Document:

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                                                                     EXHIBIT 4.4

                                    CNF INC.

                        6.70% SENIOR DEBENTURES DUE 2034

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                                                  April 30, 2004

Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated,
  As representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
    388 Greenwich Street
    New York, New York  10013

Ladies and Gentlemen:

     CNF Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the Initial Purchasers (as defined herein) upon the terms set forth in
the Purchase Agreement (as defined herein) its 6.70% Senior Debentures due 2034.
As an inducement to the Initial Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to the obligations of the Initial Purchasers
thereunder, the Company agrees with the Initial Purchasers for the benefit of
holders (as defined herein) from time to time of the Registrable Securities (as
defined herein) as follows:

     1.   Certain Definitions. For purposes of this Agreement, the following
terms shall have the following respective meanings:

          "Additional Interest" shall have the meaning assigned thereto in
     Section 2(c) hereof.

          "Affiliate" shall have the meaning specified in Rule 405 under the
     Securities Act and the terms "controlling" and "controlled" shall have
     meanings correlative thereto.

          "Agreement" shall mean this Exchange and Registration Rights
     Agreement, as may be amended from time to time.

          "Base Interest" shall mean the interest that would otherwise accrue on
     the Securities under the terms thereof and the Indenture, without giving
     effect to the provisions of this Agreement.

          The term "broker-dealer" shall mean any broker or dealer registered
     with the Commission under the Exchange Act.

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          "Business Day" shall mean any day other than a Saturday, a Sunday or a
     legal holiday or a day on which banking institutions or trust companies are
     authorized or obligated by law to close in New York City.

          "Closing Date" shall mean the date on which the Securities are
     initially issued.

          "Commission" shall mean the U.S. Securities and Exchange Commission,
     or any other federal agency at the time administering the Exchange Act or
     the Securities Act, whichever is the relevant statute for the particular
     purpose.

          "Effective Time," in the case of (i) an Exchange Registration, shall
     mean the time and date as of which the Commission declares the Exchange
     Registration Statement effective or as of which the Exchange Registration
     Statement otherwise becomes effective, and (ii) a Shelf Registration, shall
     mean the time and date as of which the Commission declares the Shelf
     Registration Statement effective or as of which the Shelf Registration
     Statement otherwise becomes effective.

          "Electing Holder" shall mean any holder of Registrable Securities that
     has returned a completed and signed Notice and Questionnaire to the Company
     in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, or any
     successor thereto, as the same shall be amended from time to time.

          "Exchange Offer" shall have the meaning assigned thereto in Section
     2(a) hereof.

          "Exchange Registration" shall have the meaning assigned thereto in
     Section 3(c) hereof.

          "Exchange Registration Statement" shall have the meaning assigned
     thereto in Section 2(a) hereof.

          "Exchange Securities" shall have the meaning assigned thereto in
     Section 2(a) hereof.

          "holder" shall mean each of the Initial Purchasers and other persons
     who acquire Registrable Securities from time to time (including any
     successors or assigns), in each case for so long as such person owns any
     Registrable Securities.

          "Indenture" shall mean the Indenture, dated as of March 8, 2000,
     between the Company and the Trustee, and supplemented by Supplemental
     Indenture No. 1 dated April 30, 2004, as the same shall be amended from
     time to time.

          "Initial Purchasers" shall mean the Initial Purchasers named in
     Schedule I to the Purchase Agreement.

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          "Losses" shall mean losses, claims, damages and liabilities (including
     legal or other expenses reasonably incurred in connection with
     investigating or defending any loss, claim, liability, damage or action).

          "New Securities" shall mean debt securities of the Company identical
     in all material respects to the Securities (except that the transfer
     restrictions shall be modified or eliminated, as appropriate).

          "Notice and Questionnaire" means a Notice of Registration Statement
     and Selling Securityholder Questionnaire substantially in the form of
     Exhibit A hereto.

          "person" shall mean a corporation, association, partnership,
     organization, business, individual, government or political subdivision
     thereof or governmental agency.

          "Purchase Agreement" shall mean the Purchase Agreement, dated as of
     April 27, 2004, between the Initial Purchasers and the Company relating to
     the Securities.

          "Registrable Securities" shall mean the Securities; provided, however,
     that a Security shall cease to be a Registrable Security when (i) in the
     circumstances contemplated by Section 2(a) hereof, the Security has been
     exchanged for an Exchange Security in an Exchange Offer as contemplated in
     Section 2(a) hereof (provided that any Exchange Security held by a
     broker-dealer participating in the Exchange Offer that, pursuant to the
     last two sentences of Section 2(a), is included in a prospectus for use in
     connection with resales by such broker-dealer shall be deemed to be a
     Registrable Security with respect to Sections 5 and 8 until resale of such
     Registrable Security has been effected within the 120-day period referred
     to in Section 2(a)); (ii) in the circumstances contemplated by Section 2(b)
     hereof, a Shelf Registration Statement registering such Security under the
     Securities Act has been declared or becomes effective and such Security has
     been sold or otherwise transferred by the holder thereof pursuant to and in
     a manner contemplated by such effective Shelf Registration Statement; (iii)
     such Security is sold pursuant to Rule 144 under circumstances in which any
     legend borne by such Security relating to restrictions on transferability
     thereof, under the Securities Act or otherwise, is removed by the Company
     or pursuant to the Indenture; (iv) such Security is eligible to be sold
     pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to
     be outstanding.

          "Registration Default" shall have the meaning assigned thereto in
     Section 2(c) hereof.

          "Registration Expenses" shall have the meaning assigned thereto in
     Section 4 hereof.

          "Resale Period" shall have the meaning assigned thereto in Section
     2(a) hereof.

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          "Restricted Holder" shall mean (i) a holder that is an affiliate of
     the Company within the meaning of Rule 405, (ii) a holder who acquires
     Exchange Securities outside the ordinary course of such holder's business,
     (iii) a holder who has arrangements or understandings with any person to
     participate in the Exchange Offer for the purpose of distributing Exchange
     Securities and (iv) a holder that is a broker-dealer, but only with respect
     to Exchange Securities received by such broker-dealer pursuant to an
     Exchange Offer in exchange for Registrable Securities acquired by the
     broker-dealer directly from the Company.

          "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
     rule promulgated under the Securities Act (or any successor provision), as
     the same may be amended from time to time.

          "Securities" shall mean, collectively, the 6.70% Senior Debentures due
     May 1, 2034 of the Company to be issued and sold to the Initial Purchasers,
     and securities issued in exchange therefor or in lieu thereof pursuant to
     the Indenture.

          "Securities Act" shall mean the Securities Act of 1933, as amended, or
     any successor thereto, as the same may be amended from time to time.

          "Shelf Registration" shall have the meaning assigned thereto in
     Section 2(b) hereof.

          "Shelf Registration Statement" shall have the meaning assigned thereto
     in Section 2(b) hereof.

          "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
     any successor thereto, and the rules, regulations and forms promulgated
     thereunder, all as the same may be amended from time to time.

          "Trustee" shall mean The Bank of New York, as successor to Bank One
     Trust Company, National Association, or any successor thereof.

          "Underwritten Offering" shall mean a firm commitment offering of
     Securities by holders through an identified underwriter reasonably
     acceptable to the Company pursuant to a Shelf Registration Statement with
     respect to at least $20 million aggregate principal amount of Securities.

     Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this
Agreement, and the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision.

     2.   Registration Under the Securities Act.

          (a)  Except as set forth in Section 2(b) below, the Company agrees to
file under the Securities Act, as soon as practicable, but no later than 90 days
after the Closing Date, a registration statement relating to an offer to
exchange (such registration

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statement, the "Exchange Registration Statement," and such offer, the "Exchange
Offer") any and all of the Securities for a like aggregate principal amount of
debt securities issued by the Company, which debt securities are substantially
identical to the Securities (and are entitled to the benefits of a trust
indenture which is substantially identical to the Indenture or is the Indenture
and which has been qualified under the Trust Indenture Act), except that they
have been registered pursuant to an effective registration statement under the
Securities Act and do not contain provisions for the Additional Interest
contemplated in Section 2(c) below (such new debt securities hereinafter called
"Exchange Securities"). The Company agrees to use its reasonable best efforts to
cause the Exchange Registration Statement to become effective under the
Securities Act as soon as practicable, but no later than 180 days after the
Closing Date. The Exchange Offer will be registered under the Securities Act on
the appropriate form and will comply in all material respects with all
applicable tender offer rules and regulations under the Exchange Act. The
Company further agrees to use its reasonable best efforts to commence and
complete the Exchange Offer promptly after the Effective Time and shall hold the
Exchange Offer open for not less than 20 Business Days and not more than 30
Business Days (unless otherwise required by applicable law) and exchange
Exchange Securities for all Registrable Securities that have been properly
tendered and not withdrawn on or prior to the expiration of the Exchange Offer.

     The Exchange Offer will be deemed to have been "completed" only if the debt
securities received by holders other than Restricted Holders in the Exchange
Offer for Registrable Securities are, upon receipt, transferable by each such
holder without restriction under the Securities Act and the Exchange Act and
without material restrictions under the blue sky or securities laws of a
substantial majority of the States of the United States of America. The Exchange
Offer shall be deemed to have been completed upon the earlier to occur of (i)
the Company having exchanged the Exchange Securities for all outstanding
Registrable Securities pursuant to the Exchange Offer and (ii) the Company
having exchanged, pursuant to the Exchange Offer, Exchange Securities for all
Registrable Securities that have been properly tendered and not withdrawn before
the expiration of the Exchange Offer, which shall be on a date that is not less
than 20 Business Days and not more than 30 Business Days following the
commencement of the Exchange Offer.

     The Company agrees (x) to include in the Exchange Registration Statement a
prospectus for use in any resales by any holder of Exchange Securities that is a
broker-dealer and (y) to keep such Exchange Registration Statement effective for
a period (the "Resale Period") beginning when Exchange Securities are first
issued in the Exchange Offer and ending upon the earlier of the expiration of
the 120th day after the Exchange Offer has been completed or such time as such
broker-dealers no longer own any Registrable Securities. With respect to such
Exchange Registration Statement, such holders shall have the benefit of the
rights of indemnification and contribution set forth in Sections 5(a), (c), (d)
and (e) hereof.

     The Company agrees, if requested by the Commission, that, prior to
effectiveness of the Exchange Registration Statement, it will provide a
supplemental letter to the Commission (A) stating that the Company is conducting
the Exchange Offer in reliance

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on the position of the Commission in Exxon Capital Holdings Corporation (pub.
avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5,
1991); and (B) including a representation that the Company has not entered into
any arrangement or understanding with any person to distribute the New
Securities to be received in the Exchange Offer and that, to the Company's
knowledge, each holder participating in the Exchange Offer is acquiring the New
Securities in the ordinary course of business and has no arrangement or
understanding with any person to participate in the distribution of the New
Securities.

          (b)  If (i) on or prior to the time the Exchange Offer is completed
there is any change in law or to existing Commission interpretations such that
the Company is not permitted to effect the Exchange Offer as contemplated by
Section 2(a) hereof, (ii) for any other reason the Exchange Registration
Statement is not declared effective within 180 calendar days following the
Closing Date or the Exchange Offer is not consummated within 30 Business Days
after the Exchange Registration Statement is declared effective (provided that,
if the Exchange Registration Statement shall be declared effective after such
180-day period or if the Exchange Offer shall be consummated after such
30-Business Day period, then the Company's obligation under this clause (ii)
arising from the failure of the Exchange Registration Statement to be declared
effective within such 180-day period or the failure of the Exchange Offer to be
consummated within 30 Business Days after the Exchange Registration Statement
becomes effective, respectively, shall terminate), (iii) any Holder is not
eligible to participate in the Exchange Offer or elects to participate in the
Exchange Offer but does not receive freely tradeable Exchange Securities
pursuant to the Exchange Offer or (iv) upon the written request of any of the
Initial Purchasers within 90 days following the consummation of the Exchange
Offer with respect to Registrable Securities that are not permitted to be
exchanged for Exchange Securities in the Exchange Offer or if the Initial
Purchasers do not receive freely tradable Exchange Securities in the Exchange
Offer, then, in the case of each of clauses (i) through (iv), the Company shall,
in lieu of (or, in the case of clauses (iii) and (iv), in addition to)
conducting the Exchange Offer contemplated by Section 2(a), file under the
Securities Act as soon as practicable, but no later than the later of 30 days
after the time such obligation to file arises, a "shelf" registration statement
providing for the registration of, and the sale on a continuous or delayed basis
by the holders of, all of the Registrable Securities, pursuant to Rule 415 or
any similar rule that may be adopted by the Commission (such filing, the "Shelf
Registration" and such registration statement, the "Shelf Registration
Statement").

     The Company agrees to use its reasonable best efforts (x) to cause the
Shelf Registration Statement to become or be declared effective no later than
the later of 90 days after the date on which the Company is required to file
such Shelf Registration Statement as provided in the immediately preceding
paragraph and 180 days after the Closing Date and, subject to Section 2(f), to
keep such Shelf Registration Statement continuously effective for a period
ending on the earlier of the second anniversary of the Effective Time or such
time as there are no longer any Registrable Securities outstanding; provided,
however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder, and (y) after

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the Effective Time of the Shelf Registration Statement, promptly upon the
request of any holder of Registrable Securities included therein that is not
then an Electing Holder, to take any action reasonably necessary to enable such
holder to use the prospectus forming a part thereof for resales of Registrable
Securities, including, without limitation, any action necessary to identify such
holder as a selling securityholder in the Shelf Registration Statement;
provided, however, that nothing in this clause (y) shall relieve any such holder
of the obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(d)(iii) hereof prior to being named
therein. The Company further agrees to supplement or make amendments to the
Shelf Registration Statement, as and when required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or rules and regulations
thereunder for shelf registration, and the Company agrees to furnish to each
Electing Holder copies of any such supplement or amendment promptly following
its filing with the Commission, but only if such amendment or supplement is not
made available on the Commission's EDGAR System.

