
expenses of such separate counsel (it being 

 

22

 

understood,
however, that such Indemnifying Party shall not be liable for the expenses of
more than one separate counsel in any one Proceeding or series of related
Proceedings together with reasonably necessary local counsel representing the
Indemnified Parties who are parties to such action) if (i) the use of
counsel chosen by the Indemnifying Party to represent the Indemnified Party
would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be legal defenses available to it
and/or other Indemnified Parties that are different from or additional to those
available to the Indemnifying Party; (iii) the Indemnifying Party shall
not have employed counsel satisfactory to the Indemnified Party to represent
the Indemnified Party within sixty (60) days after notice of the institution of
such action; or (iv) the Indemnifying Party shall authorize the
Indemnified Party to employ separate counsel at the expense of the Indemnifying
Party. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened action in
respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party unless
such settlement (i) includes an unconditional release of such Indemnified
Party from all liability on any claims that are the subject matter of such
action, (ii) does not include a statement as to, or an admission of,
fault, culpability or a failure to act by or on behalf of an Indemnified Party,
and (iii) does not include any undertaking or obligation to act or to
refrain from acting by the Indemnified Party.

 

(d)           If the indemnification
provided for in this Section 6 is unavailable to an Indemnified Party
under Section 6(a) or Section 6(b), or insufficient to hold such
Indemnified Party harmless, in respect of any losses, damages, expenses,
liabilities, claims or actions referred to therein, then each applicable
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, damages, expenses, liabilities, claims or actions (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Issuer, on the one hand, and by the Holders or the Initial
Purchaser, on the other hand, from the offering of the Registrable Securities
or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Issuer, on the one hand, and of the
Holders or the Initial Purchaser, on the other hand, in connection with the
statements or omissions which resulted in such losses, damages, expenses,
liabilities, claims or actions, as well as any other relevant equitable
considerations.  The relative fault of
the Company and the Issuer, on the one hand, and of the Holders or the Initial
Purchaser, on the other hand, shall be determined by reference to, among other
things, whether the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission relates to information supplied by the
Company and the Issuer or by the Holders or the Initial Purchaser and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. 
The amount paid or payable by a party as a result of the losses,
damages, expenses, liabilities, claims and actions referred to above shall be
deemed to include any reasonable legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any
Proceeding.

 

(e)           The Company, the
Issuer, the Holders and the Initial Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 6 were determined
by 

 

23

 

pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in Section 6(d) above.  Notwithstanding the provisions of this Section 6,
no Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities giving rise to such
contribution obligation and sold by such Holder were offered to the public
exceeds the amount of any damages which it has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
The Holders’ respective obligations to contribute pursuant to this Section 6
are several in proportion to the respective amount of Registrable Securities
they have sold pursuant to a Shelf Registration Statement, and not joint.  The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

 

(f)            The indemnity and
contribution provisions contained in this Section 6 shall remain operative
and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Holder or
the Initial Purchaser or any person controlling any Holder or Initial
Purchaser, or the Company or the Issuer, or the Company’s or the Issuer’s
officers or directors or any person controlling the Company or the Issuer and (iii) the
sale of any Registrable Security by any Holder.

 

7.             Information
Requirements.

 

(a)           The Company covenants
that, if at any time before the end of the Effectiveness Period it is not
subject to the reporting requirements of the Exchange Act, it will cooperate
with any Holder of Registrable Securities and take such further action as any
Holder of Registrable Securities may reasonably request in writing (including,
without limitation, making such representations as any such Holder may
reasonably request), all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitations of the exemptions provided by Rule 144,
Rule 144A and Regulation S under the Securities Act and customarily taken
in connection with sales pursuant to such exemptions. Upon the written request
of any Holder, the Company shall deliver to such Holder a written statement as
to whether the Company has complied with the reporting requirements of the
Exchange Act, unless such a statement has been included in the Company’s most
recent report filed with the SEC pursuant to Section 13 or Section 15(d) of
Exchange Act. Notwithstanding the foregoing, nothing in this Section 7
shall be deemed to require the Company to register any of its securities (other
than the Common Stock) under any section of the Exchange Act.

 

(b)           The Company shall file
the reports required to be filed by it under the Exchange Act and shall comply
with all other requirements set forth in the instructions to Form S-3 in
order to allow the Company to be eligible to file registration statements on Form S-3.  The Company shall use its commercially
reasonable efforts to remain eligible, pursuant to Rule 430B(b), to omit,
from the prospectus that is filed as part of a Registration Statement, the
identities of selling securityholders and amounts of securities to be
registered on their behalf.

 

24

 

8.             Miscellaneous.

 

(a)           Remedies.  The Company, the Issuer and the Guarantor
acknowledge and agree that any failure by the Company, the Issuer or the
Guarantor to comply with their obligations under this Agreement may result in
material irreparable injury to the Initial Purchaser and the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchaser or any Holder may obtain such relief as may be required
to specifically enforce the Company’s, the Issuer’s and the Guarantor’s
obligations under this Agreement.  The
Company, the Issuer and the Guarantor further agree to waive the defense in any
action for specific performance that a remedy at law would be adequate.  Notwithstanding the foregoing two sentences,
this Section 8(a) shall not apply to the subject matter referred to
in and contemplated by Section 2(e).

 

(b)           No Conflicting
Agreements.  The Company, the Issuer
and the Guarantor are not, as of the date hereof, a party to, nor shall they,
on or after the date of this Agreement, enter into, any agreement with respect
to the Company’s securities that conflicts with the rights granted to the
Holders in this Agreement.  The Company,
the Issuer and the Guarantor represent and warrant that the rights granted to
the Holders hereunder do not in any way conflict with the rights granted to the
holders of the Company’s, the Issuer’s and the Guarantor’s securities under any
other agreements.  The Company, the
Issuer and the Guarantor will not take any action with respect to the
Registrable Securities which would adversely affect the ability of any of the
Holders to include such Registrable Securities in a registration undertaken
pursuant to this Agreement.  The Company
represents and covenants that it has not granted, and shall not grant, to any
of its securityholders (other than the Holders in such capacity) the right to
include any of the Company’s securities in any Shelf Registration Statement
filed pursuant to this Agreement; provided that nothing shall prevent
the use of a Shelf Registration Statement by the Company to register such other
transactions as may be permitted under the Securities Act.

