Document:

Exhibit 4.3

 

 

 

iSTAR FINANCIAL INC.

SENIOR FLOATING RATE NOTES DUE 2010

EIGHTEENTH SUPPLEMENTAL
INDENTURE

Dated as of March 9, 2007

US BANK TRUST NATIONAL 

ASSOCIATION

Trustee

CROSS-REFERENCE
TABLE*

	
  Trust
  Act Section

  	
  Indenture

  	
  Indenture Section

  
	
  310

  	
  (a)(1)

  	
  7.10

  
	
   

  	
  (a)(2)

  	
  7.10

  
	
   

  	
  (a)(3)

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
  7.10

  
	
   

  	
  (b)

  	
  7.10

  
	
   

  	
  (c)

  	
  N.A.

  
	
  311

  	
  (a)

  	
  7.11

  
	
   

  	
  (b)

  	
  7.11

  
	
   

  	
  (c)

  	
  N.A.

  
	
  312

  	
  (a)

  	
  2.05

  
	
   

  	
  (b)

  	
  11.03

  
	
   

  	
  (c)

  	
  11.03

  
	
  313

  	
  (a)

  	
  7.06

  
	
   

  	
  (b)(2)

  	
  7.07

  
	
   

  	
  (c)

  	
  7.06;11.02

  
	
   

  	
  (d)

  	
  7.06

  
	
  314

  	
  (a)

  	
  4.03;11.02

  
	
   

  	
  (c)(1)

  	
  11.04

  
	
   

  	
  (c)(2)

  	
  11.04

  
	
   

  	
  (c)(3)

  	
  N.A.

  
	
   

  	
  (e)

  	
  11.05

  
	
   

  	
  (f)

  	
  N.A.

  
	
  315

  	
  (a)

  	
  7.01

  
	
   

  	
  (b)

  	
  7.05,11.02

  
	
   

  	
  (c)

  	
  7.01

  
	
   

  	
  (d)

  	
  7.01

  
	
   

  	
  (e)

  	
  6.11

  
	
  316

  	
  (a) (last sentence)

  	
  2.09

  
	
   

  	
  (a)(1)(A)

  	
  6.05

  
	
   

  	
  (a)(1)(B)

  	
  6.04

  
	
   

  	
  (a)(2)

  	
  N.A.

  
	
   

  	
  (b)

  	
  6.07

  
	
   

  	
  (c)

  	
  2.13

  
	
  317

  	
  (a)(1)

  	
  6.08

  
	
   

  	
  (a)(2)

  	
  6.09

  
	
   

  	
  (b)

  	
  2.04

  
	
  318

  	
  (a)

  	
  11.01

  
	
   

  	
  (b)

  	
  N.A.

  
	
   

  	
  (c)

  	
  11.01

  
				

N.A. means not applicable.

*  This Cross-Reference Table is not part of the
Indenture.

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 1.02.

  	
  Other
  Definitions

  	
  13

  
	
   

  	
   

  	
   

  
	
  Section 1.03.

  	
  Incorporation by
  Reference of Trust Indenture Act

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 1.04.

  	
  Rules of
  Construction

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  THE NOTES

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Form and Dating

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 2.02.

  	
  Execution and
  Authentication

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 2.03.

  	
  Registrar and
  Paying Agent

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 2.04.

  	
  Paying Agent to
  Hold Money in Trust

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 2.05.

  	
  Holder Lists

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 2.06.

  	
  Transfer and
  Exchange

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 2.07.

  	
  Replacement
  Notes

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 2.08.

  	
  Outstanding
  Notes

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 2.09.

  	
  Treasury Notes

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.10.

  	
  Temporary Notes

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.11.

  	
  Cancellation

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.12.

  	
  Defaulted
  Interest

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.13.

  	
  Record Date

  	
  20

  
	
   

  	
   

  	
   

  
	
  Section 2.14.

  	
  CUSIP Numbers

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  REDEMPTION AND PREPAYMENT

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  COVENANTS

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Payment of Notes

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 4.02.

  	
  Maintenance of
  Office or Agency

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 4.03.

  	
  Reports to
  Holders

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 4.04.

  	
  Compliance
  Certificate

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 4.05.

  	
  Taxes

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 4.06.

  	
  Stay, Extension
  and Usury Laws

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 4.07.

  	
  Limitation on
  Incurrence of Additional Indebtedness

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 4.08.

  	
  Corporate
  Existence

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.09.

  	
  Maintenance of
  Total Unencumbered Assets

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.10.

  	
  Termination of
  Certain Covenants if Certain Ratings are Assigned.

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.11.

  	
  Maintenance of
  Properties; Books and Records; Compliance with Law

  	
  23

  

 

 i
 

 

	
  ARTICLE 5

  	
  SUCCESSORS

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Merger,
  Consolidation, or Sale of Assets

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 5.02.

  	
  Successor
  Corporation Substituted

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  DEFAULTS AND REMEDIES

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Events of
  Default

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 6.02.

  	
  Acceleration

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 6.03.

  	
  Other Remedies

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 6.04.

  	
  Waiver of Past
  Defaults

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 6.05.

  	
  Control by
  Majority

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 6.06.

  	
  Limitation on
  Suits

  	
  27

  
	
   

  	
   

  	
   

  
	
  Section 6.07.

  	
  Rights of
  Holders of Notes to Receive Payment

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 6.08.

  	
  Collection Suit
  by Trustee

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 6.09.

  	
  Trustee May File
  Proofs of Claim

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 6.10.

  	
  Priorities

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 6.11.

  	
  Undertaking for
  Costs

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  TRUSTEE

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Duties of
  Trustee

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 7.02.

  	
  Rights of
  Trustee

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 7.03.

  	
  Individual
  Rights of Trustee

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 7.04.

  	
  Trustee’s
  Disclaimer

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 7.05.

  	
  Notice of
  Defaults

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 7.06.

  	
  Reports by
  Trustee

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 7.07.

  	
  Compensation and
  Indemnity

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 7.08.

  	
  Replacement of
  Trustee

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 7.09.

  	
  Successor
  Trustee by Merger, etc.

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 7.10.

  	
  Eligibility;
  Disqualification

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 7.11.

  	
  Preferential
  Collection of Claims

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Option to Effect
  Legal Defeasance or Covenant Defeasance

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 8.02.

  	
  Legal Defeasance
  and Discharge

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 8.03.

  	
  Covenant
  Defeasance

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 8.04.

  	
  Conditions to
  Legal or Covenant Defeasance

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 8.05.

  	
  Deposited Money
  and Government Securities to be Held in Trust; Other Miscellaneous Provisions

  	
  35

  

 

 ii
 

 

	
  Section 8.06.

  	
  Repayment to Company

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 8.07.

  	
  Reinstatement

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  AMENDMENT, SUPPLEMENT AND WAIVER

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Without Consent
  of Holders of Notes

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 9.02.

  	
  With Consent of
  Holders of Notes

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 9.03.

  	
  Compliance with
  Trust Indenture Act

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 9.04.

  	
  Revocation and
  Effect of Consents

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 9.05.

  	
  Notation on or
  Exchange of Notes

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 9.06.

  	
  Trustee to Sign
  Amendments, etc

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  SATISFACTION AND DISCHARGE

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Satisfaction and
  Discharge

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 10.02.

  	
  Application of
  Trust Money

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  MISCELLANEOUS

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Trust Indenture
  Act Controls

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 11.02.

  	
  Notices

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 11.03.

  	
  Communication by
  Holders of Notes with Other Holders of Notes

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 11.04.

  	
  Certificate and
  Opinion as to Conditions Precedent

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 11.05.

  	
  Statements
  Required in Certificate or Opinion

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 11.06.

  	
  Rules by Trustee
  and Agents

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 11.07.

  	
  No Personal
  Liability of Directors, Officers, Employees and Stockholders

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 11.08.

  	
  Governing Law

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 11.09.

  	
  No Adverse
  Interpretation of Other Agreements

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 11.10.

  	
  Successors

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 11.11.

  	
  Severability

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 11.12.

  	
  Counterpart Originals

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 11.13.

  	
  Table of
  Contents, Headings, etc.

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 11.14.

  	
  Conflicts with
  Indenture

  	
  42

  

 

EXHIBITS

Exhibit A                                               FORM OF
NOTE

 iii

SUPPLEMENTAL INDENTURE dated as of March 9, 2007
between iStar Financial Inc., a Maryland corporation (the “Company”),
and US Bank Trust National Association, as trustee (the “Trustee”).

The Company has heretofore delivered to the Trustee an
Indenture dated as of February 5, 2001, a form of which has been filed
with the Securities and Exchange Commission under the Securities Act as an
exhibit to the Company’s Registration Statement on Form S-3 (Registration
No. 333-124795), providing for the issuance from time to time of debt
securities of the Company.

The Board of Directors of the Company has duly adopted
resolutions authorizing the Company to execute and deliver this Supplemental
Indenture.

The Company and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Notes:

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.      Definitions.

“Acquired Indebtedness”
means Indebtedness of a Person or any of its Subsidiaries existing at the time
such Person becomes a Subsidiary of the Company or at the time it merges or
consolidates with the Company or any of its Subsidiaries or assumed in
connection with the acquisition of assets from such Person and in each case
whether or not incurred by such Person in connection with, or in anticipation
or contemplation of, such Person becoming a Subsidiary of the Company or such
acquisition, merger or consolidation.

“Additional Notes”
means additional Notes (other than the Initial Notes) issued under this
Supplemental Indenture in accordance with Section 2.02 and 4.07.

“Affiliate”
means, with respect to any specified Person, any other Person who directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such specified Person.  The term “control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled”
have meanings correlative of the foregoing.

“Agent” means
any Registrar, Paying Agent or co-registrar.

“Applicable Procedures”
means, with respect to any transfer or exchange of or for beneficial interests
in any Global Note, the rules and procedures of the Depositary that apply to
such transfer or exchange.

“Asset Acquisition”
means:  (1) an Investment by the
Company or any Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Subsidiary of the Company or any Subsidiary of the
Company, or shall be merged with or into the Company or any Subsidiary of the
Company; or (2) the acquisition by the Company or any Subsidiary of the
Company of the assets of any Person (other than a Subsidiary of the
Company) that constitute all or substantially all of the assets of such
Person or comprises any division or line of business of such Person or any
other properties or assets of such Person other than in the ordinary course of
business.

“Asset Sale”
means any direct or indirect sale, issuance, conveyance, transfer, lease (other
than operating leases entered into in the ordinary course of business),
assignment or other transfer for value by the Company or any Subsidiary of the
Company (including any sale and leaseback transaction) to any Person other
than the Company or a Wholly Owned Subsidiary of the Company of:

(1)           any
Capital Stock of any Subsidiary of the Company; or

(2)           any
of the Company’s or its Subsidiaries’ other property or assets other than sales
of loan-related assets made in the ordinary course of the Company’s real
estate lending business and other asset sales made in the ordinary course of
the Company’s business.

“Bankruptcy Law”
means Title 11, United States Bankruptcy Code of 1978, as amended, or any
similar United States federal or state law relating to bankruptcy, insolvency,
receivership, winding-up, liquidation, reorganization or relief of debtors or
any amendment to, succession to or change in any such law.

“Below Investment Grade Rating
Event” means the Notes
are rated below an Investment Grade Rating by each of the Rating Agencies on
any date from the date of the public notice of an arrangement that could result
in a Change of Control until the end of the 60-day period following public
notice of the occurrence of the Change of Control (which 60-day period shall be
extended so long as the rating of the Notes is under publicly announced
consideration for possible downgrade by any of the Rating Agencies).

“Board of Directors”
means, as to any Person, the board of directors of such Person or any duly
authorized committee thereof.

“Board Resolution”
means, with respect to any Person, a copy of a resolution certified by the
Secretary or an Assistant Secretary of such Person to have been duly adopted by
the Board of Directors of such Person and to be in full force and effect on the
date of such certification, and delivered to the Trustee.

“Business Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which banking institutions in the City of New York are authorized or obligated
by law or executive order to close.

“Calculation Agent” has the
meaning provided in Section 2.03.

 “Capitalized Lease Obligation” means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.

“Capital Stock”
means:

(1)           with
respect to any Person that is a corporation, any and all shares, interests,
participations or other equivalents (however designated and whether or not
voting) of corporate stock, including each class of Common Stock and
Preferred Stock of such Person; and

(2)           with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.

 2
 

“Change of Control”
means the occurrence of one or more of the following events:

(1)           any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company
to any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a “Group”), together with any Affiliates thereof (whether or not
otherwise in compliance with the provisions of this Indenture) other than to
the Permitted Holders;

(2)           the
approval by the holders of Capital Stock of the Company of any plan or proposal
for the liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture);

(3)           any
Person or Group (other than the Permitted Holders) shall become the owner,
directly or indirectly, beneficially or of record, of shares representing more
than 50% of the aggregate ordinary voting power represented by the issued and
outstanding Capital Stock of the Company; or

(4)           the replacement of a majority of the
Board of Directors of the Company over a two-year period from the directors who
constituted the Board of Directors of the Company at the beginning of such
period, and such replacement shall not have been approved by a vote of at least
a majority of the Board of Directors of the Company then still in office who
either were members of such Board of Directors at the beginning of such period
or whose election as a member of such Board of Directors was previously so
approved.

“Change of Control Triggering
Event” means the
occurrence of both a Change of Control and a Below Investment Grade Rating
Event.

“Code” means the
Internal Revenue Code of 1986, as amended, and any successor statute thereto,
as interpreted by the rules and regulations thereunder, in each case as in effect
from time to time.

“Commission”
means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act, or if at any time after the execution of this
Supplemental Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

“Common Stock”
of any Person means any and all shares, interests or other participations in,
and other equivalents (however designated and whether voting or
non-voting) of such Person’s common stock, and includes, without
limitation, all series and classes of such common stock.

“Company” means
iStar Financial Inc. and any and all successors thereto that become a party to
this Supplemental Indenture in accordance with its terms.

“Consolidated EBITDA”
means, with respect to any Person, for any period, the sum (without
duplication) of:

(1)           Consolidated
Net Income; and

(2)           to
the extent Consolidated Net Income has been reduced thereby:

(a)           all
income taxes of such Person and its Subsidiaries paid or accrued in accordance
with GAAP for such period (other than income taxes attributable to
extraordinary 

 3
 

gains or losses and direct impairment charges or the
reversal of such charges on the Company’s assets);

(b)           Consolidated
Interest Expense; and

(c)           depreciation,
depletion and amortization;

all as determined on a
consolidated basis for such Person and its Subsidiaries in accordance with
GAAP.

“Consolidated Fixed Charge
Coverage Ratio” means, with respect to any Person, the ratio of
Consolidated EBITDA of such Person during the four full fiscal quarters (the “Four Quarter Period”) ending prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the “Transaction Date”) to Consolidated Fixed Charges of
such Person for the Four Quarter Period. 
In addition to and without limitation of the foregoing, for purposes of
this definition, “Consolidated EBITDA” and “Consolidated Fixed Charges” shall
be calculated after giving effect on a pro forma basis for the period of such
calculation to:

(1)           the
incurrence or repayment of any Indebtedness of such Person or any of its
Subsidiaries (and the application of the proceeds thereof) giving rise to
the need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter Period; and

(2)           any
asset sales or other dispositions or any asset originations, asset purchases,
Investments and Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of
such Person or one of its Subsidiaries (including any Person who becomes a
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including any pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Exchange
Act) attributable to the assets which are originated or purchased, the
Investments that are made and the assets that are the subject of the Asset
Acquisition or asset sale or other disposition during the Four Quarter
Period) occurring during the Four Quarter Period or at any time subsequent
to the last day of the Four Quarter Period and on or prior to the Transaction
Date, as if such asset sale or other disposition or asset origination, asset
purchase, Investment or Asset Acquisition (including the incurrence, assumption
or liability for any such Acquired Indebtedness) occurred on the first day
of the Four Quarter Period.  If such
Person or any of its Subsidiaries directly or indirectly guarantees
Indebtedness of a third Person, the preceding sentence shall give effect to the
incurrence of such guaranteed Indebtedness as if such Person or any Subsidiary
of such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.

“Consolidated Fixed Charges”
means, with respect to any Person for any period, the sum, without duplication,
of:

(1)           Consolidated
Interest Expense; plus

(2)           the
amount of all dividend payments on any series of Preferred Stock of such Person
and, to the extent permitted under this Supplemental Indenture, its
Subsidiaries (other than 

 4
 

dividends paid in Qualified
Capital Stock) paid, accrued or scheduled to be paid or accrued during
such period.

“Consolidated Interest
Expense” means, with respect to any Person for any period, the sum
of, without duplication:

(1)           the
aggregate of the interest expense of such Person and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP, including
without limitation:  (a) any
amortization of debt discount; (b) the net costs under Interest Swap
Obligations; (c) all capitalized interest; and (d) the interest
portion of any deferred payment obligation; and

(2)           to
the extent not already included in clause (1), the interest component of
Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by such Person and its Subsidiaries during such period as determined on
a consolidated basis in accordance with GAAP.