          (c)  In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or before the date on
which such registration statement is required to be filed pursuant to Section
2(a) or 2(b), respectively, or (ii) such Exchange Registration Statement or
Shelf Registration Statement has not become effective or been declared effective
by the Commission on or before the date on which such registration statement is
required to become or be declared effective pursuant to Section 2(a) or 2(b),
respectively, or (iii) the Exchange Offer has not been completed within 30
Business Days after the initial effective date of the Exchange Registration
Statement relating to the Exchange Offer (if the Exchange Offer is then required
to be made) or (iv) any Exchange Registration Statement or Shelf Registration
Statement required by Section 2(a) or 2(b) hereof is filed and declared
effective but shall thereafter either be withdrawn by the Company or shall
become subject to an effective stop order issued pursuant to Section 8(d) of the
Securities Act suspending the effectiveness of such registration statement
(except as specifically permitted herein) without being succeeded promptly by an
additional registration statement filed and declared effective (each such event
referred to in clauses (i) through (iv), a "Registration Default" and each
period during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then, as liquidated damages for such
Registration Default, subject to the provisions of Sections 3(d)(ii) and 8(b),
additional interest ("Additional Interest"), in addition to the Base Interest,
shall accrue at a per annum rate of 0.25% until all Registration Defaults have
been cured.

          (d)  The Company shall take all reasonable actions necessary or
advisable to be taken by it to ensure that the transactions contemplated herein
are effected as so contemplated.

          (e)  Any reference herein to a registration statement as of any time
shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference herein to
any post-effective amendment to a registration statement as of any time shall be
deemed to include any

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document incorporated, or deemed to be incorporated, therein by reference as of
such time.

          (f)  During any 365-day period, the Company may suspend the use of the
prospectus forming part of the Shelf Registration Statement or, with respect to
the use in any resales by a holder of Exchange Securities that is a
broker-dealer, the Exchange Registration Statement, for up to four periods not
to exceed 45 consecutive days (other than the consecutive 45-day period
immediately prior to the stated maturity of the Securities) or an aggregate of
90 days in any 12-month period if the Board of Directors of the Company shall
have determined in good faith that because of valid business reasons (not
including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of businesses or assets, availability and preparation
of financial information relative to the Company, any subsidiary or any proposed
acquisition, pending corporate developments and similar events, it is in the
best interests of the Company to suspend such use, and prior to suspending such
use the Company provides the holders with written notice of such suspension,
which notice need not specify the nature of the event giving rise to such
suspension.

     3.   Registration Procedures.

     If the Company files a registration statement pursuant to Section 2(a) or
Section 2(b), the following provisions shall apply:

          (a)  At or before the Effective Time of the Exchange Offer or the
Shelf Registration, as the case may be, the Company shall qualify the Indenture
under the Trust Indenture Act.

          (b)  In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.

          (c)  In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):

               (i)  prepare and file with the Commission, as soon as practicable
                    but no later than 90 days after the Closing Date, an
                    Exchange Registration Statement on any form which may be
                    utilized by the Company and which shall permit the Exchange
                    Offer and resales of Exchange Securities by broker-dealers
                    during the Resale Period to be effected as contemplated by
                    Section 2(a), and use its reasonable best efforts to cause
                    such Exchange Registration Statement to become effective as
                    soon as practicable thereafter, but no later than 180 days
                    after the Closing Date;

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              (ii)   as soon as practicable prepare and file with the Commission
                     such amendments and supplements to such Exchange
                     Registration Statement and the prospectus included therein
                     as may be necessary to effect and maintain the
                     effectiveness of such Exchange Registration Statement for
                     the periods and purposes contemplated in Section 2(a)
                     hereof and as may be required by the applicable rules and
                     regulations of the Commission and the instructions
                     applicable to the form of such Exchange Registration
                     Statement, and promptly provide each broker-dealer holding
                     Exchange Securities with such number of copies of the
                     prospectus included therein (as then amended or
                     supplemented), as such broker-dealer reasonably may request
                     prior to the expiration of the Resale Period, for use in
                     connection with resales of Exchange Securities;

              (iii)  promptly give written notice to each broker-dealer that has
                     requested or received copies of the prospectus included in
                     such registration statement (A) when such Exchange
                     Registration Statement or the prospectus included therein
                     or any prospectus amendment or supplement or post-effective
                     amendment has been filed, and, with respect to such
                     Exchange Registration Statement or any post-effective
                     amendment, when the same has become effective, (B) of any
                     request by the Commission for amendments or supplements to
                     such Exchange Registration Statement or prospectus or for
                     additional information, (C) of the issuance by the
                     Commission of any stop order suspending the effectiveness
                     of such Exchange Registration Statement, (D) of the receipt
                     by the Company of any notification with respect to the
                     suspension of the qualification of the Exchange Securities
                     for sale in any jurisdiction, or (E) at any time during the
                     Resale Period when a prospectus is required to be delivered
                     under the Securities Act, that such Exchange Registration
                     Statement, prospectus, prospectus amendment or supplement
                     or post-effective amendment does not conform in all
                     material respects to the applicable requirements of the
                     Securities Act and the Trust Indenture Act and the rules
                     and regulations of the Commission thereunder or contains an
                     untrue statement of a material fact or omits to state any
                     material fact required to be stated therein or necessary to
                     make the statements therein, in light of the circumstances
                     in which they were made, not misleading; and promptly give
                     written notice to counsel of the Initial Purchasers (1) of
                     any comments by the Commission (and promptly provide copies
                     thereof) and by the blue sky or securities commissioner or
                     regulator of any

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                    state with respect thereto or any request by the Commission
                    for amendments or supplements to such Exchange Registration
                    Statement or prospectus or for additional information, (2)
                    of the issuance by the Commission of any stop order
                    suspending the effectiveness of such Exchange Registration
                    Statement or the initiation or threatening of any
                    proceedings for that purpose, (3) of the receipt by the
                    Company of any notification with respect to the suspension
                    of the qualification of the Exchange Securities for sale in
                    any jurisdiction or the initiation or threatening of any
                    proceeding for such purpose, or (4) at any time during the
                    Resale Period when a prospectus is required to be delivered
                    under the Securities Act, that such Exchange Registration
                    Statement, prospectus, prospectus amendment or supplement or
                    post-effective amendment does not conform in all material
                    respects to the applicable requirements of the Securities
                    Act and the Trust Indenture Act and the rules and
                    regulations of the Commission thereunder or contains an
                    untrue statement of a material fact or omits to state any
                    material fact required to be stated therein or necessary to
                    make the statements therein, in light of the circumstances
                    in which they were made, not misleading;

               (iv) in the event that the Company would be required, pursuant to
                    Section 3(c)(iii)(E) above, to notify any broker-dealers
                    holding Exchange Securities, subject to Section 2(f), as
                    soon as practicable prepare and furnish to each such holder
                    a reasonable number of copies of a prospectus supplemented
                    or amended so that, as thereafter delivered to purchasers of
                    such Exchange Securities during the Resale Period, such
                    prospectus shall conform in all material respects to the
                    applicable requirements of the Securities Act and the Trust
                    Indenture Act and the rules and regulations of the
                    Commission thereunder and shall not contain an untrue
                    statement of a material fact or omit to state a material
                    fact required to be stated therein or necessary to make the
                    statements therein, in light of the circumstances in which
                    they were made, not misleading;

               (v)  use its reasonable best efforts to obtain the withdrawal of
                    any order suspending the effectiveness of such Exchange
                    Registration Statement or any post-effective amendment
                    thereto at the earliest practicable date;

               (vi) use its reasonable best efforts to (A) register or qualify
                    the Exchange Securities under the securities laws or blue
                    sky laws of such jurisdictions as are contemplated by
                    Section

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                     2(a) no later than the commencement of the Exchange Offer,
                     (B) keep such registrations or qualifications in effect and
                     comply with such laws so as to permit the continuance of
                     offers, sales and dealings therein in such jurisdictions
                     until the expiration of the Resale Period and (C) cooperate
                     with the Initial Purchasers in endeavoring to qualify the
                     Securities for sale under the securities laws of such
                     jurisdictions as the Initial Purchasers may reasonably have
                     designated in writing and will make such applications, file
                     such documents and furnish such information as may be
                     reasonably required for that purpose; provided, however,
                     that the Company shall not be required for any such purpose
                     to (1) qualify as a foreign corporation in any jurisdiction
                     wherein it would not otherwise be required to qualify but
                     for the requirements of this Section 3(c)(vi), (2) consent
                     to general service of process in any such jurisdiction or
                     (3) make any changes to its certificate of incorporation or
                     by-laws or any agreement between it and its stockholders;

              (vii)  use its reasonable best efforts to obtain the consent or
                     approval of each governmental agency or authority, whether
                     federal, state or local, which may be required to effect
                     the Exchange Registration, the Exchange Offer and the
                     offering and sale of Exchange Securities by broker-dealers
                     during the Resale Period;

              (viii) provide a CUSIP number for all Exchange Securities, not
                     later than the applicable Effective Time; and

              (ix)   comply in all material respects with all applicable rules
                     and regulations of the Commission, and make generally
                     available to its securityholders an earning statement of
                     the Company and its subsidiaries complying with Section
                     11(a) of the Securities Act (including, at the option of
                     the Company, Rule 158 thereunder).

          (d)  In connection with the Company's obligations with respect to the
Shelf Registration, if applicable, the Company shall, as soon as practicable (or
as otherwise specified):

              (i)    prepare and file with the Commission, as soon as
                     practicable but in any case within the time periods
                     specified in Section 2(b), a Shelf Registration Statement
                     on any form which may be utilized by the Company and which
                     shall register all of the Registrable Securities for resale
                     by the holders thereof in accordance with such reasonable
                     method

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                     or methods of disposition as may be specified by such of
                     the holders as, from time to time, may be Electing Holders
                     and use its reasonable best efforts to cause such Shelf
                     Registration Statement to become effective as soon as
                     practicable but in any case within the time periods
                     specified in Section 2(b);

              (ii)   mail the Notice and Questionnaire to the holders of
                     Registrable Securities within a reasonable period of time
                     following the date on which the obligation to file a Shelf
                     Registration Statement arose; no holder shall be entitled
                     to be named as a selling securityholder in the Shelf
                     Registration Statement as of the Effective Time, and no
                     holder who was mailed a Notice and Questionnaire shall be
                     entitled to use the prospectus forming a part thereof for
                     resales of Registrable Securities at any time unless, and
                     no holder shall be entitled to Additional Interest until,
                     such holder has returned a completed and signed Notice and
                     Questionnaire to the Company by the deadline for response
                     set forth therein; provided, however, holders of
                     Registrable Securities shall have no less than 20 calendar
                     days from the date on which the Notice and Questionnaire is
                     first mailed to such holders to return a completed and
                     signed Notice and Questionnaire to the Company;

              (iii)  after the Effective Time of the Shelf Registration
                     Statement, upon the request of any holder of Registrable
                     Securities that is not then an Electing Holder, promptly
                     send a Notice and Questionnaire to such holder; provided
                     that the Company shall not be required to take any action
                     to name such holder as a selling securityholder in the
                     Shelf Registration Statement or to enable such holder to
                     use the prospectus forming a part thereof for resales of
                     Registrable Securities until such holder has returned a
                     completed and signed Notice and Questionnaire to the
                     Company;

              (iv)   as soon as practicable prepare and file with the Commission
                     such amendments and supplements to such Shelf Registration
                     Statement and the prospectus included therein as may be
                     necessary to effect and maintain the effectiveness of such
                     Shelf Registration Statement for the period specified in
                     Section 2(b) hereof and as may be required by the
                     applicable rules and regulations of the Commission and the
                     instructions applicable to the form of such Shelf
                     Registration Statement, and promptly furnish to the
                     Electing Holders copies of any such supplement or
                     amendment;

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              (v)    comply in all material respects with the provisions of the
                     Securities Act with respect to the disposition of all of
                     the Registrable Securities covered by such Shelf
                     Registration Statement in accordance with the reasonable
                     intended methods of disposition by the Electing Holders
                     provided for in such Shelf Registration Statement;

              (vi)   in the event of an Underwritten Offering, provide (A) the
                     Electing Holders, (B) the underwriters (which term, for
                     purposes of this Agreement, shall include a person deemed
                     to be an underwriter within the meaning of Section 2(a)(11)
                     of the Securities Act), if any, thereof, (C) any sales or
                     placement agent therefor, (D) counsel for any such
                     underwriter or agent and (E) not more than one counsel for
                     all the Electing Holders the opportunity to participate in
                     the preparation of such Shelf Registration Statement, each
                     prospectus included therein or filed with the Commission
                     and each amendment or supplement thereto;

              (vii)  in the event of an Underwritten Offering, for a reasonable
                     period prior to the commencement of such Underwritten
                     Offering, and throughout the period specified in Section
                     2(b), make available at reasonable times at the Company's
                     principal place of business or such other reasonable place
                     for inspection by the persons referred to in Section
                     3(d)(vi) who shall certify to the Company that they have a
                     current intention to sell the Registrable Securities
                     pursuant to the Shelf Registration such financial and other
                     information and books and records of the Company, and cause
                     the officers, employees, counsel and independent certified
                     public accountants of the Company to respond to such
                     inquiries, as shall be reasonably necessary, in the
                     judgment of the respective counsel referred to in such
                     Section, to conduct a reasonable investigation within the
                     meaning of Section 11 of the Securities Act; provided,
                     however, that each such party shall be required to maintain
                     in confidence and not to disclose to any other person any
                     information or records reasonably designated by the Company
                     as being confidential, until such time as (A) such
                     information becomes a matter of public record (whether by
                     virtue of its inclusion in such registration statement or
                     otherwise) (other than disclosure by any such person named
                     in Section 3(d)(vi)), (B) such person shall be required so
                     to disclose such information pursuant to a subpoena or
                     order of any court or other governmental agency or body
                     having jurisdiction over the matter (subject to the
                     requirements of such order, and only after such person
                     shall have given the

                                       13

<PAGE>

                     Company prompt prior written notice of such requirement),
                     or (C) subject to Section 2(f), such information is
                     required to be set forth in such Shelf Registration
                     Statement or the prospectus included therein or in an
                     amendment to such Shelf Registration Statement or an
                     amendment or supplement to such prospectus in order that
                     such Shelf Registration Statement, prospectus, amendment or
                     supplement, as the case may be, complies in all material
                     respects with applicable requirements of the federal
                     securities laws and the rules and regulations of the
                     Commission and does not contain an untrue statement of a
                     material fact or omit to state therein a material fact
                     required to be stated therein or necessary to make the
                     statements therein, in light of the circumstances in which
                     they were made, not misleading;