 

(c)           Amendments and
Waivers.  The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Holders of a majority of outstanding Registrable Securities; provided,
however, that, no consent is necessary from any of the Holders in the
event that this Agreement is amended, modified or supplemented for the purpose
of curing any ambiguity, defect or inconsistency that does not adversely affect
the rights of any Holders. 
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Registrable Securities may be
given by Holders of at least a majority of the Registrable Securities being
sold by such Holders pursuant to such Shelf Registration Statement; provided,
however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.  Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant
to this Section 8(c), whether or not any notice, writing or marking
indicating such amendment, 

 

25

 

modification,
supplement, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.

 

(d)           Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery, by
telecopier, by courier guaranteeing overnight delivery or by first-class mail,
return receipt requested, and shall be deemed given (A) when made, if made
by hand delivery, (B) upon confirmation, if made by telecopier, (C) one
(1) Business Day after being deposited with such courier, if made by
overnight courier or (D) on the date indicated on the notice of receipt,
if made by first-class mail, to the parties as follows:

 

(i)            if
to a Holder, at the most current address given by such Holder to the Company in
a Notice and Questionnaire or any amendment thereto or, at the Company’s
option, pursuant to the Legal Notice System on DTC, or successor system
thereto;

 

(ii)           if
to the Company, the Issuer or the Guarantor, to:

 

SL Green Realty Corp.

420 Lexington Avenue

New York, NY 10170

Telecopy No.: (646) 293-1356

Attention: Marc Holliday and Andrew Levine

 

(iii)          if
to the Initial Purchaser, to:

 

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Telecopy No.: 
(212) 816-7912

Attention: General Counsel

 

or to such other address as such person may have
furnished to the other persons identified in this Section 8(d) in
writing in accordance herewith.

 

(e)           Majority of
Registrable Securities.  For purposes
of determining what constitutes Holders of a majority of Registrable
Securities, as referred to in this Agreement, a majority shall constitute a
majority in aggregate principal amount of Registrable Securities; provided
that, for such purposes, a Holder of shares of Common Stock that constitute
Registrable Securities and issued upon exchange of the Notes shall be deemed to
hold an aggregate principal amount of the Notes (in addition to the principal
amount of the Notes then held by such Holder, if any) so exchanged.

 

(f)            Approval of
Holders.  Whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by the Company or its “affiliates”
(as such term is defined in Rule 405 under the Securities Act) (other than
the Initial Purchaser or subsequent Holders of Registrable Securities, if the
Initial Purchaser or such subsequent Holders is deemed to be such affiliates
solely by reason of their 

 

26

 

holdings
of such Registrable Securities) shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.

 

(g)           Third Party
Beneficiaries.  The Holders shall be
third party beneficiaries to the agreements made hereunder between the Company,
the Issuer and the Guarantor, on the one hand, and the Initial Purchaser, on
the other hand, and shall have the right to enforce such agreements directly to
the extent they may deem such enforcement necessary or advisable to protect
their rights or the rights of Holders hereunder. The Trustee shall be entitled
to the rights granted to it pursuant to this Agreement.

 

(h)           Successors and
Assigns.  Any person who purchases
any Notes or Covered Security from the Initial Purchaser or from any Holder
shall be deemed, for purposes of this Agreement, to be an assignee of the
Initial Purchaser or such Holder, as the case may be.  This Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of each of the
parties hereto and shall inure to the benefit of and be binding upon each
Holder of any Notes or Covered Security.

 

(i)            Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.

 

(j)            Headings.  The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

 

(k)           Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF.

 

(l)            Severability.  If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction, it being intended that all of the rights
and privileges of the parties shall be enforceable to the fullest extent
permitted by law.

 

(m)          Entire Agreement.  This Agreement is intended by the parties
hereto as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by the Company with respect to the Registrable
Securities. Except as provided in the Purchase Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities.  This Agreement supersedes all prior
agreements and undertakings among the parties with respect to 

 

27

 

such
registration rights.  No party hereto
shall have any rights, duties or obligations other than those specifically set
forth in this Agreement.

 

(n)           Termination.  This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Section 4, Section 5
or Section 6 hereof and the obligations to make payments of and provide
for Additional Interest under Section 2(e) hereof to the extent such
Additional Interest accrues prior to the end of the Effectiveness Period and to
the extent any overdue Additional Interest accrues in accordance with the last
paragraph of such Section 2(e), each of which shall remain in effect in
accordance with its terms.

 

(o)           Submission to
Jurisdiction.  Except as set forth
below, no claim, counterclaim or dispute of any kind or nature whatsoever
arising out of or in any way relating to this Agreement (“Claim”) may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company, the Issuer
and the Guarantor hereby consents to the jurisdiction of such courts and
personal service with respect thereto. 
The Company, the Issuer and the Guarantor hereby consents to personal
jurisdiction, service and venue in any court in which any Claim arising out of
or in any way relating to this Agreement is brought by any third party against
the Initial Purchaser.  THE COMPANY, THE
ISSUER AND THE GUARANTOR HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
PROCEEDING (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) IN ANY WAY ARISING
OUT OF OR RELATING TO THIS AGREEMENT. 
The Company, the Issuer and the Guarantor agree that a final judgment in
any such Proceeding brought in any such court shall be conclusive and binding
upon the Company, the Issuer or the Guarantor and may be enforced in any other
courts in the jurisdiction of which the Company, the Issuer or the Guarantor is
or may be subject, by suit upon such judgment.

 

The Remainder of This Page Intentionally
Left Blank; Signature Page Follows

 

28

 

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  SL GREEN REALTY CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Andrew S. Levine

  
	
   

  	
   

  	
  Name: Andrew S. Levine

  
	
   

  	
   

  	
  Title: Executive Vice President, Chief Legal
  Officer, General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  SL GREEN OPERATING PARTNERSHIP, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  SL Green Realty Corp.