“Consolidated Net Income”
means, with respect to any Person, for any period, the aggregate net income (or
loss) of such Person and its Subsidiaries before the payment of dividends
on Preferred Stock for such period on a consolidated basis, determined in
accordance with GAAP; provided that
there shall be excluded therefrom:

(1)           after-tax
gains and losses from Asset Sales or abandonments or reserves relating thereto
(including gains and losses from the sale of corporate tenant lease assets);

(2)           after-tax
items classified as extraordinary gains or losses and direct impairment charges
or the reversal of such charges on the Company’s assets;

(3)           the
net income (but not loss) of any Subsidiary of the referent Person to the
extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is restricted by a contract, operation of law or
otherwise;

(4)           the
net income or loss of any other Person, other than a Consolidated Subsidiary of
the referent Person, except:

(a)           to
the extent (in the case of net income) of cash dividends or distributions
paid to the referent Person, or to a Wholly Owned Subsidiary of the referent
Person (other than a Subsidiary described in clause (3) above), by
such other Person; or

(b)           that
the referent Person’s share of any net income or loss of such other Person
under the equity method of accounting for Affiliates shall not be excluded;

(5)           any
restoration to income of any contingency reserve of an extraordinary,
nonrecurring or unusual nature;

(6)           income
or loss attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued, but not including revenues, expenses, gains and
losses relating to real estate properties sold or held for sale, even if they
were classified as attributable to discontinued operations under the provisions
of SFAS No. 144); and

 5
 

(7)           in
the case of a successor to the referent Person by consolidation or merger or as
a transferee of the referent Person’s assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets.

“Consolidated Net Worth”  of any Person means the consolidated
stockholders’ equity of such Person, as of the end of the last completed fiscal
quarter ending on or prior to the date of the transaction giving rise to the
need to calculate Consolidated Net Worth determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person and interests in such Person’s
Consolidated Subsidiaries not owned, directly or indirectly, by such Person.

“Consolidated Subsidiary”
means, with respect to any Person, a Subsidiary of such Person, the financial
statements of which are consolidated with the financial statements of such
Person in accordance with GAAP.

“Corporate Trust Office of
the Trustee” shall be at the address of the Trustee specified in
Section 11.02 or such other address as to which the Trustee may give
notice to the Company.

“Currency Agreements”
means any foreign exchange contract, currency swap agreement or other similar
agreement or arrangement designed to protect the Company or any Subsidiary of
the Company against fluctuations in currency values.

“Custodian”
means any custodian, receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.

“Default” means
an event or condition the occurrence of which is, or with the lapse of time or
the giving of notice or both would be, an Event of Default.

“Definitive Note”
means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06, in the form of Exhibit A
except that such Note shall not bear the Global Note Legend and shall not have
the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

“Depositary”
means, with respect to the Notes issuable or issued in whole or in part in
global form, the Person specified in Section 2.03 as the Depositary with
respect to the Notes, and any and all successors thereto appointed as
depositary hereunder and having become such pursuant to the applicable
provision of this Supplemental Indenture.

“Determination Date,” with
respect to an Interest Period, will be the second London Banking Day preceding
the first day of the Interest Period.

 “Disqualified Capital Stock” means that portion of any
Capital Stock that, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof on or prior to the final maturity date
of the Notes.

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor statute
or statutes thereto.

 6
 

“Existing Credit Agreements”
mean: (1) Revolving Credit Agreement, dated
as of April 19, 2004 and as amended and restated as of June 28, 2006, among the
Company, the lenders party thereto and JP Morgan Chase Bank, as administrative
agent; and (2) the amended and restated credit facility between Deutsche Bank
AG, New York Branch, and iStar DB Seller LLC, dated as of January 9, 2006, in
each case together with the related documents thereto (including, without
limitation, any security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder (provided that
such increase in borrowings is permitted by Section 4.07 hereof or adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder)
all or any portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.

“fair market value”
means, with respect to any asset or property, the price which could be
negotiated in an arm’s-length, free market transaction, for cash, between
a willing seller and a willing and able buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.  Fair market value shall be determined by the
Board of Directors of the Company acting reasonably and in good faith and shall
be evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.

“Fitch” means
Fitch Ratings or any successor rating agency.

“GAAP” means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States.  For the avoidance of
doubt, revenues, expenses, gains and losses that are included in results of
discontinued operations because of the application of SFAS No. 144 will be
treated as revenues, expenses, gains and losses from continuing operations.

“Global Note Legend”
means the legend set forth in Section 2.06(f) which is required to be
placed on all Global Notes issued under this Supplemental Indenture.

“Global Notes”
means, individually and collectively, the Global Notes, in the form of
Exhibit A, issued in accordance with Section 2.01 or 2.06.

“Government Securities”
means direct obligations of, or obligations guaranteed by, the United States of
America, and for the payment of which the United States pledges its full faith
and credit.

“Holder” or “Noteholder” means a Person in whose name a Note is
registered.

“Indebtedness”
means with respect to any Person, without duplication:

(1)           all
Obligations of such Person for borrowed money;

(2)           all
Obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;

(3)           all
Capitalized Lease Obligations of such Person;

 7
 

(4)           all
Obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all Obligations under any title
retention agreement (but excluding trade accounts payable and other accrued
liabilities arising in the ordinary course of business that are not overdue by
90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted);

(5)           all
Obligations for the reimbursement of any obligor on any letter of credit,
banker’s acceptance or similar credit transaction;

(6)           guarantees
and other contingent obligations in respect of Indebtedness referred to in
clauses (1) through (5) above and clause (8) below;

(7)           all
Obligations of any other Person of the type referred to in clauses
(1) through (6) above which are secured by any lien on any property
or asset of such Person, the amount of such Obligation being deemed to be the
lesser of the fair market value of such property or asset and the amount of the
Obligation so secured;

(8)           all
Obligations under Currency Agreements and Interest Swap Obligations of such
Person; and

(9)           all
Disqualified Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum fixed
repurchase price, but excluding accrued dividends, if any.

For purposes hereof, the “maximum fixed repurchase
price” of any Disqualified Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased on any date
on which Indebtedness shall be required to be determined pursuant to this
Supplemental Indenture, and if such price is based upon, or measured by, the
fair market value of such Disqualified Capital Stock, such fair market value
shall be determined reasonably and in good faith by the Board of Directors of
the issuer of such Disqualified Capital Stock.

“Indenture”
means the Indenture dated as of February 5, 2001 between the Company and
the Trustee as amended or supplemented from time to time.

“Indirect Participant”
means a Person who holds a beneficial interest in a Global Note through a
Participant.

“Initial Notes”
means the $500 million principal amount of Senior Floating Rate Notes due 2010
of the Company issued on the Issue Date.

“Interest Payment Date”
means March 9, June 9, September 9 and December 9 of each
year commencing June 9, 2007.

“Interest Swap Obligations”
means the obligations of any Person pursuant to any arrangement with any other
Person, whereby, directly or indirectly, such Person is entitled to receive
from time to time periodic payments calculated by applying either a floating or
a fixed rate of interest on a stated notional amount in exchange for periodic
payments made by such other Person calculated by applying a fixed or a floating
rate of interest on the same notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars and similar agreements.

 8
 

“Investment” means,
with respect to any Person, any direct or indirect loan or other extension of
credit (including, without limitation, a guarantee), or corporate tenant lease
to or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences or
Indebtedness issued by, any Person.  “Investment”
shall exclude extensions of trade credit by the Company and any Subsidiary of
the Company on commercially reasonable terms in accordance with the Company’s
or its Subsidiaries’ normal trade practices, as the case may be.

“Investment Grade Rating” means a rating equal to or higher than BBB- (or
the equivalent) by Fitch, Baa3 (or the equivalent) by Moody’s and BBB- (or the
equivalent) by S&P.

 “Issue Date” means March 9, 2007, the date of original
issuance of the Initial Notes.

“LIBOR” means:

(i)            The rate for deposits in U.S.
dollars for the three-month period which appears on Reuters on page LIBOR 01 at
approximately 11:00 a.m., London time. 
If no rate appears on Reuters on page LIBOR 01, LIBOR for such interest
determination date will be determined in accordance with the provisions of
paragraph (ii) below.

(ii)           With
respect to an interest determination date on which no rate appears on Reuters
on page LIBOR 01 at approximately 11:00 a.m., London time, on such interest
determination date, the calculation agent shall request the principal London
offices of each of four major reference banks (which may include affiliates of
the underwriters) in the London interbank market selected by the
calculation agent (after consultation with us) to provide the calculation
agent with a quotation of the rate at which deposits of U.S. dollars having a
three-month maturity, commencing on the second London Banking day immediately
following such interest determination date, are offered by it to prime banks in
the London interbank market as of approximately 11:00 a.m., London time, on
such interest determination date in a principal amount equal to an amount of
not less than U.S. $1,000,000 that is representative for a single transaction
in such market at such time.  If at least
two such quotations are provided, LIBOR for such interest determination date
will be the arithmetic mean of such quotations as calculated by the calculation
agent.  If fewer than two quotations are
provided, LIBOR for such interest determination date will be the arithmetic
mean of the rates quoted at approximately 11:00 a.m., New York City time, on
such interest determination date by three major banks (which may include
affiliates of the underwriters) selected by the calculation agent (after
consultation with us) for loans in U.S. dollars to leading European banks
having a three-month maturity commencing on the second London Banking day
immediately following such interest determination date and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid
by the calculation agent are not quoting such rates as mentioned in this
sentence, LIBOR for such interest determination date will be LIBOR determined
with respect to the immediately preceding interest determination date.

“Lien” means any
lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance
of any kind (including any conditional sale or other title retention agreement,
any lease in the nature thereof and any agreement to give any security
interest).

“London Banking Day” is any day
in which dealings in United States dollars are transacted or, with respect to
any future date, are expected to be transacted in the London interbank market.

 9
 

 “Maturity” when used with respect to the Notes means the date
on which the principal of the Notes becomes due and payable as therein provided
or as provided in this Supplemental Indenture at Stated Maturity, and whether
by declaration of acceleration or otherwise.

“Moody’s” means
Moody’s Investor Service, Inc. or any successor rating agency.

“Non-Recourse Indebtedness”
means any of the Company’s or any of its Subsidiaries’ Indebtedness that is:

(1)           specifically
advanced to finance the acquisition of investment assets and secured only by
the assets to which such Indebtedness relates without recourse to the Company
or any of its Subsidiaries (other than subject to such customary carve-out
matters for which the Company or its Subsidiaries acts as a guarantor in
connection with such Indebtedness, such as fraud, misappropriation and
misapplication, unless, until and for so long as a claim for payment or
performance has been made thereunder (which has not been satisfied) at
which time the obligations with respect to any such customary carve-out shall
not be considered Non-Recourse Indebtedness, to the extent that such claim is a
liability of the Company for GAAP purposes);

(2)           advanced
to any of the Company’s Subsidiaries or group of its Subsidiaries formed for
the sole purpose of acquiring or holding investment assets against which a loan
is obtained that is made without recourse to, and with no
cross-collateralization against, the Company or any of the Company’s
Subsidiaries’ other assets (other than subject to such customary carve-out
matters for which the Company or its Subsidiaries acts as a guarantor in
connection with such Indebtedness, such as fraud, misappropriation and
misapplication, unless, until and for so long as a claim for payment or
performance has been made thereunder (which has not been satisfied) at
which time the obligations with respect to any such customary carve-out shall
not be considered Non-Recourse Indebtedness, to the extent that such claim is a
liability of the Company for GAAP purposes) and upon complete or partial
liquidation of which the loan must be correspondingly completely or partially
repaid, as the case may be; or

(3)           specifically
advanced to finance the acquisition of real property and secured by only the
real property to which such Indebtedness relates without recourse to the
Company or any of its Subsidiaries (other than subject to such customary
carve-out matters for which the Company or its Subsidiaries acts as a guarantor
in connection with such Indebtedness, such as fraud, misappropriation and
misapplication, unless, until and for so long as a claim for payment or
performance has been made thereunder (which has not been satisfied) at
which time the obligations with respect to any such customary carve-out shall
not be considered Non-Recourse Indebtedness, to the extent that such claim is a
liability of the Company for GAAP purposes).

“Notes” means,
collectively, the Initial Notes and the Additional Notes, if any, and treated
as a single class of securities, as amended or supplemented from time to time
in accordance with the terms hereof, that are issued pursuant to this
Supplemental Indenture.

“Obligations”
means all obligations for principal, premium, interest, penalties, fees,
indemnification, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

“Officer” means,
with respect to any Person, the President, Chief Executive Officer, any Vice
President, Chief Operating Officer, Treasurer, Secretary or the Chief Financial
Officer of such Person.

 10

“Officers’ Certificate”
means, with respect to any Person, a certificate signed by two Officers of such
Person; provided, however, that every Officers’
Certificate with respect to compliance with a covenant or condition provided
for in this Supplemental Indenture shall include (i) a statement that the
Officers making or giving such Officers’ Certificate have read such condition
and any definitions or other provisions contained in this Supplemental
Indenture relating thereto and (ii) a statement as to whether, in the
opinion of the signers, such conditions have been complied with.

“Opinion of Counsel”
means an opinion from legal counsel who is reasonably acceptable to the Trustee
that meets the requirements of Section 11.05.  The counsel may be an employee of or counsel
to the Company, any Subsidiary of the Company or the Trustee.

“Participant”
means, with respect to the Depositary, a Person who has an account with the
Depositary.

“Permitted Holder(s)”
means SOFI-IV SMT Holdings, L.L.C. and Starwood Capital Group, L.L.C. and each
of their respective Affiliates.

“Permitted Indebtedness”
means, without duplication, each of the following:

Indebtedness under: (a) the
Notes; (b) the Company’s $300.0 million aggregate principal amount of 5.500%
Senior Notes due 2012 issued on the Issue Date and the Company’s $250.0 million
aggregate principal amount of 5.850% Senior Notes due 2017 issued on the Issue
Date; (c) the Company’s $889.7 million aggregate principal amount of 5.95%
Senior Notes due 2013 that were issued on September 22, 2006 and October 18,
2006; (d) the Company’s $500.0 million aggregate principal amount of Senior
Floating Rate Notes due 2009 that were issued on September 18, 2006; (e) the
Company’s $500.0 million aggregate principal amount of 5.875% Senior Notes due
2016 and the $500.0 million aggregate principal amount of 5.650% Senior Notes
due 2011 that were issued on February 21, 2006; (f) the Company’s $250.0
million aggregate principal amount of 5.80% Senior Notes due 2011 and the
$225.0 million Senior Floating Rate Notes due 2009 that were issued on December
14, 2005; (g) the Company’s $100.0 million in unsecured floating rate trust
preferred securities that were issued on September 14, 2005; (h) the Company’s
$250.0 million aggregate principal amount of 5.375% Senior Notes due 2010 that
were issued on April 21, 2005; (i) the Company’s $250.0 million aggregate
principal amount of 6.05% Senior Notes due 2015 that were issued on April 21,
2005; (j) the Company’s $50.0 million aggregate principal amount of 7.95%
Senior Notes due 2006, which the Company assumed as a result of the merger of
TriNet with iStar on March 30, 2005; (k) the Company’s $700.0 million aggregate
principal amount of 5.15% Senior Notes due 2012 and the $400.0 million
aggregate principal amount of floating rate notes due 2008 that were issued on
March 1, 2005; (l) the Company’s $250.0 million aggregate principal amount of
5.70% Notes due 2014 issued on March 9, 2004, and an additional $117.0 million
aggregate amount of 5.70% Notes due 2014 issued on March 1, 2005 in connection
with the Company’s exchange offer for TriNet Corporate Realty Trust, Inc.’s
7.70% Notes due 2017; (m) the Company’s $200.0 million aggregate principal
amount of floating rate notes due 2007 that were issued on March 12, 2004 and
May 10, 2004; (n) the Company’s $250.0 million aggregate principal amount of
5.125% Notes due 2011 that were issued on March 30, 2004; (o) the Company’s
$350.0 million aggregate principal amount of 4.875% Senior Notes due 2009 that
were issued on January 23, 2004; (p) the Company’s $350.0 million aggregate
principal amount of 6.00% Senior Notes due 2010 that were issued on December
12, 2003; (q) the Company’s $150.0 million aggregate 

 11
 

principal
amount of 6.50% Senior Notes due 2013 that were issued on December 12, 2003;
(r) the Company’s $185.0 million aggregate principal amount of 7.00% Senior
Notes due 2008 that were issued in March and April of 2003; and (s) the Company’s
$50.3 million aggregate principal amount of 8.75% Senior Notes due 2008 that
were issued on August 16, 2001;

(2)           Indebtedness
incurred pursuant to the Existing Credit Agreements in an aggregate principal
amount at any time outstanding not to exceed the maximum aggregate amount
available under the Existing Credit Agreements as in effect on the Issue Date
reduced by any required permanent repayments (which are accompanied by a
corresponding permanent commitment reduction) thereunder;

(3)           other
Indebtedness of the Company and its Subsidiaries outstanding on the Issue Date
reduced by the amount of any scheduled amortization payments or mandatory
prepayments when actually paid or permanent reductions thereon;

(4)           Interest
Swap Obligations of the Company covering Indebtedness of the Company or any of
its Subsidiaries and Interest Swap Obligations of any Subsidiary of the Company
covering Indebtedness of such Subsidiary; provided, however,
that such Interest Swap Obligations are entered into to protect the Company and
its Subsidiaries from fluctuations in interest rates on Indebtedness incurred
in accordance with this Supplemental Indenture to the extent the notional
principal amount of such Interest Swap Obligation does not exceed the principal
amount of the Indebtedness to which such Interest Swap Obligation relates;

(5)           Indebtedness
under Currency Agreements; provided that
in the case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its Subsidiaries
outstanding other than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities and compensation payable thereunder;

(6)           Indebtedness
of a Subsidiary of the Company to the Company or to a Wholly Owned Subsidiary
of the Company for so long as such Indebtedness is held by the Company or a
Wholly Owned Subsidiary of the Company;

(7)           Indebtedness
of the Company to a Wholly Owned Subsidiary of the Company for so long as such
Indebtedness is held by a Wholly Owned Subsidiary of the Company, in each case
subject to no Lien; provided that:  (a) any Indebtedness of the Company to
any Wholly Owned Subsidiary of the Company is unsecured and subordinated,
pursuant to a written agreement, to the Company’s obligations under this
Supplemental Indenture and the Notes; and (b) if as of any date any Person
other than a Wholly Owned Subsidiary of the Company owns or holds any such
Indebtedness or any Person holds a Lien in respect of such Indebtedness, such
date shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the Company;

(8)           Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business; provided, however, that such
Indebtedness is extinguished within two business days of incurrence;

(9)           Indebtedness
of the Company or any of its Subsidiaries represented by letters of credit for
the account of the Company or such Subsidiary, as the case may be, in order to
provide 

 12
 

security for workers’
compensation claims, payment obligations in connection with self-insurance or
similar requirements in the ordinary course of business;

(10)         Refinancing
Indebtedness; and

(11)         additional
Indebtedness of the Company and its Subsidiaries in an aggregate principal
amount not to exceed $15.0 million at any one time outstanding (which
amount may, but need not, be incurred in whole or in part under the Existing
Credit Agreements).

