Document:

Exhibit 4.22

 

 

 

iSTAR FINANCIAL INC.

 

6.5% SENIOR NOTES DUE 2013

 

 

FOURTH SUPPLEMENTAL INDENTURE

 

Dated as of December 12, 2003

US BANK TRUST NATIONAL 

ASSOCIATION

 

Trustee

 

 

 

 

CROSS-REFERENCE TABLE*

 

Please note that this
document has not been marked for Cross-referencing

 

	
  Trust Indenture

  Act Section

  	
   

  	
  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

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Definitions

  	
  1

  
	
  Section 1.02.

  	
  Other Definitions

  	
  16

  
	
  Section 1.03.

  	
  Incorporation by
  Reference of Trust Indenture Act

  	
  17

  
	
  Section 1.04.

  	
  Rules of
  Construction

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  
	
   

  	
   

  	
   

  
	
  THE
  NOTES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Form and Dating

  	
  17

  
	
  Section 2.02.

  	
  Execution and
  Authentication

  	
  18

  
	
  Section 2.03.

  	
  Registrar and Paying
  Agent

  	
  18

  
	
  Section 2.04.

  	
  Paying Agent to Hold
  Money in Trust

  	
  18

  
	
  Section 2.05.

  	
  Holder Lists

  	
  19

  
	
  Section 2.06.

  	
  Transfer and Exchange

  	
  19

  
	
  Section 2.07.

  	
  Replacement Notes

  	
  22

  
	
  Section 2.08.

  	
  Outstanding Notes

  	
  22

  
	
  Section 2.09.

  	
  Treasury Notes

  	
  23

  
	
  Section 2.10.

  	
  Temporary Notes

  	
  23

  
	
  Section 2.11.

  	
  Cancellation

  	
  23

  
	
  Section 2.12.

  	
  Defaulted Interest

  	
  23

  
	
  Section 2.13.

  	
  Record Date

  	
  23

  
	
  Section 2.14.

  	
  CUSIP Numbers

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION
  AND PREPAYMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Notices to Trustee

  	
  24

  
	
  Section 3.02.

  	
  Selection of Notes to
  Be Redeemed

  	
  24

  
	
  Section 3.03.

  	
  Notice of Redemption

  	
  24

  
	
  Section 3.04.

  	
  Effect of Notice of
  Redemption

  	
  25

  
	
  Section 3.05.

  	
  Deposit of Redemption
  Price

  	
  25

  
	
  Section 3.06.

  	
  Notes Redeemed in Part

  	
  25

  
	
  Section 3.07.

  	
  Optional Redemption

  	
  25

  
	
  Section 3.08.

  	
  Mandatory Redemption

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Payment of Notes

  	
  26

  
	
  Section 4.02.

  	
  Maintenance of Office
  or Agency

  	
  26

  
	
  Section 4.03.

  	
  Reports to Holders

  	
  27

  
	
  Section 4.04.

  	
  Compliance Certificate

  	
  27

  
	
  Section 4.05.

  	
  Taxes

  	
  28

  
	
  Section 4.06.

  	
  Stay, Extension and
  Usury Laws

  	
  28

  
	
  Section 4.07.

  	
  Limitation on
  Restricted Payments

  	
  28

  
	
  Section 4.08.

  	
  Limitation on Dividend
  and Other Payment Restrictions Affecting Subsidiaries

  	
  30

  
	
  Section 4.09.

  	
  Limitation on
  Incurrence of Additional Indebtedness

  	
  31

  

 

i

 

	
  Section 4.10.

  	
  Limitation on
  Transactions with Affiliates

  	
  31

  
	
  Section 4.11.

  	
  Limitation on Liens

  	
  32

  
	
  Section 4.12.

  	
  Corporate Existence

  	
  33

  
	
  Section 4.13.

  	
  Offer to Repurchase
  Upon Change of Control

  	
  33

  
	
  Section 4.14.

  	
  Limitation on Preferred
  Stock of Subsidiaries

  	
  34

  
	
  Section 4.15.

  	
  Conduct of Business

  	
  34

  
	
  Section 4.16.

  	
  Limitation of
  Guarantees by Subsidiaries

  	
  34

  
	
  Section 4.17.

  	
  Maintenance of Total
  Unencumbered Assets

  	
  35

  
	
  Section 4.18.

  	
  Termination of Certain
  Covenants In Event of Investment Grade Rating

  	
  35

  
	
  Section 4.19.

  	
  Maintenance of
  Properties; Books and Records; Compliance with Law

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  
	
   

  	
   

  	
   

  
	
  SUCCESSORS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Merger, Consolidation,
  or Sale of Assets

  	
  36

  
	
  Section 5.02.

  	
  Successor Corporation
  Substituted

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFAULTS
  AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Events of Default

  	
  37

  
	
  Section 6.02.

  	
  Acceleration

  	
  39

  
	
  Section 6.03.

  	
  Other Remedies

  	
  39

  
	
  Section 6.04.

  	
  Waiver of Past Defaults

  	
  39

  
	
  Section 6.05.

  	
  Control by Majority

  	
  40

  
	
  Section 6.06.

  	
  Limitation on Suits

  	
  40

  
	
  Section 6.07.

  	
  Rights of Holders of
  Notes to Receive Payment

  	
  40

  
	
  Section 6.08.

  	
  Collection Suit by
  Trustee

  	
  40

  
	
  Section 6.09.

  	
  Trustee May File
  Proofs of Claim

  	
  40

  
	
  Section 6.10.

  	
  Priorities

  	
  41

  
	
  Section 6.11.

  	
  Undertaking for Costs

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Duties of Trustee

  	
  41

  
	
  Section 7.02.

  	
  Rights of Trustee

  	
  42

  
	
  Section 7.03.

  	
  Individual Rights of
  Trustee

  	
  43

  
	
  Section 7.04.

  	
  Trustee’s Disclaimer

  	
  43

  
	
  Section 7.05.

  	
  Notice of Defaults

  	
  43

  
	
  Section 7.06.

  	
  Reports by Trustee

  	
  43

  
	
  Section 7.07.

  	
  Compensation and
  Indemnity

  	
  44

  
	
  Section 7.08.

  	
  Replacement of Trustee

  	
  44

  
	
  Section 7.09.

  	
  Successor Trustee by
  Merger, etc.

  	
  45

  
	
  Section 7.10.

  	
  Eligibility;
  Disqualification

  	
  45

  
	
  Section 7.11.

  	
  Preferential Collection
  of Claims

  	
  45

  

 

ii

 

	
  ARTICLE 8

  	
   

  
	
   

  	
   

  	
   

  
	
  LEGAL
  DEFEASANCE AND COVENANT DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Option to Effect Legal
  Defeasance or Covenant Defeasance

  	
  45

  
	
  Section 8.02.

  	
  Legal Defeasance and
  Discharge

  	
  46

  
	
  Section 8.03.

  	
  Covenant Defeasance

  	
  46

  
	
  Section 8.04.

  	
  Conditions to Legal or
  Covenant Defeasance

  	
  46

  
	
  Section 8.05.

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

  	
  48

  
	
  Section 8.06.

  	
  Repayment to Company

  	
  48

  
	
  Section 8.07.

  	
  Reinstatement

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  
	
   

  	
   

  	
   

  
	
  AMENDMENT,
  SUPPLEMENT AND WAIVER

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Without Consent of
  Holders of Notes

  	
  49

  
	
  Section 9.02.

  	
  With Consent of Holders
  of Notes

  	
  49

  
	
  Section 9.03.

  	
  Compliance with Trust
  Indenture Act

  	
  50

  
	
  Section 9.04.

  	
  Revocation and Effect
  of Consents

  	
  51

  
	
  Section 9.05.

  	
  Notation on or Exchange
  of Notes

  	
  51

  
	
  Section 9.06.

  	
  Trustee to Sign
  Amendments, etc

  	
  51

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  
	
   

  	
   

  	
   

  
	
  SATISFACTION
  AND DISCHARGE

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Satisfaction and
  Discharge

  	
  51

  
	
  Section 10.02.

  	
  Application of Trust
  Money

  	
  52

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Trust Indenture Act
  Controls

  	
  52

  
	
  Section 11.02.

  	
  Notices

  	
  52

  
	
  Section 11.03.

  	
  Communication by
  Holders of Notes with Other Holders of Notes

  	
  53

  
	
  Section 11.04.

  	
  Certificate and Opinion
  as to Conditions Precedent

  	
  53

  
	
  Section 11.05.

  	
  Statements Required in
  Certificate or Opinion

  	
  53

  
	
  Section 11.06.

  	
  Rules by Trustee
  and Agents

  	
  54

  
	
  Section 11.07.