  
	
   

  	
   

  	
  Its: General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Levine

  
	
   

  	
   

  	
   

  	
  Name: Andrew S. Levine

  
	
   

  	
   

  	
   

  	
  Title: Executive Vice President, Chief Legal
  Officer, General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RECKSON OPERATING PARTNERSHIP, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Wyoming Acquisition GP LLC

  
	
   

  	
   

  	
  Its: General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Andrew S. Levine

  
	
   

  	
   

  	
   

  	
  Name: Andrew S. Levine

  
	
   

  	
   

  	
   

  	
  Title: Director

  
	
   

  
	
  Accepted and agreed to as of the

  
	
  date first above written, on behalf

  
	
  of itself:

  
	
   

  
	
  CITIGROUP GLOBAL MARKETS INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/
  John Wieker

  	
   

  
	
   

  	
  Name: John Wieker

  	
   

  
	
   

  	
  Title: Vice President

  	
   

  
							

 

29Exhibit
4.2

 

	
  

  	
   

  	
  CLIFFORD CHANCE LLP

  

 

 

 

DIAGEO 2010 SHARESAVE PLAN

 

 

Approved by shareholders of
the Company on 14 October 2010

 

Adopted by the board of the
Company on 14 August 2010

 

HMRC Reference: SRS105709

 

The Plan is a discretionary benefit offered by
the Diageo group for the benefit of its employees.  Its main purpose is to increase the interest
of the employees in the Company’s long-term business goals and performance
through share ownership.  The Plan is an
incentive for the employees’ future performance and commitment to the goals of
the Diageo group.

 

Shares purchased under the Plan and any gains
made by exercising options granted under the Plan are not part of salary for
any purpose (except to any extent required by statute).

 

The Plan is being offered for the first time in
2010 and the Board shall have the right to decide, in its sole discretion,
whether or not further options will be offered in the future and to which
employees the Plan will be extended.

 

Participating in the Plan is an investment
opportunity distinct from any employment contract.  Participation in the Plan entails the risk
associated with an investment.  An
individual who participates in the Plan is treated as being aware of such risks
and accepts such risks of his own free will.

 

The detailed rules for the Plan are set
out in this document.

 

 

CONTENTS

 

	
  Rule

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Definitions
  And Interpretation

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Eligibility

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Invitations

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Applications

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Scaling
  Back

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Option
  Price

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Grant Of
  Options

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Limits

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Exercise
  Of Options

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Leavers
  And Deceased Participants

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Takeovers
  And Other Corporate Events

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Adjustment
  Of Options

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Alterations

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Miscellaneous

  	
   

  	
  17

  

 

1

 

1.                                 DEFINITIONS
AND INTERPRETATION

 

1.1                           In this Plan, unless the context otherwise requires:

 

“Associated
Company” means an associated company of the Company as described in
paragraph 47 of Schedule 3 except for the purpose of Rule 10.7 (Meaning of ceasing employment) when that
expression shall have the meaning described in paragraph 35 of Schedule 3;

 

“Board”
means the board of directors of the Company or a duly authorised committee of
the Board or a duly authorised person;

 

“Bonus Date”
means the date on which a bonus is payable under the relevant Savings Contract
and from which date an Option is normally exercisable;

 

“Company”
means Diageo plc (registered in England and Wales with registered number
23307);

 

“Contribution”
means a contribution under a Savings Contract;

 

“Control”
means control within the meaning of section 719 of ITEPA;

 

“dealing day”
means a dealing day of either the London Stock Exchange or any other securities
exchange on which Shares are quoted and from which the Option Price is
determined;

 

“Eligible
Employee” means a person who satisfies the conditions described in Rule 2.1
(General rule on eligibility);

 

“Grant Date”
means the date on which an Option is granted;

 

“HMRC”
means HM Revenue and Customs;

 

“Invitation”
means an invitation to apply for an Option as described in Rule 3 (Invitations);

 

“ITEPA”
means the Income Tax (Earnings and Pensions) Act 2003;

 

“Listing
Rules” means the Listing Rules published by the UKLA;

 

“London Stock
Exchange” means London Stock Exchange plc;

 

“Option”
means a right to acquire Shares granted under the Plan;

 

“Option Price”
means the price at which Shares may be acquired on the exercise of an Option as
determined under Rule 6 (Option Price);

 

“Participant”
means a person who holds an Option including his personal representatives;

 

1

 

“Participating
Company” means:

 

(a)                                      the Company; and

 

(b)                                     any Subsidiary designated by the Board;

 

“Plan” means the Diageo 2010 Sharesave Plan  as amended from time to time;

 

“Rule”
means a rule of the Plan;

 

“Savings
Contract” means an agreement under a certified SAYE savings
arrangement, within the meaning of paragraph 48(1) of Schedule 3, which
has been approved by HMRC for the purposes of Schedule 3;

 

“Schedule 3”
means Schedule 3 to ITEPA;

 

“Shares”
means fully paid ordinary shares in the capital of the Company which satisfy
the requirements of paragraphs 18 to 22 of Schedule 3, unless Rule 9.11 (Shares ceasing to satisfy Schedule 3 requirements)
applies;

 

“Specified
Age” means 60 years old;

 

“Subsidiary”
means a body corporate which is a subsidiary (within the meaning of section
1159 of the Companies Act 2006) of the Company and of which the Company has
Control;

 

“UKLA”
means the United Kingdom Listing Authority;

 

and expressions not defined in this Plan have
the same meanings as they have in Schedule 3.

 

1.2                           Any reference in the Plan to any enactment includes a reference to that
enactment as from time to time modified, extended or re-enacted.

 

1.3                           Words of the feminine gender shall include the masculine and vice versa
and words in the singular shall include the plural and vice versa unless, in
either case, the context otherwise requires or it is otherwise stated.

 

1.4                           Expressions in italics and headings are for guidance only and do not
form part of the Plan.