              (viii) promptly notify each of the Electing Holders, and, in any
                     Underwritten Offering, any sales or placement agent
                     therefor and any underwriter thereof (which notification
                     may be made through any managing underwriter that is a
                     representative of such underwriter for such purpose) and
                     confirm such notice in writing upon request, (A) when such
                     Shelf Registration Statement or the prospectus included
                     therein or any prospectus amendment or supplement or
                     post-effective amendment has been filed, and, with respect
                     to such Shelf Registration Statement or any post-effective
                     amendment, when the same has become effective, (B) any
                     request by the Commission for amendments or supplements to
                     such Shelf Registration Statement or prospectus or for
                     additional information, (C) of the issuance by the
                     Commission of any stop order suspending the effectiveness
                     of such Shelf Registration Statement, (D) of the receipt by
                     the Company of any notification with respect to the
                     suspension of the qualification of the Registrable
                     Securities for sale in any jurisdiction, or (E) if at any
                     time when a prospectus is required to be delivered under
                     the Securities Act, that such Shelf Registration Statement,
                     prospectus, prospectus amendment or supplement or
                     post-effective amendment does not conform in all material
                     respects to the applicable requirements of the Securities
                     Act and the Trust Indenture Act and the rules and
                     regulations of the Commission thereunder or contains an
                     untrue statement of a material fact or omits to state any
                     material fact required to be stated therein or necessary to
                     make the statements therein, in light of the circumstances
                     in which they were made, not misleading; and promptly give
                     written notice to counsel of the Initial Purchasers (1) of
                     any comments by

                                       14

<PAGE>

                    the Commission (and promptly provide copies thereof) and by
                    the blue sky or securities commissioner or regulator of any
                    state with respect thereto or any request by the Commission
                    for amendments or supplements to such Shelf Registration
                    Statement or prospectus or for additional information, (2)
                    of the issuance by the Commission of any stop order
                    suspending the effectiveness of such Shelf Registration
                    Statement or the initiation or threatening of any
                    proceedings for that purpose, (3) of the receipt by the
                    Company of any notification with respect to the suspension
                    of the qualification of the Registrable Securities for sale
                    in any jurisdiction or the initiation or threatening of any
                    proceeding for such purpose, or (4) if at any time when a
                    prospectus is required to be delivered under the Securities
                    Act, that such Shelf Registration Statement, prospectus,
                    prospectus amendment or supplement or post-effective
                    amendment does not conform in all material respects to the
                    applicable requirements of the Securities Act and the Trust
                    Indenture Act and the rules and regulations of the
                    Commission thereunder or contains an untrue statement of a
                    material fact or omits to state any material fact required
                    to be stated therein or necessary to make the statements
                    therein, in light of the circumstances in which they were
                    made, not misleading;

               (ix) use its reasonable best efforts to obtain the withdrawal of
                    any order suspending the effectiveness of such registration
                    statement or any post-effective amendment thereto at the
                    earliest practicable date;

               (x)  if requested by any managing underwriter or underwriters or
                    any placement or sales agent in an Underwritten Offering or
                    any Electing Holder, promptly incorporate in a prospectus
                    supplement or post-effective amendment such information as
                    is required by the applicable rules and regulations of the
                    Commission relating to the terms of the sale of such
                    Registrable Securities, including information with respect
                    to the principal amount of Registrable Securities being sold
                    by such Electing Holder or agent or to any underwriters, the
                    name and description of such Electing Holder, agent or
                    underwriter, the offering price of such Registrable
                    Securities and any discount, commission or other
                    compensation payable in respect thereof, the purchase price
                    being paid therefor by such underwriters and with respect to
                    any other material terms of the offering of the Registrable
                    Securities to be sold by such Electing Holder or agent or to
                    such underwriters; and make all

                                       15

<PAGE>

                     required filings of such prospectus supplement or
                     post-effective amendment promptly after notification of the
                     matters to be incorporated in such prospectus supplement or
                     post-effective amendment;

              (xi)   furnish to each Electing Holder and, with respect to an
                     Underwritten Offering, each placement or sales agent, if
                     any, therefor, each underwriter, if any, thereof and the
                     respective counsel referred to in Section 3(d)(vi) a
                     conformed copy of such Shelf Registration Statement, each
                     such amendment and supplement thereto (in each case
                     including, if requested, all exhibits thereto and documents
                     incorporated by reference therein to the extent not
                     available on the Commission's EDGAR system) and the
                     prospectus included in such Shelf Registration Statement
                     (including each preliminary prospectus and any summary
                     prospectus) as such Electing Holder, agent, if any, and
                     underwriter, if any, may reasonably request in order to
                     facilitate the offering and disposition of the Registrable
                     Securities owned by such Electing Holder, and offered or
                     sold by such agent or underwritten by such underwriter in
                     such Underwritten Offering and to permit such Electing
                     Holder, agent and underwriter to satisfy the prospectus
                     delivery requirements of the Securities Act; and the
                     Company hereby consents to the use of such prospectus
                     (including such preliminary and summary prospectus) and any
                     amendment or supplement thereto by each such Electing
                     Holder and by any such agent and underwriter in such
                     Underwritten Offering, in each case in the form most
                     recently provided to such person by the Company, in
                     connection with the offering and sale of the Registrable
                     Securities covered by the prospectus (including such
                     preliminary and summary prospectus) or any supplement or
                     amendment thereto;

              (xii)  use reasonable best efforts to (A) register or qualify the
                     Registrable Securities to be included in such Shelf
                     Registration Statement under such securities laws or blue
                     sky laws of such jurisdictions as any Electing Holder and
                     each placement or sales agent, if any, therefor and
                     underwriter, if any, thereof shall reasonably request, (B)
                     keep such registrations or qualifications in effect and
                     comply with such laws so as to permit the continuance of
                     offers, sales and dealings therein in such jurisdictions
                     during the period the Shelf Registration is required to
                     remain effective under Section 2(b) above and for so long
                     as may be necessary to enable any such Electing Holder,

                                       16

<PAGE>

                     agent or underwriter to complete its distribution of
                     Securities pursuant to such Shelf Registration Statement
                     and (C) take such reasonable actions as may be reasonably
                     necessary or advisable to enable each such Electing Holder,
                     agent, if any, and underwriter, if any, to consummate the
                     disposition in such jurisdictions of such Registrable
                     Securities; provided, however, that the Company shall not
                     be required for any such purpose to (1) qualify as a
                     foreign corporation in any jurisdiction wherein it would
                     not otherwise be required to qualify but for the
                     requirements of this Section 3(d)(xii), (2) consent to
                     general service of process in any such jurisdiction or (3)
                     make any changes to its certificate of incorporation or
                     by-laws or any agreement between it and its stockholders;

              (xiii) use its reasonable best efforts to obtain the consent or
                     approval of each governmental agency or authority, whether
                     federal, state or local, which may be required to effect
                     the Shelf Registration or the offering or sale in
                     connection therewith or to enable the selling holder or
                     holders to offer, or to consummate the disposition of,
                     their Registrable Securities;

              (xiv)  unless any Registrable Securities shall be in book-entry
                     form only, cooperate with the Electing Holders and the
                     managing underwriters of an Underwritten Offering to
                     facilitate the timely preparation and delivery of
                     certificates representing Registrable Securities to be
                     sold, which certificates, if so required by any securities
                     exchange upon which any Registrable Securities are listed,
                     shall be penned, lithographed or engraved, or produced by
                     any combination of such methods, on steel engraved borders,
                     and which certificates shall not bear any restrictive
                     legends; and, in the case of an underwritten offering,
                     enable such Registrable Securities to be in such
                     denominations and registered in such names as the managing
                     underwriters may request at least two business days prior
                     to any sale of the Registrable Securities;

              (xv)   provide a CUSIP number for all Registrable Securities, not
                     later than the applicable Effective Time;

              (xvi)  in the event of an Underwritten Offering, enter into one or
                     more underwriting agreements, engagement letters, agency
                     agreements or similar agreements, as appropriate, including
                     customary provisions relating to indemnification and
                     contribution, and take such other actions in connection

                                       17

<PAGE>

                     therewith as any Electing Holders aggregating at least 50%
                     in aggregate principal amount of the Registrable Securities
                     included therein shall request in order to expedite or
                     facilitate the disposition of such Registrable Securities;

             (xvii)  in the event of an Underwritten Offering and as required by
                     an the agreement referred to in Section 3(d)(xvi) hereof,
                     (A) make such representations and warranties to the
                     Electing Holders and the underwriters thereof in form,
                     substance and scope as are customarily made in connection
                     with an offering of debt securities pursuant to any
                     appropriate underwriting agreement and a registration
                     statement filed on the form applicable to the Shelf
                     Registration; (B) obtain an opinion of counsel to the
                     Company in customary form for such an offering; (C) obtain
                     a "cold comfort" letter or letters from the independent
                     certified public accountants of the Company to be in
                     customary form and covering such matters of the type
                     customarily covered by letters of such type and (D) deliver
                     such documents and certificates, including officers'
                     certificates, as may be reasonably requested and as are
                     customary for such offerings;

             (xviii) notify in writing each holder of Registrable Securities of
                     any amendment or waiver of this Agreement effected pursuant
                     to Section 8(h) hereof, which notices shall contain the
                     text of the amendment or waiver effected or a description
                     thereof;

             (xix)   in the case of an Underwritten Offering, in the event that
                     any broker-dealer registered under the Exchange Act shall
                     underwrite any Registrable Securities or participate as a
                     member of an underwriting syndicate or selling group or
                     "assist in the distribution" (within the meaning of the
                     Conduct Rules (the "Conduct Rules) of the National
                     Association of Securities Dealers, Inc. ("NASD") or any
                     successor thereto, as amended from time to time) thereof,
                     assist such broker-dealer in complying with the
                     requirements of such Conduct Rules; and

             (xx)    comply, in all material respects, with all applicable rules
                     and regulations of the Commission, and make generally
                     available to its securityholders an earning statement of
                     the Company and its subsidiaries complying with Section
                     11(a) of the Securities Act (including, at the option of
                     the Company, Rule 158 thereunder).

                                       18

<PAGE>

          (e)  In the event that the Company would be required, pursuant to
Section 3(d)(viii)(E) above, to notify the Electing Holders, the placement or
sales agent, if any, therefor and the managing underwriters, if any, thereof,
the Company shall promptly prepare and furnish to each of the Electing Holders,
to each placement or sales agent, if any, and to each such underwriter, if any,
entitled to such notification a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material respects
to the applicable requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading.

          (f)  Each holder agrees that upon receipt of any notice from the
Company pursuant to Sections 2(f), 3(c)(iii)(E) or 3(d)(viii)(E) hereof, such
holder shall forthwith discontinue the disposition of Registrable Securities or
Exchange Securities, as the case may be, pursuant to the registration applicable
to such Registrable Securities or Exchange Securities, as the case may be, until
such holder shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, such holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such holder's possession of the prospectus covering such Registrable
Securities or Exchange Securities, as the case may be, at the time of receipt of
such notice.

          (g)  In the event of a Shelf Registration, in addition to the
information required to be provided by each Electing Holder in its Notice
Questionnaire, the Company may require such Electing Holder to furnish to the
Company such additional information regarding such Electing Holder and such
Electing Holder's intended method of distribution of Registrable Securities as
may be required in order to comply with the Securities Act. Each such Electing
Holder agrees to notify the Company as promptly as practicable of any inaccuracy
or change in information previously furnished by such Electing Holder to the
Company or of the occurrence of any event in either case as a result of which
any prospectus relating to such Shelf Registration contains or would contain an
untrue statement of a material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable Securities
or omits to state any material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and promptly
to furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such prospectus
shall not contain, with respect to such Electing Holder or the disposition of
such Registrable Securities, an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

     4.   Registration Expenses.

                                       19

<PAGE>

     The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Agreement, including (a) all Commission and any NASD registration, filing and
review fees and expenses including reasonable fees and disbursements of counsel
for the placement or sales agent or underwriters in connection with such
registration, filing and review, (b) all reasonable fees and expenses in
connection with the qualification of the Securities for offering and sale under
the State securities and blue sky laws referred to in Section 3(d)(xii) hereof,
provided that the Company shall not be required to (1) qualify as a foreign
corporation, (2) to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a consent
or (3) make any changes to its certificate of incorporation or by-laws or any
agreement between it and its stockholders, (c) all reasonable expenses relating
to the preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the reasonable expenses of preparing the Securities
for delivery and the expenses of printing or producing any underwriting
agreements, agreements among underwriters, selling agreements and all other
documents in connection with the offering, sale or delivery of Securities to be
disposed of (including certificates representing the Securities), (d) reasonable
fees and expenses of the Trustee under the Indenture, any agent of the Trustee
and any counsel for the Trustee and of any collateral agent or custodian, (e)
internal expenses (including all salaries and expenses of the Company's officers
and employees performing legal or accounting duties), (f) reasonable fees,
disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "cold
comfort" letters required by or incident to such performance and compliance),
(g) reasonable fees, disbursements and expenses of any "qualified independent
underwriter" engaged pursuant to Section 3(d)(xix) hereof, (i) reasonable fees,
disbursements and expenses of one counsel for the Electing Holders retained in
connection with a Shelf Registration, as selected by the Electing Holders of at
least a majority in aggregate principal amount of the Registrable Securities
held by Electing Holders (which counsel shall be reasonably satisfactory to the
Company), (j) any fees charged by securities rating services for rating the
Securities, and (k) reasonable fees, expenses and disbursements of any other
persons, including special experts, retained by the Company in connection with
such registration (collectively, the "Registration Expenses"). Notwithstanding
the foregoing, the holders of the Registrable Securities being registered shall
pay all agency fees and commissions and underwriting discounts and commissions
attributable to the sale of such Registrable Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
holders (severally or jointly), other than the counsel and experts specifically
referred to above.

     5.   Indemnification.

          (a)  Indemnification by the Company. The Company will indemnify and
hold harmless each of the holders of Registrable Securities included in an
Exchange Registration Statement, each of the Electing Holders of Registrable
Securities included in a Shelf Registration Statement and each person who
participates as a placement or sales agent or as an underwriter in any offering
or sale of such Registrable Securities against

                                       20

<PAGE>

any Losses, joint or several, to which such holder, agent or underwriter may
become subject under the Securities Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Exchange
Registration Statement or Shelf Registration Statement, as the case may be,
under which such Registrable Securities were registered under the Securities
Act, or any preliminary, final or summary prospectus contained therein or
furnished by the Company to any such holder, Electing Holder, agent or
underwriter, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (with
respect to a prospectus, in light of the circumstances under which they were
made) not misleading, and will reimburse such holder, such Electing Holder, such
agent and such underwriter for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company shall not be
liable to any such person in any such case to the extent that any such Loss
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, or
preliminary, final or summary prospectus, or amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by such person expressly for use therein.