  	
  No Personal Liability
  of Directors, Officers, Employees and Stockholders

  	
  54

  
	
  Section 11.08.

  	
  Governing Law

  	
  54

  
	
  Section 11.09.

  	
  No Adverse
  Interpretation of Other Agreements

  	
  54

  
	
  Section 11.10.

  	
  Successors

  	
  54

  
	
  Section 11.11.

  	
  Severability

  	
  54

  
	
  Section 11.12.

  	
  Counterpart Originals

  	
  54

  
	
  Section 11.13.

  	
  Table of Contents,
  Headings, etc.

  	
  54

  
	
  Section 11.14.

  	
  Conflicts with
  Indenture

  	
  55

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  FORM OF
  NOTE

  	
   

  

 

iii

 

SUPPLEMENTAL INDENTURE dated as of December 12,
2003 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. 333-109599),
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 4.09.

 

“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.

 

“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.

 

“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.

 

“Cash Equivalents”
means:

 

(1)           marketable
direct obligations issued by, or unconditionally guaranteed by, the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within one year from the
date of acquisition thereof;

 

(2)           marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing 

 

2

 

within one year from the
date of acquisition thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either S&P or Moody’s;

 

(3)           commercial
paper maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having a rating of at least A-1 from S&P or at
least P-1 from Moody’s;

 

(4)           certificates
of deposit or bankers’ acceptances maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $250.0 million;

 

(5)           repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (1) above entered into with any bank
meeting the qualifications specified in clause (4) above; and

 

(6)           investments
in money market funds that invest substantially all their assets in securities
of the types described in clauses (1) through (5) above.

 

“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 Supplemental 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 Supplemental 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; provided, however,
that no Change of Control shall be deemed to have occurred as a result of the
sale or transfer by the Permitted Holders of shares of Capital Stock of the
Company representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of the Company to a
Person or Group, whether in one transaction or a series of related
transactions, that has an investment grade senior unsecured credit rating from
both of Moody’s and S&P and the Company’s senior unsecured ratings from
Moody’s and S&P are the same or better immediately following such sale or
transfer as before such sale or transfer; 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.

 

3

 

“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, whether outstanding on the Measurement Date or
issued after the Measurement Date, 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 Adjusted
Earnings” with respect to any Person, for any period, means the
Consolidated Net Income, less dividend payments on Preferred Stock, plus
depreciation and amortization (including the Company’s share of joint venture
depreciation and amortization).

 

“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 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
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 

 

4

 

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 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:

 

5

 

(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 of any Person acquired in a “pooling of interests” transaction
accrued prior to the date it becomes a Subsidiary of the referent Person or is
merged or consolidated with the referent Person or any Subsidiary of the
referent Person;

 

(4)           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, except for such restrictions permitted by clauses (f), (g) and (h) of
Section 4.08 whether such permitted restrictions exist on the Measurement
Date or are created thereafter;

 

(5)           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 (4) 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;

 

(6)           any
restoration to income of any contingency reserve of an extraordinary,
nonrecurring or unusual nature, except to the extent that provision for such
reserve was made out of Consolidated Net Income accrued at any time following
the Measurement Date;

 

(7)           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

 

(8)           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.

 

6

 

“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.

 

“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 (other
than an event which would constitute a Change of Control), matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control) on or prior to the final maturity
date of the Notes.

 

“Equity Offering”
means an underwritten public offering of Qualified Capital Stock of the Company
pursuant to a registration statement filed with the Commission in accordance
with the Securities Act or a private placement of Qualified Capital Stock of
the Company generating gross proceeds of at least $25.0 million.

 

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

 

“Existing Credit Agreements”
mean: (1) the Credit Agreement dated as of July 26, 2001, between the
Company, the lenders party thereto in their capacities as lenders thereunder
and Bank of America, N.A., as agent; (2) the Amended and Restated Credit
Agreement dated as of December 28, 2000 between SFI II, Inc. and
Greenwich Capital Markets, Inc., as lender; (3) the credit facility
between Deutsche Bank AG, New York Branch, and iStar DB Seller LLC, dated as of
January 11, 2001; (4) the credit facility, dated as of August 12,
1998, between Lehman Brothers Holdings, Inc. and SFT Whole Loan A, Inc.;
and (5) the Master Repurchase Agreement dated September 30, 2002
between Goldman Sachs Mortgage Company and iStar Finance Sub V LLC, 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 4.09 hereof) or adding
Subsidiaries of 

 

7

 

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.

 

“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, which are in effect as of the Measurement Date.  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.

 

“Guarantor”
means: each of the Company’s Subsidiaries that in the future executes a
supplemental indenture in which such Subsidiary agrees to be bound by the terms
of this Supplemental Indenture as a Guarantor; provided that
any Person constituting a Guarantor as described above shall cease to
constitute a Guarantor when its respective Guarantee is released in accordance
with the terms of this Supplemental Indenture.

 

“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;

 

(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);

 

8

 

(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.

 

“Independent Financial
Advisor” means a firm: (1) that does not, and whose directors,
officers and employees or Affiliates do not, have a direct or indirect
financial interest in the Company; and (2) that, in the judgment of the
Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.

 

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

 

“Initial Notes”
means the $150.0 million principal amount of 6.5% Senior Notes due 2013 of the
Company issued on the Issue Date.

 

“Interest Payment Date”
means June 15 and December 15 of each year commencing June 15,
2004.

 

“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.

 

9

 

“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”
means a rating of the Notes by both S&P and Moody’s, each such rating being
one of such agency’s four highest generic rating categories that signifies
investment grade (i.e. BBB- (or the equivalent) or higher by S&P and
Baa3 (or the equivalent) or higher by Moody’s); provided,
in each case, such ratings are publicly available; provided,
further, that in the event Moody’s or S&P is no longer in
existence for purposes of determining whether the Notes are rated “Investment
Grade,” such organization may be replaced by a nationally recognized
statistical rating organization (as defined in Rule 436 under the
Securities Act) designated by the Company, notice of which shall be given to
the Trustee.

 

“Issue Date”
means December 12, 2003, the date of original issuance of the Initial
Notes.

 

“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).

 

“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, whether at Stated Maturity or on a redemption date or
pursuant to a Change of Control Offer, and whether by declaration of
acceleration, call for redemption, purchase or otherwise.

 

“Measurement Date”
means August 16, 2001.

 

“Moody’s” means
Moody’s Investors 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,

 

10

 

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.

 

“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:

 

(1)           Indebtedness
under the Initial Notes and under the Company’s $350.0 million aggregate
principal amount of 6.0% Senior Notes due 2010 that were issued on December 12,
2003, the Company’s $350.0 million aggregate principal amount of 8 3/4% Senior
Notes due 2008 that were issued on the Measurement Date and the $185.0 million
aggregate principal amount of 7.0% Senior Notes due 2008 that were issued in March and
April of 2003;

 

11

 

(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 in existence on the Measurement
Date and as in effect on the Measurement 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 Measurement
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 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

 

12

 

(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 4.09
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.

 

“Permitted Liens”  means the following types of Liens:

 

(1)           Liens
for taxes, assessments or governmental charges or claims either: (a) not
delinquent; or (b) contested in good faith by appropriate proceedings and
as to which the Company or its Subsidiaries shall have set aside on its books
such reserves as may be required pursuant to GAAP;

 

(2)           statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in good
faith, if such reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made in respect thereof;

 

(3)           Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, including any Lien securing letters of credit issued in the ordinary
course of business consistent with past practice in connection therewith, or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the payment
of borrowed money);

 

(4)           judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been duly initiated
for the review of such judgment shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have expired;

 

(5)           easements,
rights-of-way, zoning restrictions and other similar charges or encumbrances in
respect of real property not interfering in any material respect with the
ordinary conduct of the business of the Company or any of its Subsidiaries;

 

(6)           any
interest or title of a lessor under any Capitalized Lease Obligation; provided that such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;

 

(7)           Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or
created for the 

 

13

 

account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;

 

(8)           Liens
securing reimbursement obligations with respect to commercial letters of credit
which encumber documents and other property relating to such letters of credit
and products and proceeds thereof;

 

(9)           Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual, or warranty requirements of the Company or any of its
Subsidiaries, including rights of offset and set-off;

 

(10)         Liens
securing Interest Swap Obligations which Interest Swap Obligations relate to
Indebtedness that is otherwise permitted under this Supplemental Indenture; and

 

(11)         Liens
securing Indebtedness under Currency Agreements.

 

“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.

 

“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 4.09 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

 

(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.

 

14

 

“Responsible Officer”
means, when used with respect to the Trustee, any managing director, director,
principal, vice president, assistant vice president, assistant treasurer, associate
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.