For purposes of determining compliance with
Section 4.07 hereof, in the event that an item of Indebtedness meets the
criteria of more than one of the categories of Permitted Indebtedness described
in clauses (1) through (11) above or is entitled to be incurred
pursuant to the second paragraph of such covenant, the Company shall, in its
sole discretion, classify (or later reclassify) such item of Indebtedness
in any manner that complies with this covenant. 
Accrual of interest, accretion or amortization of original issue discount,
the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms, and the payment of dividends on Disqualified
Capital Stock in the form of additional shares of the same class of
Disqualified Capital Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Capital Stock for purposes of the “Limitation
on Incurrence of Additional Indebtedness” covenant.

“Person” means
an individual, partnership, corporation, unincorporated organization, trust or
joint venture, or a governmental agency or political subdivision thereof.

“Preferred Stock”
of any Person means any Capital Stock of such Person that has preferential
rights to any other Capital Stock of such Person with respect to dividends or
redemptions or upon liquidation.

“Qualified Capital Stock”
means any Capital Stock that is not Disqualified Capital Stock.

“Rating Agencies”
means (1) each of Fitch, Moody’s and
S&P; and (2) if any of Fitch, Moody’s or S&P ceases to rate the notes
or fails to make a rating of the notes publicly available for reasons outside
of the Company’s control, a “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange
Act, selected by the Company (as certified by a resolution of the Company’s
Board of Directors) as a replacement agency for Fitch, Moody’s or S&P, or
all of them, as the case may be.

“Refinance”
means, in respect of any security or Indebtedness, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part.  “Refinanced” and “Refinancing”
shall have correlative meanings.

“Refinancing Indebtedness”
means any Refinancing by the Company or any Subsidiary of the Company of
Indebtedness incurred in accordance with Section 4.07 hereof (other than
pursuant to clauses (2), (4), (5), (6), (7), (8), (9) or (11) of the
definition of Permitted Indebtedness), in each case that does not:

(1)           result
in an increase in the aggregate principal amount of Indebtedness of such Person
as of the date of such proposed Refinancing (plus the amount of any premium
required to be paid under the terms of the instrument governing such Indebtedness
and plus the amount of reasonable expenses incurred by the Company in
connection with such Refinancing); or

 13
 

(2)           create
Indebtedness with:  (a) a Weighted
Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced; or (b) a final maturity
earlier than the final maturity of the Indebtedness being Refinanced; provided that (i) if such Indebtedness being Refinanced
is Indebtedness of the Company, then such Refinancing Indebtedness shall be
Indebtedness solely of the Company, and (ii) if such Indebtedness being
Refinanced is subordinate or junior to the Notes, then such Refinancing
Indebtedness shall be subordinate to the Notes at least to the same extent and
in the same manner as the Indebtedness being Refinanced.

“REIT” means
Real Estate Investment Trust.

“Responsible Officer”
means, when used with respect to the Trustee, any vice president, assistant
vice president, assistant treasurer, trust officer or any other officer within
the corporate trust department of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
shall mean, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge and
familiarity with the particular subject.

 “Secured Indebtedness” means any Indebtedness secured by a
Lien upon the property of the Company or any of its Subsidiaries.

“Securities Act”
means the Securities Act of 1933, as amended.

“Significant Subsidiary,”
with respect to any Person, means any Subsidiary of such Person that satisfies
the criteria for a “significant subsidiary” set forth in
Rule 1.02(w) of Regulation S-X under the Exchange Act.

“S&P” means
Standard & Poor’s Ratings Group, a division of McGraw Hill Inc., a New York
corporation, or any successor rating agency.

“Stated Maturity”
when used with respect to any Indebtedness or any installment of interest
thereon means the dates specified in such Indebtedness as the fixed date on
which the principal of or premiums on such Indebtedness or such installment of
interest is due and payable.

“Subsidiary,”
with respect to any Person, means:

(1)           any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such
Person; or

(2)           any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.

“Supplemental Indenture”
means this Supplemental Indenture as amended or supplemented from time to time.

“Total Unencumbered Assets”
as of any date means the sum of:

(1)           those
Undepreciated Real Estate Assets not securing any portion of Secured
Indebtedness; and

 14
 

(2)           all
other assets (but excluding intangibles and accounts receivable) of the
Company and its Subsidiaries not securing any portion of Secured Indebtedness
determined on a consolidated basis in accordance with GAAP.

“Trustee” means
the party named as such above until a successor replaces it in accordance with
the applicable provisions of this Supplemental Indenture and thereafter means
the successor serving hereunder.

“Trust Indenture Act”
means the Trust Indenture Act of 1939, as amended.

“Undepreciated Real Estate
Assets” means, as of any date, the cost (being the original cost to
the Company or any of Subsidiaries plus capital improvements) of real
estate assets of the Company and its Subsidiaries on such date, before
depreciation and amortization of such real estate assets, determined on a
consolidated basis in accordance with GAAP.

“Unsecured Indebtedness”
means any Indebtedness of the Company or any of its Subsidiaries that is not
Secured Indebtedness.

“Weighted Average Life to
Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing: 
(1) the then outstanding aggregate principal amount of such
Indebtedness into; (2) the sum of the total of the products obtained by
multiplying (i) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal, including payment
at final maturity, in respect thereof, by (ii) the number of years (calculated
to the nearest one-twelfth) which will elapse between such date and the
making of such payment.

“Wholly Owned Subsidiary”
of any Person means any Subsidiary of such Person of which all the outstanding
voting securities (other than in the case of a foreign Subsidiary, directors’
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned by such Person or any
Wholly Owned Subsidiary of such Person.

Section 1.02.      Other
Definitions.

	
  Term

  	
  Defined in

  Section

  
	
   

  	
   

  
	
  “Authentication
  Order”

  	
  2.02

  
	
  “Covenant
  Defeasance”

  	
  8.03

  
	
  “Change
  of Control Date”

  	
  4.10

  
	
  “Change
  of Control Payment Date”

  	
  4.10

  
	
  “Change
  of Control Offer”

  	
  4.10

  
	
  “Change
  of Control Purchase Date”

  	
  4.10

  
	
  “Change
  of Control Purchase Price”

  	
  4.10

  
	
  “DTC”

  	
  2.03

  
	
  “Event
  of Default”

  	
  6.01

  
	
  “incur”

  	
  4.07

  
	
  “Legal
  Defeasance”

  	
  8.02

  
	
  “Paying
  Agent”

  	
  2.03

  
	
  “Registrar”

  	
  2.03

  
	
  “Surviving
  Entity”

  	
  5.01

  

 

 15
 

Section 1.03.          Incorporation by Reference
of Trust Indenture Act. 
Whenever this Supplemental Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this
Supplemental Indenture.

All terms used in this Supplemental Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule under the TIA have the meanings so assigned to them.

Section 1.04.          Rules of Construction. 
Unless the context otherwise requires:

(a)           a term has the meaning assigned to
it;

(b)           an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP;

(c)           “or” is not exclusive;

(d)           words in the singular include the
plural, and in the plural include the singular;

(e)           provisions apply to successive events
and transactions; and

(f)            references to sections of or rules
under the Securities Act shall be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.

ARTICLE 2

THE NOTES

Section 2.01.          Form and Dating.

(a)           General.  The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A
hereto.  The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage.  Each Note shall be dated the date of its
authentication.  The Notes shall be in
denominations of $2,000 and integral multiples of $1,000.

The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Supplemental
Indenture and the Company and the Trustee, by their execution and delivery of
this Supplemental Indenture, expressly agree to such terms and provisions and
to be bound thereby.  However, to the
extent any provision of any Note conflicts with the express provisions of this
Supplemental Indenture, the provisions of this Supplemental Indenture shall
govern and be controlling.

(b)           Global Notes.  Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the
Global Note Legend thereon and the “Schedule of Exchanges of Interests in the
Global Note” attached thereto).  Notes
issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the “Schedule
of Exchanges of Interests in the Global Note” attached thereto).  Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate principal amount of outstanding Notes from time
to time endorsed thereon and that the aggregate principal amount of outstanding
Notes represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges.  Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the aggregate principal amount of outstanding Notes represented 

 16
 

thereby shall be made by the Trustee or the Custodian, at the direction
of the Trustee, in accordance with written instructions given by the Holder
thereof as required by Section 2.06 hereof.

Section 2.02.      Execution
and Authentication.  One or
more Officers shall sign the Notes for the Company by manual or facsimile
signature and apply the seal of the Company.

If an Officer whose signature is on a Note no longer
holds that office at the time a Note is authenticated, the Note shall
nevertheless be valid.

A Note shall not be valid until authenticated by the
manual signature of the Trustee.  The
signature shall be conclusive evidence that the Note has been authenticated
under this Supplemental Indenture.

The Trustee shall, upon a written order of the Company
signed by one or more Officers (an “Authentication Order”),
authenticate Notes for original issue on the Issue Date in aggregate principal
amount not to exceed $500.0 million (other than as provided in
Section 2.07).  The Trustee shall
authenticate Additional Notes thereafter (so long as permitted by the terms of
this Supplemental Indenture) for original issue upon one or more
Authentication Orders in aggregate principal amount as specified in such order
(other than as provided in Section 2.07). 
Each such Authentication Order shall specify the amount of Notes to be
authenticated, whether the Notes are to be Initial Notes or Additional Notes
and whether the Notes are to be issued as Definitive Notes or Global Notes or
such other information as the Trustee shall reasonably request.

The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Notes.  An authenticating agent may authenticate
Notes whenever the Trustee may do so. 
Each reference in this Supplemental Indenture to authentication by the
Trustee includes authentication by such agent. 
An authenticating agent has the same rights as an Agent to deal with
Holders or an Affiliate of the Company.

Section 2.03.      Registrar,
Paying Agent and Calculation Agent. 
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (“Registrar”) and
an office or agency where Notes may be presented for payment (“Paying Agent”).  The
Registrar shall keep a register of the Notes and of their transfer and
exchange.  The Company may appoint one or
more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrar
and the term “Paying Agent” includes any additional paying agent.  In addition, the Company shall appoint a
calculation agent (the “Calculation Agent”) to determine the interest rate on
the Notes.  The Company may change any
Paying Agent or Registrar without notice to any Holder.  The Company shall notify the Trustee in
writing of the name and address of any Agent not a party to this Supplemental
Indenture.  If the Company fails to
appoint or maintain another entity as Registrar, Paying Agent or Calculation
Agent, the Trustee shall act as such. 
The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.

The Company initially appoints The Depository Trust
Company (“DTC”) to act as Depositary with
respect to the Global Notes.

The Company initially appoints the Trustee to act as
the Registrar, Paying Agent and Calculation Agent to act as Custodian with
respect to the Global Notes.

Section 2.04.      Paying Agent
to Hold Money in Trust.  The
Company shall require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or interest on the Notes, and will notify the Trustee in writing
of any default by the Company in making any such payment.  While any such default continues, the Trustee
may require a Paying Agent to pay all 

 17
 

money held by it to the Trustee. 
The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee.  Upon payment over
to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money.  If the Company or a Subsidiary acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent
for the Notes.

Section 2.05.          Holder Lists.  The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of all Holders and
shall otherwise comply with TIA § 312(a). 
If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and
addresses of the Holders and the Company shall otherwise comply with TIA
§ 312(a).

Section 2.06.          Transfer and Exchange.

(a)           Transfer and Exchange of
Global Notes.  A Global Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.  All Global Notes will be exchanged by the
Company for Definitive Notes if (i) the Company delivers to the Trustee
written notice from the Depositary that it is unwilling or unable to continue
to act as Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not appointed
by the Company within 120 days after the date of such notice from the
Depositary or (ii) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for Definitive
Notes and delivers a written notice to such effect to the Trustee.  Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be
issued in such names as the Depositary shall instruct the Trustee in
writing.  Global Notes also may be
exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof.  Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or
any portion thereof, pursuant to this Section 2.06 or Section 2.07 or
2.10 hereof, shall be authenticated and delivered in the form of, and shall be,
a Global Note.  A Global Note may not be
exchanged for another Note other than as provided in this Section 2.06(a);
provided, however, that beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b) or (c) hereof.

(b)           Transfer and Exchange of
Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial
interests in the Global Notes shall be effected through the Depositary, in
accordance with the provisions of this Supplemental Indenture and the
Applicable Procedures.  Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one
or more of the other following subparagraphs, as applicable:

(i)            Transfer of Beneficial
Interests in the Same Global Note. 
Beneficial interests in any Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in a Global
Note.  No written orders or instructions
shall be required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).

(ii)           All Other Transfers and
Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and
exchanges of beneficial interests that are not subject to
Section 2.06(b)(i) above, the transferor of such beneficial interest
must deliver to the Registrar either (A) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to credit or cause to
be 

 18
 

credited a beneficial
interest in another Global Note in an amount equal to the beneficial interest
to be transferred or exchanged and (2) instructions given in accordance
with the Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to cause to
be issued a Definitive Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange referred
to in (1) above.  Upon satisfaction
of all of the requirements for transfer or exchange of beneficial interests in
Global Notes contained in this Supplemental Indenture and the Notes or
otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note(s) pursuant to
Section 2.06(g) hereof.

(c)           Transfer or Exchange of
Beneficial Interests for Definitive Notes.  If any holder of a beneficial interest in a
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(g) hereof, and the Company shall
execute and the Trustee shall authenticate and deliver to the Person designated
in the instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant.  The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered.

(d)           Transfer and Exchange of
Definitive Notes for Beneficial Interests.  A Holder of a Definitive Note may exchange
such Note for a beneficial interest in a Global Note or transfer such
Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Global Note at any time.  Upon receipt of a request for such an
exchange or transfer, the Trustee shall cancel the applicable Definitive Note
and increase or cause to be increased the aggregate principal amount of one of
the Global Notes.

If any such exchange or transfer from a Definitive
Note to a beneficial interest is effected at a time when a Global Note has not
yet been issued, the Company shall issue and, upon receipt of an Authentication
Order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.

(e)           Transfer and Exchange of
Definitive Notes for Definitive Notes.  Upon written request by a Holder of
Definitive Notes and such Holder’s compliance with the provisions of this
Section 2.06(e), the Registrar shall register the transfer or exchange of
Definitive Notes.  Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing.  In addition, the requesting Holder shall
provide any additional certifications, documents and information, as
applicable, required pursuant to this Section 2.06(e).

A Holder of Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of a Definitive Note.  Upon receipt of a written request to register
such a transfer, the Registrar shall register the Definitive Notes pursuant to
the instructions from the Holder thereof.

 19
 

(f)            Global Note Legend.  Each Global Note shall bear a legend in
substantially the following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE SUPPLEMENTAL INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE
IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE
TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTION 2.06 OF THE SUPPLEMENTAL INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE SUPPLEMENTAL INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE SUPPLEMENTAL
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.”

(g)           Cancellation and/or
Adjustment of Global Notes. 
At such time as all beneficial interests in a particular Global Note
have been exchanged for Definitive Notes or a particular Global Note has been
repurchased or canceled in whole and not in part, each such Global Note shall
be returned to or retained and canceled by the Trustee in accordance with
Section 2.11 hereof.  At any time
prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a
Person who will take delivery thereof in the form of a beneficial interest in
another Global Note, such other Global Note shall be increased accordingly and
an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.

(h)           General Provisions
Relating to Transfers and Exchanges.

(i)            To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Global Notes and Definitive Notes upon the Company’s order or at the Registrar’s
request.

(ii)           No service charge shall be made to a
holder of a beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company and the
Trustee may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.06 and 9.05 hereof).

(iii)          All Global Notes and Definitive Notes
issued upon any registration of transfer or exchange of Global Notes or
Definitive Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Supplemental Indenture,
as the Global Notes or Definitive Notes surrendered upon such registration of
transfer or exchange.

(iv)          The Company shall not be required to
register the transfer of or to exchange a Note between a record date and the
next succeeding Interest Payment Date.

 20

(v)           Prior to due presentment for the
registration of a transfer of any Note, the Trustee, any Agent and the Company
may deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of principal
of and interest on such Notes and for all other purposes, and none of the
Trustee, any Agent or the Company shall be affected by notice to the contrary.