          (b)  Indemnification by the Holders and any Agents and Underwriters.
The Company may require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Section 2(b) hereof and to
entering into any underwriting agreement with respect thereto, that the Company
shall have received an undertaking reasonably satisfactory to it from the
Electing Holder of such Registrable Securities and from each underwriter named
in any such underwriting agreement or placement or sales agent, severally and
not jointly, to (i) indemnify and hold harmless the Company, and all other
holders of Registrable Securities, against any Losses to which the Company or
such other holders of Registrable Securities may become subject, under the
Securities Act or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such registration statement, or any
preliminary, final or summary prospectus contained therein or furnished by the
Company to any such Electing Holder, agent or underwriter, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (with respect to a prospectus, in light
of the circumstances under which they were made) not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder, underwriter or agent expressly for use therein, and (ii) reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that no such Electing Holder shall be
required to undertake liability to any person under this Section 5(b) for any
amounts in excess of the dollar amount of the proceeds to be received by such
Electing Holder from the sale of such Electing Holder's Registrable Securities
pursuant to such registration.

                                       21

<PAGE>

          (c)  Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 5, notify such indemnifying party in writing of
the commencement of such action. No indemnification provided for in Section 5(a)
or 5(b) shall be available to any party who shall fail to give notice as
provided in this Section 5(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 5(a) or 5(b). In case any
such action shall be brought against any indemnified party and it shall notify
an indemnifying party of the commencement thereof, such indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. Neither party shall, without the written
consent of the other party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the other party from all liability arising
out of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of the other
party.

          (d)  Contribution. If for any reason the indemnification provisions
contemplated by Section 5(a) or Section 5(b) are unavailable to or insufficient
to hold harmless an indemnified party in respect of any Losses (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such Losses (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 5(d) were determined by
pro rata allocation (even if the holders or any agents or underwriters or all

                                       22

<PAGE>

of them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 5(d). The amount paid or payable by an indemnified party as a
result of the Losses (or actions in respect thereof) referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5(d), no holder
shall be required to contribute any amount in excess of the amount by which the
dollar amount of the proceeds received by such holder from the sale of any
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) exceeds the amount of any damages which such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The holders' and any underwriters'
obligations in this Section 5(d) to contribute shall be several in proportion to
the principal amount of Registrable Securities registered or underwritten, as
the case may be, by them and not joint.

          (e)  The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each holder, agent and underwriter and each person, if any, who controls any
holder, agent or underwriter within the meaning of the Securities Act; and the
obligations of the holders and any agents or underwriters contemplated by this
Section 5 shall be in addition to any liability which the respective holder,
agent or underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company (including any
person who, with his consent, is named in any registration statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the Securities Act.

     6.   Underwritten Offerings.

          (a)  Selection of Underwriters. If any of the Registrable Securities
covered by the Shelf Registration are to be sold pursuant to an Underwritten
Offering, the managing underwriter or underwriters thereof shall be designated
by Electing Holders holding at least a majority in aggregate principal amount of
the Registrable Securities to be included in such offering, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Company.

          (b)  Participation by Holders. Each holder of Registrable Securities
hereby agrees with each other such holder that no such holder may participate in
any Underwritten Offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved

                                       23

<PAGE>

by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

     7.   Rule 144.

     The Company covenants to the holders of Registrable Securities that to the
extent it shall be required to do so under the Exchange Act, the Company shall
timely file the reports required to be filed by it under the Exchange Act or the
Securities Act (including the reports under Section 13 and 15(d) of the Exchange
Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission
under the Securities Act) and the rules and regulations adopted by the
Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements. Notwithstanding the foregoing, nothing in this Section 7
shall be deemed to require the Company to register any of its securities
pursuant to the Exchange Act.

     8.   Miscellaneous.

          (a)  No Inconsistent Agreements. The Company represents, warrants,
covenants and agrees that it has not granted, and shall not grant, registration
rights with respect to Registrable Securities or any other securities which
would be inconsistent with the terms contained in this Agreement.

          (b)  Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Initial Purchasers and the holders from time
to time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Initial Purchasers and such holders, in
addition to any other remedy to which they may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of the
Company under this Agreement in accordance with the terms and conditions of this
Agreement, in any court of the United States or any State thereof having
jurisdiction.

          (c)  Notices. All notices, requests, claims, demands, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, if delivered personally or by courier,
or three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to it
at 3240 Hillview Avenue, Palo Alto, CA 94304, and if to a holder, to the address
of such holder set forth in the security register or

                                       24

<PAGE>

other records of the Company, or to such other address as the Company or any
such holder may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

          (d)  Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the parties hereto and the holders from time to time of the
Registrable Securities and the respective successors and assigns of the parties
hereto and such holders. In the event that any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be deemed a
beneficiary hereof for all purposes and such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such transferee shall be entitled to receive the
benefits of, and be conclusively deemed to have agreed to be bound by all of the
applicable terms and provisions of this Agreement. If the Company shall so
request, any such successor, assign or transferee shall agree in writing to
acquire and hold the Registrable Securities subject to all of the applicable
terms hereof.

          (e)  Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
or made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any holder of Registrable Securities, any director, officer or partner of such
holder, any agent or underwriter or any director, officer or partner thereof, or
any controlling person of any of the foregoing, and shall survive delivery of
and payment for the Registrable Securities pursuant to the Purchase Agreement
and the transfer and registration of Registrable Securities by such holder and
the consummation of an Exchange Offer.

          (f)  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          (g)  Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.

          (h)  Entire Agreement; Amendments. This Agreement and the other
writings referred to herein (including the Indenture and the form of Securities)
or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter. This Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a written instrument
duly executed by the Company and the holders of at least a majority in aggregate
principal amount of the Registrable Securities

                                       25

<PAGE>

at the time outstanding. Each holder of any Registrable Securities at the time
or thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 8(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or is
delivered to such holder.

          (i)  Inspection. For so long as this Agreement shall be in effect,
upon written request to the Company, a copy of this Agreement and a complete
list of the names and addresses of all the holders of Registrable Securities
shall be mailed to any holder of Registrable Securities for proper purposes only
(which shall include any purpose related to the rights of the holders of
Registrable Securities under the Securities, the Indenture and this Agreement).

          (j)  Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.

                                       26

<PAGE>

     If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Initial Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Initial Purchasers the
Company. It is understood that your acceptance of this letter on behalf of each
of the Initial Purchasers is pursuant to the authority set forth in a form of
agreement among the Initial Purchasers, the form of which shall be submitted to
the Company for examination upon request, but without warranty on your part as
to the authority of the signers thereof.

                                        Very truly yours,

                                        CNF INC.

                                        By: ____________________________
                                            Name: Mark C. Thickpenny
                                            Title: Vice President and Treasurer

Accepted as of the date hereof:

CITIGROUP GLOBAL MARKETS INC.
MORGAN STANLEY & CO. INCORPORATED,
on behalf of themselves and as representatives
of the Initial Purchasers

BY: CITIGROUP GLOBAL MARKETS INC.

By:_______________________________
Name: Stephen H. Woo
Title: Vice President

                                       27

<PAGE>

                                                                       EXHIBIT A

                                    CNF INC.

                         INSTRUCTION TO DTC PARTICIPANTS

                                (Date of Mailing)

                     URGENT - IMMEDIATE ATTENTION REQUESTED

                         DEADLINE FOR RESPONSE: [DATE]*

The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in the CNF Inc. (the "Company") 6.70% Senior
Debentures due 2034 (the "Securities") are held. The Company is in the process
of registering the Securities under the Securities Act of 1933 for resale by the
beneficial owners thereof. In order to have their Securities included in the
registration statement, beneficial owners must complete and return the enclosed
Notice of Registration Statement and Selling Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the
enclosed materials as soon as possible as their rights to have the Securities
included in the registration statement depend upon their returning the Notice
and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact CNF Inc., 3240
Hillview Avenue, Palo Alto, California 94304, (650) [494-2900].

----------
*Not less than 20 calendar days from date of mailing.

                                      A-1

<PAGE>

                                    CNF INC.

                        Notice of Registration Statement
                                       and
                      Selling Securityholder Questionnaire

                                     (Date)

Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Registration Rights Agreement") between CNF Inc. (the "Company") and the
Initial Purchasers named therein. Pursuant to the Registration Rights Agreement,
the Company has filed with the United States Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (the "Shelf Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of the Company's 6.70% Senior
Debentures due 2034 (the "Securities"). A copy of the Registration Rights
Agreement is attached hereto. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.

Each beneficial owner of Registrable Securities (as defined below) is entitled
to have the Registrable Securities beneficially owned by it included in the
Shelf Registration Statement. In order to have Registrable Securities included
in the Shelf Registration Statement, this Notice of Registration Statement and
Selling Securityholder Questionnaire ("Notice and Questionnaire") must be
completed, executed and delivered to the Company's counsel at the address set
forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners
of Registrable Securities who do not complete, execute and return this Notice
and Questionnaire by such date (i) will not be named as selling securityholders
in the Shelf Registration Statement and (ii) may not use the prospectus forming
a part thereof for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.

The term "Registrable Securities" is defined in the Registration Rights
Agreement.

                                      A-2

<PAGE>

                                    ELECTION

The undersigned holder (the "Selling Securityholder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Registration Rights Agreement,
including, without limitation, Section 5 of the Agreement, as if the undersigned
Selling Securityholder were an original party thereto.

Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and
as Exhibit B to the Registration Rights Agreement.

The Selling Securityholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:

                                       A-3

<PAGE>

                                  QUESTIONNAIRE

     (1)  (a)  Full Legal Name of Selling Securityholder:
               ________________________________________________________

          (b)  Full Legal Name of Registered Holder (if not the same as in
               (a) above) of Registrable Securities Listed in Item (3) below:
               ________________________________________________________

          (c)  Full Legal Name of DTC Participant (if applicable and if not the
               same as (b) above) Through Which Registrable Securities Listed in
               Item (3) below are Held:
               ________________________________________________________

     (2)  Address for Notices to Selling Securityholder:

                                ________________________________________________
                                ________________________________________________
                                ________________________________________________

          Telephone:            ________________________________________________

          Fax:                  ________________________________________________

          Contact Person:       ________________________________________________

     (3)  Beneficial Ownership of Securities:

          Except as set forth below in this Item (3), the undersigned
          does not beneficially own any Securities.

          (a)  Principal amount of Registrable Securities beneficially owned:

               _________________________________________________________________

               CUSIP No(s). of such Registrable Securities: ____________________

          (b)  Principal amount of Securities other than Registrable Securities
               beneficially owned:
               _________________________________________________________________
               CUSIP No(s). of such other Securities: __________________________

          (c)  Principal amount of Registrable Securities which the undersigned
               wishes to be included in the Shelf Registration Statement:
               _________________________________________________________________
               CUSIP No(s). of such Registrable Securities to be included in the
               Shelf Registration Statement:____________________________________

                                      A-4

<PAGE>

     (4)  Beneficial Ownership of Other Securities of the Company:

          Except as set forth below in this Item (4), the undersigned Selling
          Securityholder is not the beneficial or registered owner of any other
          securities of the Company, other than the Securities listed above in
          Item (3).

          State any exceptions here:

     (5)  Relationships with the Company:

          Except as set forth below, neither the Selling Securityholder nor any
          of its affiliates, officers, directors or principal equity holders (5%
          or more) has held any position or office or has had any other material
          relationship with the Company (or its predecessors or affiliates)
          during the past three years.

          State any exceptions here:

     (6)  Plan of Distribution:

          Except as set forth below, the undersigned Selling Securityholder
          intends to distribute the Registrable Securities listed above in Item
          (3) only as follows (if at all): Such Registrable Securities may be
          sold from time to time directly by the undersigned Selling
          Securityholder or, alternatively, through underwriters, broker-dealers
          or agents. Such Registrable Securities may be sold in one or more
          transactions at fixed prices, at prevailing market prices at the time
          of sale, at varying prices determined at the time of sale, or at
          negotiated prices. Such sales may be effected in transactions (which
          may involve crosses or block transactions) (i) on any national
          securities exchange or quotation service on which the Registered
          Securities may be listed or quoted at the time of sale, (ii) in the
          over-the-counter market, (iii) in transactions otherwise than on such
          exchanges or services or in the over-the-counter market, or (iv)
          through the writing of options. In connection with sales of the
          Registrable Securities or otherwise, the Selling Securityholder may
          enter into hedging transactions with broker-dealers, which may in turn
          engage in short sales of the Registrable Securities in the course of
          hedging the positions they assume. The Selling Securityholder may also
          sell Registrable Securities short and deliver Registrable Securities
          to close out such short positions, or loan or pledge Registrable
          Securities to broker-dealers that in turn may sell such securities.

          State any exceptions here:

                                       A-5

<PAGE>

          By signing below, the Selling Securityholder acknowledges that it
          understands its obligation to comply, and agrees that it will comply,
          with the provisions of the Exchange Act and the rules and regulations
          thereunder, particularly Regulation M.

          In the event that the Selling Securityholder transfers all or any
          portion of the Registrable Securities listed in Item (3) above after
          the date on which such information is provided to the Company, the
          Selling Securityholder agrees to notify the transferee(s) at the time
          of the transfer of its rights and obligations under this Notice and
          Questionnaire and the Agreement.

          By signing below, the Selling Securityholder consents to the
          disclosure of the information contained herein in its answers to Items
          (1) through (6) above and the inclusion of such information in the
          Shelf Registration Statement and related Prospectus. The Selling
          Securityholder understands that such information will be relied upon
          by the Company in connection with the preparation of the Shelf
          Registration Statement and related Prospectus.