 

“Senior Recourse
Indebtedness” means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness that is Non-Recourse Indebtedness and
other than Subordinated Indebtedness).

 

“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.

 

“Subordinated Indebtedness”
means all of the Company’s and its Subsidiaries’ Indebtedness that expressly
provides that such Indebtedness shall be subordinated in right of payment to
any other Indebtedness and matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise, or is redeemable at the sole option of
the holder thereof (except, in each case, upon the occurrence of a Change of
Control) on or after the final maturity date of the Notes.

 

“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

 

15

 

(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

  	
   

  
	
  “Affiliate Transaction”

  	
   

  	
  4.10

  	
   

  
	
  “Authentication Order”

  	
   

  	
  2.02

  	
   

  
	
  “Change of Control Date”

  	
   

  	
  4.13

  	
   

  
	
  “Change of Control Payment Date”

  	
   

  	
  4.13

  	
   

  
	
  “Change of Control Offer”

  	
   

  	
  4.13

  	
   

  
	
  “Change of Control Purchase Date”

  	
   

  	
  4.13

  	
   

  
	
  “Change of Control Purchase Price”

  	
   

  	
  4.13

  	
   

  
	
  “Covenant Defeasance”

  	
   

  	
  8.03

  	
   

  
	
  “DTC”

  	
   

  	
  2.03

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “incur”

  	
   

  	
  4.09

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Restricted Payment”

  	
   

  	
  4.07

  	
   

  
	
  “Surviving Entity”

  	
   

  	
  5.01

  	
   

  

 

16

 

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 $1,000 and integral multiples thereof.

 

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 and redemptions.  Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes 

 

17

 

represented 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.

 

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 $150,000,000 (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 and Paying 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.  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 or Paying 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 and Paying Agent and 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 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 

 

18

 

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 credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest

 

19

 

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.

 

20

 

(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
redeemed, 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, 4.13 and 9.05 hereof).

 

(iii)          The Registrar shall not be required to
register the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in part.

 

(iv)          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.

 

21

 

(v)           The Company shall not be required (A) to
issue, to register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register
the transfer of or to exchange a Note between a record date and the next
succeeding Interest Payment Date.

 

(vi)          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.

 

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

 

(viii)        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 a redemption date or
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.

 

22

 

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 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, if so, the Trustee shall use CUSIP
numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the Notes,
and any such redemption shall not be affected by any defect in or the omission
of such numbers.  The Company will
promptly notify the Trustee in writing of any change in the CUSIP numbers.

 

23

 

ARTICLE 3

REDEMPTION AND PREPAYMENT

 

Section 3.01.     
Notices to Trustee.  If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.07 hereof, it
shall furnish to the Trustee, at least 30 days but not more than 60 days before
a redemption date, an Officers’ Certificate setting forth (i) the clause
of this Supplemental Indenture pursuant to which the redemption shall occur, (ii) the
redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the
redemption price and (v) the CUSIP numbers of the Notes to be redeemed.

 

Section 3.02.     
Selection of Notes to Be Redeemed.  In the event that the Company chooses to
redeem less than all of the Notes, selection of the Notes for redemption will
be made by the Trustee either:

 

(1)           in compliance with the requirements
of the principal national securities exchange, if any, on which the Notes are
listed; or

 

(2)           on a pro rata
basis, by lot or by such method as the Trustee shall deem fair and appropriate.

 

No Notes of a principal amount of $1,000 or less shall
be redeemed in part.  If a partial
redemption is made with the proceeds of an Equity Offering (as defined in Section 3.07(b)),
the Trustee will select the Notes only on a pro rata basis
or on as nearly a pro rata basis as is practicable
(subject to DTC procedures).

 

The Trustee shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be
redeemed.  Notes and portions of Notes
selected shall be in amounts of $1,000 or whole multiples of $1,000; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed.  Except as provided in the
preceding sentence, provisions of this Supplemental Indenture that apply to
Notes called for redemption also apply to portions of Notes called for redemption.

 

Section 3.03.     
Notice of Redemption.  At least 30 days but not more than 60 days
before a redemption date, the Company shall mail or cause to be mailed, by
first class mail (at its own expense), a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.

 

The notice shall identify the Notes to be redeemed,
including the CUSIP numbers, and shall state:

 

(a)           the redemption date;

 

(b)           the redemption price and the amount
of accrued and unpaid interest, if any, to be paid;

 

(c)           if any Note is being redeemed in
part, the portion of the principal amount of such Note to be redeemed and that,
after the redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;

 

(d)           the name and address of the Paying
Agent;

 

(e)           that Notes called for redemption must
be surrendered to the Paying Agent to collect the redemption price;

 

24

 

(f)            that, unless the Company defaults in
making such redemption payment, interest on Notes called for redemption ceases
to accrue on and after the redemption date;

 

(g)           the paragraph of the Notes and/or Section of
this Supplemental Indenture pursuant to which the Notes called for redemption
are being redeemed; and

 

(h)           that no representation is made as to
the correctness or accuracy of the CUSIP number, if any, listed in such notice
or printed on the Notes.

 

At the Company’s written request, the Trustee shall
give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company shall have provided to
the Trustee, at least 45 days prior to the redemption date (unless a shorter
notice shall be satisfactory to the Trustee), the information required by clauses
(a) through (d) above.

 

Section 3.04.     
Effect of Notice of Redemption.  Once notice of redemption is mailed in
accordance with Section 3.03 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the redemption
price.  A notice of redemption may not be
conditional.

 

Section 3.05.     
Deposit of Redemption Price.  One Business Day prior to the redemption
date, the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest on all Notes to
be redeemed on that date and any amounts owed the Trustee.  The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed and any
amounts owed the Trustee.

 

If the Company complies with the provisions of the
preceding paragraph, on and after the redemption date, interest shall cease to
accrue on the Notes or the portions of Notes called for redemption.  If a Note is redeemed on or after an interest
record date but on or prior to the related interest payment date, then any accrued
and unpaid interest shall be paid to the Person in whose name such Note was
registered at the close of business on such record date.  If any Note called for redemption shall not
be so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case
at the rate provided in the Notes and in Section 4.01 hereof.

 

Section 3.06.     
Notes Redeemed in Part.  Upon surrender of a Note that is redeemed in
part, the Company shall issue and, upon the Company’s written request, the
Trustee shall authenticate for the Holder at the expense of the Company a new
Note equal in principal amount to the unredeemed portion of the Note
surrendered.

 

Section 3.07.     
Optional Redemption.  (a)  Beginning December 15, 2008,
the Company may redeem the Notes, in whole at any time, or in part from time to
time, for cash, upon not less than 30 nor more than 60 days’ notice.  If the Notes are redeemed during the
twelve-month period commencing on December 15 of any of the years
indicated below, the redemption price will equal the percentage of the
principal amount of the redeemed Notes shown opposite that year, plus accrued
and unpaid interest to the applicable redemption date:

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2008

  	
   

  	
  103.250

  	
  %

  
	
  2009

  	
   

  	
  102.167

  	
  %

  
	
  2010

  	
   

  	
  101.083

  	
  %

  
	
  2011 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

25

 

(b)           Optional Redemption Upon
Equity Offerings.  At any
time, or from time to time, on or prior to December 15, 2006, the Company
may, at its option, use the net cash proceeds of one or more Equity Offerings
to redeem up to 35% of the principal amount of the Notes issued under this
Supplemental Indenture at a redemption price of 106.5% of the principal amount
thereof plus accrued and unpaid interest thereon, if any, to the date of
redemption; provided that:

 

(1)           at least 65% of the principal amount
of Notes issued under this Supplemental Indenture remains outstanding
immediately after any such redemption; and

 

(2)           the Company makes such redemption not
more than 60 days after the consummation of any such Equity Offering.

 

Other than as specifically provided in this Section 3.07,
any redemption pursuant to this Section 3.07 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.

 

Section 3.08.     
Mandatory Redemption.  The Company shall not be required to make
mandatory redemption payments with respect to the Notes prior to Maturity.

 

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.

 

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 

 

26

 

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 certified independent
accountants; 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.

 

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.