 

2.                                 ELIGIBILITY

 

2.1                           General rule on eligibility

 

An individual is eligible to be invited to
apply for an Option only if:

 

(a)                                      he is either an employee (but not a director) of a Participating Company
or a director of a Participating Company who is required to work for the
company for at least 25 hours a week (excluding meal breaks);

 

2

 

(b)                                     he either satisfies the conditions in Rule 2.2 (Individuals eligible) or is nominated by
the Board for this purpose; and

 

(c)                                      he is not excluded from being granted an Option because of paragraph 11
of Schedule 3 (Material interest in a close
company).

 

2.2                           Individuals eligible

 

The conditions referred to in Rule 2.1(b) are
that:

 

(a)                                      the individual shall have a qualifying period of continuous service (if
any) with the Company or any Subsidiary from time to time as the Board may
decide, such period not to exceed five years before the Grant Date; and

 

(b)                                     the individual’s earnings from the office or employment referred to in Rule 2.1(a) meet
(or would meet if there were any) the requirements set out in paragraphs 6(2)(c) and
(6)(2)(ca) of Schedule 3.

 

3.                                 INVITATIONS

 

3.1                           Issuing Invitations

 

The Board shall decide if and when Invitations
will be issued.  If the Board decides to
issue Invitations then it must issue an Invitation to each Eligible Employee.

 

3.2                           Timing of Invitations

 

Invitations may be issued at any time but
before the Board decides when to issue Invitations it must have regard both to
when the Option Price may be determined under Rule 6.1 (Option Price — timing of determination)
and any regulatory restrictions on both the issuing of such Invitations and any
subsequent grant of Options.

 

3.3                           Content of Invitations

 

Each Invitation will specify:

 

(a)                                      the date by which an application for an Option must be received (being
not less than 14 days after the date of the Invitation unless otherwise agreed
in advance with HMRC);

 

(b)                                     the Option Price (or how the Option Price will be determined);

 

(c)                                      any choice as to the term of the Option in terms of the number of
monthly contributions payable;

 

(d)                                     the minimum monthly Contribution which must not be less than £5 (or as
otherwise stated in the relevant Savings Contract) nor more than £10;

 

(e)                                      the maximum monthly Contribution, which must be not more than £250 or as
otherwise specified in paragraph 25 of Schedule 3; and

 

3

 

(f)                                        if the bonus payable under a Savings Contract shall not be taken into
account in determining the number of Shares made subject to an Option, then
that fact.

 

4.                                 APPLICATIONS

 

4.1                           Form of application

 

An application for an Option shall be
accompanied by an application for a Savings Contract in which the Eligible
Employee must state:

 

(a)                                      the Contribution he proposes to make;

 

(b)                                     that his proposed Contribution, when added to any other Contribution he
makes under any other Savings Contract, will not exceed the maximum permitted
under Schedule 3;

 

(c)                                      if he has a choice of Savings Contract, the Savings Contract chosen; and

 

(d)                                     if he has a choice of repayment date, the repayment date chosen.

 

4.2                           Number of Shares under Option

 

An application for an Option shall be for an
Option to acquire the largest whole number of Shares which could be acquired at
the Option Price with an amount equal to the expected Contributions plus the
bonus payable under the relevant Savings Contract on the Bonus Date unless it
was specified in the Invitation that the bonus would not be included for this
purpose.

 

4.3                           Effect of limits

 

If there are applications for Options over more
Shares than permitted under Rule 8 (Limits),
then each application for an Option and a related Savings Contract shall be
deemed to have been amended or withdrawn under Rule 5 (Scaling back).

 

If an Eligible Employee specifies in his
application for a Savings Contract a proposed Contribution which:

 

(a)                                      when added to any other Contribution he makes under any other Savings
Contract; and

 

(b)                                     if the Board, acting fairly and reasonably, decides, when added to any
other Contribution he made under any other Savings Contract which he has
cancelled without exercising the option to which such Savings Contract related

 

would exceed the maximum
permitted in the related Invitation then the Board is authorised to reduce the
proposed Contribution to the maximum amount permitted.

 

5.                                 SCALING
BACK

 

If valid applications for Options are received
for a total number of Shares which exceeds any maximum number permitted by the
Board or permitted by the limit in Rule

 

4

 

8 (Limits),
then the Board shall scale back the applications using one or more of the following
methods:

 

(a)                                      by reducing the proposed Contributions by the same proportion provided
that the reduced amount shall not be less than the minimum amount permitted
under the relevant Savings Contract;

 

(b)                                     where relevant, by treating any application for a longer Option term
under a Savings Contract as an application for a shorter Option term under that
Savings Contract;

 

(c)                                      by treating the expected repayment under a Savings Contract as not
including a bonus; or

 

(d)                                     by deeming each choice of a Savings Contract of a five year term as one
of a three year term.

 

If scaling back under the preceding provisions
of this Rule does not make available sufficient Shares to allow all
Eligible Employees who have made valid applications to be granted Options, the
Board may either select applications by lot or decide not to accept any
applications on that occasion.

 

6.                                 OPTION
PRICE

 

6.1                           Option Price — timing of
determination

 

The Option Price may only be determined by
reference to dealing days falling:

 

(a)                                      within the period of 6 weeks starting on:

 

(i)                        the
day on which the Plan is formally approved by HMRC under Schedule 3;

 

(ii)                     the
dealing day after the day on which the Company announces its results for any
period; or

 

(iii)                  any
day on which a new Savings Contract prospectus is announced or comes into
force; or

 

(b)                                     at any other time when the circumstances are considered by the Board to
be sufficiently exceptional to justify the issuing of Invitations.

 

6.2                           Option Price — method of
determination

 

The Board will determine the Option Price which
must be:

 

(a)                                      not manifestly less than 80 per cent (or such other percentage as may be
specified in paragraph 28(1) of Schedule 3) of the Market Value (as
defined below) of a Share on either:

 

(i)                        a
day immediately preceding the date on which Invitations are sent to Eligible
Employees; or

 

5

 

(ii)                     the
date specified in the Invitation; and

 

(b)                                     in the case of an Option to acquire Shares only by subscription, not
less than the nominal value of those Shares.