(vi)          The Trustee shall authenticate Global
Notes and Definitive Notes in accordance with the provisions of
Section 2.02 hereof.

(vii)         All certifications, certificates and
Opinions of Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.

Section 2.07.      Replacement
Notes.  If any mutilated Note
is surrendered to the Trustee or the Company and the Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, the Company
shall issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced.  The
Company may charge for its expenses in replacing a Note.

Every replacement Note is an additional obligation of
the Company and shall be entitled to all of the benefits of this Supplemental
Indenture equally and proportionately with all other Notes duly issued
hereunder.

Section 2.08.      Outstanding
Notes.  The Notes outstanding
at any time are all the Notes authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, those reductions in the
interest in a Global Note effected by the Trustee in accordance with the
provisions hereof, and those described in this Section as not outstanding.  Except as set forth in Section 2.09
hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.

If a Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide purchaser.

If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.

If the Paying Agent (other than the Company, a
Subsidiary or an Affiliate of any thereof) holds, on the maturity date,
money sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to
accrue interest.

Section 2.09.      Treasury
Notes.  In determining whether
the Holders of the required principal amount of Notes have concurred in any
direction, waiver or consent, Notes owned by the Company, or by any Affiliate
of the Company, shall be considered as though not outstanding, except that for
the purposes of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Notes that the Trustee actually
knows are so owned shall be so disregarded.

Section 2.10.      Temporary
Notes.  Until certificates
representing Notes are ready for delivery, the Company may prepare and the
Trustee, upon receipt of an Authentication Order, shall authenticate temporary
Notes.  Temporary Notes shall be
substantially in the form of certificated Notes but may have

 21
 

 

variations that the Company considers appropriate for temporary Notes
and as shall be reasonably acceptable to the Trustee.  Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes.

Holders of temporary Notes shall be entitled to all of
the benefits of this Supplemental Indenture.

Section 2.11.      Cancellation.  The Company at any time may deliver Notes to
the Trustee for cancellation.  The
Registrar and Paying Agent shall forward to the Trustee any Notes surrendered
to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall destroy canceled Notes (subject to the record
retention requirement of the Exchange Act). 
The Company may not issue new Notes to replace Notes that it has paid or
that have been delivered to the Trustee for cancellation.

Section 2.12.      Defaulted
Interest.  If the Company
defaults in a payment of interest on the Notes, it shall pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on
the defaulted interest, to the Persons who are Holders on a subsequent special
record date, in each case at the rate provided in the Notes and in
Section 4.01 hereof.  The Company
shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment.  The Company shall fix or cause to be fixed
each such special record date and payment date; provided that
no such special record date shall be less than 10 days prior to the related
payment date for such defaulted interest. 
At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.

Section 2.13.      Record Date.  The Company may set a record date for
purposes of determining the identity of Holders entitled to vote or to consent
to any action by vote or consent authorized or permitted by Sections 6.04
and 6.05.

Section 2.14.      CUSIP
Numbers.  The Company in
issuing the Notes may use “CUSIP” numbers (if then generally in use) and
the Company will promptly notify the Trustee in writing of any change in the
CUSIP numbers.

ARTICLE 3

REDEMPTION AND PREPAYMENT

The Notes may not be redeemed prior to the Maturity
Date.

ARTICLE 4

COVENANTS

Section 4.01.      Payment of
Notes.  The Company shall pay
or cause to be paid the principal of, premium, if any, and interest on the
Notes on the dates and in the manner provided in the Notes.  Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary, holds as of 10:00 a.m. Eastern Time on the due
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due.

 22
 

 

The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal at the rate equal to the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace
period) at the same rate to the extent lawful.

Section 4.02.      Maintenance
of Office or Agency.  The
Company shall maintain in the Borough of Manhattan, the City of New York, an
office or agency (which may be an office of the Trustee or an affiliate of the
Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Supplemental Indenture may be
served.  The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency.  If at any time
the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.

The Company may also from time to time designate one
or more other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in the Borough of Manhattan, the
City of New York for such purposes.  The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in accordance
with Section 2.03.

Section 4.03.      Reports to
Holders.  Whether or not
required by the rules and regulations of the Commission, so long as any Notes
are outstanding, the Company shall furnish the Holders of Notes:

(1)           all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” that describes the financial condition and results
of operations of the Company and its consolidated Subsidiaries (showing in
reasonable detail, either on the face of the financial statements or in the
footnotes thereto and in Management’s Discussion and Analysis of Financial
Condition and Results of Operations, the financial condition and results of
operations of the Company and its Subsidiaries) and, with respect to the
annual information only, a report thereon by the Company’s independent
registered public accounting firm; and

(2)           all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports, in each case within the time periods specified
in the Commission’s rules and regulations.

In addition, whether or not required by the rules and
regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability within the
time periods specified in the Commission’s rules and regulations (unless the
Commission will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request.  In addition, the Company has agreed that, for
so long as any Notes remain outstanding, it will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.

 23
 

 

Section 4.04.      Compliance
Certificate.  (a) The Company
shall deliver to the Trustee, within 90 days after the end of each fiscal year,
an Officers’ Certificate stating that a review of the activities of the Company
and its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled their obligations under
this Supplemental Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained
in this Supplemental Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Supplemental
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge
and what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.

(b)           The
Company shall, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon any Officer becoming aware of any Default or Event of
Default, an Officers’ Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.

Section 4.05.      Taxes.  The Company shall pay, and shall cause each
of its Subsidiaries to pay, prior to delinquency, all material taxes,
assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is
not adverse in any material respect to the Holders.

Section 4.06.      Stay,
Extension and Usury Laws.  The
Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Supplemental Indenture; and the Company (to the extent that
it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.

Section 4.07.      Limitation
on Incurrence of Additional Indebtedness.  The Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, become liable, contingently or otherwise, with respect to, or
otherwise become responsible for payment of (collectively, “incur”) any Indebtedness (including, without
limitation, Acquired Indebtedness) other than Permitted Indebtedness.

Notwithstanding the foregoing, if no Default or Event
of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company or any of
its Subsidiaries may incur Indebtedness (including, without limitation,
Acquired Indebtedness), in each case if on the date of the incurrence of such
Indebtedness, after giving effect to the incurrence thereof, the Consolidated Fixed
Charge Coverage Ratio of the Company is greater than 1.5 to 1.0.

Section 4.08.      Corporate
Existence.  Subject to
Article 5 hereof, the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Subsidiaries, in accordance with the respective organizational documents (as
the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and its

 24
 

 

Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof
is not adverse in any material respect to the Holders.

Section 4.09.      Maintenance
of Total Unencumbered Assets. 
The Company and its Subsidiaries shall maintain Total Unencumbered
Assets of not less than 120% of the aggregate outstanding principal amount of
the Unsecured Indebtedness of the Company and its Subsidiaries, in each case on
a consolidated basis.

Section 4.10.      Offer to
Repurchase Upon Change of Control Triggering Event.  (a) 
Upon the occurrence of a Change of Control Triggering Event (the date of
such occurrence, the “Change of Control Date”),
each Holder shall have the right to require the Company to purchase such Holder’s
Notes in whole or in part in integral multiples of $1,000 at a purchase price
(the “Change of Control Purchase Price”) in cash
equal to 101% of the principal amount of such Notes, plus accrued and unpaid
interest, if any, at the date of purchase (the “Change of
Control Purchase Date”), pursuant to and in accordance with the
offer described in this Section 4.10 (the “Change of Control Offer”).

(b)           Within
30 days following the Change of Control Date the Company shall send, by first
class mail, a notice to the Holders and the Trustee stating:

(i)            that the Change of Control Offer is
being made pursuant to this Section 4.10 and that all Notes validly tendered
will be accepted for payment;

(ii)           the Change of Control Purchase Price
and the Change of Control Purchase Date, which shall be a Business Day that is
no earlier than 30 days nor later than 60 days from the date such notice is mailed
(the “Change of Control Payment Date”) other
than as may be required by law;

(iii)          that any Note not tendered will
continue to accrue interest;

(iv)          that any Note accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest after
the Change of Control Payment Date unless the Company shall default in the
payment of the Change of Control Purchase Price of the Notes and the only
remaining right of the Holder is to receive payment of the Change of Control
Purchase Price upon surrender of the applicable Note to the Paying Agent;

(v)           that Holders electing to have a
portion of a Note purchased pursuant to a Change of Control Offer may only
elect to have such Note purchased in integral multiples of $1,000;

(vi)          that if a Holder elects to have a Note
purchased pursuant to the Change of Control Offer it will be required to
surrender the Note, with the form entitled “Option of Holder to Elect Purchase”
on the reverse of the Note completed, or transfer by book-entry transfer, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Change of Control Payment Date;

(vii)         that a Holder will be entitled to
withdraw its election if the Company receives, not later than the third
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder, the
principal amount

 25
 

 

of Notes such Holder
delivered for purchase, and a statement that such Holder is withdrawing its
election to have such Note purchased; and

(viii)        that if Notes are purchased only in part
a new Note of the same type will be issued in principal amount equal to the
unpurchased portion of the Notes surrendered.

(c)           On
or before the Change of Control Payment Date, the Company shall, to the extent
lawful, accept for payment, all Notes or portions thereof validly tendered
pursuant to the Change of Control Offer, and shall deliver to the Trustee an
Officers’ Certificate stating that such Notes or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section 4.10.
The Company, the Depositary or the Paying Agent, as the case may be, shall
promptly mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company
for purchase, and the Company shall promptly issue a new Note, and the Trustee,
upon written request from the Company shall authenticate and mail or deliver
such new Note to such Holder, in a principal amount equal to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof.

(d)           The
Company shall comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of Notes
pursuant to an offer hereunder. To the extent the provisions of any securities
laws or regulations conflict with the provisions under this Section 4.10, the
Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.10 by
virtue thereof.

Section 4.11.      Termination
of Certain Covenants if Certain Ratings are Assigned.  The obligations under the covenants contained
in Sections 4.07 and 4.09 hereof shall cease to apply to the Company in
the event, and only for so long as, (1) the Notes are rated BBB or Baa2,
or higher by at least two of the three Rating Agencies, and (2) no Default
or Event of Default has occurred and is continuing.

Section 4.12.      Maintenance
of Properties; Books and Records; Compliance with Law.

(a)   The Company shall and shall cause each of its
Subsidiaries to at all times cause all properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment, and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereto; provided that
nothing in this Section 4.12 shall prevent the Company or any of its
Subsidiaries from discontinuing the operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or disposal is
either (i) in the ordinary course of business, (ii) in the reasonable
and good faith judgment of the Board of Directors or management of the Company
or the Subsidiary concerned, as the case may be, desirable in the conduct of
the business of the Company or such Subsidiary, as the case may be, or
(iii) otherwise permitted by this Indenture.

(b)           The
Company shall and shall cause each of its Subsidiaries to keep proper and true
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of the Company and each
of its Subsidiaries, and reflect on its financial statements adequate accruals
and appropriations to reserves, all in accordance with GAAP consistently
applied to the Company and its Subsidiaries taken as a whole.

(c)           The
Company shall and shall cause each of its Subsidiaries to comply in all material
respects with all statutes, laws, ordinances, or government rules and
regulations to which it is subject,

 26
 

 

non-compliance with which would materially adversely affect the
business, earnings, properties, assets or condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole.

ARTICLE 5

SUCCESSORS

Section 5.01.      Merger,
Consolidation, or Sale of Assets. 
The Company shall not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company’s assets (determined
on a consolidated basis for the Company and the Company’s
Subsidiaries) whether as an entirety or substantially as an entirety to
any Person unless:

(1)           either:

(a)           the Company shall be the surviving or
continuing entity; or

(b)           the Person (if other than the
Company) formed by such consolidation or into which the Company is merged
or the Person which acquires by sale, assignment, transfer, lease, conveyance
or other disposition the properties and assets of the Company and of the
Company’s Subsidiaries substantially as an entirety (the “Surviving
Entity”):

(i)            shall
be an entity organized and validly existing under the laws of the United States
or any State thereof or the District of Columbia; and

(ii)           shall
expressly assume, by supplemental indenture (in form and substance satisfactory
to the Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of the
Notes and the performance of every covenant of the Notes and this Supplemental
Indenture on the part of the Company to be performed or observed;

(2)           immediately after giving effect to
such transaction and the assumption contemplated by
clause (1)(b)(ii) above (including giving effect to any Indebtedness
and Acquired Indebtedness incurred or anticipated to be incurred in connection
with or in respect of such transaction), the Company or such Surviving Entity,
as the case may be:  (a) shall have
a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of
the Company immediately prior to such transaction; and (b) shall be able
to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.07 hereof, if such covenant is
then in effect; provided, however, that this
clause (2) shall not apply in the event of a transaction between the
Company and TriNet;

(3)           immediately before and immediately
after giving effect to such transaction and the assumption contemplated by
clause (1)(b)(ii) above (including, without limitation, giving effect
to any Indebtedness and Acquired Indebtedness incurred or anticipated to be
incurred and any Lien granted in connection with or in respect of the
transaction), no Default or Event of Default shall have occurred or be
continuing; and

(4)           the Company or the Surviving Entity
shall have delivered to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and, if a supplemental
indenture

 27
 

 

is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this
Supplemental Indenture and that all conditions precedent in this Supplemental
Indenture relating to such transaction have been satisfied.

For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of
one or more Subsidiaries of the Company the Capital Stock of which constitutes
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.

Section 5.02.      Successor
Corporation Substituted.  Upon
any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company in accordance with Section 5.01 hereof, in which the Company
is not the continuing corporation, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such
sale, assignment, transfer, lease, conveyance or other disposition is made
shall succeed to, and be substituted for (so that from and after the date of
such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Supplemental Indenture referring to the “Company” shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of, the Company under this Supplemental
Indenture and the Notes with the same effect as if such successor corporation
had been named as the Company herein; provided, however, that, in the case of a transfer by lease, the
predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01.      Events of
Default.  The following are “Events of Default”:

(1)           the failure to pay interest on any
Notes when the same becomes due and payable and the default continues for a
period of 30 days;

(2)           the failure to pay the principal on
any Notes, when such principal becomes due and payable, at maturity or
otherwise (including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer);

(3)           a default in the observance or
performance of any other covenant or agreement contained in this Supplemental
Indenture and such default continues for a period of 30 days after the
Company receives written notice specifying the default (and demanding that such
default be remedied) from the Trustee or the Holders of at least 25% of
the outstanding principal amount of the Notes (except in the case of a default
with respect to Section 5.01 hereof, which will constitute an Event of
Default with such notice requirement but without such passage of time
requirement);

(4)           the failure to pay at final maturity
(giving effect to any applicable grace periods and any extensions
thereof) the principal amount of any Indebtedness (other than Non-Recourse
Indebtedness) of the Company or any Subsidiary of the Company, or the
acceleration of the final stated maturity of any such Indebtedness (which
acceleration is not rescinded, annulled or otherwise cured within 20 days
of receipt by the Company or such Subsidiary of notice of any such
acceleration) if the aggregate principal amount of such Indebtedness,
together with the

 28
 

 

principal amount of any other such Indebtedness in
default for failure to pay principal at final maturity or which has been
accelerated, aggregates $50.0 million or more at any time;

(5)           there shall have been the entry by a
court of competent jurisdiction of:

(a)           a decree or order for relief in
respect of the Company or any Significant Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law; or

(b)           a decree or order adjudging the
Company or any Significant Subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company or any Significant Subsidiary under any applicable federal or state
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Subsidiary or of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and any such decree or order for relief shall
continue to be in effect, or any such other decree or order shall be unstayed
and in effect, for a period of 60 consecutive days; or

(6)           (a) 
the Company or any Significant Subsidiary commences a voluntary case or
proceeding under any applicable Bankruptcy Law or any other case or proceeding
to be adjudicated bankrupt or insolvent;

(b)           the Company or any Significant
Subsidiary consents to the entry of a decree or order for relief in respect of
the Company or such Significant Subsidiary in an involuntary case or proceeding
under any applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it;

(c)           the Company or any Significant
Subsidiary files a petition or answer or consent seeking reorganization or
relief under any applicable federal or state law;

(d)           the Company or any Significant
Subsidiary:

(i)            consents
to the filing of such petition or the appointment of, or taking possession by,
a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or such Significant Subsidiary or of any substantial
part of its property;

(ii)           makes
an assignment for the benefit of creditors; or

(iii)          admits
in writing its inability to pay its debts generally as they become due; or

(e)           the Company or any Significant
Subsidiary takes any corporate action in furtherance of any such actions in
this clause (6).

Section 6.02.      Acceleration.  If an Event of Default (other than an Event
of Default specified in clauses (5) or (6) above with respect to
the Company) shall occur and be continuing, the Trustee or the Holders of
at least 25% in principal amount of outstanding Notes may declare the principal
of and accrued interest on all the Notes to be due and payable by notice in
writing to the Company and the Trustee specifying the respective Event of
Default and that it is a “notice of acceleration” (the “Acceleration
Notice”), and the same shall become immediately due and payable.

 29
 

 

If an Event of Default specified in
clauses (5) or (6) above with respect to the Company occurs and
is continuing, then all unpaid principal of, and premium, if any, and accrued
and unpaid interest on all of the outstanding Notes shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.