 

27

 

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 Restricted Payments.  The Company shall not, and shall not cause or
permit any of its Subsidiaries to, directly or indirectly:

 

(1)           declare or pay any dividend or make
any distribution (other than dividends or distributions payable in Qualified
Capital Stock of the Company) on or in respect of shares of the Company’s
Capital Stock to holders of such Capital Stock;

 

(2)           purchase, redeem or otherwise acquire
or retire for value any Capital Stock of the Company or any warrants, rights or
options to purchase or acquire shares of any class of such Capital Stock; or

 

(3)           make any principal payment on,
purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for
value, prior to any scheduled final maturity, scheduled repayment or scheduled
sinking fund payment, any Indebtedness of the Company that is subordinate or
junior in right of payment to the Notes

 

if at the time of such action (each, a “Restricted Payment”) or immediately after giving effect
thereto,

 

(i)            a Default or an Event of Default
shall have occurred and be continuing; or

 

(ii)           the Company is not able to incur at
least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.09 hereof; or

 

(iii)          the aggregate amount of Restricted
Payments (including such proposed Restricted Payment) made subsequent to the
Measurement Date (the amount expended for such purposes, if other than in cash,
being the fair market value of such property as determined in good faith by the
Board of Directors of the Company) shall exceed the sum of:

 

(w)                               95%
of the cumulative Consolidated Adjusted Earnings (or if cumulative Consolidated
Adjusted Earnings shall be a loss, minus 100% of such loss) of the Company
earned subsequent to June 30, 2001 and on or prior to the date the
Restricted Payment occurs (the “Reference Date”) (treating such period as a
single accounting period); plus

 

28

 

(x)                                   100%
of the aggregate net cash proceeds received by the Company from any Person
(other than a Subsidiary of the Company) from the issuance and sale subsequent
to the Measurement Date and on or prior to the Reference Date of Qualified
Capital Stock of the Company; plus

 

(y)                                 without
duplication of any amounts included in clause (iii)(x) above, 100% of the
aggregate net cash proceeds of any equity contribution received by the Company
from a holder of the Company’s Capital Stock (excluding, in the case of clauses
(iii)(x) and (y), any net cash proceeds from an Equity Offering to the
extent used to redeem the Notes in compliance with the provisions set forth
under Section 3.07(b) hereof).

 

The foregoing provisions do not prohibit:

 

(1)           the payment of any dividend within
60 days after the date of declaration of such dividend if the dividend
would have been permitted on the date of declaration;

 

(2)           if no Default or Event of Default
shall have occurred and be continuing, the acquisition of any shares of Capital
Stock of the Company, either (i) solely in exchange for shares of
Qualified Capital Stock of the Company or (ii) through the application of
net proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock of the Company;

 

(3)           if no Default or Event of Default
shall have occurred and be continuing, the acquisition of any Indebtedness of
the Company that is subordinate or junior in right of payment to the Notes
either (i) solely in exchange for shares of Qualified Capital Stock of the
Company, or (ii) through the application of net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of (a) shares of Qualified Capital Stock of the Company or (b) Refinancing
Indebtedness;

 

(4)           so long as no Default or Event of
Default shall have occurred and be continuing, repurchases by the Company of
Common Stock of the Company from employees of the Company or any of its
Subsidiaries or their authorized representatives upon the death, disability or
termination of employment of such employees, in an aggregate amount not to
exceed $500,000 in any calendar year;

 

(5)           the declaration or payment by the
Company of any dividend or distribution that is necessary to maintain its
status as a REIT under the Code if:

 

(a)           the Consolidated Fixed Charge
Coverage Ratio of the Company is greater than 2.0 to 1.0; and

 

(b)           no Default or Event of Default shall
have occurred and be continuing;

 

(6)           the payment of any dividend on
Preferred Stock of the Company; and

 

(7)           Restricted Payments in an amount not
to exceed $75.0 million.

 

In determining the aggregate amount of Restricted
Payments made subsequent to the Measurement Date in accordance with
clause (iii) of the immediately preceding paragraph, amounts expended
pursuant to clauses (1), (2) (ii), 3 (ii) (a), (4), (5) and (7) shall
be included in such calculation.

 

29

 

Section 4.08.     
Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries. 
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary of the Company to:

 

(1)           pay dividends or make any other
distributions on or in respect of its Capital Stock;

 

(2)           make loans or advances or to pay any
Indebtedness or other obligation owed to the Company or any other Subsidiary of
the Company; or

 

(3)           transfer any of its property or
assets to the Company or any other Subsidiary of the Company,

 

except for such encumbrances or restrictions existing under or by
reason of:

 

(a)           applicable law;

 

(b)           this Supplemental Indenture;

 

(c)           customary non-assignment provisions
of any contract or any lease governing a leasehold interest of any Subsidiary
of the Company;

 

(d)           any instrument governing Acquired
Indebtedness, which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired;

 

(e)           agreements existing on the Measurement
Date to the extent and in the manner such agreements are in effect on the
Measurement Date;

 

(f)            provisions of any agreement
governing Indebtedness incurred in accordance with this Supplemental Indenture
that impose such encumbrances or restrictions upon the occurrence of a default
or failure to meet financial covenants or conditions under the agreement;

 

(g)           restrictions on the transfer of
assets (other than cash) held in a Subsidiary of the Company imposed under any
agreement governing Indebtedness incurred in accordance with this Supplemental
Indenture;

 

(h)           provisions of any agreement governing
Indebtedness incurred in accordance with this Supplemental Indenture that
require a Subsidiary to service its debt obligations before making dividends,
distributions or advancements in respect of its Capital Stock;

 

(i)            an agreement governing Indebtedness
incurred to Refinance the Indebtedness issued, assumed or incurred pursuant to
an agreement referred to in clause (b), (d) or (e) above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such Indebtedness are not
materially less favorable to the Company in any material respect as determined
by the Board of Directors of the Company in their reasonable and good faith
judgment than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (b), (d) or (e).

 

30

 

Section 4.09.     
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 1.50 to
1.0;

 

•                  the
ratio of the aggregate amount of Indebtedness outstanding on a consolidated
basis to the Company’s Consolidated Net Worth is less than 5.0 to 1.0; and

 

•                  the
ratio of the aggregate amount of Senior Recourse Indebtedness outstanding on a
consolidated basis to the sum of: (1) the Company’s Consolidated Net
Worth; and (2) the aggregate amount of the Subordinated Indebtedness outstanding
on a consolidated basis is less than 2.75 to 1.0; provided,
however, that the aggregate principal amount of such Subordinated
Indebtedness is not in excess of the Company’s Consolidated Net Worth.

 

Notwithstanding the foregoing, the Company shall not
permit TriNet Corporate Realty Trust, Inc. (“TriNet”)
or any of its Subsidiaries to incur Indebtedness (as defined in the indenture
governing TriNet’s outstanding publicly-held debt securities on the Measurement
Date) if, immediately after giving effect to the incurrence of such
Indebtedness and the application of the proceeds thereof, the aggregate
principal amount of all outstanding Indebtedness of TriNet and its Subsidiaries
on a consolidated basis determined in accordance with GAAP is greater than 55%
of the sum of (without duplication): (1) the Total Assets (as defined in
the indenture governing TriNet’s outstanding publicly-held debt securities on
the Measurement Date) of TriNet and its Subsidiaries as of the end of the
calendar quarter covered in TriNet’s Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, most recently filed
with the Commission (or, if such filing is not permitted under the Exchange
Act, with the Trustee) prior to the incurrence of such additional Indebtedness;
and (2) the purchase price of any real estate assets or mortgages
receivable acquired, and the amount of any securities offering proceeds
received (to the extent that such proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Indebtedness), by TriNet or
any Subsidiary of TriNet since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Indebtedness.  The above limitation shall
terminate immediately upon TriNet ceasing to exist as a Subsidiary of the
Company as a result of a merger or consolidation of TriNet with the Company or
the sale, transfer, disposition or distribution of all or substantially all of
TriNet’s assets to the Company.

 

Section 4.10.     
Limitation on Transactions with Affiliates.  The Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an “Affiliate Transaction”), other than: (1) Affiliate
Transactions permitted as described below; and (2) Affiliate Transactions
on terms that are no less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm’s-length basis from
a Person that is not an Affiliate of the Company or such Subsidiary.

 

31

 

All Affiliate Transactions (and each series of related
Affiliate Transactions which are similar or part of a common plan) involving
aggregate payments or other property with a fair market value in excess of
$5.0 million shall be approved by the Board of Directors of the Company or
such Subsidiary, as the case may be, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions.  If the Company or any Subsidiary of the
Company enters into an Affiliate Transaction (or a series of related Affiliate
Transactions related to a common plan) that involves an aggregate fair market
value of more than $10.0 million, the Company or such Subsidiary, as the
case may be, shall, prior to the consummation thereof, obtain a favorable
opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Subsidiary, as the case may be,
from a financial point of view, from an Independent Financial Advisor and file
the same with the Trustee.