 

For the purpose of this Rule, “Market Value” on any day means:

 

(aa)                                if Shares are quoted in the London Stock Exchange Daily Official List:

 

(i)        the middle-market quotation of Shares (as derived from
that list) for that day;

 

(ii)       if the Board decides, the average of the middle-market
quotations of Shares (as derived from that list) over the period of 3 dealing
days ending on that day; or

 

(iii)      the middle-market quotation of the Shares (as derived
from that list) on such other dealing day or days as may be agreed in advance
with HMRC;

 

(bb)                              if paragraph (aa) above does not apply, the market value (within the
meaning of Part VIII of the Taxation of Chargeable Gains Act 1992) of a
Share as agreed in advance for the purposes of the Plan with HMRC Shares and
Assets Valuation.

 

7.                                 GRANT
OF OPTIONS

 

7.1                           Grant procedure

 

Subject to Rule 5 (Scaling back) and Rule 7.5 (Approvals and consents), the Board may
grant an Option to every individual who:

 

(a)                                      has submitted a valid application for an Option; and

 

(b)                                     is an Eligible Employee on the Grant Date.

 

7.2                           Restrictions on timing of grant of
Options

 

Options must be granted within 30 days (or 42
days if applications are scaled back) after the first day by reference to which
the Option Price is set under Rule 6.1 but:

 

(a)                                      not before the date on which HMRC approves the Plan for the purposes of
Schedule 3; nor

 

(b)                                     later than 13 October 2020 (that is, the expiry of the period of 10
years beginning with the date on which the Plan is approved by shareholders of
the Company).

 

7.3                           Method of satisfying options

 

Unless specified to the contrary by the Board
at the time of grant of an Option, an Option may be satisfied:

 

6

 

(a)                                      by the issue of new Shares; and/or

 

(b)                                     by the transfer of treasury Shares; and/or

 

(c)                                      by the transfer of Shares other than the transfer of treasury Shares.

 

The Board may decide to change the way in which
it is intended that an Option may be satisfied after it has been granted, having
regard to the provisions of Rule 8 (Limits).

 

7.4                           Non-transferability and bankruptcy

 

An Option granted to any person:

 

(a)                                      shall not be transferred, assigned, charged or otherwise disposed of
(except on his death to his personal representatives) and shall lapse
immediately on any attempt to do so; and

 

(b)                                     shall lapse immediately if he is declared bankrupt.

 

7.5                           Approvals and consents

 

The grant of any Option shall be subject to
obtaining any approval or consent required under the Listing Rules, any relevant
share dealing code of the Company, the City Code on Takeovers and Mergers, or
any other relevant UK or overseas regulation or enactment.

 

8.                                 LIMITS

 

8.1                           10 per cent. in 10 years limit

 

An Option shall not be granted in any calendar
year if, at the time of its proposed Grant Date, it would cause the number of
Shares allocated (as defined in Rule 8.2) in the period of 10 calendar
years ending with that year under the Plan and under any other employee share
plan adopted by the Company to exceed such number as represents 10 per cent. of
the ordinary share capital of the Company in issue at that time.

 

8.2                           Meaning of “allocated”

 

For the purpose of Rule 8.1:

 

(a)                                      Shares are allocated:

 

(i)                        when
an option, award or other contractual right to acquire unissued Shares or
treasury Shares is granted;

 

(ii)                     where
Shares are issued or treasury Shares are transferred otherwise than pursuant to
an option, award or other contractual right to acquire Shares, when those
Shares are issued or treasury Shares transferred;

 

7

 

(b)                                     the number of Shares allocated in respect of an option, award or other
contractual right shall be such number as the Board shall reasonably determine;

 

(c)                                      any Shares which have been issued or which may be issued (or any Shares
transferred out of treasury or which may be transferred out of treasury) to any
trustees to satisfy the exercise of any option, award or other contractual
right shall be treated as “allocated” unless they are already treated as allocated
under this Rule; and

 

(d)                                     for the avoidance of doubt, existing Shares other than treasury Shares
that are transferred or over which options, awards or other contractual rights
are granted shall not count as “allocated”.

 

8.3                           Post-grant events affecting numbers
of “allocated” Shares

 

For the purposes of Rule 8.2:

 

(a)                                      where

 

(i)                        any
option, award or other contractual right to acquire unissued Shares or treasury
Shares is released or lapses (whether in whole or in part); or

 

(ii)                     after
the grant of an option, award or other contractual right the Board determines
that:

 

(a)                                           where an amount is normally payable on its exercise it
shall be satisfied without such payment but instead by the payment of cash
equal to the gain made on its exercise; or

 

(b)                                          it shall be satisfied by the transfer of existing Shares (other than
Shares transferred out of treasury),

 

the unissued Shares or treasury Shares which
consequently cease to be subject to the option, award or other contractual
right shall not count as “allocated”; and

 

(b)                                     the number of Shares allocated in respect of an option, award or other
contractual right shall be such number as the Board shall reasonably determine
from time to time.

 

8.4                           Changes to investor guidelines

 

Treasury Shares shall cease to count as “allocated”
for the purpose of Rule 8.1 if institutional investor guidelines cease to
require such Shares to be so counted.

 

8.5                           Board Limit

 

The Board may impose a limit on the number of
Shares over which Options may be granted on any particular occasion.

 

8

 

9.           EXERCISE OF OPTIONS

 

9.1         Normal period for exercise

 

An Option may only be exercised during the
period beginning with the Bonus Date and ending 6 months after the Bonus Date
except where Rule 10 (Leavers and
deceased participants) or Rule 11 (Takeovers and other corporate events) applies.

 

9.2         Restriction on exercise: material
interest in a close company

 

Regardless of any other Rule, a Participant
shall not exercise an Option when he is ineligible to participate in the Plan
because of paragraph 11 of Schedule 3 (Material
interest in a close company).

 

9.3         Long stop date for exercise

 

Unless Rule 10.1 (Deceased Participants) applies, an Option
shall not be capable of exercise later than 6 months after the Bonus Date and,
if not exercised, it shall lapse at the end of that period.