At any time after a declaration of acceleration with
respect to the Notes as described in the preceding paragraph, the Holders of a
majority in principal amount of the Notes may rescind and cancel such
declaration and its consequences:

(1)           if the rescission would not conflict
with any judgment or decree;

(2)           if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of the acceleration;

(3)           to the extent the payment of such
interest is lawful, interest on overdue installments of interest and overdue
principal, which has become due otherwise than by such declaration of
acceleration, has been paid;

(4)           if the Company has paid the Trustee
its reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances; and

(5)           in the event of the cure or waiver of
an Event of Default of the type described in clauses (5) or
(6) of Section 6.01 hereof, the Trustee shall have received an
Officers’ Certificate and an Opinion of Counsel that such Event of Default has
been cured or waived.  No such rescission
shall affect any subsequent Default or impair any right consequent thereto.

Section 6.03.      Other
Remedies.  If an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal, premium, if any, and interest on the Notes
or to enforce the performance of any provision of the Notes or this
Supplemental Indenture.

The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Holder of a Note in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. 
All remedies are cumulative to the extent permitted by law.

Section 6.04.      Waiver of
Past Defaults.  Holders of not
less than a majority in aggregate principal amount of the then outstanding
Notes by notice in writing to the Trustee may on behalf of the Holders of all
of the Notes waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of
the principal of, premium, if any, or interest on, the Notes (including in
connection with a Change of Control Offer or other offer to purchase) (provided, however, that the Holders of a majority in
aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration).  Upon
any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this
Supplemental Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

Section 6.05.      Control by
Majority.  Holders of a
majority in principal amount of the then outstanding Notes may, by written
notice, direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it.  However,

 

 30

the Trustee may refuse to follow any direction that conflicts with law
or this Supplemental Indenture that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in any personal liability.

Section 6.06.      Limitation
on Suits.  A Holder of a Note
may pursue a remedy with respect to this Supplemental Indenture or the Notes
only if:

(a)           a
Holder gives to the Trustee written notice of a continuing Event of Default;

(b)           the
Holders of at least 25% in principal amount of the then outstanding Notes make
a written request to the Trustee to pursue the remedy;

(c)           such
Holder or Holders offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;

(d)           the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer and, if requested, the provision of indemnity; and

(e)           during
such 60-day period the Holders of a majority in principal amount of the then
outstanding Notes do not give the Trustee a written direction inconsistent with
the request.

A Holder may not use this Supplemental Indenture to
prejudice the rights of another Holder or to obtain a preference or priority
over another Holder.

Section 6.07.      Rights of
Holders of Notes to Receive Payment. 
Notwithstanding any other provision of this Supplemental Indenture, the
right of any Holder to receive payment of principal, premium, if any, and
interest on the Notes so held, on or after the respective due dates expressed
in the Notes (including in connection with an offer to purchase), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.

Section 6.08.      Collection
Suit by Trustee.  If an Event
of Default specified in Section 6.01(1) or (2) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any amounts due the Trustee
under Section 7.07 hereof.

Section 6.09.      Trustee May
File Proofs of Claim.  The
Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent in
writing to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof.  To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07
hereof out of the estate in any such proceeding, shall be

 31
 

 

denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.  Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.

Section 6.10.      Priorities.  If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:

First:  to the Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;

Second:  to Holders of Notes for amounts due and
unpaid on the Notes for principal, premium, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any and interest, respectively;
and

Third:  to the Company or to such party as a court of
competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for
any payment to Holders of Notes pursuant to this Section 6.10.

Section 6.11.      Undertaking
for Costs.  In any suit for
the enforcement of any right or remedy under this Supplemental Indenture or in
any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant.  This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or
a suit by Holders of more than 10% in principal amount of the then outstanding
Notes.

ARTICLE 7

TRUSTEE

Section 7.01.      Duties of
Trustee.  (a) If an Event of
Default has occurred and is continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Supplemental Indenture, and use the same
degree of care and skill in its exercise, as a prudent person would exercise or
use under the circumstances in the conduct of such person’s own affairs.

(b)           Except
during the continuance of an Event of Default:

(i)            the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Supplemental
Indenture and no implied covenants or obligations shall be read into this
Supplemental Indenture against the Trustee; and

(ii)           the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the

 32
 

 

Trustee and conforming to the requirements of this
Supplemental Indenture in the absence of bad faith on the Trustee’s part; provided, however, that the Trustee shall examine the
certificates and opinions to determine whether or not they substantially
conform to the requirements of this Supplemental Indenture.

(c)           The
Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

(i)            this paragraph does not limit the
effect of paragraph (b) of this Section 7.01;

(ii)           the Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts;

(iii)          the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a written direction received by it pursuant to Section 6.05; and

(iv)          the Trustee shall not be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties under this Supplemental Indenture or in the
exercise of any of its rights or powers, if it has reasonable grounds to
believe repayment of the funds or adequate indemnity against the risk or
liability is not reasonably assured to it.

(d)           Every
provision of this Supplemental Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee is subject to the
provisions of this Section 7.01 and to the provisions of the TIA.

(e)           The
Trustee may refuse to perform any duty or exercise any right or power unless it
receives indemnity satisfactory to it against any loss, liability or expense.

(f)            The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company.  Money and Government Securities held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.

(g)           The
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of
not less than a majority in principal amount of the Notes at the time
outstanding given pursuant to Section 6.05 of this Supplemental Indenture,
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Supplemental Indenture.

Section 7.02.      Rights of
Trustee.  (a) The Trustee may
rely conclusively on any document believed by it to be genuine and to have been
signed or presented by the proper Person.  The Trustee need not investigate any fact or
matter stated in the document.

(b)           Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel that conforms to Section 11.04.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.

(c)           The
Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.

 33
 

 

(d)           The
Trustee shall not be liable for any action it takes or omits to take in good
faith that it believes to be authorized or within its rights or powers, except
conduct that constitutes willful misconduct, negligence or bad faith.

(e)           The
Trustee may consult with counsel, and the Trustee will not be liable for any
action it takes or omits in reliance on, and in accordance with advice of
counsel.

(f)            The
Trustee will not be required to investigate any facts or matters stated in any
document, but if it decides to investigate any matters or facts, the Trustee or
its agents or attorneys will be entitled to examine the books, records and
premises of the Company.

Section 7.03.      Individual
Rights of Trustee.  The
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Company or any Affiliate of the
Company with the same rights it would have if it were not Trustee.  Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights.  However, the Trustee must comply with
Sections 7.10 and 7.11 hereof.

Section 7.04.      Trustee’s
Disclaimer.  The Trustee
(i) is not responsible for and makes no representation as to the validity
or adequacy of this Supplemental Indenture, (ii) shall not be accountable
for the Company’s use of the proceeds from the Notes and (iii) shall not
be responsible for any statement of the Company in this Supplemental Indenture,
other than the Trustee’s certificate of authentication, or in any prospectus
used in the sale of any of the Notes, other than statements, if any, provided
in writing by the Trustee for use in such prospectus.

Section 7.05.      Notice of
Defaults.  The Trustee will
give to the Holders notice of any Default with regard to the Notes actually
known to a Responsible Officer within 90 days after receipt of such knowledge
and in the manner and to the extent provided in TIA § 313(c), and
otherwise as provided in Section 11.02 of this Supplemental Indenture; provided, however, that except in the case of a Default in
payment of the principal of, premium, if any, or interest on any Note, the
Trustee will be protected in withholding notice of Default if and so long as a
committee of its Responsible Officers in good faith determines that withholding
of the notice is in the interests of the Holders of the Notes.

Section 7.06.      Reports by
Trustee.  Within 60 days after
each October 15 beginning with the October 15 following the date of
this Supplemental Indenture, the Trustee will mail to each Holder, at the name
and address which appears on the registration books of the Company, and to each
Holder who has, within the two years preceding the mailing, filed that person’s
name and address with the Trustee for that purpose and each Holder whose name
and address have been furnished to the Trustee pursuant to Section 2.05, a
brief report dated as of that October 15 which complies with TIA
§ 313(a).  Reports to Noteholders
pursuant to this Section 7.06 shall be transmitted in the manner and to
the extent provided in TIA § 313(c). 
The Trustee also will comply with TIA § 313(b).

A copy of each report will at the time of its mailing
to Holders be filed with each stock exchange on which the Notes are listed and
also with the SEC.  The Company will
promptly notify the Trustee when the Notes are listed on any stock exchange and
of any delisting of the Notes.

Section 7.07.      Compensation
and Indemnity.  The Company
shall pay to the Trustee from time to time reasonable compensation for its services.  The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its
services.  Such expenses shall include
the reasonable compensation and expenses, disbursements and advances of the
Trustee’s agents, counsel, accountants and experts.

 34
 

 

The Company shall indemnify the Trustee against any
and all loss, liability or expense (including reasonable attorney’s
fees) incurred by it in connection with the administration of the trust
created by this Supplemental Indenture and the performance of its duties under
this Supplemental Indenture.  The Trustee
shall notify the Company promptly of any claim for which it may seek
indemnity.  Failure by the Trustee to so
notify the Company shall not relieve the Company of its obligations
hereunder.  The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel.  The
Company need not pay for any settlement made without its consent.  The Company need not reimburse any expense or
indemnify against any loss, expense or liability incurred by the Trustee to the
extent it is due to the Trustee’s own willful misconduct, negligence or bad
faith.

To secure the Company’s obligations to make payments
to the Trustee under this Section 7.07, the Trustee shall have a Lien
prior to the Notes on all money or property held or collected by the Trustee,
other than money or property held in trust to pay principal or interest on
particular Notes.  Those obligations of
the Company shall survive the satisfaction and discharge of this Supplemental
Indenture.

When the Trustee incurs expenses or renders services
after an Event of Default specified in Sections 6.01(6) or
(7) hereof occurs, the expenses and the compensation for the services of
the Trustee are intended to constitute expenses of administration under any
Bankruptcy Law.

For purposes of this Section 7.07, “Trustee” will
include any predecessor Trustee, but the willful misconduct, negligence or bad
faith of any Trustee shall not affect the rights of any other Trustee under
this Section 7.07.

Section 7.08.      Replacement
of Trustee.  The Trustee may
resign at any time by so notifying the Company. 
The Holders of a majority in aggregate principal amount of the then
outstanding Notes may remove the Trustee by so notifying the Trustee and the
Company and may appoint a successor Trustee. 
The Company may remove the Trustee if:

(a)           the
Trustee fails to comply with Section 7.10;

(b)           the
Trustee is adjudged bankrupt or insolvent or an order for relief is entered
with respect to the Trustee under any Bankruptcy Law;

(c)           a
custodian or public officer takes charge of the Trustee or its property; or

(d)           the
Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee.  Within one
year after the successor Trustee takes office, the Holders of a majority in
aggregate principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.

No removal or appointment of a Trustee will be valid
if that removal or appointment would conflict with any law applicable to the
Company.

A successor Trustee will deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee
will, subject to the Lien provided for in Section 7.07, transfer all
property held by it as Trustee to the successor Trustee, the resignation or
removal of the retiring Trustee will become effective, and the successor
Trustee will have all the rights,

 35
 

 

powers and duties of the Trustee under this
Supplemental Indenture.  A successor
Trustee will mail notice of its succession to each Holder.

If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee,
the Company or the Holders of a majority in aggregate principal amount of the
then outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.10,
any Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee
pursuant to this Section, the Company’s obligations under Section 7.07
shall continue for the benefit of the retiring Trustee.

Section 7.09.      Successor
Trustee by Merger, etc.  If
the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust assets to, another Person, the
resulting, surviving or transferee Person will, without any further act, be the
successor Trustee.

If at the time a successor by merger, conversion or
consolidation to the Trustee succeeds to the trusts created by this
Supplemental Indenture any of the Notes have been authenticated but not
delivered, the successor to the Trustee may adopt the certificate of
authentication of the predecessor Trustee, and deliver the Notes which were
authenticated by the predecessor Trustee; and if at that time any of the Notes
have not been authenticated, the successor to the Trustee may authenticate
those Notes in its own name as the successor to the Trustee; and in either case
the certificates of authentication will have the full force provided in this
Supplemental Indenture for certificates of authentication.

Section 7.10.      Eligibility;
Disqualification.  The Trustee
will at all times satisfy the requirements of TIA § 310(a).  The Trustee will at all times have (or shall
be a member of a bank holding company system whose parent corporation
has) a combined capital and surplus of at least $50,000,000 as set forth
in its most recently published annual report of condition, which will be deemed
for this paragraph to be its combined capital and surplus.  The Trustee will comply with TIA
§ 310(b).

Section 7.11.      Preferential
Collection of Claims.  The
Trustee shall comply with TIA § 311(a), excluding any creditor
relationship listed in TIA § 311(b). 
A Trustee who has resigned or been removed shall be subject to TIA
§ 311(a) to the extent indicated therein.

ARTICLE 8

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01.      Option to
Effect Legal Defeasance or Covenant Defeasance.  The Company may, at the option of its Board
of Directors evidenced by a Board Resolution set forth in an Officers’
Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof
be applied to all outstanding Notes upon compliance with the conditions set
forth below in this Article 8.

Section 8.02.      Legal
Defeasance and Discharge. 
Upon the Company’s exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed
to have been discharged from its obligations with respect to all outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). 
For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall

 36
 

 

thereafter be deemed to be “outstanding” only for the purposes of
Section 8.05 hereof and the other Sections of this Supplemental
Indenture referred to in (a) and (b) below, and to have satisfied all
its other obligations under such Notes and this Supplemental Indenture (and the
Trustee, on written demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged hereunder:  (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Company’s obligations with respect to such Notes under
Article 2 and Section 4.02 hereof, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company’s
obligations in connection therewith and (d) this Article 8.  Subject to compliance with this
Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.

Section 8.03.      Covenant
Defeasance.  Upon the Company’s
exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, the Company shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.09 and 4.11
hereof and clause (2) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in
Section 8.04 are satisfied (hereinafter, “Covenant
Defeasance”), and the Notes shall thereafter be deemed not “outstanding”
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes).  For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Supplemental Indenture
and such Notes shall be unaffected thereby. 
In addition, upon the Company’s exercise under Section 8.01 hereof
of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(4) and (5) hereof shall not constitute Events of
Default.

Section 8.04.      Conditions
to Legal or Covenant Defeasance. 
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding U.S. Notes:

In order to exercise either Legal Defeasance or
Covenant Defeasance:

(a)           the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, cash in United States dollars, non-callable Government Securities,
or a combination thereof, in such amounts as will be sufficient, in the written
opinion of a nationally recognized independent registered public accounting
firm addressed to the Trustee, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the stated date for payment thereof;

(b)           in
the case of an election under Section 8.02 hereof, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or
(ii) since the date of this Supplemental Indenture, there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders
of the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the

 37
 

 

same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred;

(c)           in
the case of an election under Section 8.03 hereof, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes as a result
of such Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;

(d)           no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day after
the date of deposit;

(e)           such
Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under this Supplemental Indenture or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

(f)            the
Company shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Company with the intent of preferring the
Holders over any other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company or others;

(g)           the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for or
relating to the Legal Defeasance or the Covenant Defeasance, as the case may
be, have been complied with; and

(h)           the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that, assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the date of deposit and that no Holder is an
insider of the Company, after the 91st day following the date of deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally.

Notwithstanding the foregoing, the opinion of counsel
required by clause (b) above with respect to Legal Defeasance need not be
delivered if all Notes not theretofore delivered to the Trustee for
cancellation (1) have become due and payable or (2) will become due
and payable on the maturity date within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company.

Section 8.05.      Deposited
Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions.  Subject to
Section 8.06 hereof, all money and non-callable Government Securities
(including the proceeds thereof) deposited with the Trustee pursuant to
Section 8.04 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Supplemental Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as
the Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent
required by law.

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable Government Securities deposited pursuant to Section 8.04

 38
 

 

hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.

Anything in this Article 8 to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon the written request of the Company any money or non-callable
Government Securities held by it as provided in Section 8.04 hereof which,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.

Section 8.06.      Repayment to
Company.  Any money deposited
with the Trustee or any Paying Agent, or then held by the Company, in trust for
the payment of the principal of, premium, if any, or interest on any Note and
remaining unclaimed for two years after such principal, and premium, if any, or
interest has become due and payable shall be paid to the Company on its written
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall
Street  Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

Section 8.07.      Reinstatement.  If the Trustee or Paying Agent is unable to
apply any United States dollars or non-callable Government Securities in
accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company’s
obligations under this Supplemental Indenture and the Notes shall be revived
and reinstated as though no deposit had occurred pursuant to Section 8.02
or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 8.02 or 8.03 hereof, as
the case may be; provided, however, that, if the
Company makes any payment of principal of, premium, if any, or interest on any
Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

ARTICLE 9

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01.      Without
Consent of Holders of Notes. 
Notwithstanding Section 9.02 of this Supplemental Indenture, the
Company and the Trustee may amend or supplement this Supplemental Indenture or
the Notes without the consent of any Holder of a Note:

(a)           to
cure any ambiguity, defect or inconsistency that does not adversely affect in
any material respect the rights hereunder of any Holder of the Notes;

(b)           to
provide for uncertificated Notes in addition to or in place of certificated Notes
or to alter the provisions of Article 2 hereof (including the related
definitions) in a manner that does not materially adversely affect any
Holder;

 39
 

 

(c)           to
provide for the assumption of the Company’s obligations to the Holders by a
successor to the Company pursuant to Article 5 hereof;

(d)           to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect in any material respect
the rights hereunder of any Holder of the Notes;

(e)           to
comply with requirements of the SEC in order to effect or maintain the
qualification of this Supplemental Indenture under the TIA; or

(f)            to
evidence and provide for the acceptance of appointment under this Supplemental
Indenture of a successor Trustee.