          In accordance with the Selling Securityholder's obligation under
          Section 3(d) of the Agreement to provide such information as may be
          required by law for inclusion in the Shelf Registration Statement, the
          Selling Securityholder agrees to promptly notify the Company of any
          inaccuracies or changes in the information provided herein which may
          occur subsequent to the date hereof at any time while the Shelf
          Registration Statement remains in effect. All notices hereunder and
          pursuant to the Agreement shall be made in writing, by hand-delivery,
          first-class mail, or air courier guaranteeing overnight delivery as
          follows:

               (i)  To the Company:

                                       Eberhard G. H. Schmoller,
                                       Senior Vice President and General Counsel
                                       CNF Inc.
                                       3240 Hillview Avenue
                                       Palo Alto, California 94304

               (ii) With a copy to:

                                       Gregg A. Noel
                                       Skadden, Arps, Slate, Meagher & Flom LLP
                                       300 South Grand Avenue, Suite 3400
                                       Los Angeles, California 90071

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company's counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives, and assigns of the Company and the
Selling Securityholder (with respect

                                       A-6

<PAGE>

to the Registrable Securities beneficially owned by such Selling Securityholder
and listed in Item (3) above. This Agreement shall be governed in all respects
by the laws of the State of New York.

                                       A-7

<PAGE>

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:_______________

      _______________________________________________________________________
      Selling Securityholder
      (Print/type full legal name of beneficial owner of Registrable Securities)

      By:______________________________________________________
      Name:
      Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:

                                Gregg A. Noel
                                Skadden, Arps, Slate, Meagher & Flom LLP
                                300 South Grand Avenue, Suite 3400
                                Los Angeles, California 90071

                                       A-8

<PAGE>

                                                                       EXHIBIT B

              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

[_________________]
CNF Inc.
c/o [_______________]
[Address of [__________]]

Attention: Trust Officer

         Re: CNF Inc. (the "Company")
               % Senior Debentures due

Dear Ladies and Gentlemen:

Please be advised that ________________ has transferred $____________ aggregate
principal amount of the above-referenced Debentures pursuant to an effective
Registration Statement on Form [______] (File No. 333-_________) filed by the
Company.

We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the Debentures is named as a "Selling Holder" in the
Prospectus dated ___________ or in supplements thereto, and that the aggregate
principal amount of the Debentures transferred are the Debentures listed in such
Prospectus opposite such owner's name.

Dated:

                                        Very truly yours,

                                        ________________________________________
                                        (Name)

                                        By:_____________________________________
                                        (Authorized Signature)exv4w12

 

Exhibit 4.12

CAPITAL AUTOMOTIVE REIT,

as Issuer

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

SECOND SUPPLEMENTAL TRUST INDENTURE

Dated as of May 12, 2004

Providing for Issuance of

6% CONVERTIBLE NOTES DUE MAY 15, 2024

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page

	ARTICLE I DEFINED TERMS
	 	 	1	 
	ARTICLE II DESCRIPTION OF CONVERTIBLE NOTES
	 	 	6	 
	SECTION 2.1 Establishment.
	 	 	6	 
	SECTION 2.2 Payment of Principal and Interest.
	 	 	7	 
	SECTION 2.3 Global Securities.
	 	 	8	 
	SECTION 2.4 Transfer.
	 	 	9	 
	SECTION 2.5 Denominations.
	 	 	9	 
	SECTION 2.6 Ranking.
	 	 	9	 
	SECTION 2.7 Defeasance
	 	 	9	 
	SECTION 2.8 Additional Events of Default; Amendments.
	 	 	9	 
	ARTICLE III REDEMPTION
	 	 	10	 
	SECTION 3.1 Optional Redemption.
	 	 	10	 
	SECTION 3.2 Notice of Redemption.
	 	 	10	 
	SECTION 3.3 Purchase of Convertible Notes at the Option of the Holder.
	 	 	11	 
	SECTION 3.4 Purchase of Convertible Notes at Option of the Holder upon a Change in Control.
	 	 	15	 
	SECTION 3.5 Effect of Purchase Notice or Change in Control Purchase Notice.
	 	 	17	 
	SECTION 3.6 Covenant to Comply With Securities Laws Upon Purchase of Convertible Notes.
	 	 	18	 
	SECTION 3.7 Repayment to the Company.
	 	 	19	 
	ARTICLE IV CONVERSION OF CONVERTIBLE NOTES
	 	 	19	 
	SECTION 4.1 Conversion of Convertible Notes.
	 	 	19	 
	SECTION 4.2 Adjustment of Conversion Rate.
	 	 	23	 
	SECTION 4.3 When Adjustment May Be Deferred.
	 	 	27	 
	SECTION 4.4 When No Adjustment Required.
	 	 	27	 
	SECTION 4.5 Notice of Adjustment.
	 	 	27	 
	SECTION 4.6 Voluntary Increase.
	 	 	28	 
	SECTION 4.7 Notice of Certain Transactions.
	 	 	28	 
	SECTION 4.8 Reorganization of the Company; Special Distributions.
	 	 	28	 
	SECTION 4.9 Company Determination Final.
	 	 	29	 
	SECTION 4.10 Trustee’s Adjustment Disclaimer.
	 	 	29	 
	SECTION 4.11 Simultaneous Adjustments.
	 	 	30	 
	SECTION 4.12 Successive Adjustments.
	 	 	30	 
	SECTION 4.13 Savings Provisions.
	 	 	30	 
	ARTICLE V COVENANTS
	 	 	30	 
	SECTION 5.1 Restriction on Subsidiary Indebtedness and Preferred Stock.
	 	 	30	 
	SECTION 5.2 Provision of Financial Information.
	 	 	31	 
	ARTICLE VI MISCELLANEOUS PROVISIONS
	 	 	31	 
	SECTION 6.1 Ratification and Incorporation of Base Indenture.
	 	 	31	 
	SECTION 6.2 Governing Law.
	 	 	31	 
	SECTION 6.3 Counterparts.
	 	 	31	 
	SECTION 6.4 Entire Agreement.
	 	 	32	 

-i-

 

 

     THIS SECOND SUPPLEMENTAL TRUST INDENTURE is made as of this 12th day of
May, 2004 (the “Supplemental Indenture”), by and between Capital
Automotive REIT, a real estate investment trust organized under the laws of the
State of Maryland, as issuer (the “Company”), and Wells Fargo Bank,
National Association, a national banking association organized under the laws
of the United States of America, as trustee (the “Trustee”).

RECITALS OF THE COMPANY

     WHEREAS, the Company has heretofore entered into a Base Indenture with the
Trustee, dated as of April 15, 2004 (the “Base Indenture”), providing
for the issuance from time to time of unsubordinated debentures, notes or other
evidences of indebtedness in series;

     WHEREAS, the Base Indenture is incorporated herein by this reference and
the Base Indenture, as supplemented by this Second Supplemental Indenture, is
herein called the “Indenture;”

     WHEREAS, under the Base Indenture, the Board of Directors of the Company
may at any time establish a new series of Securities, in accordance with the
provisions of the Base Indenture, with the terms of such series established
pursuant to a supplemental indenture executed by the Company and the Trustee;

     WHEREAS, the Company proposes to create under the Base Indenture a new
series of Securities;

     WHEREAS, the Company desires to issue $110,000,000 of its 6% Convertible
Notes due May 15, 2024, having the terms and conditions hereinafter set forth,
primarily in order to pay down or eliminate existing Indebtedness and pursue
other general corporate purposes;

     WHEREAS, all conditions necessary to authorize the execution and delivery
of this Supplemental Indenture and to make it a valid and binding obligation of
the Company have been done or performed;

     NOW THEREFORE, for and in consideration of the agreements and obligations
set forth herein and for good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINED TERMS

     The following defined terms used herein shall, unless the context
otherwise requires, have the meanings specified below. Capitalized terms used
and not otherwise defined herein shall have the respective meanings given them
in the Base Indenture:

 

 

     “Accounting Event” shall be deemed to occur if (a) the
authoritative guidance promulgated by the Financial Accounting Standards Board,
the Commission, or other national accounting standard setters permits the
settlement of an issuer’s obligation to repurchase securities at the option of
the holder thereof in the issuer’s Capital Stock and expressly provides that
such shares issuable in satisfaction of such repurchase obligation shall not be
taken into account for purposes of computing the issuer’s diluted earnings per
share (unless and until such shares are actually issued) and such guidance
remains in effect, or (b) the Company receives advice from a nationally
recognized accounting firm that such settlement and accounting treatment are
permitted.

     “Capital Stock” of any Person means any and all shares (including
ordinary shares or American Depositary Shares), interests, participations, or
other equivalents, however designated, of corporate stock or other equity
participations, including partnership interests, whether general or limited, of
such Person and any rights (other than debt securities convertible or
exchangeable into an equity interest), warrants or options to acquire an equity
interest in such Person.

     “Change in Control” will be deemed to have occurred at the time
after Original Issue Date that any of the following occurs:

     (a) any “person” or “group” within the meaning of Sections 13(d) or
14(d)(2) of the Exchange Act, including the Company’s affiliates, other
than the Company, its Subsidiaries or its or their employee benefit
plans, files a Schedule 13D or Schedule TO or any successor schedule,
form or report under the Exchange Act disclosing that such person or
group has become the “beneficial owner,” as defined in Rule 13d-3 under
the Exchange Act, of greater than 50% of the voting power of the Common
Shares or other Capital Stock into which the Common Shares may be
reclassified or sold; provided, however, that a person shall not be
deemed a beneficial owner of, or to own beneficially, (i) any securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such person or any of such person’s Affiliates until such tendered
securities are accepted for purchase or exchange thereunder or (ii) any
securities if such beneficial ownership (A) arises solely as a result of
a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to the applicable rules and regulations under
the Exchange Act and (B) is not also then reportable on Schedule 13D or
any successor schedule under the Exchange Act; or

     (b) consummation of any share exchange, consolidation or merger of
the Company pursuant to which the Common Shares will be converted into
cash, securities or other property in each case other than a share
exchange, consideration, or merger of the Company in which the holders of
the Company’s Common Shares immediately prior to such transaction have,
directly or indirectly, at least a majority of the total voting power in
aggregate of all classes of Capital Stock of the continuing or surviving
Company immediately after such transaction.

-2-

 

A Change in Control will not be deemed to have occurred in respect of either of
the foregoing, however, if either:

     (i) the average of the Closing Prices of the Common Shares for the
five consecutive Trading Days ending immediately before the later of the
Change in Control or the public announcement thereof, equals or exceeds
105% of the Conversion Price of the Convertible Notes immediately before
the Change in Control or the public announcement thereof, or

     (ii) at least 90% of the consideration in the transaction or
transactions constituting the Change in Control consists of Capital Stock
traded on a national securities exchange or quoted on the Nasdaq National
Market or which will be so traded or quoted when issued or exchanged in
connection with a Change in Control.

     “Change in Control Purchase Date” has the meaning provided in
Section 3.4(a) hereof.

     “Change in Control Purchase Notice” has the meaning provided in
Section 3.4(c) hereof.

     “Change in Control Purchase Price” has the meaning provided in
Section 3.4(a) hereof.

     “Closing Price” means, as of any date of determination, the closing
sale price of a Common Share on such date (or if no closing sale price is
reported, the average of the bid and asked prices or, if more than one in
either case, the average of the average bid and the average asked prices) on
such date as reported by the Nasdaq National Market, or if the Common Shares
are not quoted on the Nasdaq National Market, as reported by the principal U.S.
exchange or quotation system on which the Common Shares are then listed or
quoted. If the Common Shares are not listed or quoted for trading on a
principal U.S. exchange or automated quotation system, the “Closing Price”
will be the average of the mid-point of the last bid and asked prices for the
Common Shares on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for
this purpose.

     “Common Shares” means the shares of beneficial interest, $0.01 par
value per share, of the Company, which is the Company’s only outstanding class
of Common Shares.

     “Company Notice” has the meaning provided in Section 3.3(f) hereof.

     “Company Notice Date” has the meaning provided in Section 3.3(f)
hereof.

     “Conversion Agent” means the Trustee or such other office or agency
designated by the Company where Convertible Notes may be presented for
conversion.

     “Conversion Date” has the meaning provided in Section 4.1(c)
hereof.

     “Conversion Price” per Common Share means $1,000 divided by the
then-applicable Conversion Rate. The Initial Closing Price is $35.5679 per
Common Share.

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     “Conversion Rate” means, as of any date of determination, the
number of Common Shares into which a Convertible Note may be converted in
accordance with Article IV hereof. The initial Conversion Rate is 28.1152 per
$1,000 principal amount of Convertible Notes.

     “Conversion Value” of a Convertible Note means, as of any date of
determination, the product of the Closing Price multiplied by the Conversion
Rate.

     “Convertible Notes” has the meaning provided in Section 2.1 hereof.

     “Corporate Trust Office of the Trustee” means 213 Court Street,
Suite 703, Middletown, CT, 06457.

     “Current Market Price” means, (i) for purposes of Section 4.2(b),
(c) or (d), with respect to a Common Share on any day, the average of the daily
Closing Prices for the five consecutive Trading Days commencing six Trading
Days before the date on which Common Shares traded on such date settle regular
way on the Record Date with respect to distributions, issuances or other events
requiring computation under Section 4.2(b), (c) or (d); and (ii) for purposes
of Section 4.2(e), the average of the daily Closing Prices for the five
consecutive Trading Days commencing on the Trading Day next succeeding the
Expiration Date.

     “Ex-Dividend Date” means the first date upon which a sale of a
Common Share does not automatically transfer the right to receive the relevant
dividend from the seller of the Common Share to the buyer.

     “Expiration Date” has the meaning provided in Section 4.2(e)
hereof.

     “Expiration Time” has the meaning provided in Section 4.2(e)
hereof.

     “Extraordinary Cash Dividend” means any dividend or other cash
distribution payable in respect of the Common Shares that is not a Regular Cash
Dividend.

     “Interest Payment Date” means each May 15 and November 15 of each
year, commencing November 15, 2004.

     “Interest Period” means any six-month period from May 15 to
November 15 and from November 15 to May 15, as appropriate. Notwithstanding,
the initial Interest Period shall begin on the Original Issue Date and end on
November 15, 2004.

     “Market Price” of Common Shares on a Purchase Date means the
average of the Closing Prices of the Common Shares for the five Trading Day
period ending on the third Business Day Prior to such Purchase Date (if the
third Business Day prior to such Purchase Date is a Trading Day, or if not,
then on the last Trading Day immediately prior to the third Business Day),
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of the Trading Days of the five Trading Day period and
ending on such Purchase Date, of any event described in Section 4.2; subject,
however to the conditions set forth in Sections 4.3 and 4.4.

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     “Maryland REIT Statute” means Title 8 of the Corporations and
Associates Article of the Annotated Code of Maryland.

     “Original Issue Date” means May 12, 2004.