 

9.4         No exercise on early cessation of
savings

 

Regardless of any other rule of this Plan,
where, before an Option has become capable of exercise, the Participant:

 

(a)                                      gives notice that he intends to stop paying Contributions under the
related Savings Contract;

 

(b)                                     is deemed under the terms of the Savings Contract to have given such
notice (for example, for missing more than 6
monthly Contributions); or

 

(c)                                      makes an application for repayment of the Contributions paid under it,

 

the Option shall not become exercisable and
shall immediately lapse.

 

9.5         Limitation on exercise

 

The amount paid for Shares on the exercise of
an Option shall not exceed the amount of the Contributions made under the
related Savings Contract before the date of exercise together with any interest
or bonus paid under that Savings Contract.

 

9.6         Option only exercisable once

 

An Option shall not be capable of being
exercised more than once.

 

9

 

9.7         Method of exercise

 

The exercise of any Option shall be effected in
the form and manner prescribed by the Board and subject to the prior approval
of HMRC. Unless the Board, acting fairly and reasonably, determines otherwise,
any notice of exercise shall take effect only when the Company receives it,
together with payment of the relevant aggregate Option Price.

 

9.8         Restriction on use of unissued Shares
or treasury Shares

 

No Shares may be issued or treasury Shares
transferred to satisfy the exercise of any Option to the extent that such issue
or transfer would cause the number of Shares allocated (as defined in Rule 8.2
(Meaning of “allocated”) and
adjusted under Rule 8.3 (Post-grant
events affecting numbers of “allocated” Shares)) to exceed the limit
in Rule 8.1 (10 per cent. in 10 years
limit) except where there is a variation of share capital of the
Company which results in the number of Shares so allocated exceeding such
limits solely by virtue of that variation.

 

9.9         Allotment and transfer timetable

 

Within 30 days after an Option has been
exercised by a Participant, the Board shall allot to him (or a nominee for him)
or, if appropriate, procure the transfer to him (or a nominee for him) of the
number of Shares in respect of which the Option has been exercised, provided
that the Board considers that the issue or transfer of those Shares would be
lawful in all relevant jurisdictions.

 

9.10       Share rights

 

All Shares allotted under the Plan shall rank
equally in all respects with Shares then in issue except for any rights
attaching to such Shares by reference to a record date before the date of the
allotment.

 

Where Shares are transferred under the Plan,
Participants will be entitled to any rights attaching to such Shares by
reference to a record date on or after the date of such transfer.

 

9.11       Shares ceasing to satisfy Schedule 3
requirements

 

If at any time the Shares cease to satisfy the
requirements of paragraphs 18 to 22 of Schedule 3 (Fully paid up, unrestricted, ordinary share capital):

 

(a)                                      an Option may be exercised regardless of that fact (but subject to the
other provisions of the Plan); and

 

(b)                                     the Company shall notify HMRC as soon as practicable (which may withdraw
its approval of the Plan under Schedule 3).

 

9.12       Restriction on exercise period:
participants who are subject to taxation in the USA

 

Regardless of any other Rule, in the case of an
Option granted to a Participant who is subject to taxation in the United States
of America, such Option shall be exercised (if at

 

10

 

all) by no later than 15 March in the year
following the calendar year in which it first becomes exercisable in accordance
with the provisions of the Plan.

 

10.         LEAVERS AND DECEASED PARTICIPANTS

 

10.1       Deceased Participants

 

If a Participant dies:

 

(a)                                      before the Bonus Date then his Option may be exercised by his personal
representatives during the period of 12 months after his death and, if not
exercised, it shall lapse at the end of that period; or

 

(b)                                     on or within 6 months after the Bonus Date then his Option may be
exercised by his personal representatives during the period of 12 months after
the Bonus Date and, if not exercised, it shall lapse at the end of that period.

 

10.2       Injury, disability, redundancy,
retirement and transfer out of the group

 

If a Participant ceases to be a director or
employee of a Participating Company by reason of:

 

(a)                                      injury, disability or redundancy (within the meaning of the Employment
Rights Act 1996); or

 

(b)                                     retirement on reaching the Specified Age or any other age at which he is
bound to retire under his contract of employment;

 

(c)                                      his office or employment being with a company of which the Company
ceases to have Control; or

 

(d)                                     the business or part of a business in which he works being transferred
to a person who is not an Associated Company nor a company of which the Company
has Control,

 

he may, subject to Rule 9.3
(Long stop date for exercise),
exercise his Option during the period of 6 months after such cessation and, if
not exercised it shall, subject to Rule 10.1 (Deceased Participants), lapse at the end of that period.

 

10.3       Cessation of employment in other
circumstances on or before third anniversary

 

If a Participant ceases to be a director or
employee of a Participating Company on or before the third anniversary of the
Grant Date for a reason other than one of those specified in Rule 10.1 (Deceased Participants) or Rule 10.2 (Injury, disability, redundancy, retirement and
transfer out of the group) then his Option shall lapse on such
cessation.

 

10.4       Cessation of employment after third
anniversary

 

If a Participant ceases to be a director or
employee of a Participating Company after the third anniversary of the Grant
Date for any reason (other than dismissal for

 

11

 

misconduct) he may, subject to Rule 9.3 (Long stop date for exercise), exercise his
Option during the period of 6 months following such cessation and if not
exercised it shall, subject to Rule 10.1 (Deceased
Participants), lapse at the end of that period.

 

10.5       Employment by Associated Company

 

If, on the Bonus Date, a Participant holds an
office or employment with a company which is not a Participating Company but
which is an Associated Company or a company of which the Company has Control,
he may exercise his Option on and within 6 months after the Bonus Date and if
not exercised it shall, subject to Rule 10.1 (Deceased Participants), lapse at the end of that period.

 

10.6       Participant reaching Specified Age

 

If a Participant continues to be a director or
employee of a Participating Company after the date on which he reaches the
Specified Age, he may, subject to Rule 9.3 (Long stop date for exercise), exercise his Option within 6
months after reaching that age.

 

10.7       Meaning of ceasing employment

 

A Participant shall not be treated for the
purposes of Rule 10 (Leavers and
deceased Participants) as ceasing to be a director or employee of a
Participating Company until he ceases to be a director or employee of the
Company, any Associated Company and any company under the Control of the
Company.