Upon the written request of the Company accompanied
by, to the extent necessary, a Board Resolution authorizing the execution of
any such amended or supplemental Supplemental Indenture, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee
shall join with the Company in the execution of any amended or supplemental
Supplemental Indenture authorized or permitted by the terms of this
Supplemental Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Supplemental Indenture
that affects its own rights, duties or immunities under this Supplemental
Indenture or otherwise.

Section 9.02.      With Consent
of Holders of Notes.  Except
as provided below in this Section 9.02, the Company and the Trustee may
amend or supplement this Supplemental Indenture, and the Notes with the written
consent of the Holders of at least a majority in principal amount of the Notes
then outstanding voting as a single class (including consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except
a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Supplemental Indenture
or the Notes may be waived with the written consent of the Holders of a
majority in principal amount of the then outstanding Notes voting as a single
class (including consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes).

Upon the written request of the Company accompanied by
a Board Resolution authorizing the execution of any such amended or
supplemental Supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company in the
execution of such amended or supplemental Supplemental Indenture unless such
amended or supplemental Supplemental Indenture directly affects the Trustee’s
own rights, duties or immunities under this Supplemental Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Supplemental Indenture.

It shall not be necessary for the consent of the
Holders of Notes under this Section 9.02 to approve the particular form of
any proposed amendment or waiver, but it shall be sufficient if such consent approves
the substance thereof.

After an amendment, supplement or waiver under this
Section becomes effective, the Company shall mail to the Holders affected
thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any

 

 40

way impair or affect the validity of any such amended
or supplemental Supplemental Indenture or waiver.  Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority in aggregate principal amount of the Notes
then outstanding voting as a single class may waive in writing compliance in a
particular instance by the Company with any provision of this Supplemental
Indenture or the Notes.  However, without
the written consent of each Holder affected, an amendment or waiver under this
Section 9.02 may not (with respect to any Notes held by a non-consenting
Holder):

(a)           reduce the amount of Notes whose
Holders must consent to an amendment;

(b)           reduce the rate of or change or have
the effect of changing the time for payment of interest, including defaulted interest,
on any Notes;

(c)           reduce the principal of or change or
have the effect of changing the fixed maturity of any Notes;

(d)           make any Notes payable in money other
than that stated in the Notes;

(e)           make any change in provisions of this
Supplemental Indenture protecting the right of each Holder to receive payment
of principal of and interest on such Note on or after the due date thereof or
to bring suit to enforce such payment, or permitting Holders of a majority in
principal amount of Notes to waive Defaults or Events of Default;

(f)            after the Company’s obligation to
purchase Notes arises thereunder, amend, change or modify in any material
respect the obligation of the Company to make and consummate of Change of
Control Offer in the event of a Change of Control Triggering Event or, after
such Change of Control Triggering Event has recurred, modify any of the
provisions or definitions with respect thereto; or

(g)           modify or change any provision of
this Supplemental Indenture or the related definitions affecting the
subordination or ranking of the Notes in a manner which adversely affects the
Holders.

Section 9.03.      Compliance
with Trust Indenture Act. 
Every amendment or supplement to this Supplemental Indenture or the
Notes shall be set forth in a amended or supplemental Supplemental Indenture
that complies with the TIA as then in effect.

Section 9.04.      Revocation
and Effect of Consents.  Until
an amendment, supplement or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder of a Note and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note.  However, any such Holder or
subsequent Holder may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or
amendment becomes effective.  An
amendment, supplement or waiver becomes effective in accordance with its terms
and thereafter binds every Holder.

Section 9.05.      Notation on
or Exchange of Notes.  The
Trustee may place an appropriate notation about an amendment, supplement or
waiver on any Note thereafter authenticated. 
The Company in exchange for all Notes may issue and the Trustee shall,
upon receipt of an Authentication Order, authenticate new Notes that reflect
the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a
new Note shall not affect the validity and effect of such amendment, supplement
or waiver.

 41
 

 

Section 9.06.      Trustee to
Sign Amendments, etc.  The
Trustee shall sign any amended or supplemental Supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee.  The Company may not sign an
amendment or supplemental Supplemental Indenture until the Board of Directors
approves it.  In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject
to Section 7.01 hereof) shall be fully protected in relying
conclusively upon, in addition to the documents required by Section 11.04
hereof, an Officer’s Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental indenture is authorized or permitted
by this Supplemental Indenture.

ARTICLE 10

SATISFACTION AND DISCHARGE

Section 10.01.      Satisfaction
and Discharge.  This
Supplemental Indenture will be discharged and will cease to be of further
effect (except as to surviving rights or registration of transfer or exchange
of the Notes, as expressly provided for in this Supplemental Indenture) as
to all outstanding Notes, when:

(a)           either:

(i)            all the Notes theretofore
authenticated and delivered (except lost, stolen or destroyed Notes that have
been replaced or paid and Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation; or

(ii)           all Notes not theretofore delivered
to the Trustee for cancellation have become due and payable and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Notes not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Notes to the date of deposit together with
irrevocable instructions from the Company directing the Trustee to apply such
funds to the payment thereof at maturity;

(b)           the Company has paid all other sums
payable under this Supplemental Indenture by the Company; and

(c)           the Company has delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel stating that all
conditions precedent under this Supplemental Indenture relating to the
satisfaction and discharge of this Supplemental Indenture have been complied
with.

Section 10.02.      Application
of Trust Money.  Subject to
the provisions of Section 8.06, all money deposited with the Trustee
pursuant to Section 10.01 shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Supplemental Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium, if any) and
interest for whose payment such money has been deposited with the Trustee; but
such money need not be segregated from other funds except to the extent
required by law.

If the Trustee or Paying Agent is unable to apply any
money or Government Securities in accordance with Section 10.01 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application,

 42
 

 

the Company’s obligations under this Supplemental
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 10.01; provided that
if the Company has made any payment of principal of, premium, if any, or
interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the
Trustee or Paying Agent.

ARTICLE 11

MISCELLANEOUS

Section 11.01.      Trust
Indenture Act Controls.  If
any provision of this Supplemental Indenture limits, qualifies or conflicts
with the duties imposed by TIA § 318(c), the imposed duties shall control.

Section 11.02.      Notices.  Any notice or communication by the Company or
the Trustee to the other is duly given if in writing and delivered in Person or
mailed by first class mail (regular, registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
to the other’s address:

If to the Company:

iStar Financial Inc.

1114 Avenue of the Americas, 27th Floor

New York, NY  10036

Facsimile:  (212) 930-9494

Attention:  Chief Executive Officer

With a copy to:

Clifford Chance US LLP

31 West 52nd Street

New York, NY  10019

Facsimile:  (212) 878-8375

Attention:  Kathleen L. Werner, Esq.

If to the Trustee:

US Bank Trust National Association

100 Wall Street, 19th Floor

New York, NY 10005

Facsimile:  (212) 361-6153

Attention:  Corporate Trust Department

The Company or the
Trustee, by notice to the others may designate additional or different
addresses for subsequent notices or communications.

All notices and communications (other than those sent
to Holders) shall be deemed to have been duly given:  at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the courier, if
sent by overnight air courier guaranteeing next day delivery.

 43
 

 

Any notice or communication to a Holder shall be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address shown
on the register kept by the Registrar. 
Any notice or communication shall also be so mailed to any Person
described in TIA § 313(c), to the extent required by the TIA.  Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency with respect to
other Holders.

If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not the
addressee receives it.

If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same time.

Section 11.03.      Communication
by Holders of Notes with Other Holders of Notes.  Holders may communicate pursuant to TIA
§ 312(b) with other Holders with respect to their rights under this
Supplemental Indenture or the Notes.  The
Company, the Trustee, the Registrar and anyone else shall have the protection
of TIA § 312(c).

Section 11.04.      Certificate
and Opinion as to Conditions Precedent.  Upon any request or application by the
Company to the Trustee to take any action under this Supplemental Indenture,
the Company shall furnish to the Trustee:

(a)           an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Supplemental Indenture relating to the proposed action
have been satisfied; and

(b)           an Opinion of Counsel in form and
substance reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants have been
satisfied.

Section 11.05.      Statements
Required in Certificate or Opinion. 
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Supplemental Indenture (other than a
certificate provided pursuant to TIA § 314(a)(4)) shall comply with
the provisions of TIA § 314(e) and shall include:

(a)           a statement that the Person making
such certificate or opinion has read such covenant or condition;

(b)           a brief statement as to the nature
and scope of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;

(c)           a statement that, in the opinion of
such Person, he or she has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and

(d)           a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been satisfied.

Section 11.06.      Rules by
Trustee and Agents.  The
Trustee may make reasonable rules for action by or at a meeting of
Holders.  The Registrar or Paying Agent
may make reasonable rules and set reasonable requirements for its functions.

 44
 

 

Section 11.07.      No Personal
Liability of Directors, Officers, Employees and Stockholders.  No past, present or future director, officer,
employee, incorporator or stockholder of the Company, as such, shall have any
liability for any obligations of the Company under the Notes, this Supplemental
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation.  Each
Holder by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.

Section 11.08.      Governing
Law.  THE INTERNAL LAW OF THE
STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL
INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.

Section 11.09.      No Adverse
Interpretation of Other Agreements. 
This Supplemental Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person.  Any such indenture, loan
or debt agreement may not be used to interpret this Supplemental Indenture.

Section 11.10.      Successors.  All agreements of the Company in this
Supplemental Indenture and the Notes shall bind its successors.  All agreements of the Trustee in this
Supplemental Indenture shall bind its successors.

Section 11.11.      Severability.  In case any provision in this Supplemental
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

Section 11.12.      Counterpart
Originals.  The parties may
sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but
all of them together represent the same agreement.

Section 11.13.      Table of
Contents, Headings, etc.  The
Table of Contents, Cross-Reference Table and Headings of the Articles and
Sections of this Supplemental Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Supplemental
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.

Section 11.14.      Conflicts
with Indenture.  If any
provision of this Supplemental Indenture is inconsistent with any provision of
the Indenture, the provision of this Supplemental Indenture will control with
regard to the Notes.

[Signatures on
following page]

 

 45

SIGNATURES

	
  Dated as of March 9, 2007

  	
   

  
	
   

  	
   

  
	
   

  	
  iSTAR FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  US BANK TRUST NATIONAL ASSOCIATION, not 

  in its individual capacity, but solely as Trustee

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT A

[Face of Note]

[Insert the Global Note Legend, if applicable
pursuant to the provisions of the 

Supplemental Indenture]

	
  CUSIP 45031UBE0

  
	
  Senior Floating
  Rate Notes due 2010

  
	
  No. 1

  	
   

  	
  $500,000,000

  
	
  iSTAR FINANCIAL
  INC.

  
	
   

  	
   

  	
   

  
	
  promises to pay to CEDE & CO., or registered
  assigns, the principal sum of FIVE HUNDRED MILLION Dollars on March 9,
  2010.

  
	
   

  
	
  Interest Payment Dates: March 9, June 9,
  September 9 and December 9

  
	
   

  
	
  Record Dates: February 15, May 15, August 15 and
  November 15

  
	
   

  
	
  Dated: March 9, 2007

  	
   

  	
   

  
	
  .

  	
   

  	
  iSTAR FINANCIAL INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SEAL

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  This is one of the Notes referred to

  	
   

  	
   

  
	
  in the within-mentioned Supplemental Indenture:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  US BANK TRUST NATIONAL ASSOCIATION

  	
   

  	
   

  
	
    as Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
   

  
					

 

 

[Back of Note]

Senior Floating Rate Notes due 2010

Capitalized terms
used herein shall have the meanings assigned to them in the Indenture referred
to below unless otherwise indicated.

1.  INTEREST.  iStar Financial Inc., a Maryland corporation
(the “Company”), promises to pay interest on
the principal amount of this note quarterly in arrears on March 9,
June 9, September 9 and December 9 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”) at the rate per annum, reset
quarterly (the “interest reset period” and the
first date in such period, the “interest reset date”),
equal to three-month LIBOR (as defined below) plus 0.35% to be determined
by the calculation agent.  Interest on
the notes will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from March 9, 2007; provided that
if there is no existing default in the payment of interest, and if this note is
authenticated between a record date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such next
succeeding interest payment date; provided, further,
that the first interest payment date shall be June 9, 2007.  The Company shall pay interest (including
post-petition interest in any proceeding under any bankruptcy law) on
overdue principal and premium, if any, from time to time on demand at the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any bankruptcy law) on overdue installments of interest
(without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. 
Interest will be computed on the basis of a 360-day year using the
actual number of days elapsed from and including an interest payment date to
but excluding the next succeeding interest payment date.  If any interest payment date on the Notes
other than the maturity date is not a Business Day, such interest payment date
will be postponed to the next succeeding Business Day, except that if such
Business Day falls in the next succeeding calendar month, such interest payment
date will be the immediately preceding Business Day:  If the
maturity date of the Notes falls on a day that is not a Business Day, the
required payment of principal and interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on such payment for the period from and after the maturity date to the
date of such payment on the next succeeding Business Day.

The interest rate on the Notes applicable to each
interest reset period commencing on the related interest reset date, or the
original issue date in the case of the initial interest period, will be the
rate determined as of the applicable interest determination date.  The “interest determination date” will be the
second London business day immediately preceding the original issue date, in
the case of the initial interest reset period, or thereafter the applicable
interest reset date.

US Bank Trust National Association, or its successor
appointed by the Company, will act as calculation agent.  Three-month LIBOR will be determined by the
calculation agent as of the applicable interest determination date in
accordance with the following provisions:

(i)                   LIBOR
is the rate for deposits in U.S. dollars for the three-month period which
appears on Reuters on page LIBOR 01 at approximately 11:00 a.m., London
time.  If no rate appears on Reuters on
page LIBOR 01, LIBOR for such interest determination date will be determined in
accordance with the provisions of paragraph (ii) below.

(ii)                With
respect to an interest determination date on which no rate appears on Reuters
on page LIBOR 01 at approximately 11:00 a.m., London time, on such interest
determination date, the calculation agent shall request the principal London
offices of each of four major reference banks (which may include affiliates of
the underwriters) in the London interbank market selected by the calculation
agent (after consultation with us) to provide the calculation agent with a
quotation of the rate at which deposits of U.S. dollars having a

 

three-month maturity, commencing on the second London Banking day
immediately following such interest determination date, are offered by it to
prime banks in the London interbank market as of approximately 11:00 a.m.,
London time, on such interest determination date in a principal amount equal to
an amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time. 
If at least two such quotations are provided, LIBOR for such interest
determination date will be the arithmetic mean of such quotations as calculated
by the calculation agent.  If fewer than
two quotations are provided, LIBOR for such interest determination date will be
the arithmetic mean of the rates quoted at approximately 11:00 a.m., New York
City time, on such interest determination date by three major banks (which may
include affiliates of the underwriters) selected by the calculation agent
(after consultation with us) for loans in U.S. dollars to leading European
banks having a three-month maturity commencing on the second London Banking day
immediately following such interest determination date and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that is
representative for a single transaction in such market at such time; provided, however, that if the banks selected as aforesaid
by the calculation agent are not quoting such rates as mentioned in this
sentence, LIBOR for such interest determination date will be LIBOR determined
with respect to the immediately preceding interest determination date.

All percentages resulting from any calculation of any
interest rate for the Notes will be rounded, if necessary, to the nearest one
hundred thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward and all dollar amounts will be rounded to the
nearest cent, with one-half cent being rounded upward.

Promptly upon such determination, the calculation
agent will notify us and the Trustee (if the calculation agent is not the
Trustee) of the interest rate for the new interest reset period.  Upon request of a holder of the Notes, the
calculation agent will provide to such holder the interest rate in effect on
the date of such request and, if determined, the interest rate for the next
interest reset period.

All calculations made by the calculation agent for the
purposes of calculating interest on the Notes shall be conclusive and binding
on the holders and the Company, absent manifest error.

2.  METHOD OF PAYMENT.  The Company will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of
Notes at the close of business on the February 15, May 15, August 15 and
November 15 immediately preceding the Interest Payment Date, even if such
Notes are canceled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with
respect to defaulted interest.  The Notes
will be payable as to principal, premium, if any, and interest at the office or
agency of the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of interest
may be made by check mailed to the Holders at their addresses set forth in the
register of Holders, and provided that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest, and premium, if any, on, all Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent.  Such payment shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.  The
Company reserves the right to pay interest to Holders of Notes by check mailed
to such Holders at their registered addresses or by wire transfer to Holders of
at least $5 million aggregate principal amount of Notes.

3.  PAYING AGENT AND REGISTRAR.  Initially, US Bank Trust National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar.  The Company may change any

 

Paying Agent or Registrar
without notice to any Holder.  The
Company or any of its Subsidiaries may act in any such capacity.

4.  INDENTURE.  The Company issued the Notes under an
Indenture dated as of February 5, 2001, as amended and supplemented,
including as supplemented by a Supplemental Indenture dated as of March 9, 2007
(collectively, the “Indenture”)
between the Company and the Trustee.  The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code §§ 77aaa-77bbbb).  The
Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. 
To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and
be controlling.  The Notes are
obligations of the Company.  The Company
is issuing $225.0 million in aggregate principal amount on the Issue Date
and may issue Additional Notes in accordance with the terms of the Indenture.

5.  REPURCHASE OF OPTION OF HOLDER.  Upon
the occurrence of a Change of Control Triggering Event, the Company will be
required to offer to purchase all of the outstanding Notes at a principal price
equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, thereon to the date of purchase.