 

The restrictions set forth in the first paragraph of
this Section 4.10 shall not apply to:

 

(1)           reasonable fees and compensation paid
to and indemnity provided on behalf of, officers, directors, employees or
consultants of the Company or any Subsidiary of the Company as determined in
good faith by the Company’s Board of Directors or senior management;

 

(2)           transactions exclusively between or
among the Company and any of its Subsidiaries or exclusively between or among
such Subsidiaries in the ordinary course of business, provided
such transactions are not otherwise prohibited by this Supplemental Indenture;

 

(3)           transactions between the Company or
one of its Subsidiaries and any Person in which the Company or one of its
Subsidiaries has made an Investment in the ordinary course of the Company’s
real estate lending business and such Person is an Affiliate solely because of
such Investment;

 

(4)           transactions between the Company or
one of its Subsidiaries and any Person in which the Company or one of its
Subsidiaries holds an interest as a joint venture partner and such Person is an
Affiliate solely because of such interest;

 

(5)           any agreement as in effect as of the
Measurement Date or any amendment thereto or any transaction contemplated
thereby (including pursuant to any amendment thereto) in any replacement
agreement thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders in any material respect than the original
agreement as in effect on the Measurement Date; and

 

(6)           Restricted Payments permitted by Section 4.07.

 

Section 4.11.     
Limitation on Liens.  The Company shall not, and shall not cause or
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit or suffer to exist any Liens of any kind on the assets of the
Company securing Indebtedness of the Company unless:

 

(1)           in the case of Liens securing
Indebtedness of the Company that is expressly subordinate or junior in right of
payment to the Notes, the Notes are secured by a Lien on such property, assets
or proceeds that is senior in priority to such Liens; and

 

(2)           in all other cases, the Notes are
equally and ratably secured except for:

 

(a)           Liens existing as of the Measurement
Date to the extent and in the manner such Liens are in effect on the
Measurement Date;

 

32

 

(b)           Liens securing the Notes;

 

(c)           Liens securing Refinancing
Indebtedness that is incurred to Refinance any Indebtedness that has been
secured by a Lien permitted under this Supplemental Indenture and that has been
incurred in accordance with the provisions of this Supplemental Indenture; provided, however, that such Liens: (i) are no less
favorable to the Holders than the Liens in respect of the Indebtedness being
Refinanced; and (ii) do not extend to or cover any property or assets of
the Company not securing the Indebtedness so Refinanced; and

 

(ii)           Permitted Liens.

 

Section 4.12.     
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
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 4.13.     
Offer to Repurchase Upon Change of Control.  (a)  Upon the occurrence of a Change of
Control (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 4.13 (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 4.13 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;

 

33

 

(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 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 4.13.  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 4.13,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under this Section 4.13
by virtue thereof.

 

Section 4.14.     
Limitation on Preferred Stock of Subsidiaries.  The Company shall not permit any of its
Subsidiaries to issue any Preferred Stock (other than to the Company or to a
Wholly Owned Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly Owned Subsidiary of the Company) to own any Preferred Stock
of any Subsidiary of the Company, other than Preferred Stock outstanding on the
Measurement Date of Subsidiaries formed to facilitate maintaining the Company’s
REIT status.

 

Section 4.15.     
Conduct of Business.  The Company and its Subsidiaries shall engage
primarily in the financing and real-estate related businesses contemplated by Article III(b) of
the Company’s Amended and Restated Charter as in effect on the Measurement Date
and other activities related to or arising out of those activities.

 

Section 4.16.     
Limitation of Guarantees by Subsidiaries.  The Company shall not permit any of its
Subsidiaries, directly or indirectly, by way of the pledge of any intercompany
note or otherwise, to assume, guarantee or in any other manner become liable
with respect to any Indebtedness of the Company, unless, in any such case:

 

34

 

(1)           such Subsidiary executes and delivers
a supplemental indenture to this Supplemental Indenture, providing a guarantee
of payment of the Notes by such Subsidiary; and

 

(2)           if such assumption, guarantee or
other liability of such Subsidiary is provided in respect of Indebtedness that
is expressly subordinated to the Notes, the guarantee or other instrument
provided by such Subsidiary in respect of such subordinated Indebtedness shall
be subordinated to the Guarantee pursuant to subordination provisions no less
favorable to the Holders of the Notes than those contained in this Supplemental
Indenture.

 

Notwithstanding the foregoing, any such Guarantee by a
Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any further
action required on the part of the Trustee or any Holder, upon:

 

(1)           the unconditional release of such
Subsidiary from its liability in respect of the Indebtedness in connection with
which such Guarantee was executed and delivered pursuant to the preceding
paragraph; or

 

(2)           any sale or other disposition (by
merger or otherwise) to any Person that is not a Subsidiary of the Company of
all of the Company’s Capital Stock in, or all or substantially all of the
assets of, such Subsidiary; provided that: (a) such
sale or disposition of such Capital Stock or assets is otherwise in compliance
with the terms of this Supplemental Indenture; and (b) such assumption,
guarantee or other liability of such Subsidiary has been released by the
holders of the other Indebtedness so guaranteed.

 

Section 4.17.     
Maintenance of Total Unencumbered Assets.  The Company and its Subsidiaries shall
maintain Total Unencumbered Assets of not less than 125% of the aggregate
outstanding principal amount of the Unsecured Indebtedness of the Company and
its Subsidiaries, in each case on a consolidated basis.

 

Section 4.18.     
Termination of Certain Covenants In Event of
Investment Grade Rating.  In
the event that each of the Rating Categories assigned to the Notes by the
Rating Agencies is Investment Grade, the obligations under the covenants
contained in Sections 4.07, 4.08, 4.10, 4.11, 4.14, 4.15 and 4.16 hereof
shall cease to apply to the Company in the event, and only for so long as, the
Notes are rated Investment Grade and no Default or Event of Default has
occurred and is continuing.

 

Section 4.19.     
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 4.19 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
Supplemental 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 

 

35

 

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, 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 corporation; 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 a corporation 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 4.09 hereof; 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

 

36

 

(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 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, upon
redemption 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 

 

37

 

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 principal amount of
any other such Indebtedness in default for failure to pay principal at final
maturity or which has been accelerated, aggregates $20.0 million or more
at any time;

 

(5)           one or more judgments in an aggregate
amount in excess of $20.0 million shall have been rendered against the
Company or any of its Subsidiaries and such judgments remain undischarged,
unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and non-appealable (other than any judgments as to
which, and only to the extent, a reputable insurance company has acknowledged
coverage of such judgments in writing);

 

(6)           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

 

(7)           (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 (7).

 

38

 

Section 6.02.     
Acceleration.  If an Event of Default (other than an Event
of Default specified in clauses (6) or (7) 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.

 

If an Event of Default specified in clauses (6) or
(7) 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 (6) or (7) 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 

 

39

 

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, 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 

 

40

 

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 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:

 

41

 

(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 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 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.

 

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(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.

 

(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, written 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.

 

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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.

 

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.

 

44

 

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, 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.

 

45

 

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 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, 4.08, 4.09, 4.10, 4.11, 4.14, 4.15, 4.16, 4.17, 4.18 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 opinion of a nationally
recognized firm of independent public accountants, to pay the principal of,
premium, if any, and interest on the outstanding Notes on the stated date for
payment thereof or on the applicable redemption date, as the case may be, and
any other amounts owing under this Supplemental Indenture, if in the case of an
optional redemption date prior to electing to

 

46

 

exercise either Legal Defeasance or Covenant Defeasance, the Company
has delivered to the Trustee an irrevocable notice to redeem all of the
outstanding Notes on such redemption date;

 

(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 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.

 

47

 

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
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.

 

48

 

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;

 

(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 (including Section 4.13 hereof), 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

 

49

 

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 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, or change the date on which
any Notes may be subject to redemption or reduce the redemption price therefor;

 

(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 a Change of Control Offer in the
event of a Change of Control or, after such Change of Control, 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.

 

50

 

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.

 

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 or redemption, as the case may be;

 

51

 

(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,
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 others is duly given if
in writing and delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telex, telecopier or overnight air
courier guaranteeing next day delivery, to the others’ 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

200 Park Avenue, 52nd Floor

New York, NY  10166-0153

Facsimile:  (212) 878-8375

Attention:  Kathleen L. Werner, Esq.

 

52

 

If to the Trustee:

US Bank Trust National Association

100 Wall Street, 19th Floor

New York, NY 10005

Attention:  Angelita Pena, 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.

 

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:

 

53

 

(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.

 

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.

 

54

 

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]

 

55

 

SIGNATURES

 

	
  Dated as of December 12, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
  iSTAR FINANCIAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Catherine D. Rice

  	
   

  
	
   

  	
   

  	
  Name: Catherine D. Rice

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  US BANK TRUST NATIONAL ASSOCIATION, not in its
  individual capacity, but solely as Trustee

  
	
   

  	
  By:

  	
  /s/ Angelita Pena

  	
   

  
	
   

  	
   

  	
  Name: Angelita Pena

  
	
   

  	
   

  	
  Title: Authorized Signatory

  
					

 

 

EXHIBIT A

 

[Face of Note]

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

Supplemental Indenture]

 

CUSIP/CINS 45031UAC5

6.5% Senior Notes due
2013

	
  No.         