 

11.         TAKEOVERS AND OTHER CORPORATE
EVENTS

 

11.1       General offers

 

If any person (or any group of persons acting
in concert) obtains Control of the Company as a result of making a general
offer to acquire:

 

(a)                                      the whole of the issued ordinary share capital of the Company (other
than that which is already owned by it) which is made on a condition such that
if it is satisfied the acquiring Company will have Control of the Company; or

 

(b)                                     all the Shares (other than those already owned by it),

 

the Board shall within 7 days after becoming
aware of that event notify every Participant of it and, subject to Rule 9.3
(Long stop date for exercise), Rule 10
(Leavers and deceased Participants)
and Rule 11.7 (Internal reorganisations),
any Option may be exercised within one month after such notification or such
longer period as the Board may permit, provided such period is not later than 6
months after such person has obtained Control of the Company.

 

11.2       Compulsory acquisition

 

In the event that any person becomes bound or
entitled to acquire shares in the Company under sections 979 to 982 of the
Companies Act 2006 the Board shall, as soon as practicable, notify every
Participant of that event and, subject to Rule 9.3 

 

12

 

(Long stop
date for exercise), Rule 10 (Leavers
and deceased Participants) and Rule 11.7 (Internal reorganisations), any Option may
be exercised at any time when that person remains so bound or entitled, but to
the extent that it is not exercised within that period an Option shall
(regardless of any other provision of the Plan) lapse at the end of that
period.

 

11.3       Scheme of arrangement

 

In the event that under section 899 of the
Companies Act 2006 (or other local procedure which HMRC agrees is equivalent) a
court sanctions a compromise or arrangement proposed for the purposes of or in
connection with a scheme for the reconstruction or amalgamation of the Company
an Option may, subject to Rule 9.3 (Long
stop date for exercise), Rule 10 (Leavers and deceased Participants) and Rule 11.7 (Internal reorganisations), be exercised
within six months after such event, but to the extent that the Option is not
exercised within that period it shall (regardless of any other provision of the
Plan) lapse at the end of that period.

 

11.4       Voluntary winding up

 

In the event that the Company passes a
resolution for voluntary winding up the Board shall, as soon as practicable,
notify every Participant of that event and, subject to Rule 9.3 (Long stop date for exercise), Rule 10
(Leavers and deceased Participants)
and Rule 11.7 (Internal reorganisations),
any Option may be exercised within six months after the passing of the
resolution for the winding up, but to the extent that it is not exercised
within that period an Option shall (regardless of any other provision of the
Plan) lapse at the end of that period.

 

11.5       Option rollover: general provisions

 

If any company (“the acquiring company”):

 

(a)                                      obtains Control of the Company as a result of making a general offer to
acquire:

 

(i)                        the
whole of the issued ordinary share capital of the Company (other than that
which is already owned by it) which is made on a condition such that if it is
satisfied the acquiring company will have Control of the Company; or

 

(ii)                     all
the Shares (other than those already owned by it); or

 

(b)                                     obtains Control of the Company under a compromise or arrangement
sanctioned by the court under section 899 of the Companies Act 2006 (or other
local procedure which HMRC agrees is equivalent); or

 

(c)                                      becomes bound or entitled to acquire shares in the Company under
sections 979 to 982 of the Companies Act 2006,

 

any Participant may, at any time within the
relevant period specified under paragraph 38(3) of Schedule 3, by
agreement with the acquiring company, release any Option

 

13

 

(“the Old
Option”) in consideration of the grant to him of an Option (“the New Option”) which, for the purposes of
paragraph 39 of Schedule 3, is equivalent to the Old Option but relates to
shares in a different company (whether the acquiring company itself or some
other company falling within paragraph 18(b) or (c) of Schedule 3).

 

11.6       Option rollover: interpretation of
Rules

 

Where a New Option is granted under Rule 11.5
(Option rollover: general provisions)
the following terms of the Plan shall, in relation to the New Option, be
construed as if:

 

(a)                                      except for the purposes of the definitions of “Participating Company”
and “Subsidiary” in Rules 1.1 (Definitions),
the expression “the Company” were defined as “a company whose shares may be
acquired by the exercise of options granted under the Plan”;

 

(b)                                     the Savings Contract made in connection with the Old Option had been
made in connection with the New Option;

 

(c)                                      the Bonus Date in relation to the New Option were the same as that in
relation to the Old Option; and

 

(d)                                     Rule 13.2 (Shareholder approval)
were omitted.

 

11.7       Internal reorganisations

 

In the event that:

 

(a)                                      an offer (as referred to in Rule 11.1 (General offers)) is made or a compromise or arrangement (as
referred to in Rule 11.3 (Scheme of
arrangement)) is proposed which is expected to result in the Company
becoming controlled by a new company (the “New
Company”);

 

(b)                                     at least 75% of the shares in the New Company are expected to be held by
substantially the same persons who immediately before the offer or proposal was
made were shareholders in the Company; and

 

(c)                                      the Board and the New Company agree that this Rule should apply,

 

then an Option shall not become exercisable
under Rule 11.1 (General offers)
or Rule 11.3 (Schemes of arrangement)
but may nonetheless be released in consideration for the grant of a New Option
under Rule 11.5 (Option rollover:
general provisions) and, if not so released, shall then
automatically lapse at the end of the relevant period specified in paragraph 38(3) of
Schedule 3.

 

14

 

12.         ADJUSTMENT OF OPTIONS

 

12.1       General rule

 

Subject to Rule 12.3 (HMRC approval), in the event of any
variation of the share capital of the Company, the Board may make such
adjustments as it considers appropriate under Rule 12.2 (Method of adjustment).

 

12.2       Method of adjustment

 

An adjustment made under this Rule shall
be to one or more of the following:

 

(a)                                      the number of Shares in respect of which any Option may be exercised;

 

(b)                                     subject to Rule 12.4 (Adjustment
below nominal value), the Option Price; and

 

(c)                                      where an Option has been exercised but no Shares have been allotted or
transferred after such exercise, the number of Shares which may be so allotted
or transferred and the price at which they may be acquired.