6.  DENOMINATIONS, TRANSFER,
EXCHANGE.  The Notes are in
registered form without coupons in denominations of $2,000 and integral
multiples of $1,000.  The transfer of
Notes may be registered and Notes may be exchanged as provided in the
Indenture.  The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and the Company and the Trustee may require a Holder to
pay any taxes and fees required by law or permitted by the Indenture.  Also, the Company need not exchange or
register the transfer of any Notes during the period between a record date and
the corresponding Interest Payment Date.

7.   PERSONS DEEMED OWNERS.  The registered Holder of a Note may be
treated as its owner for all purposes.

8.  AMENDMENT, SUPPLEMENT AND
WAIVER.  Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in principal amount of
the then outstanding Notes voting as a single class, and any existing default
or compliance with any provision of the Indenture or the Notes may be waived
with the written consent of the Holders of a majority in principal amount of
the then outstanding Notes voting as a single class.  Without the consent of any Holder of a Note,
the Indenture or the Notes may be amended or supplemented to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to or
in place of certificated Notes, to provide for the assumption of the Company’s
obligations to Holders of the Notes in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect in any material respects
the rights under the Indenture of any such Holder, to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act or to evidence and provide for the
acceptance of appointment under the Indenture of a successor Trustee.

9.  DEFAULTS AND REMEDIES.  Events of Default are set forth in the
Indenture.  If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable.  Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of bankruptcy
or insolvency, all outstanding Notes will become due and payable without
further action or notice.  Holders may
not enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in writing in its

 

exercise of any trust or
power.  The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their
interest.  The Holders of a majority in
aggregate principal amount of the Notes then outstanding by written notice to
the Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes.  The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.

10.  TRUSTEE DEALINGS WITH
COMPANY.  The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.

11.  NO RECOURSE AGAINST OTHERS.  A director, officer, employee, incorporator
or stockholder, of the Company, as such, shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver
and release are part of the consideration for the issuance of the Notes.

12.  AUTHENTICATION.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

13.  ABBREVIATIONS.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT
TEN (= joint tenants with right of survivorship and not as tenants in
common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

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

 

The Company will
furnish to any Holder upon written request and without charge a copy of the
Indenture.  Requests may be made to:

iStar Financial Inc.

1114 Avenue of the Americas, 27th Floor

New York, NY  10036

Attention:  Investor Relations

 

ASSIGNMENT FORM

	
  To assign this Note, fill in
  the form below:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (I) or (we) assign and transfer this Note
  to:

  	
   

  	
   

  
	
   

  	
   

  	
  (Insert
  assignee’s legal name)

  
	
   

  
	
  (Insert
  assignee’s soc. sec. or tax I.D. no.)

  
	
   

  
	
   

  
	
   

  
	
  (Print or type
  assignee’s name, address and zip code)

  
	
  and irrevocably appoint

  	
   

  	
   

  
	
  to transfer this Note on the books of the Company.
  The agent may substitute another to act for him.

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on

  
	
   

  	
   

  	
   

  	
  the face of this Note)

  
	
   

  	
   

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  	
   

  
	
  

  

  	
   

  	
   

  
	
  *         Participant
  in a recognized Signature Guarantee Medallion Program (or other signature
  guarantor acceptable to the Trustee).

  
										

 

 

OPTION OF HOLDER
TO ELECT PURCHASE

	
  If you want to elect to have
  this Note purchased by the Company pursuant to Section 4.10 of the Indenture,
  check the 

  
	
  following box:  o

  
	
   

  
	
  If you want to
  elect to have only part of the Note purchased by the Company pursuant to
  Section 4.10 of the 

  
	
  Indenture, state the amount you elect to have
  purchased.

  
	
   

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on 

  
	
   

  	
   

  	
   

  	
  the face of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax Identification No.:

  	
   

  
	
  Signature Guarantee*:

  	
   

  	
   

  	
   

  
	
  

  

  	
   

  	
   

  
	
  *          Participant
  in a recognized Signature Guarantee Medallion Program (or other signature
  guarantor acceptable to the Trustee).

  
								

 

 

SCHEDULE OF
EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

The following
exchanges of a part of this Global Note for an interest in another Global Note
or for a Definitive Note, or exchanges of a part of another Global Note or
Definitive Note for an interest in this Global Note, have been made:  

	
  Date of Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount 

  of this Global Note

  	
   

  	
  Amount of

  increase in

  Principal Amount 

  of this Global Note

  	
   

  	
  Principal Amount

  of this Global Note 

  following such 

  decrease

  (or increase)

  	
   

  	
  Signature of 

  authorized officer

  of Trustee or Note

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 A-1Exhibit 10.31

 

 

 

SUPERIOR ESSEX INC.

AMENDED AND RESTATED EXECUTIVE BONUS PLAN

 

 

 

 

 

TABLE OF
CONTENTS

	
  ARTICLE 1

  	
   

  	
  ESTABLISHMENT OF PLAN

  	
   

  	
  1

  
	
  1.1

  	
   

  	
  Background

  	
   

  	
  1

  
	
  1.2

  	
   

  	
  Purpose

  	
   

  	
  1

  
	
  1.3

  	
   

  	
  Effective Date

  	
   

  	
  1

  
	
  ARTICLE 2

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  2.1

  	
   

  	
  Definitions

  	
   

  	
  1

  
	
  ARTICLE 3

  	
   

  	
  ADMINISTRATION

  	
   

  	
  4

  
	
  3.1

  	
   

  	
  Committee

  	
   

  	
  4

  
	
  3.2

  	
   

  	
  Authority of Committee

  	
   

  	
  4

  
	
  3.3

  	
   

  	
  Decisions Binding

  	
   

  	
  4

  
	
  ARTICLE 4

  	
   

  	
  ELIGIBILITY

  	
   

  	
  5

  
	
  4.1

  	
   

  	
  Designation of Participants

  	
   

  	
  5

  
	
  4.2

  	
   

  	
  Partial Year Participation

  	
   

  	
  5

  
	
  4.3

  	
   

  	
  Demotions

  	
   

  	
  5

  
	
  ARTICLE 5

  	
   

  	
  OPERATION OF THE PLAN

  	
   

  	
  5

  
	
  5.1

  	
   

  	
  Plan Structure

  	
   

  	
  5

  
	
  5.2

  	
   

  	
  Establishment of Target Bonuses

  	
   

  	
  5

  
	
  5.3

  	
   

  	
  Corporate Financial Objectives

  	
   

  	
  6

  
	
  5.4

  	
   

  	
  Business Unit Financial Objectives

  	
   

  	
  6

  
	
  5.5

  	
   

  	
  Adjustment to Financial Objectives

  	
   

  	
  6

  
	
  5.6

  	
   

  	
  Payout Form and Timing

  	
   

  	
  6

  
	
  5.7

  	
   

  	
  Terminations of Employment

  	
   

  	
  6

  
	
  ARTICLE 6

  	
   

  	
  AMENDMENT, MODIFICATION AND TERMINATION

  	
   

  	
  7

  
	
  6.1

  	
   

  	
  Amendment, Modification and Termination

  	
   

  	
  7

  
	
  6.2

  	
   

  	
  Termination After or During Plan Year

  	
   

  	
  7

  
	
  ARTICLE 7

  	
   

  	
  GENERAL PROVISIONS

  	
   

  	
  8

  
	
  7.1

  	
   

  	
  No Right to Participate

  	
   

  	
  8

  
	
  7.2

  	
   

  	
  No Right to Employment

  	
   

  	
  8

  
	
  7.3

  	
   

  	
  Withholding

  	
   

  	
  8

  
	
  7.4

  	
   

  	
  Funding

  	
   

  	
  8

  
	
  7.5

  	
   

  	
  Expenses

  	
   

  	
  8

  
	
  7.6

  	
   

  	
  Titles and Headings

  	
   

  	
  8

  
	
  7.7

  	
   

  	
  Gender and Number

  	
   

  	
  8

  
	
  7.8

  	
   

  	
  Governing Law

  	
   

  	
  8

  
	
  7.9

  	
   

  	
  Omnibus Plan Controls

  	
   

  	
  8

  

 

 

 i

SUPERIOR
ESSEX INC.

AMENDED AND RESTATED EXECUTIVE BONUS PLAN

ARTICLE 1

ESTABLISHMENT OF PLAN

1.1           BACKGROUND.  This
Amended and Restated Executive Bonus Plan (the “Executive Bonus Plan” or the “Plan”)
is a subplan of the Superior Essex Inc. 2005 Incentive Plan (“Omnibus Plan”),
consisting of a program for the grant of annual Performance-Based Cash Awards
under Article 9 of the Omnibus Plan. 
This Plan has been established and approved, and will be administered
by, the Committee pursuant to the terms of the Omnibus Plan, including without
limitation, Article 14 thereof.  It is
intended that the Performance Bonuses earned under this Plan shall be Qualified
Performance-Based Cash Awards with respect to Participants who are Covered
Employees, with the intent that the Performance Bonuses will be fully
deductible by the Company without regard to the limitations of Code Section
162(m).  The applicable Award limits of
Section 5.4 of the Omnibus Plan shall apply with respect to this Plan.  As of the Effective Date, Section 5.4 of the
Omnibus Plan provides that the aggregate dollar value of any Performance-Based
Cash Award or other cash-based award that may be paid to any one Participant
during any one calendar year under the Omnibus Plan is $3,000,000.

1.2.          PURPOSE.  The purpose of this Plan is to provide for
the payment of a cash bonus to eligible executives of the Company, the payment
of which will be based on the achievement of Performance Objectives during a
Plan Year.  Business Unit and Corporate
Financial Objectives are designed to focus on overall Corporate or Business
Unit financial results that drive shareholder value.  Unless otherwise specified by the Committee,
the Performance Objectives include Corporate Financial Objectives and Business
Unit Financial Objectives (for Business Unit executives).

1.3.          EFFECTIVE DATE.  This Plan was
originally adopted in principle by the Committee on February 23, 2005, subject
to approval as to form by the Chair of the Committee and to approval by the
stockholders of the Omnibus Plan.  This
Plan became effective on May 3, 2005, the date the Omnibus Plan was approved by
the Company’s stockholders (the “Effective Date”).  This Plan was amended and restated by the
Committee on March 29, 2006, to be effective as of the beginning of Plan Year
2006 and on February 15, 2007 to be effective as of the beginning of Plan Year
2007.

ARTICLE 2

DEFINITIONS

2.1.          DEFINITIONS.  Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Omnibus
Plan.  In addition, the 

 1
 

following
terms shall have the following meanings for purposes of this Plan, unless the
context in which they are used clearly indicates that some other meaning is
intended.

Adjusted Business Unit Operating Income.  A non-GAAP financial measure for a Business
Unit for a given year, which is Adjusted EBITDA of such Business Unit as
reflected in the Company’s year-end earnings release, decreased by depreciation
and amortization.  Adjusted Business Unit
Operating Income does not reflect the internal allocation of management fees
among the consolidated group.

Adjusted EBITDA.  A non-GAAP financial measure for the Company
or a Business Unit for a given year, as reflected in the Company’s year-end
earnings release, or if Adjusted EBITDA is no longer reported, EBITDA.  Adjusted EBITDA is generally operating
income, increased by other income (exclusive of interest income) and reduced by
other expense and further adjusted as follows, without duplication and only to
the extent such item is included as a component of operating income:

(1)                                  increased
by depreciation and amortization,

(2)                                  increased
or reduced to eliminate the effects of extraordinary items, within the meaning
of GAAP,

(3)                                  increased
or reduced to eliminate the effects of accounting changes implemented during
the Plan Year,

(4)                                  increased
or reduced to eliminate the impact of discontinued operations,

(5)                                  increased
or reduced by other charges that are considered to be non-recurring or special
items, and

(6)                                  increased
or reduced by non-cash gains, losses, income or expenses, such as non-cash
compensation expense.

Adjusted EPS.  A non-GAAP financial measure for the Company
for a given year, as reflected in the Company’s year-end earnings release, or
if Adjusted EPS is no longer reported, EPS. 
Adjusted EPS is generally earnings per diluted share of the Company  excluding the after-tax impact of special items detailed in
the earnings release, without duplication. 
Notwithstanding the foregoing, in the event the Company shall issue new
shares during a Plan Year, all newly issued shares in such Plan Year shall be
disregarded in calculating Adjusted EPS for that Plan Year for purposes of this
Plan; provided, however, that the Committee may choose not to disregard some or
all of such newly issued shares in the calculation of Adjusted EPS if the
effect of including such newly issued shares would be to decrease the amount of
Performance Bonuses that otherwise would be payable under this Plan for such
Plan Year.

Business Unit.  The principal business segments of the
Company during any Plan Year.  Unless
otherwise specified by the Committee, the Business Units are (i) 

 2
 

Communications and (ii) Magnet Wire and Distribution
and Copper Rod (excluding Essex Nexans Europe SAS).

Business Unit Financial Objectives.  The Business Unit Financial Objectives
established by the Committee for a Plan Year, as provided in Article 5.

Consolidated Adjusted EBITDA.  For any Plan Year, Adjusted EBITDA for the
Company as a whole (including the results of Essex Nexans Europe SAS).

Corporate Financial Objectives.  The Corporate Financial Objectives
established by the Committee for a Plan Year, as provided in Article 5.

EPS. 
Earnings per shares of the Company, as reflected in the Company’s
year-end earnings release.

Executive Bonus Plan or Plan.  The Superior Essex Inc. Amended and Restated
Executive Bonus Plan as set forth in this document together with any subsequent
amendments hereto.

GAAP.  Generally accepted accounting principles for
U.S. companies.

Performance Bonus.  The bonus payable to a Participant under this
Plan calculated by reference to the achievement of applicable Performance
Objectives, as determined in accordance with Article 5.

Performance Objectives.  Collectively with respect to a Participant,
the Corporate Financial Objectives and Business Unit Financial Objectives (if
applicable), as provided in Article 5.

Plan Year.  January 1 to December 31 of each year.

Target Bonus.  Has the meaning described in Section 5.2.

Triggering Acquisition.  An acquisition (or combination of
acquisitions) in which the acquired entity’s EBITDA (on a proforma basis) for
the four quarters completed immediately prior to consummation of the
acquisition is equal to one percent (1%) or more of the Adjusted EBITDA for the
Company (on a consolidated basis) for the same period.

Triggering Disposition.  The disposition of businesses, product lines
or interests that, individually or in the aggregate, represent one percent (1%)
or more of the Company’s target Adjusted EBITDA (on a consolidated basis) for
the four fiscal quarters completed immediately prior to the consummation of the
disposition.

 3
 

ARTICLE 3

ADMINISTRATION

3.1.          COMMITTEE.  This Plan shall be administered by the
Committee.

3.2.          AUTHORITY OF COMMITTEE.  Without limiting its authority under Article
4 of the Omnibus Plan, the Committee has the exclusive power, authority and
discretion to:

(a)  Designate Participants for each Plan Year;

(b)  Establish and review Performance Objectives
and weightings for different Performance Objectives for each Plan Year;

(c)  Establish Target Bonuses for Participants for
each Plan Year;

(d)  Determine whether and to what extent
Performance Objectives were achieved for each Plan Year;

(e)  Decrease the Performance Bonus otherwise
payable to any Participant resulting from the achievement of financial
Performance Objectives in any Plan Year, based on such subjective factors as
the Committee shall deem relevant, in accordance with the parameters, if any,
set forth in the relevant Schedule (for example, a Schedule permits such
reduction by up to X%);

(f)  Increase the Performance Objectives or
decrease the Performance Bonus otherwise payable to any Participant resulting
from the achievement of financial Performance Objectives in any Plan Year, if
the Committee determines that the Performance Objectives would result in
payouts that would be disproportionate to the Company’s performance or other
extraordinary circumstances merit a reduction in the amounts earned;

(g)  Establish, adopt or revise any rules and
regulations as it may deem necessary or advisable to administer this Plan;

(h)  Make all other decisions and determinations
that may be required under this Plan or as the Committee deems necessary or
advisable to administer this Plan; and

(i)  Amend this Plan as provided herein.

3.3.          DECISIONS BINDING.  The Committee’s interpretation of this Plan
and all decisions and determinations by the Committee with respect to this Plan
are final, binding, and conclusive on all parties.

 4
 

ARTICLE 4

ELIGIBILITY

4.1.          DESIGNATION
OF PARTICIPANTS.  Exhibit A hereto
lists the Executives who are designated as Participants in this Plan.  The Committee, in its discretion, may
determine whether other positions may qualify for participation in all or any
portion of this Plan for any subsequent Plan Year or change Target Bonuses of
existing Participants, subject to the terms of any Employment Agreement with
the Participant.  Before March 31 of each
Plan Year, the Committee shall approve and substitute a new Exhibit A
indicating the Participants and their Target Bonuses for that Plan Year.  The Committee will notify or cause
Participants to be notified of their eligibility to participate, and the terms
thereof, in writing.

4.2.          PARTIAL YEAR PARTICIPATION.  If a Participant begins employment or is
promoted to an eligible position after the beginning of a Plan Year, the
Committee, in its discretion, may determine whether such employee may
participate in this Plan and if so, the terms of such participation, which will
be pro rated based on the number of days such person participated in this Plan
during the Plan Year, unless the Committee determines otherwise.  If a Participant takes a leave of absence
during the Plan Year for any reason the Participant will receive a pro rata
share of a Performance Bonus, if any, for such Plan Year, unless the Committee
decides otherwise.