     “Principal Value Conversion” has the meaning provided in Section
4.1(b)(i).

     “Purchased Shares” has the meaning provided in Section 4.2(e).

     “Purchase Date” has the meaning provided in Section 3.3(a) hereof.

     “Purchase Notice” has the meaning provided in Section 3.3(b)
hereof.

     “Purchase Price” has the meaning provided in Section 3.3(a) hereof.

     “Record Date” means, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Shares have the right
to receive any cash, securities or other property or in which the Common Shares
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of shareholders entitled to receive such cash, securities or
other property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).

     “Redemption Date” has the meaning provided in Section 3.1 hereof.

     “Redemption Price” has the meaning provided in Section 3.1 hereof.

     “Regular Cash Dividend” means the regular quarterly cash
distributions as declared by the Board of Trustees as part of the Company’s
dividend payment practice or stated cash dividend payment practice or stated
cash dividend policy then in effect, as well as any dividends declared by the
Board of Trustees that are necessary to preserve the Company’s status as a real
estate investment trust for federal income tax purposes, whether publicly
announced or not.

     “Regular Record Date” means, with respect to each Interest Payment
Date, the close of business on the last calendar day of the month immediately
preceding the month in which such Interest Payment Date (whether or not a
Business Day) occurs.

     “Sale Price” means, on any date of determination, the average of
the secondary market bid quotations per Convertible Note in the principal
amount of $1,000, obtained by the Conversion Agent for $5 million aggregate
principal amount of Convertible Notes at approximately 3:30 p.m., New York City
time, on such determination date from three nationally recognized securities
dealers (none of which shall be an Affiliate of the Company) in The City of New
York (or such other place that may be determined from time to time by the
Company) selected by the Company; provided, however if (a) three such bids can
not be obtained by the Conversion Agent, then the average of the two bids shall
be obtained; (b) only one such bid can reasonably be obtained by the Conversion
Agent, that one bid shall be used. If the Conversion Agent cannot reasonably
obtain at least one such bid, or in the Company’s reasonable judgment, the bid
quotations are not indicative of the secondary market value of the Convertible
Notes as of

-5-

 

such determination date, then the Sale Price for such determination date
shall be deemed to be less than 94% of the Conversion Values of the Convertible
Notes during that period.

     “Significant Subsidiary” means (1) any guarantor that would be a
“significant subsidiary” as defined in Regulation S-X promulgated pursuant to
the Securities Act as such Regulation is in effect on the Original Issue Date
and (2) any guarantor that, when aggregated with all other guarantors that are
not otherwise Significant Subsidiaries and as to which any bankruptcy event has
occurred and is continuing, would constitute a Significant Subsidiary under
clause (1) of this definition.

     “Special Record Date” has the meaning provided in Section 2.2(a)
hereof.

     “Stated Maturity” means May 15, 2024.

     “Subsidiary” means, with respect to any Person:

     (1) any Company, limited liability company, association or other business
entity of which more than 50% of the total voting power of the Equity Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of the Board of Directors thereof are at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and

     (2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or of one or more Subsidiaries of
such Person (or any combination thereof).

Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Company.

     “Trading Day” means (a) if the applicable security is listed,
admitted for trading or quoted on the New York Stock Exchange, the Nasdaq
National Market or another U.S. national or regional securities exchange, a
day on which the New York Stock Exchange, the Nasdaq National Market or such
other national or regional securities exchange, as the case may be, is open for
business or (b) if the applicable security is not so listed, admitted for
trading or quoted, any Business Day.

     “Trigger Event” has the meaning provided in Section 4.2(c).

     “Triggering Distribution” has the meaning provided in Section
4.2(d).

ARTICLE II

DESCRIPTION OF CONVERTIBLE NOTES

     SECTION 2.1 Establishment.

     (a) There is hereby established a new series of notes to be issued under
the Indenture, to be designated as the Company’s 6% Convertible Notes due May
15, 2024 (the “Convertible Notes”).

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     (b) There are to be authenticated and delivered $110,000,000 principal
amount of Convertible Notes. The maximum principal amount of Convertible Notes
of this series that may be issued is $110,000,000.

     (c) The Convertible Notes shall be issued in fully registered form. The
Convertible Notes shall be issued in the form of one or more Global Securities
in substantially the form set out in Exhibit A hereto. The Depositary
with respect to the Convertible Notes shall be The Depository Trust Company.

     (d) The form of the Trustee’s Certificate of Authentication for the
Convertible Notes shall be in substantially the form attached to the form of
Convertible Note.

     (e) Each Convertible Note shall be dated the date of authentication
thereof and shall bear interest from the Original Issue Date or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for.

     SECTION 2.2 Payment of Principal and Interest.

     (a) The principal of the Convertible Notes shall be due at Stated Maturity
(unless earlier redeemed, accelerated, purchased or converted). The unpaid
principal amount of the Convertible Notes shall bear interest at the rate of 6%
per annum until paid. Interest for each Interest Period shall be paid
semi-annually in arrears on each Interest Payment Date to the Person in whose
name the Convertible Notes are registered on the Regular Record Date for such
Interest Payment Date, provided that interest payable at the Stated Maturity of
principal or on a Redemption Date or Purchase Date as provided herein shall be
paid to the Person to whom principal is payable, except as otherwise provided
herein. Any such interest that is not so punctually paid or duly provided for
shall forthwith cease to be payable to the Holders on such Regular Record Date
and may either be paid to the Person or Persons in whose name the Convertible
Notes are registered at the close of business on a special record date
(“Special Record Date”) for the payment of such defaulted interest to be
fixed by the Trustee, notice whereof shall be given to Holders of the
Convertible Notes not less than ten days prior to such Special Record Date, or
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange, if any, on which the Convertible Notes
shall be listed, and upon such notice as may be required by any such exchange,
all as more fully provided in the Base Indenture.

     (b) Payments of interest on the Convertible Notes shall include interest
accrued to but excluding the respective Interest Payment Dates. Interest
payments for the Convertible Notes shall be computed and paid on the basis of a
360-day year of twelve, 30-day months. In the event that any date on which
interest is payable on the Convertible Notes is not a Business Day, then a
payment of the interest payable on such date shall be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on the date the payment was originally payable.

     (c) Subject to the rules of the Depositary with respect thereto, payment
of the principal and interest due at the Stated Maturity or earlier redemption,
purchase or conversion of the Convertible Notes shall be made upon surrender of
the Convertible Notes at the Corporate

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Trust Office of the Trustee. The Company will pay cash amounts in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. The Company may pay interest, the Redemption Price,
Purchase Price, Change in Control Purchase Price and the principal amount at
Stated Maturity, as the case may be, by check or wire payable in such money;
provided, however that a Holder holding Convertible Notes with an aggregate
principal amount in excess of $2,000,000 will be paid by wire transfer in
immediately available funds at the election of such Holder. The Company may
mail an interest check to the Holder’s registered address. Notwithstanding the
foregoing, so long as this Convertible Note is registered in the name of a
Depositary or its nominee, all payments hereon shall be made by wire transfer
of immediately available funds to the account of the Depositary or its nominee.

     SECTION 2.3 Global Securities.

     (a) The Convertible Notes will be issued in the form of one or more Global
Securities registered in the name of the Depositary or its nominee. Except
under the limited circumstances described below, Convertible Notes represented
by one or more Global Securities will not be exchangeable for, and will not
otherwise be issuable as, Convertible Notes in definitive form. The Global
Securities described above may not be transferred except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or to a successor Depositary or its
nominee.

     (b) Owners of beneficial interests in such a Global Security will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing a Convertible Note shall be exchangeable, except
for another Global Security of like denomination and tenor to be registered in
the name of the Depositary or its nominee or to a successor Depositary or its
nominee. The rights of Holders of such Global Security shall be exercised only
through the Depositary.

     (c) A Global Security shall be exchangeable for Convertible Notes
registered in the names of persons other than the Depositary or its nominee
only if (i) the Depositary notifies the Company that it is unwilling or unable
to continue as a Depositary for such Global Security and no successor
Depositary shall have been appointed by the Company, or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act, at
a time when the Depositary is required to be so registered to act as such
Depositary and no successor Depositary shall have been appointed by the
Company, in each case within 90 days after the Company receives such notice or
becomes aware of such cessation, (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable, or (iii) there
shall have occurred an Event of Default with respect to the Convertible Notes.
Any Global Security that is exchangeable pursuant to the preceding sentence
shall be exchangeable for Convertible Notes registered in such names as the
Depositary shall direct.

     (d) If the Convertible Notes are in the form of one or more Global
Securities, any requirement hereunder for delivery of such Convertible Note (or
identification of certificate numbers with respect thereto) shall require the
beneficial owners thereof and the Company to comply with the requirements of
the Depositary and its direct and indirect participants with respect thereto.
If the Convertible Notes become registrable in the names of persons other than
the Depositary, any requirement for the Company to pay the Purchase Price,
Change in Control

-8-

 

Purchase Price, or to issue Common Shares on account of any conversion
shall be contingent upon such Holder delivering its certificate representing
such Convertible Notes to the Company, together with any required endorsement
of such certificate.

     SECTION 2.4 Transfer.

     (a) No service charge will be made for any transfer or exchange of
Convertible Notes, but payment will be required of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith.

     (b) The Company shall not be required (a) to issue, transfer or exchange
any Convertible Notes during a period beginning at the opening of business 15
days before the date of the mailing of a notice pursuant to Section 11.5 of the
Base Indenture identifying the numbers of the Convertible Notes to be called
for redemption, and ending at the close of business on the day of the mailing,
or (b) to transfer or exchange any Convertible Notes theretofore selected for
redemption in whole or in part, except the unredeemed portion of any
Convertible Notes redeemed in part.

     SECTION 2.5 Denominations. 

     The Convertible Notes may be issued in denominations of $1,000.00, or any
integral multiple thereof.

     SECTION 2.6 Ranking.

     The Convertible Notes will rank pari passu with all of the Company’s other
unsecured and unsubordinated Indebtedness.

     SECTION 2.7 Defeasance. The provisions of Article IV of the Base
Indenture shall be inapplicable to the Convertible Notes.

     SECTION 2.8 Additional Events of Default; Amendments.

     (a) In addition to those matters set forth in Section 5.1 of the Base
Indenture, an “Event of Default” with respect to the Convertible Notes shall
also mean any of the following events:

     (i) default in the Company’s obligation to repurchase Convertible
Notes upon the Company’s exercise of its repurchase option pursuant to
Section 3.1, upon the occurrence of a Change in Control pursuant to
Section 3.4 or upon the exercise by a holder of its option to require the
Company to repurchase such holder’s Convertible Notes pursuant to Section
3.3; or

     (ii) default in the Company’s obligation to convert the Convertible
Notes upon exercise of a Holder’s conversion right and continuance of
such default for ten Business Days.

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     (b) In addition to any waiver of default restrictions set forth in Section
5.13 of the Base Indenture, Holders of Convertible Notes may not waive any
Event of Default listed in Section 2.8(a).

     (c) In addition to the restrictions on amendments set forth in Section 9.2
of the Base Indenture, without the consent of each Holder of an outstanding
Convertible Note, no amendments shall be made that would:

     (i) reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price;

     (ii) make any change that adversely affects the right to convert the
Convertible Notes into Common Shares; or

     (iii) make any change that adversely affects the Holders’ right to
require the Company to purchase a Convertible Note.

ARTICLE III

REDEMPTION

     SECTION 3.1 Optional Redemption.

     The Company, at its option, may redeem the Convertible Notes in cash, at
any time in whole or from time to time in part, on or after May 15, 2009 on any
date (a “Redemption Date”), at a redemption price equal to 100% of the
principal amount of the Convertible Notes to be redeemed (the “Redemption
Price”) plus any accrued and unpaid interest on the principal amount to be
redeemed to but excluding the Redemption Date; provided that if the Redemption
Date is on or after a Regular Record Date but on or prior to the related
Interest Payment Date, interest will be payable to the Holders in whose names
the Convertible Notes are registered at the close of business on the relevant
Regular Record Date.

     SECTION 3.2 Notice of Redemption.

     (a) The Company shall provide notice to the Trustee and to each Holder of
Securities of Convertible Notes as provided in Sections 11.3 and 11.5 of the
Base Indenture except that notice to Holders shall be given at least 15 days
but not more than 60 days before the Redemption Date. In addition to the
information required by Section 11.5, the Company shall provide to each Holder
with the Notice of Redemption:

     (i) the Conversion Price;

     (ii) the name and address of the Paying Agent and Conversion Agent;

     (iii) that the Convertible Notes called for redemption may be
converted at any time before the close of business on the Business Day
preceding the Redemption Date; and

-10-

 

     (iv) that the Holders who want to convert Convertible Notes must
satisfy the requirements set forth in paragraph 8 of the Global Security.

     (b) If any Convertible Note selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Convertible Note so selected, the converted portion of such Convertible
Note shall be deemed (so far as may be) to be the portion selected for
redemption. Convertible Notes that have been converted during a selection of
Convertible Notes to be redeemed may be treated by the Trustee as outstanding
for the purpose of such selection.

     SECTION 3.3 Purchase of Convertible Notes at the Option of the
Holder. 

     (a) General. On each of May 15, 2009, May 15, 2014 and May 15, 2019
(each, a “Purchase Date”), each Holder shall have the right, at such
Holder’s option, to require the Company to purchase any or all of such Holder’s
Convertible Notes. The Company shall purchase such Convertible Notes at a
price equal to 100% of the principal amount of the Convertible Notes to be
purchased (the “Purchase Price”) plus any accrued and unpaid interest on
the principal amount to be purchased to but excluding the Purchase Date;
provided that if the Purchase Date is on or after a Regular Record Date but on
or prior to the related Interest Payment Date, interest will be payable to
Holders in whose names the Convertible Notes are registered at the close of
business on the relevant Regular Record Date.