  	
   

  	
  $                            

  

 

iSTAR FINANCIAL INC.

 

promises to pay to                                                            ,
or registered assigns, the principal sum of

 

Dollars on December 15, 2013.

 

Interest Payment Dates:  June 15
and December 15

 

Record Dates:  June 1 and
December 1

 

	
  Dated:
  [               ]

  	
   

  
	
   

  	
   

  
	
   

  	
  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]

6.5% Senior Notes due 2013

 

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 at 6.5% per annum from December 12, 2003
until maturity.  The Company will pay
interest semi-annually in arrears on June 15 and December 15 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day
(each an “Interest Payment Date”).  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 December 12, 2003; 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 15,
2004.  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 of twelve
30-day months.

 

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 June 1 or December 1 next 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 December 12, 2003 (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

 

A-2

 

is issuing $150.0 million in aggregate principal amount on the Issue
Date and may issue Additional Notes in accordance with the terms of the
Indenture.

 

5.  OPTIONAL
REDEMPTION.

 

(a)           Optional Redemption.  Beginning December 15, 2008, the Company may
redeem the Notes, in whole at any time, or in part from time to time, for cash,
upon not less than 30 nor more than 60 days’ notice.  If the Notes are redeemed during the
twelve-month period commencing on December 15 of any of the years indicated
below, the redemption price will equal the percentage of the principal amount
of the redeemed Notes shown opposite that year, plus accrued and unpaid
interest to the applicable redemption date:

 

	
  Year

  	
   

  	
  Redemption Price

  	
   

  
	
  2008

  	
   

  	
  103.250

  	
  %

  
	
  2009

  	
   

  	
  102.167

  	
  %

  
	
  2010

  	
   

  	
  101.083

  	
  %

  
	
  2011 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)           Optional Redemption Upon Equity Offerings.  At any time, or from time to time, on or
prior to December 15, 2006, the Company may, at its option, use the net cash
proceeds of one or more Equity Offerings to redeem up to 35% of the principal
amount of the Notes issued under the Indenture at a redemption price of 106.5%
of the principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date of redemption; provided that:

 

(1)       at least 65% of the principal amount of
Notes issued under the Indenture remains outstanding immediately after any such
redemption; and

 

(2)       the Company makes such redemption not
more than 60 days after the consummation of any such Equity Offering.

 

6.  MANDATORY
REDEMPTION.

 

Except as set forth in paragraph 7 below, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.

 

7.  REPURCHASE
AT OPTION OF HOLDER.

 

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

 

8.  NOTICE OF REDEMPTION.  Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address.  Notes in denominations larger than $1,000 may
be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. 
On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.

 

9.  DENOMINATIONS, TRANSFER, EXCHANGE.  The Notes are in registered form without
coupons in denominations of $1,000 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

 

A-3

 

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.  The Company need not exchange
or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part.  Also, the Company need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date
and the corresponding Interest Payment Date.

 

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

 

11.  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.

 

12.  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.

 

13.  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.

 

14.  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

 

A-4

 

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.

 

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

 

16.  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).

 

17.  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 and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.

 

A-5

 

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

 

A-6

 

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).

 

A-7

 

OPTION OF HOLDER TO ELECT
PURCHASE

 

If you want to elect to have this Note purchased by
the Company pursuant to Section 4.13 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 4.13 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).

 

A-8

 

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-9EXHIBIT 4.23

 

 

 

iSTAR FINANCIAL
INC.

 

5.15% SENIOR NOTES
DUE 2012

 

 

FIFTH SUPPLEMENTAL
INDENTURE

 

Dated as of March
1, 2005

 

 

US BANK TRUST
NATIONAL

ASSOCIATION

 

Trustee

 

 

 

 

 

CROSS-REFERENCE
TABLE*

 

 

	
  Trust Indenture

  Act Section

  	
   

  	
  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

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Notices to Trustee

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.02.

  	
  Selection of Notes to Be Redeemed

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.03.

  	
  Notice of Redemption

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 3.04.

  	
  Effect of Notice of Redemption

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.05.

  	
  Deposit of Redemption Price

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.06.

  	
  Notes Redeemed in Part

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.07.

  	
  Optional Redemption

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 3.08.

  	
  Mandatory Redemption

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  COVENANTS

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Payment of Notes

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.02.

  	
  Maintenance of Office or Agency

  	
  23

  
	
   

  	
   

  	
   

  
	
  Section 4.03.

  	
  Reports to Holders

  	
  24

  
				

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 4.04.

  	
  Compliance Certificate

  	
  24

  
	
   

  	
   

  	
   

  
	
  Section 4.05.

  	
  Taxes

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 4.06.

  	
  Stay, Extension and Usury Laws

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 4.07.

  	
  Limitation on Incurrence of
  Additional Indebtedness

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 4.08.

  	
  Corporate Existence

  	
  25

  
	
   

  	
   

  	
   

  
	
  Section 4.09.

  	
  Conduct of Business

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 4.10.

  	
  Maintenance of Total Unencumbered
  Assets

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 4.11.

  	
  Termination of Certain Covenants if
  Certain Ratings are Assigned.

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 4.12.

  	
  Maintenance of Properties; Books
  and Records; Compliance with Law

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  SUCCESSORS

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Merger, Consolidation, or Sale of
  Assets

  	
  26

  
	
   

  	
   

  	
   

  
	
  Section 5.02.

  	
  Successor Corporation Substituted

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  DEFAULTS AND REMEDIES

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Events of Default

  	
  28

  
	
   

  	
   

  	
   

  
	
  Section 6.02.

  	
  Acceleration

  	
  29

  
	
   

  	
   

  	
   

  
	
  Section 6.03.

  	
  Other Remedies

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 6.04.

  	
  Waiver of Past Defaults

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 6.05.

  	
  Control by Majority

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 6.06.

  	
  Limitation on Suits

  	
  30

  
	
   

  	
   

  	
   

  
	
  Section 6.07.

  	
  Rights of Holders of Notes to
  Receive Payment

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 6.08.

  	
  Collection Suit by Trustee

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 6.09.

  	
  Trustee May File Proofs of Claim

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 6.10.

  	
  Priorities

  	
  31

  
	
   

  	
   

  	
   

  
	
  Section 6.11.

  	
  Undertaking for Costs

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  TRUSTEE

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Duties of Trustee

  	
  32

  
	
   

  	
   

  	
   

  
	
  Section 7.02.

  	
  Rights of Trustee

  	
  33

  
	
   

  	
   

  	
   

  
	
  Section 7.03.

  	
  Individual Rights of Trustee

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 7.04.

  	
  Trustee’s Disclaimer

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 7.05.

  	
  Notice of Defaults

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 7.06.

  	
  Reports by Trustee

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 7.07.

  	
  Compensation and Indemnity

  	
  34

  
	
   

  	
   

  	
   

  
	
  Section 7.08.

  	
  Replacement of Trustee

  	
  35

  
				

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 7.09.

  	
  Successor Trustee by Merger, etc.

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 7.10.

  	
  Eligibility; Disqualification

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 7.11.

  	
  Preferential Collection of Claims

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  LEGAL DEFEASANCE AND COVENANT
  DEFEASANCE

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 8.01.

  	
  Option to Effect Legal Defeasance
  or Covenant Defeasance

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 8.02.

  	
  Legal Defeasance and Discharge

  	
  36

  
	
   

  	
   

  	
   

  
	
  Section 8.03.

  	
  Covenant Defeasance

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 8.04.

  	
  Conditions to Legal or Covenant
  Defeasance

  	
  37

  
	
   

  	
   

  	
   

  
	
  Section 8.05.

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

  	
  38

  
	
   

  	
   

  	
   

  
	
  Section 8.06.

  	
  Repayment to Company

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 8.07.

  	
  Reinstatement

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  AMENDMENT, SUPPLEMENT AND WAIVER

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 9.01.

  	
  Without Consent of Holders of Notes

  	
  39

  
	
   

  	
   

  	
   

  
	
  Section 9.02.

  	
  With Consent of Holders of Notes

  	
  40

  
	
   

  	
   

  	
   

  
	
  Section 9.03.

  	
  Compliance with Trust Indenture Act

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 9.04.

  	
  Revocation and Effect of Consents

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 9.05.

  	
  Notation on or Exchange of Notes

  	
  41

  
	
   

  	
   

  	
   

  
	
  Section 9.06.