4.3.          DEMOTIONS.  If a Participant is demoted during the Plan
Year, the Committee will determine whether Plan participation ends at that
time, or is continued, perhaps at a reduced level.  If participation ends, any Performance Bonus
earned during the time of participation will be prorated for the Plan Year.

ARTICLE 5

OPERATION OF THE PLAN

5.1.          PLAN
STRUCTURE.  Each Participant shall be
eligible to receive a Performance Bonus for the Plan Year if the Company meets
or exceeds certain Performance Objectives set by the Committee.

5.2.          ESTABLISHMENT OF TARGET BONUSES.  Exhibit A sets forth the percentage of each
Participant’s base salary that will be awarded to the Participant if the established
Performance Objectives are achieved at the target level (the “Target Bonus”).  Each Participant’s Target Bonus percentage
will be communicated in writing to the Participant unless such target is
specified in his or her Employment Agreement with the Company.  The actual Performance Bonus to a Participant
may be greater or less than his or her Target Bonus, depending on the level of
achievement of Performance Objectives, as provided in the relevant Schedule,
and depending on whether the Committee exercises its discretion to reduce a
resulting Performance Bonus as provided herein or in the relevant Schedule.

 5
 

5.3.          CORPORATE FINANCIAL OBJECTIVES.  Before March 31 of each Plan Year, the
Committee shall approve the Corporate Financial Objectives for the Plan Year
for corporate-level Participants, based on any one or more of the Qualified
Business Criteria listed in Section 14.2 of the Omnibus Plan, and shall set
forth such Corporate Financial Objectives in one or more Schedules attached to
this Plan document.  Such Corporate
Financial Objectives for the current Plan Year are reflected in Schedule
I.  The Schedule provides the formula for
determining a Participant’s Performance Bonus based on the level of achievement
of Corporate Financial Objectives.

5.4.          BUSINESS UNIT FINANCIAL OBJECTIVES.  Before March 31 of each Plan Year, the
Committee shall approve the Corporate Financial Objectives, if any, and
Business Unit Financial Objectives for the Plan Year for Business Unit
Participants, based on any one or more of the Qualified Business Criteria
listed in Section 14.2 of the Omnibus Plan, and shall set forth any such
Corporate Financial Objectives and Business Unit Financial Objectives in one or
more Schedules attached to this Plan document. 
The Corporate Financial Objectives and Business Unit Financial
Objectives for the current Plan Year are reflected in Schedule II.  The Schedule provides the formula for
determining a Participant’s Performance Bonus based on the level of achievement
of Business Unit Financial Objectives and Corporate Financial Objectives.

5.5.          ADJUSTMENT TO FINANCIAL OBJECTIVES  If prior to the end of a Plan Year the
Company engages in a Triggering Disposition or a Triggering Acquisition, in
each case a “Re-Set Event,” the Corporate Financial Objectives and Business
Unit Financial Objectives for the Plan Year shall be adjusted, effective as of
the date of the Re-Set Event, (x) to reflect any Triggering Disposition by
eliminating from the original Corporate and/or Business Unit Financial Objectives,
as applicable, the plan business results relating to the disposed business for
the remainder of the Plan Year, and (y) to reflect any Triggering Acquisition,
by establishing supplemental Corporate Financial Objectives and/or Business
Unit Financial Objectives, as the Committee deems appropriate, with respect to
the acquired business, which may be zero. 
Notwithstanding the foregoing, the Committee may choose not to make one
or more such adjustments if the effect of not making such adjustment would be
to decrease the amount of Performance Bonuses that otherwise would be payable
under this Plan for such Plan Year. 
Nothing in this Section 5.5 will be construed to authorize the Committee
to take actions under this Section 5.5 that would preclude the Performance
Bonuses from qualifying for the Section 162(m) Exemption (as defined in the
Omnibus Plan).

5.6.          PAYOUT FORM AND TIMING.  Subject to Section 5.7 hereof in the case of
termination of employment, Performance Bonuses will be paid within thirty (30)
days after the Committee determines whether and to what extent Performance
Objectives were achieved, but no later than March 15 next following the end of
the Plan Year for which the Performance Bonuses, if any, were earned.

5.7.          TERMINATION OF EMPLOYMENT.  In the event of the termination of a
Participant’s employment prior to the end of the Plan Year by reason of the
Participant’s death, Disability, Retirement, termination by the Company without
Cause, 

 6
 

or resignation by
the Participant for Good Reason, the Participant will be paid a Performance
Bonus equal to the pro rata portion of the Target Bonus that would otherwise be
payable as if the performance through the date of termination was the
performance for the Plan Year, provided that the applicable Performance
Objectives are met for the portion of the Plan Year during which the
Participant was employed by the Company (for example, if actual performance
through the date of termination represented 90% of target Performance
Objectives for the Plan Year, the Participant would be entitled to a prorata
portion of the corresponding percentage of his or her Target Bonus based on the
applicable performance matrix, and if the threshold level of performance was
not achieved, no bonus would be paid). 
As soon as practicable after the date of termination, the Committee
shall make a determination as to the extent to which Performance Objectives had
been achieved for the portion of the Plan Year during which the Participant was
employed, and the Performance Bonus to the terminated Participant will be paid
within thirty days after such determination. 
Any amounts paid on behalf of a deceased Participant will be paid to the
Participant’s Beneficiary.  For
terminations after the end of the Plan Year, but before payout from this Plan,
payout will be made as though the termination had not occurred.

ARTICLE 6

AMENDMENT, MODIFICATION AND TERMINATION

6.1.          AMENDMENT,
MODIFICATION AND TERMINATION.  The
Committee may, at any time and from time to time, amend, modify or terminate
this Plan.  The Committee may condition
any amendment or modification on the approval of shareholders of the Company if
such approval is necessary or deemed advisable with respect to tax, securities
or other applicable laws, policies or regulations, including without limitation
Code Section 162(m).

6.2.          TERMINATION AFTER OR DURING PLAN
YEAR.  Termination of this Plan after
a Plan Year but before Performance Bonuses are paid for that Plan Year will not
reduce Participants’ rights to receive Performance Bonuses for the Plan
Year.  Termination or amendment of this
Plan during a Plan Year may be retroactive to the beginning of the Plan Year,
at the discretion of the Committee.  If
any amendment or termination occurs during a Plan Year, the Committee shall
determine when and to what extent Performance Bonuses, if any, shall be paid
for the portion of the Plan Year preceding the amendment or termination,
provided that if a Change in Control occurs, no such amendment or termination
may adversely affect amounts payable to a Participant without the consent of
the Participant.

 7
 

ARTICLE 7

GENERAL PROVISIONS

7.1.          NO
RIGHT TO PARTICIPATE.  No officer or
employee shall have any right to be selected to participate in this Plan.

7.2.          NO RIGHT TO EMPLOYMENT.  Nothing in this Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate any
Participant’s employment at any time, nor confer upon any Participant any right
to continue in the employ of the Company or any Subsidiary.

7.3.          WITHHOLDING.  The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to
remit to the Company, an amount sufficient to satisfy federal, state, and local
taxes (including the Participant’s FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of this Plan.

7.4.          FUNDING.  Benefits payable under this Plan to a Participant or to a Beneficiary will be paid by the Company from its general assets.  The Company is not required to segregate on its books or otherwise establish any funding procedure for any amount to be used for the payment of benefits under this Plan.  The Company may, however, in its sole discretion, set funds aside in investments to meet its anticipated obligations under this Plan.  Any such action or set-aside may not be deemed to create a trust of any kind between the Company and any Participant or beneficiary or to constitute the funding of any Plan benefits.  Consequently, any person entitled to a payment under this Plan will have no rights greater than the rights of any other unsecured creditor of the Company.

7.5.          EXPENSES.  The expenses of administering this Plan shall
be borne by the Company and its Subsidiaries.

7.6.          TITLES AND HEADINGS.  The titles and headings of the Sections in
this Plan are for convenience of reference only, and in the event of any
conflict, the text of this Plan, rather than such titles or headings, shall
control.

7.7.          GENDER AND NUMBER.  Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.

7.8.          GOVERNING LAW.  To the extent not governed by federal law,
this Plan shall be construed in accordance with and governed by the laws of the
State of Delaware.

7.9           OMNIBUS PLAN CONTROLS.  This Plan is adopted pursuant to and shall be
governed by and construed in accordance with the Omnibus Plan.  In the event of any actual or alleged
conflict between the provisions of the Omnibus Plan and the 

 8
 

provisions of this
Plan, the provisions of the Omnibus Plan shall be controlling and
determinative.

The
foregoing is hereby acknowledged as being the Superior Essex Inc. Amended and
Restated Executive Bonus Plan as adopted by the Committee on February 15, 2007,
to be effective as of January 1, 2007.

 

	
  

  	
  SUPERIOR ESSEX INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Barbara L. Blackford

  	
   

  
	
   

  	
  Barbara L. Blackford

  	
   

  
	
   

  	
  Executive Vice President,

  	
   

  
	
   

  	
  General Counsel and Corporate Secretary

  	
   

  

 

 

 9

 

EXHIBIT A

PARTICIPANTS AND TARGET BONUS PERCENTAGES EFFECTIVE JANUARY
1, 2007

UNDER THE AMENDED AND RESTATED EXECUTIVE BONUS PLAN

 

	
  Name

  	
   

  	
  % of Base Salary Payable at

  Target Achievement of

  Performance Objectives

  	
   

  
	
  Stephen M. Carter, CEO

  	
   

  	
   

  	
  100

  	
  %

  	
   

  
	
  David S.
  Aldridge, CFO

  	
   

  	
   

  	
  55

  	
  %

  	
   

  
	
  Justin F. Deedy,
  Jr., EVP and President, Communications Group

  	
   

  	
   

  	
  55

  	
  %

  	
   

  
	
  H. Patrick Jack,
  EVP and President, Essex Group

  	
   

  	
   

  	
  55

  	
  %

  	
   

  
	
  Barbara L.
  Blackford, EVP, General Counsel and Secretary

  	
   

  	
   

  	
  55

  	
  %

  	
   

  
	
  Debrah Baker-Oliver,
  SVP, Administrative Services

  	
   

  	
   

  	
  40

  	
  %

  	
   

  
	
  Tracye Gilleland, SVP, Controller

  	
   

  	
   

  	
  40

  	
  %

  	
   

  

 

 

 A-1

 

2007 Executive Bonus Plan Model

Schedule I

Corporate Model

(Participants as shown in “Exhibit A, Amended and Restated
Executive Bonus Plan”)

 

 

	
  Consolidated Adjusted EBITDA Driver

  	
   

  	
  50%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Adjusted EBITDA (%
  Target Achieved versus Plan)

  	
   

  	
  < 79%

  	
   

  	
  79%

  	
   

  	
  82%

  	
   

  	
  86%

  	
   

  	
  90%

  	
   

  	
  95%

  	
   

  	
  100%

  	
   

  	
  105%

  	
   

  	
  110%

  	
   

  	
  115%

  	
   

  	
  120%

  	
   

  	
  125%

  	
   

  	
  > 125%

  	
   

  
	
  Consolidated Adjusted EBITDA
  ($M)*

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
   

  	
   

  
	
  % Payout**

  	
   

  	
  0%

  	
   

  	
  20%

  	
   

  	
  35%

  	
   

  	
  50%

  	
   

  	
  75%

  	
   

  	
  90%

  	
   

  	
  100%

  	
   

  	
  120%

  	
   

  	
  140%

  	
   

  	
  160%

  	
   

  	
  180%

  	
   

  	
  200%

  	
   

  	
  200%

  	
   

  

 

Note: When
performance falls between two points, interpolation shall occur.

 

 

	
  Adjusted
  EPS Driver

  	
   

  	
  50%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted EPS*

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
   

  	
   

  
	
  % Payout**

  	
   

  	
  0%

  	
   

  	
  20%

  	
   

  	
  50%

  	
   

  	
  85%

  	
   

  	
  95%

  	
   

  	
  100%

  	
   

  	
  120%

  	
   

  	
  140%

  	
   

  	
  160%

  	
   

  	
  180%

  	
   

  	
  200%

  	
   

  	
  200%

  	
   

  

 

Note: When performance
falls between two points, interpolation shall occur.

 

*Targets for specific quantitative measures intentionally deleted for
this public filing.

 

** If either the threshold level of Consolidated Adjusted EBITDA or
Adjusted EPS is achieved, an additional bonus (the “Personal Performance
Bonus”) will be added to the Performance Bonus in an amount equal to 20% of the
total Performance Bonus calculated as provided under the Consolidated Adjusted
EBITDA Driver and the Adjusted EPS Driver (“Driver Performance Bonus”);
provided that the Committee, in its sole and absolute discretion, based on its
assessment of individual performance, may decrease or eliminate such Personal
Performance Bonus.  In addition, the
amounts to be paid as Driver Performance Bonus, if any, may be reduced by the
Committee, in its sole and absolute discretion, by up to 20% based on its
assessment of an Executive’s individual performance.  It is contemplated that the Committee will
eliminate or reduce the Personal Performance Bonus unless the Committee
assesses that special individual performance merits payment of the Personal
Performance Bonus.

 

 

2007 Executive Bonus Plan Model

Schedule II

Business Unit Model

(Participants as shown in “Exhibit A, Amended and Restated
Executive Bonus Plan”)

 

 

	
  Communications Div. Adjusted Operating Income
  (O.I.) Driver

  	
   

  	
  75%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  O.I. (% Target Achieved versus Plan)

  	
   

  	
  < 83%

  	
   

  	
  83%

  	
   

  	
  87%

  	
   

  	
  92%

  	
   

  	
  96%

  	
   

  	
  100%

  	
   

  	
  120%

  	
   

  	
  128%

  	
   

  	
  135%

  	
   

  	
  143%

  	
   

  	
  150%

  	
   

  	
  > 150%

  	
   

  
	
  Adjusted O.I. ($M)*

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
   

  	
   

  
	
  %
  Payout**

  	
   

  	
  0%

  	
   

  	
  20%

  	
   

  	
  50%

  	
   

  	
  67%

  	
   

  	
  83%

  	
   

  	
  100%

  	
   

  	
  120%

  	
   

  	
  140%

  	
   

  	
  160%

  	
   

  	
  180%

  	
   

  	
  200%

  	
   

  	
  200%

  	
   

  

 

Note: When performance falls between two points, interpolation shall
occur.

 

 

	
  Essex Div. Adjusted Operating Income (O.I.)
  Driver

  	
   

  	
  75%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  O.I. (% Target Achieved versus Plan)

  	
   

  	
  <80%

  	
   

  	
  80%

  	
   

  	
  85%

  	
   

  	
  90%

  	
   

  	
  95%

  	
   

  	
  100%

  	
   

  	
  105%

  	
   

  	
  110%

  	
   

  	
  115%

  	
   

  	
  120%

  	
   

  	
  125%

  	
   

  	
  > 125%

  	
   

  
	
  Adjusted O.I. ($M)*

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
   

  	
   

  
	
  %
  Payout**

  	
   

  	
  0%

  	
   

  	
  20%

  	
   

  	
  50%

  	
   

  	
  67%

  	
   

  	
  84%

  	
   

  	
  100%

  	
   

  	
  120%

  	
   

  	
  140%

  	
   

  	
  160%

  	
   

  	
  180%

  	
   

  	
  200%

  	
   

  	
  200%

  	
   

  

 

Note: When performance falls between two points, interpolation shall
occur.

 

 

	
  Consolidated
  Adjusted EBITDA Driver

  	
   

  	
  25%

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consolidated Adjusted EBITDA (%
  Target Achieved versus Plan)

  	
   

  	
  <79%

  	
   

  	
  79%

  	
   

  	
  82%

  	
   

  	
  86%

  	
   

  	
  90%

  	
   

  	
  95%

  	
   

  	
  100%

  	
   

  	
  105%

  	
   

  	
  110%

  	
   

  	
  115%

  	
   

  	
  120%

  	
   

  	
  125%

  	
   

  	
  >
  125%

  	
   

  
	
  Consolidated Adjusted EBITDA
  ($M)*

  	
   

  	
   

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
  *

  	
   

  	
   

  	
   

  
	
  % Payout**

  	
   

  	
  0%

  	
   

  	
  20%

  	
   

  	
  35%

  	
   

  	
  50%

  	
   

  	
  75%

  	
   

  	
  90%

  	
   

  	
  100%

  	
   

  	
  120%

  	
   

  	
  140%

  	
   

  	
  160%

  	
   

  	
  180%

  	
   

  	
  200%

  	
   

  	
  200%

  	
   

  

 

Note: When performance falls between two points, interpolation shall
occur.

 

*Targets for specific quantitative measures intentionally deleted for
this public filing.

 

** If either the threshold level of Adjusted Operating Income or
Consolidated Adjusted EBITDA is achieved, an additional bonus (the “Personal
Performance Bonus”) will be added to the Performance Bonus in an amount equal
to 20% of the total Performance Bonus calculated as provided under the Adjusted
Operating Income Driver and the Consolidated Adjusted EBITDA Driver (“Driver
Performance Bonus”); provided that the Committee, in its sole and absolute
discretion, based on its assessment of individual performance, may decrease or
eliminate such Personal Performance Bonus. 
In addition, the amounts to be paid as Driver Performance Bonus, if any,
may be reduced by the Committee, in its sole and absolute discretion, by up to
20% based on its assessment of an Executive’s individual performance.  It is contemplated that the Committee will
eliminate or reduce the Personal Performance Bonus unless the Committee assesses
that special individual performance merits payment of the Personal Performance
Bonus.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00119-of-00352.parquet"}]]