     (b) Exercise of Purchase Option. For a Convertible Note to be so
purchased at the option of the Holder, the Paying Agent must receive:

     (i) from the Holder a written notice of purchase (a “Purchase
Notice”) at any time from the opening of business on the date that is
20 Business Days prior to the Purchase Date until the close of business
on the fifth Business Day prior to such Purchase Date stating:

     (A) the portion of the principal amount of the Convertible
Note which the Holder will deliver to be purchased, which portion
must be in principal amounts of $1,000 or an integral multiple
thereof;

     (B) that such Convertible Note shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified in
paragraph 6 of the Global Security and in this Indenture;

     (C) if an Accounting Event has occurred and the Company has
elected, pursuant to Section 3.3(c), to pay the Purchase Price in
Common Shares, whether, if such portion of the Purchase Price shall
ultimately become payable entirely in cash because any of the
conditions to payment of the Purchase Price in Common Shares is not
satisfied prior to the close of business on the relevant Purchase
Date as set forth in Section 3.3(e), such Holder elects (i) to
withdraw such Purchase Notice as to some or all of the Convertible
Notes to which such Purchase Notice relates (stating the expected
principal amount of the Convertible Notes as to which such
withdrawal shall relate), or (ii) to receive cash in respect of the
entire

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Purchase Price for all Convertible Notes (or portions thereof)
to which such Purchase Notice relates; and

     (D) delivery of such Convertible Note to the Paying Agent
prior to, on or after the Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent, such
delivery being a condition to receipt by the Holder of the Purchase
Price therefor, together with all accrued interest; provided,
however, that such Purchase Price, together with all accrued
interest, shall be so paid pursuant to this Section 3.3 only if the
Convertible Note so delivered to the Paying Agent shall conform in
all respects to the description thereof in the related Purchase
Notice, as determined by the Company.

     If a Holder, in a Purchase Notice or a written notice of withdrawal
delivered to the Paying Agent in accordance with Section 3.5, fails to indicate
such Holder’s choice with respect to the election set forth in clause (C) of
Section 3.3(b)(i), such Holder shall be deemed to have elected to receive cash
in respect of the entire Purchase Price for all Convertible Notes subject to
such Purchase Notice in the circumstances set forth in such clause (C).

     The Company shall purchase from the Holder thereof, pursuant to this
Section 3.3, a portion of a Convertible Note if the Principal Amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Convertible Note also apply to
the purchase of such portion of such Convertible Note.

     Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.3 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Purchase Date and
compliance with Section 3.3(b).

     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 3.3(b) shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Business Day preceding the Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
3.5.

     The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.

     (c) Manner of Payment of Purchase Price. The Purchase Price of
Convertible Notes in respect of which a Purchase Notice pursuant to Section
3.3(b) has been given shall be paid in U.S. legal tender. Notwithstanding the
foregoing, upon the occurrence of an Accounting Event, the Company may elect to
pay the Purchase Price of Convertible Notes, in cash or Common Shares.

     (d) Payment of Purchase Price in Cash. If the Purchase Price is to be
paid in cash, the Company shall deposit cash, in respect of purchases under
this Section 3.3, at the time and in the manner as provided in Section 3.5(b),
sufficient to pay the aggregate Purchase Price of all Convertible Notes,
together with all accrued interest to, but not including, the Purchase Date, to
be purchased pursuant to this Section 3.3.

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     (e) Payment of Purchase Price in Common Shares. If an Accounting Event
has occurred and the Company has elected to pay the Purchase Price of
Convertible Notes in Common Shares, the Company shall issue a number of Common
Shares equal to the quotient obtained by dividing (i) the Purchase Price to be
paid by Common Shares by (ii) the Market Price of one Common Share as
determined by the Company in the Company Notice, subject to the next succeeding
paragraph.

     The Company shall not issue fractional Common Shares in payment of the
Purchase Price. Instead, the Company shall pay cash based on the Market Price
for all fractional shares. It is understood that if a Holder elects to have
more than one Convertible Note purchased, the number of Common Shares shall be
based on the aggregate amount of Convertible Notes to be purchased.

     The Company’s right to exercise its election to purchase Convertible Notes
through the issuance of Common Shares shall be conditioned upon:

     (i) the occurrence of an Accounting Event;

     (ii) the Company not having given its Company Notice of an election
to pay in cash and its giving of a timely Company Notice of an election
to purchase the Convertible Notes with Common Shares as provided herein;

     (iii) the registration of such Common Shares under the Securities
Act or the Exchange Act, in each case, if required by applicable law;

     (iv) the authorization for quotation of such Common Shares on the
Nasdaq National Market, or if the Common Shares are not then quoted on
the Nasdaq National Market, the listing of such Common Shares on a
principal national securities exchange on which the Common Shares are
then listed;

     (v) any necessary qualifications or registration under applicable
state securities laws or the availability of an exemption therefrom; and

     (vi) the receipt by the Trustee of an Officers’ Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Shares are in conformity with this Indenture and (B) the Common
Shares to be issued by the Company in payment of the Purchase Price in
respect of the Convertible Notes have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in payment
of the Purchase Price in respect of the Convertible Notes, shall be
validly issued, fully paid and non-assessable and free from preemptive
rights under the Company’s Declaration of Trust and Bylaws and the
Maryland REIT Statute, and, in the case of such Officers’ Certificate,
stating that the conditions above and the condition set forth in the
second succeeding sentence have been satisfied and, in the case of such
Opinion of Counsel, stating that the conditions in clauses (iii) through
(v) above have been satisfied.

     Such Officers’ Certificate shall also set forth the number of Common
Shares to be issued for each $1,000 principal amount and the Closing Price of a
single Common Share on each Trading Day during the period commencing on the
first Trading Day of the period during which

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the Market Price is calculated and ending on the third day prior to the
applicable Purchase Date. The Company may pay the Purchase Price in Common
Shares only if the information necessary to calculate the Market Price is
published in a daily newspaper of national circulation. If the foregoing
condition and the conditions in clauses (i) through (vi) above are not
satisfied prior to the close of business on the Purchase Date, and the Company
has elected to purchase the Convertible Notes pursuant to this Section 3.3
through the issuance of Common Shares, the Company shall pay the entire
Purchase Price of Convertible Notes in cash.

     Upon determination of the actual number of Common Shares to be issued upon
redemption of Convertible Notes, the Company shall (i) disseminate a press
release containing such information through at least two of Reuter’s Economic
Services, Bloomberg Business News, PR Newswire and Dow Jones & Company Inc. and
(ii) publish such information on its web site or through such other public
medium as it may use at that time.

     (f) Company Notice. In connection with any purchase of Convertible Notes
pursuant to Section 3.3, the Company shall give written notice of the Purchase
Date to the Holders (the “Company Notice”). The Company Notice shall be
sent by first-class mail to the Trustee and to each Holder (and to each
beneficial owner as required by applicable law) not less than 20 Business Days
prior to any Purchase Date (the “Company Notice Date”). Each Company
Notice shall include a form of Purchase Notice to be completed by a Convertible
Noteholder and shall state:

     (i) the Purchase Price and the Conversion Price per $1,000 principal
amount of Convertible Notes;

     (ii) the name and address of the Paying Agent and the Conversion
Agent;

     (iii) if an Accounting Event has occurred, whether the Company is
electing to pay the Purchase Price in cash or Common Shares;

     (iv) if an Accounting Event has occurred and the Company has elected
to pay the Purchase Price in Common Shares, the Market Price and the
method for calculating same;

     (v) that Convertible Notes as to which a Purchase Notice has been
given may be converted if they are otherwise convertible only in
accordance with Article IV hereof and paragraph 8 of the Global Security
if the applicable Purchase Notice has been withdrawn in accordance with
the terms of this Indenture;

     (vi) that Convertible Notes must be surrendered to the Paying Agent
to collect payment;

     (vii) that the Purchase Price for, and any accrued interest on, any
Convertible Note as to which a Purchase Notice has been given and not
withdrawn will be paid promptly following the later of the Purchase Date
and the time of surrender of such Convertible Note;

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     (viii) the procedures the Holder must follow to exercise rights
under Section 3.3 and a brief description of those rights;

     (ix) briefly, the conversion rights of the Convertible Notes;

     (x) the procedures for withdrawing a Purchase Notice (including
pursuant to the terms of Section 3.5);

     (xi) that, unless the Company defaults in making payments on
Convertible Notes for which a Purchase Notice has been submitted,
interest on such Convertible Notes will cease to accrue on the Purchase
Date; and

     (xii) the CUSIP number of the Convertible Notes.

     At the Company’s request, the Trustee shall give such Company Notice in
the Company’s name and at the Company’s expense; provided, however, that in all
cases, the text of such Company Notice shall be prepared by the Company.

     SECTION 3.4 Purchase of Convertible Notes at Option of the Holder upon
a Change in Control.

     (a) If at any time the Convertible Notes remain outstanding there shall
have occurred a Change in Control, Convertible Notes shall be purchased by the
Company, at the option of the Holder thereof, at a price equal to 100% of the
principal amount of the Convertible Notes to be purchased (the “Change in
Control Purchase Price”) plus any accrued and unpaid interest on the
principal amount to be purchased to but not including the date that is 45
Business Days after the occurrence of the Change in Control (the “Change in
Control Purchase Date”), subject to satisfaction by or on behalf of the
Holder of the requirements set forth in Section 3.4(c).

     (b) Within 30 days after the occurrence of a Change in Control, the
Company shall mail a written notice of the Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Change in Control Purchase
Notice to be completed by the Convertible Noteholder and shall state:

     (i) briefly, the events causing a Change in Control and the date of
such Change in Control;

     (ii) the date by which the Change in Control Purchase Notice
pursuant to this Section 3.4 must be given;

     (iii) the Change in Control Purchase Date and the last date on which
a Holder may exercise its purchase right;

     (iv) the Change in Control Purchase Price;

     (v) the name and address of the Paying Agent and the Conversion
Agent;

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     (vi) the Conversion Price;

     (vii) that Convertible Notes as to which a Change in Control
Purchase Notice has been given may be converted pursuant to Article IV
hereof only if the Change in Control Purchase Notice has been withdrawn
in accordance with the terms of this Indenture;

     (viii) that Convertible Notes must be surrendered to the Paying
Agent to collect payment;

     (ix) that the Change in Control Purchase Price for any Convertible
Note as to which a Change in Control Purchase Notice has been duly given
and not withdrawn will be paid promptly following the later of the Change
in Control Purchase Date and time of surrender of such Convertible Note;

     (x) briefly, the procedures the Holder must follow to exercise
rights under this Section 3.4;

     (xi) briefly, the conversion rights of the Convertible Notes;

     (xii) the procedures for withdrawing a Change in Control Purchase
Notice;

     (xiii) that, unless the Company defaults in making payment of such
Change in Control Purchase Price, interest on Convertible Notes
surrendered for purchase by the Company will cease to accrue on and after
the Change in Control Purchase Date; and

     (xiv) the CUSIP number of the Convertible Notes.

     (c) A Holder may exercise its rights specified in Section 3.4(a) upon
delivery of a written notice of purchase (a “Change in Control Purchase
Notice”) to the Paying Agent at any time prior to the close of business on
the fifth Business Day prior to the Change in Control Purchase Date, stating:

     (i) the portion of the principal amount of the Convertible Note to
be purchased, which portion must be $1,000 or an integral multiple
thereof; and

     (ii) that such Convertible Note shall be purchased pursuant to the
terms and conditions specified in paragraph 6 of the Global Security.

     The delivery of such Convertible Note to the Paying Agent prior to, on or
after the Change in Control Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Change in Control Purchase Price therefor;
provided, however that such Change in Control Purchase Price shall be so paid
pursuant to this Section 3.4 only if the Convertible Note so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth
in the related Change in Control Purchase Notice.

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     The Company shall purchase from the Holder thereof, pursuant to this
Section 3.4, a portion of a Convertible Note if the principal amount of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Convertible Note also apply to
the purchase of such portion of such Convertible Note.

     Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.4 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Change in Control
Purchase Date and compliance with Section 3.4(c).

     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.4(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Business Day
immediately preceding the Change in Control Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
3.5.

     The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.

     SECTION 3.5 Effect of Purchase Notice or Change in Control Purchase
Notice.

     Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.3(b) or Section 3.4(c), as
applicable, the Holder of the Convertible Note in respect of which such
Purchase Notice or Change in Control Purchase Notice, as the case may be, was
given shall (unless such Purchase Notice or Change in Control Purchase Notice
is withdrawn as specified in the following two paragraphs) thereafter be
entitled to receive solely the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Convertible Note. Such
Purchase Price or Change in Control Purchase Price, together with all accrued
interest to, but not including, the Purchase Date or Change in Control Purchase
Date, as the case may be, shall be paid to such Holder promptly following the
later of (x) the Purchase Date or the Change in Control Purchase Date, as the
case may be, with respect to such Convertible Note (provided the conditions in
Section 3.3(b) or Section 3.4(c), as applicable, have been satisfied) and (y)
the time of delivery of such Convertible Note to the Paying Agent in the manner
provided in this Indenture. Convertible Notes in respect of which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been given
by the Holder thereof may not be converted pursuant to Article IV hereof on or
after the date of the delivery of such Purchase Notice or Change in Control
Purchase Notice, as the case may be, unless such Purchase Notice or Change in
Control Purchase Notice, as the case may be, has first been validly withdrawn
as specified in the following two paragraphs.

     A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent in accordance with the Purchase Notice or Change
in Control Purchase Notice, as the case may be, at any time prior to the close
of business on the Business Day preceding the Purchase Date or the Change in
Control Purchase Date, as the case may be, specifying:

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     (i) the principal amount of the Convertible Note with respect to
which such notice of withdrawal is being submitted, and

     (ii) the principal amount, if any, of the Convertible Note which
remains subject to the original Purchase Notice or Change in Control
Purchase Notice, as the case may be, and which has been or will be
delivered for purchase by the Company.

     A written notice of withdrawal of a Purchase Notice shall be in the form
set forth in the preceding paragraph.

     There shall be no purchase of any Convertible Notes pursuant to Section
3.3 or 3.4 if there has occurred (prior to, on or after, as the case may be,
the giving, by the Holders of such Convertible Notes, of the required Purchase
Notice or Change in Control Purchase Notice, as the case may be) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Convertible Notes). The Paying Agent will promptly return to
the respective Holders thereof any Convertible Notes (x) with respect to which
a Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Convertible Notes) in which case, upon such return, the
Purchase Notice or Change in Control Purchase Notice with respect thereto shall
be deemed to have been withdrawn.

     (b) Deposit of Purchase Price or Change in Control Purchase Price.
Prior to 10:00 a.m. (local time in the City of New York) on the Purchase Date
or the Change in Control Purchase Date, as the case may be, the Company shall
deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 6.5 of the Base
Indenture) an amount of money (in immediately available funds if deposited on
such Business Day) sufficient to pay the aggregate Purchase Price, together
with all accrued interest to, but not including, the Purchase Date or Change in
Control Purchase Price, as the case may be, of all the Convertible Notes or
portions thereof which are to be purchased as of the Purchase Date or Change in
Control Purchase Date, as the case may be.