  	
  Trustee to Sign Amendments, etc

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  SATISFACTION AND DISCHARGE

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 10.01.

  	
  Satisfaction and Discharge

  	
  42

  
	
   

  	
   

  	
   

  
	
  Section 10.02.

  	
  Application of Trust Money

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  MISCELLANEOUS

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 11.01.

  	
  Trust Indenture Act Controls

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 11.02.

  	
  Notices

  	
  43

  
	
   

  	
   

  	
   

  
	
  Section 11.03.

  	
  Communication by Holders of Notes
  with Other Holders of Notes

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 11.04.

  	
  Certificate and Opinion as to
  Conditions Precedent

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 11.05.

  	
  Statements Required in Certificate
  or Opinion

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 11.06.

  	
  Rules by Trustee and Agents

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 11.07.

  	
  No Personal Liability of Directors,
  Officers, Employees and Stockholders

  	
  44

  
	
   

  	
   

  	
   

  
	
  Section 11.08.

  	
  Governing Law

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 11.09.

  	
  No Adverse Interpretation of Other
  Agreements

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 11.10.

  	
  Successors

  	
  45

  
				

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  Section 11.11.

  	
  Severability

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 11.12.

  	
  Counterpart Originals

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 11.13.

  	
  Table of Contents, Headings, etc.

  	
  45

  
	
   

  	
   

  	
   

  
	
  Section 11.14.

  	
  Conflicts with Indenture

  	
  45

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  FORM OF NOTE

  	
   

  
					

 

iv

 

SUPPLEMENTAL
INDENTURE dated as of March 1, 2005 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. 333-114113), 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 Premium” means, with respect to the Notes at any
Redemption Date, the greater of: (1) 1.0% of the principal amount of such Note;
and (2) the excess of (a) the present value at such Redemption Date of (i) the
outstanding principal amount of such Note on the redemption date plus (ii) all
required remaining scheduled interest payments due on such Note through March
1, 2012, computed using a discount rate equal to the Treasury Rate plus 20
basis points; over (b) the outstanding principal amount of such Note on such
Redemption Date. Calculation of the Applicable Premium will be made by the
Company or on behalf of the Company by such Person as the Company shall
designate; provided, however, that such calculation
shall not be a duty or obligation of the Trustee.

 

 

“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.

 

“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.

 

“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

 

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

 

“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 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
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

 

3

 

(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 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);

 

4

 

(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 (4) 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

 

(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.

 

5

 

“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.

 

“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.

 

“Existing Credit Agreements” mean: (1) the Revolving
Credit Agreement, dated as of April 19, 2004 and as amended as of December 17,
2004, among the Company, the lenders party thereto and JPMorgan Chase Bank, as
administrative agent; (2) the Amended and Restated Credit Agreement dated
as of December 28, 2000 between SFI II, Inc. and Greenwich Capital
Markets, Inc., as lender; (3) the credit facility between Deutsche
Bank AG, New York Branch, and iStar DB Seller LLC, dated as of January 11,
2001; (4) the credit facility, dated as of August 12, 1998, between
Lehman Brothers Holdings, Inc. and SFT Whole Loan A, Inc.; and (5)
the Master Repurchase Agreement dated September 30, 2002 between Goldman Sachs
Mortgage Company and iStar Finance Sub V LLC, 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

 

6

 

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.

 

“Guarantor” means: each of the Company’s Subsidiaries that in
the future executes a supplemental indenture in which such Subsidiary agrees to
be bound by the terms of this Supplemental Indenture as a Guarantor; provided that any Person constituting a Guarantor as
described above shall cease to constitute a Guarantor when its respective
Guarantee is released in accordance with the terms of this Supplemental
Indenture.

 

“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;

 

(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

 

7

 

(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 $700 million principal amount of
5.15% Senior Notes due 2012 of the Company issued on the Issue Date.

 

“Interest Payment Date” means March 1 and
September 1 of each year commencing September 1, 2005.

 

“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.

 

“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.

 

“Issue Date” means March 1, 2005, the date of original
issuance of the Initial Notes.

 

“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).

 

“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, whether at Stated Maturity or on
a redemption date, and whether by declaration of acceleration, call for
redemption, purchase or otherwise.

 

8

 

“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.

 

“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

 

9

 

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:

 

(1)                                  Indebtedness
under: (a) the Initial Notes and the $400 million aggregate principal amount of
the Company’s Senior Floating Rate Notes due 2008 issued on the date hereof;
(b) the Company’s $250.0 million aggregate principal amount of 5.125% Notes due
2011 that were issued on March 30, 2004; (c) the Company’s $175.0 million
aggregate principal amount of floating rate notes due 2007 that were issued on
March 12, 2004; (d) the Company’s $250.0 million aggregate principal amount of
5.70% Notes due 2014 issued on March 9, 2004 plus any additional notes of that
series issued pursuant to the Company’s offer to exchange notes of that series
for any and all TriNet Corporate Realty Trust, Inc. 7.70% Notes due 2017; (e)
the Company’s $350.0 million aggregate principal amount of 4.875% Senior Notes
due 2009 that were issued on January 23, 2004; (f) the Company’s $350.0 million
aggregate principal amount of 6.0% Senior Notes due 2010 that were issued on
December 12, 2003; (g) the Company’s $150.0 million aggregate principal amount
of 6.5% Senior Notes due 2013 that were issued on December 12, 2003; (h) the
Company’s $350.0 million aggregate principal amount of 8 3/4% Senior Notes due
2008 that were issued on August 16, 2001; and (i) the $185.0 million aggregate
principal amount of 7.0% Senior Notes due 2008 that were issued in March and
April of 2003;

 

(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

 

10

 

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 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.

 

11

 

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

 

“Rating Agencies” means S&P, Moody’s and Fitch.

 

“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

 

(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 managing director, director, principal, vice president, assistant
vice president, assistant treasurer, associate 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.

 

12

 

“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

 

(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.

 

“Treasury Rate”
means, with respect to a Redemption Date, the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) that has become publicly available on the third Business Day prior to
our providing notice of redemption (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most
nearly equal to the period from such Redemption Date to the maturity date; provided, however, that if the period from such Redemption
Date to the maturity date is not equal to the constant maturity of the United
States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from such Redemption Date to the maturity date is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.

 

“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.

 

13

 

“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

  	
   

  
	
  “DTC”

  	
   

  	
  2.03

  	
   

  
	
  “Event of Default”

  	
   

  	
  6.01

  	
   

  
	
  “incur”

  	
   

  	
  4.07

  	
   

  
	
  “Legal Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “Paying Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Redemption Date”

  	
   

  	
  3.07

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Surviving Entity”

  	
   

  	
  5.01

  	
   

  

 

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.

 

14

 

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 $1,000 and integral multiples thereof.

 

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 and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented 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.

 

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 $700,000,000 (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.

 

15

 

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 and Paying 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. 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 or Paying 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 and Paying Agent
and 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 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

 

16

 

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 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

 

17

 

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.

 

(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 redeemed, 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

 

18

 

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)                               The
Registrar shall not be required to register the transfer of or exchange any
Note selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part.

 

(iv)                              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.

 

(v)                                 The
Company shall not be required (A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under Section 3.02
hereof and ending at the close of business on the day of selection, (B) to
register the transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being redeemed in
part or (C) to register the transfer of or to exchange a Note between a record
date and the next succeeding Interest Payment Date.

 

(vi)                              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.

 

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

 

(viii)                        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.

 

19

 

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 a redemption date or 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 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.

 

20

 

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, if so, the Trustee shall use
CUSIP numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the Notes,
and any such redemption shall not be affected by any defect in or the omission
of such numbers. The Company will promptly notify the Trustee in writing of any
change in the CUSIP numbers.

 

ARTICLE 3

REDEMPTION AND PREPAYMENT

 

Section 3.01.                             Notices to Trustee. If the Company elects to redeem Notes
pursuant to the optional redemption provisions of Section 3.07 hereof, it
shall furnish to the Trustee, at least 30 days but not more than 60 days before
a redemption date, an Officers’ Certificate setting forth (i) the clause of
this Supplemental Indenture pursuant to which the redemption shall occur, (ii)
the redemption date, (iii) the principal amount of Notes to be redeemed,
(iv) the redemption price and (v) the CUSIP numbers of the Notes to be
redeemed.

 

Section 3.02.                             Selection of Notes to Be Redeemed. In the event that the
Company chooses to redeem less than all of the Notes, selection of the Notes
for redemption will be made by the Trustee either:

 

(1)                                  in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed; or

 

(2)                                  on
a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate.