 

12.3       HMRC approval

 

At a time when the Plan is approved by HMRC
under Schedule 3, no adjustment under Rule 12.2 (Method of adjustment) shall be made
without the prior approval of HMRC.

 

12.4       Adjustment below nominal value

 

An adjustment under Rule 12.2 (Method of adjustment) may reduce the
Option Price of those Options to be satisfied by the subscription of Shares to
less than their nominal value, but only if and to the extent that the Board is
authorised:

 

(a)                                      to capitalise from the reserves of the Company a sum equal to the amount
by which the nominal value of the Shares in respect of which the Option is
exercised exceeds the Option Price; and

 

(b)                                     to apply that sum in paying up that amount on such Shares,

 

so that on the exercise of any Option in
respect of which such a reduction shall have been made the Board shall
capitalise that sum (if any) and apply it in paying up that amount.

 

13.         ALTERATIONS

 

13.1       General rule

 

Except as described in Rule 13.2 (Shareholder approval) and Rule 13.4 (Alterations to disadvantage of Participants),
the Board may at any time alter the Plan or the terms of any Option.

 

If an alteration is made to a key feature (as
defined in paragraph 42(2B) of Schedule 3) of the Plan at a time when the Plan
is approved by HMRC under Schedule 3, the alteration will not have effect
unless and until either HMRC has approved the alteration

 

15

 

or the Board resolves that the alteration shall
take effect even if this causes the Plan to cease to be approved under Schedule
3 (in which circumstances, the Board shall notify HMRC as soon as practicable
after resolving that the alteration shall take effect).

 

13.2       Shareholder approval

 

Except as described in Rule 13.3 (Exceptions to shareholder approval), no
alteration to the advantage of an individual to whom an Option has been or may
be granted shall be made under Rule 13.1 (General
rule) to the provisions concerning:

 

(a)                                      eligibility;

 

(b)                                     the individual limits on participation;

 

(c)                                      the overall limits on the issue of Shares or the transfer of treasury
Shares under the Plan;

 

(d)                                     the basis for determining a Participant’s entitlement to, and the terms
of, Shares provided under the Plan;

 

(e)                                      the adjustments that may be made in the event of any variation of
capital; and

 

(f)                                        the terms of this Rule 13.2

 

without the prior approval by ordinary
resolution of the members of the Company in general meeting.

 

13.3       Exceptions to shareholder approval

 

Rule 13.2 (Shareholder approval) shall not apply to any minor
alteration to benefit the administration of the Plan, to take account of a
change in legislation or to obtain or maintain favourable tax, exchange control
or regulatory treatment for Participants, the Company, any company of which the
Company has Control or any Associated Company.

 

13.4       Alterations to disadvantage of
Participants

 

No alteration to the material disadvantage of
any Participant shall be made under Rule 13.1 (General rule) unless:

 

(a)                                      the Board shall have invited every relevant Participant to indicate
whether or not he approves the alteration; and

 

(b)                                     the alteration is approved by a majority of those Participants who have
given such an indication.

 

16

 

14.         MISCELLANEOUS

 

14.1       Employment

 

The rights and obligations of any individual
under the terms of his office or employment with the Company, any Associated Company
or any company of which the Company has Control shall not be affected by his
participation in the Plan or any right which he may have to participate in
it.  An individual who participates in
the Plan waives any and all rights to compensation or damages in consequence of
the termination of his office or employment for any reason whatsoever (and
regardless of whether such termination is lawful or unlawful) insofar as those
rights arise or may arise from his ceasing to have rights under or be entitled to
exercise any option under the Plan as a result of such termination.  Participation in the Plan shall not confer a
right to continued employment upon any individual who participates in it.  The issuing of an Invitation and the grant of
an Option does not imply that any further Invitations or grants of Options will
be made nor that a Participant has any right to receive such an Invitation or
be granted any further Options.

 

14.2       Disputes

 

In the event of any dispute or disagreement as
to the interpretation of the Plan, or as to any question or right arising from
or related to the Plan, the decision of the Board shall be final and binding
upon all persons.

 

The exercise of any power or discretion by the
Board shall not be open to question by any person and a Participant or former
Participant shall have no rights in relation to the exercise or omission to
exercise any such power or discretion.

 

14.3       Notices

 

Any notice or other communication under or in
connection with the Plan may be given:

 

(a)                                      by personal delivery or by post, in the case of a company to its
registered office, and in the case of an individual to his last known address,
or, where he is a director or employee of a Participating Company or an
Associated Company, either to his last known address or to the address of the
place of business at which he performs the whole or substantially the whole of
the duties of his office or employment; or

 

(b)                                     in an electronic communication to their usual business address or such
other address for the time being notified for that purpose to the person giving
the notice; or

 

(c)                                      by such other method as the Board determines.

 

Where any such notice or
other communication is given by an Eligible Employee or a Participant to the
Company, it shall be effective only on receipt by the Company.

 

17

 

14.4       Third Parties

 

No third party has any right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of the Plan.

 

14.5       Benefits not pensionable

 

Benefits provided under the Plan shall not be
pensionable.

 

14.6       Data Protection

 

Each Participant acknowledges that there will
be collection, processing and transfer of his personal data for any purpose
relating to the operation of the Plan. 
This includes:

 

14.6.1                      providing personal data to any Participating Company,
any Associated Company or any company of which the Company has Control and any
third party such as trustees of any employee benefit trust, administrators of
the Plan, registrars, brokers and any of their respective agents;

 

14.6.2                      processing of personal data by any such Participating
Company, any Associated Company or any company of which the Company has Control
or third party;

 

14.6.3                      transferring personal data to a country outside the
European Economic Area (including a country which does not have data protection
laws equivalent to those prevailing in the European Economic Area); and

 

14.6.4                      providing personal data to potential purchasers of the
Company, the Participant’s employer or the business in which the Participant
works.

 

14.7       Governing law

 

The Plan and all Options shall be governed by
and construed in accordance with the law of England and Wales and the Courts of
England and Wales have exclusive jurisdiction to hear any dispute.

 

18

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