 

No
Notes of a principal amount of $1,000 or less shall be redeemed in part. If a
partial redemption is made with the proceeds of an Equity Offering (as defined
in Section 3.07(b)), the Trustee will select the Notes only on a pro rata basis or on as nearly a pro rata
basis as is practicable (subject to DTC procedures).

 

The
Trustee shall promptly notify the Company in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the
principal amount thereof to be redeemed.

 

21

 

Notes
and portions of Notes selected shall be in amounts of $1,000 or whole multiples
of $1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Supplemental Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption.

 

Section 3.03.                             Notice of Redemption. At least 30 days but not more than 60
days before a redemption date, the Company shall mail or cause to be mailed, by
first class mail (at its own expense), a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.

 

The
notice shall identify the Notes to be redeemed, including the CUSIP numbers,
and shall state:

 

(a)                                  the
redemption date;

 

(b)                                 the
redemption price and the amount of accrued and unpaid interest, if any, to be
paid;

 

(c)                                  if
any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the redemption date upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed portion
shall be issued upon cancellation of the original Note;

 

(d)                                 the
name and address of the Paying Agent;

 

(e)                                  that
Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;

 

(f)                                    that,
unless the Company defaults in making such redemption payment, interest on
Notes called for redemption ceases to accrue on and after the redemption date;

 

(g)                                 the
paragraph of the Notes and/or Section of this Supplemental Indenture
pursuant to which the Notes called for redemption are being redeemed; and

 

(h)                                 that
no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.

 

At the
Company’s written request, the Trustee shall give the notice of redemption in
the Company’s name and at its expense; provided, however,
that the Company shall have provided to the Trustee, at least 45 days prior to
the redemption date (unless a shorter notice shall be satisfactory to the
Trustee), the information required by clauses (a) through (d) above.

 

Section 3.04.                             Effect of Notice of Redemption. Once notice of redemption is
mailed in accordance with Section 3.03 hereof, Notes called for redemption
become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional.

 

Section 3.05.                             Deposit of Redemption Price. One Business Day prior to the
redemption date, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption price of and accrued interest on
all Notes to be redeemed on that date and any amounts owed the Trustee. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption price of, and accrued interest on, all
Notes to be redeemed and any amounts owed the Trustee.

 

22

 

If the
Company complies with the provisions of the preceding paragraph, on and after
the redemption date, interest shall cease to accrue on the Notes or the
portions of Notes called for redemption. If a Note is redeemed on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption date until
such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in
Section 4.01 hereof.

 

Section 3.06.                             Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall issue and, upon the Company’s written request,
the Trustee shall authenticate for the Holder at the expense of the Company a
new Note equal in principal amount to the unredeemed portion of the Note
surrendered.

 

Section 3.07.                             Optional Redemption. The Notes may be redeemed or purchased
in whole or in part at the Company’s option at any time prior to the maturity
of the Notes at a price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to the date
of the redemption or purchase (the “Redemption Date”) (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).

 

Other
than as specifically provided in this Section 3.07, any redemption
pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.

 

Section 3.08.                             Mandatory Redemption. The Company shall not be required to
make mandatory redemption payments with respect to the Notes prior to Maturity.

 

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.

 

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

 

23

 

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.

 

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,

 

24

 

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 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.                             Conduct of Business. The Company and its Subsidiaries shall
engage primarily in the financing and real-estate related businesses
contemplated by Article III(b) of the Company’s Amended and Restated
Charter as in effect and other activities related to or arising out of those
activities.

 

Section 4.10.                             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

 

25

 

amount of the Unsecured Indebtedness of the Company
and its Subsidiaries, in each case on a consolidated basis.

 

Section 4.11.                             Termination of Certain Covenants if Certain Ratings are Assigned.  The obligations under the covenants contained
in Sections 4.07 and 4.10 hereof shall case to apply to the Company in the
event that, 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 Supplemental 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, 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 corporation; 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”):

 

26

 

(i)                                     shall
be a corporation 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 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.

 

27

 

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, upon redemption or otherwise;

 

(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 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;

 

28

 

(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.

 

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.

 

29

 

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 (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,
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

 

30

 

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 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

 

31

 

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 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.

 

32

 

(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 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.

 

(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, written 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

 

33

 

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.

 

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.

 

34

 

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, 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.

 

35

 

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 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, 4.10, 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

 

36

 

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 opinion
of a nationally recognized independent registered public accounting firm, to
pay the principal of, premium, if any, and interest on the outstanding Notes on
the stated date for payment thereof or on the applicable redemption date, as
the case may be, and any other amounts owing under this Supplemental Indenture,
if in the case of an optional redemption date prior to electing to exercise
either Legal Defeasance or Covenant Defeasance, the Company has delivered to
the Trustee an irrevocable notice to redeem all of the outstanding Notes on
such redemption date;

 

(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 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;

 

37

 

(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 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.

 

38

 

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;

 

(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

 

39

 

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 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, or change the date on which any Notes may be subject to redemption
or reduce the redemption price therefor;

 

(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; or

 

(f)                                    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.

 

40

 

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.

 

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

 

41

 

Company
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;

 

(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, 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 others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others’ 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

 

42

 

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

Attention:  Angelita Pena, 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.

 

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

 

43

 

(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.

 

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.

 

44

 

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 1, 2005

 

	
   

  	
  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 45031UAR2

 

5.15% Senior Notes
due 2012

 

	
  No.         

  	
  $                    

  

 

iSTAR FINANCIAL
INC.

 

promises to pay to                                                         ,
or registered assigns, the principal sum of                

 

Dollars on March 1, 2012.

Interest Payment
Dates:  March 1 and September 1

Record Dates: February 15
and August 15

 

Dated: 
[               ]

 

	
   

  	
  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

  	
   

  
						

 

A-1

 

[Back of Note]

5.15% Senior Notes due 2012

 

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 at 5.15% per
annum from March 1, 2005 until maturity. The company will pay interest
semi-annually in arrears on March 1 and September 1 of each year, or if any
such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). 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 1, 2005; 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 September 1, 2005. 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 of twelve 30-day months. 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. 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.

 

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 or August 15 next 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 1, 2005 (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

 

A-2

 

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 $700 million in aggregate principal amount on
the Issue Date and may issue Additional Notes in accordance with the terms of
the Indenture.

 

5. OPTIONAL
REDEMPTION.

 

The
Notes may be redeemed or purchased in whole or in part at the Company’s option
at any time prior to the maturity of the Notes at a price equal to 100% of the
principal amount thereof plus the Applicable Premium as of, and accrued but
unpaid interest, if any, to the date of the redemption or purchase (the
“Redemption Date”) (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).

 

“Applicable Premium” means, with
respect to the Notes at any Redemption Date, the greater of: (1) 1.0% of the
principal amount of such Note; and (2) the excess of (a) the present value at
such Redemption Date of (i) the principal amount of such Note on the redemption
date plus (ii) all required remaining scheduled interest payments due on such
Note through March 1, 2012, computed using a discount rate equal to the
Treasury Rate plus 20 basis points; over (b) the principal amount of such Note
on such Redemption Date. Calculation of the Applicable Premium will be made by
the Company or on behalf of the Company by such Person as the Company shall
designate; provided, however, that such calculation
shall not be a duty or obligation of the Trustee.

 

“Treasury Rate” means, with respect
to a Redemption Date, the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) that
has become publicly available on the third Business Day prior to our providing
notice of redemption (or, if such Statistical Release is no longer published,
any publicly available source of similar market data)) most nearly equal to the
period from such Redemption Date to the maturity date; provided,
however, that if the period from such Redemption Date to the
maturity date is not equal to the constant maturity of the United States
Treasury security for which a weekly average yield is given, the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of United States Treasury
securities for which such yields are given, except that if the period from such
Redemption Date to the maturity date is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.

 

6. MANDATORY
REDEMPTION.

 

The Company shall not be
required to make mandatory redemption payments with respect to the Notes.

 

7. NOTICE OF
REDEMPTION. Notice of redemption will be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder whose Notes are
to be redeemed at its registered address. Notes in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000, unless
all of the Notes held by a Holder are to be redeemed. On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

 

8. DENOMINATIONS,
TRANSFER, EXCHANGE. The Notes are in registered form without coupons
in denominations of $1,000 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

 

A-3

 

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. The Company need not exchange or register the transfer of any Note
or portion of a Note selected for redemption, except for the unredeemed portion
of any Note being redeemed in part. Also, the Company need not exchange or
register the transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed or during the period between a record date and the
corresponding Interest Payment Date.

 

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

 

10. 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.

 

11. 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.

 

12. 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.

 

13. 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

 

A-4

 

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.

 

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

 

15. 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).

 

16. 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 and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.

 

A-5

 

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

 

A-6

 

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).

 

A-7

 

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-8

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