     SECTION 3.6 Covenant to Comply With Securities Laws Upon Purchase of
Convertible Notes. 

     When complying with the provisions of Section 3.3 or 3.4 hereof (provided
that such offer or purchase constitutes an “issuer tender offer” for purposes
of Rule 13e-4 (which term, as used herein, includes any successor provision
thereto) under the Exchange Act at the time of such offer or purchase), the
Company shall (i) comply in all material respects with Rule 13e-4 and Rule
14e-1 under the Exchange Act, (ii) file the related Schedule TO (or any
successor schedule, form or report) under the Exchange Act, and (iii) otherwise
comply in all material respects with all federal and state securities laws so
as to permit the rights and obligations under Sections 3.3 and 3.4 to be
exercised in the time and in the manner specified in Sections 3.3 and 3.4.

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     SECTION 3.7 Repayment to the Company.

     The Trustee and the Paying Agent shall return to the Company any cash that
remains unclaimed, together with interest or dividends, if any, thereon
(subject to the provisions of Section 6.2(j) of the Base Indenture), held by
them for the payment of the Purchase Price or Change in Control Purchase Price,
as the case may be, and accrued interest; provided, however, that to the extent
that the aggregate amount of cash deposited by the Company pursuant to Section
3.5 exceeds the aggregate Purchase Price or Change in Control Purchase Price,
as the case may be, of the Convertible Notes or portions thereof which the
Company is obligated to purchase as of the Purchase Date or Change in Control
Purchase Date, as the case may be, and accrued interest thereon, then, unless
otherwise agreed in writing with the Company, promptly after the Business Day
following the Purchase Date or Change in Control Purchase Date, as the case may
be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon (subject to the provisions of Section
6.2(j) of the Base Indenture).

ARTICLE IV

CONVERSION OF CONVERTIBLE NOTES

     SECTION 4.1 Conversion of Convertible Notes.

     (a) Subject to the further provisions of this Article IV and paragraph 8
of the Global Security, a Holder of a Convertible Note may convert the
principal amount of such Convertible Note (or any portion thereof equal to
$1,000 or any integral multiple of $1,000 in excess thereof) into Common Shares
on any Business Day, if the average of the Closing Prices of the Common Shares
for the immediately preceding 30 consecutive Trading Day period is more than
110% of the average of the Conversion Prices of our Common Shares during such
30-Trading Day period (the “Closing Price Condition”), subject to the
exceptions provided below; provided, however, that if such Convertible Note is
called for redemption or submitted or presented for purchase pursuant to
Article III such conversion right shall terminate at the close of business on
the Business Day immediately preceding the Redemption Date or Change in Control
Purchase Date, as the case may be, for such Convertible Note (unless the
Company shall default in making the redemption payment or Change in Control
Purchase Price payment when due, in which case the conversion right shall not
apply following the close of business on the date such default is cured and
such Convertible Note is redeemed or purchased, as the case may be). The
number of Common Shares deliverable upon conversion of a Convertible Note is
determined by dividing (x) the principal amount of the Convertible Notes, or
the portion thereof being converted, by (y) the Conversion Price in effect on
the Conversion Date. The initial Conversion Price and the Conversion Rate
shall be that set forth in paragraph 8 of the Global Security.

     Holders will not receive any cash payment representing accrued and unpaid
interest upon conversion of a Convertible Note. Accrued and unpaid interest
on the Convertible Note shall be deemed paid in full rather than canceled,
extinguished or forfeited. The Company will not adjust the Conversion Rate to
account for accrued interest, if any.

     A Holder of Convertible Notes is not entitled to any rights of a holder of
Common Shares until such Holder has converted its Convertible Note to Common
Shares, and only to the extent

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such Convertible Note are deemed to have been converted into Common Shares
pursuant to this Article IV.

(b) Even if the Closing Price Condition is not satisfied,

     (i) if during any five consecutive Trading Day period, the average
of the Sale Prices for the Convertible Notes for that five consecutive
Trading Day period was less than 94% of the average of the Conversion
Values for the Convertible Notes during that period, a Holder may
surrender Convertible Notes for conversion at any time during the
following five Business Days; provided, however, that if on any
Conversion Date on which a Convertible Note is surrendered for conversion
based on the condition described in this paragraph that is on or after
May 15, 2019, the Closing Price on the Trading Day before the Conversion
Date is greater than 100% of the then applicable Conversion Price and
less than 110% of the then applicable Conversion Price, then Holders
surrendering Convertible Notes for conversion will receive, at the option
of the Company, in lieu of Common Shares based on the then applicable
Conversion Rate, cash or Common Shares with a value equal to the
principal amount of the Convertible Notes being converted (a
“Principal Value Conversion”). Common Shares delivered upon a
Principal Value Conversion will be valued at the Closing Price on the
Conversion Date. The Company shall deliver Common Shares upon a
Principal Value Conversion no later than the third business day following
the determination of the Closing Price;

The Conversion Agent will determine the Sale Price of the Convertible
Notes pursuant to this Section 4.1(b)(i) only after being instructed to
do so by the Company. The Company has no obligation to so instruct the
Conversion Agent unless a Holder provides the Company with reasonable
evidence that the provisions of this Section 4.1(b)(i) have been
satisfied. If such reasonable evidence is so presented, the Company
shall instruct the Conversion Agent to determine the Sale Prices for the
applicable period; provided that the Conversion Agent shall be under no
duty or obligation to make the calculations described in Section 4(b)(i)
hereof or to determine whether the Convertible Notes are convertible
pursuant to such Section. For the avoidance of doubt, the Company shall
make the calculations described in Section 4.1(b)(i) using the Sale Price
provided by the Conversion Agent.

     (ii) a Holder may surrender for conversion a Convertible Note that
has been called for redemption pursuant to Section 3.1 at any time prior
to close of business on the Business Day prior to the Redemption Date;

     (iii) in the event that the Company declares:

     (A) a dividend or distribution of any rights or warrants to
all holders of Common Shares entitling them to subscribe for or
purchase, for a period expiring within 60 days, Common Shares at a
price less than the Current Market Price on the Trading Day
immediately preceding the Record Date for such dividend or
distribution, or

     (B) a dividend or distribution of cash, debt securities (or
other evidences of indebtedness), or other assets (excluding
dividends or distributions

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for which Conversion Rate adjustment is required to be made
under Section 4.2(a) or Section 4.2(b) below), where the fair
market value of such dividend or distribution has a per share value
exceeding 10% of the Current Market Price as of the Trading Day
immediately preceding the declaration date for such dividend or
distribution,

then the Convertible Notes may be surrendered for conversion beginning on
the date the Company gives notice to the Holders of such right, which
shall not be less than 20 days prior to the Ex-Dividend Date for such
dividend or distribution, and Convertible Notes may be surrendered for
conversion at any time until the earlier of the close of business on the
Business Day prior to the Ex-Dividend Date or the Company’s announcement
that such distribution will not take place. No adjustment to the ability
of the holders to convert will be made if the holders are entitled to
participate in the distribution without conversion; and

     (iv) in the event that the Company is a party to a consolidation,
merger or binding share exchange pursuant to which all or substantially
all of the Common Shares would be converted into cash, securities or
other property, the Convertible Notes may be surrendered for conversion
at any time from or after the date which is 15 days prior to the
anticipated effective date of the transaction until 15 days after the
actual date of such transaction.

The Board of Trustees shall determine the anticipated effect date of the
transaction, and such determination shall be conclusive and binding on
the Holders and shall be publicly announced by the Company by issuance of
a press release and publication on its website or through such other
public medium as it may use at that time not later than two Business Days
prior to the 15th day before the anticipated effective date.

     (c) Conversion Procedure. To convert a Convertible Note, a Holder must
satisfy the requirements in paragraph 8 of the Global Security. The first
Business Day on which the Holder satisfies all those requirements is the
conversion date (the “Conversion Date”).

     As soon as practicable after the Conversion Date, the Company shall
deliver to the Holder, through the Conversion Agent, a certificate for the
number of full Common Shares deliverable upon the conversion or exchange and
cash in lieu of any fractional share determined pursuant to Section 4.1(d);
provided that, in case of a Principal Value Conversion pursuant to Section
4.1(b)(i), the Company shall deliver such Common Shares or cash pursuant to
Section 4.1(d) not later than three Business Days following the Conversion
Date. The person in whose name the certificate is registered shall be treated
as a shareholder of record on and after the next Business Day following the
Conversion Date. Upon conversion of a Convertible Note, such person shall no
longer be a Holder of such Convertible Note. No payment or adjustment will be
made for dividends on, or other distributions with respect to, any Common
Shares except as provided in this Article IV.

     If any Holder elects to convert Convertible Notes (in whole or in part)
during the period from the close of business on any Regular Record Date for the
payment of an installment of interest to the opening of business on the next
succeeding Interest Payment Date, then the Holder shall deliver to the
Conversion Agent payment in funds acceptable to the Company of an amount

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equal to the interest payable on such Interest Payment Date on the
principal amount of such Convertible Notes then being converted, and such
interest installment shall be payable to such registered Holder notwithstanding
the conversion of the Convertible Notes, subject to the provisions of this
Indenture relating to the payment of defaulted interest by the Company. If the
Company defaults in the payment of interest payable on such Interest Payment
Date, the Company shall promptly repay such funds to such Holder.

     Nothing in this Section 4.1 shall affect the right of a Holder in whose
name any Convertible Note is registered at the close of business on a Regular
Record Date to receive the interest payable on such Convertible Note on the
related Interest Payment Date in accordance with the terms of this Indenture
and the Convertible Notes. If the Holder converts more than one Convertible
Note at the same time, the number of Common Shares deliverable upon the
conversion shall be based on the total principal amount of the Convertible
Notes converted.

     If the last day on which a Convertible Note may be converted is not a
Business Day, the Convertible Note may be converted on the next succeeding day
that is a Business Day.

     If a Convertible Note is converted in part, the Company shall execute and
the Trustee shall authenticate and deliver to the Holder, a new Convertible
Note in an authorized denomination equal in principal amount to the unconverted
portion of the Convertible Note.

     A Convertible Note in respect of which a Holder has delivered a Purchase
Notice pursuant to Section 3.3 or a Change in Control Purchase Notice pursuant
to Section 3.4 exercising the option of such Holder to require the Company to
purchase such Convertible Note may be converted only if such Purchase Notice or
Change in Control Purchase Notice is withdrawn by a written notice of
withdrawal complying in all respects with each of the provisions of this
Indenture relating to such notice and delivered to the Paying Agent prior to
the close of business on the Business Day preceding the Purchase Date or Change
in Control Purchase Date, as the case may be.

     (d) Cash Payments in Lieu of Fractional Shares. The Company shall not
issue fractional Common Shares upon conversion of Convertible Notes. Instead
the Company shall deliver cash for the current market value of the fractional
share. The current market value of a fractional share shall be determined to
the nearest 1/1,000 of a share by multiplying the Closing Price on the Trading
Day immediately preceding the Conversion Date by the fractional amount and
rounding the product to the nearest whole cent.

     (e) Taxes on Conversion. The Company shall pay any documentary, stamp or
similar issue or transfer tax due on the issue of Common Shares upon conversion
of a Convertible Note. However, the Holder shall pay any such tax which is due
because the Holder requests the shares to be issued in a name other than the
Holder’s name. The Conversion Agent may refuse to deliver the certificates
representing the Common Shares being issued in a name other than the Holder’s
name until the Conversion Agent receives a sum sufficient to pay any tax which
shall be due because the shares are to be issued in a name other than the
Holder’s name. Nothing herein shall preclude the Company’s withholding any tax
required by law or regulations.

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     (f) Covenants of the Company. The Company shall, prior to issuance of any
Convertible Notes hereunder, and from time to time as may be necessary, reserve
out of its authorized but unissued Common Shares a sufficient number of Common
Shares to permit the conversion of the Convertible Notes. All Common Shares
delivered upon conversion of the Convertible Notes shall be newly issued
shares, shall be duly and validly issued and fully paid and nonassessable, and
shall be free from preemptive rights under the Company’s Declaration of Trust
and Bylaws and the Maryland REIT Statute and free of any lien or adverse claim.
The Company shall endeavor promptly to comply with all federal and state
securities laws regulating the order and delivery of Common Shares upon the
conversion of Convertible Notes, if any, and shall cause to have listed or
quoted all such Common Shares on each United States national securities
exchange, automated quotation system or over-the-counter or other domestic
market on which the Common Shares are then listed or quoted; provided, that if
the rules of such exchange, system or market permit the Company to defer the
listing or quotation of the Common Shares until the first conversion of the
Convertible Notes into Common Shares in accordance with the provisions of this
Indenture, the Company covenants to list such Common Shares issuable upon
conversion of the Convertible Notes in accordance with the requirements of such
exchange, system or market at such time.

     SECTION 4.2 Adjustment of Conversion Rate.

     The Conversion Rate shall be adjusted from time to time by the Company as
follows:

     (a) In case the Company shall (i) pay a dividend on its Common Shares in
Common Shares, (ii) make a distribution on its Common Shares in Common Shares,
(iii) subdivide its outstanding Common Shares into a greater number of shares,
or (iv) combine its outstanding Common Shares into a smaller number of shares,
the Conversion Rate in effect immediately prior thereto shall be adjusted so
that the same shall equal the rate determined by multiplying the Conversion
Rate in effect immediately prior to such event by a fraction of which the
numerator shall be the number of Common Shares outstanding immediately after
such event and the denominator of which shall be the number of Common Shares
outstanding immediately prior to such event. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the Record Date in
the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of subdivision or combination.

     (b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Shares entitling them (for a period
commencing no earlier than the Record Date described below and expiring not
more than 60 days after such Record Date) to subscribe for or purchase Common
Shares (or securities convertible into Common Shares) at a price per share (or
having a conversion price per share) less than the Current Market Price on the
Trading Day immediately prior to the Record Date for such issuance, the
Conversion Rate in effect shall be adjusted so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to such Record Date by a fraction of which the numerator shall be the number of
Common Shares outstanding at the close of business on the date immediately
preceding the Record Date plus the number of additional Common Shares offered
(or into which the Convertible Notes so offered are convertible), and the
denominator of which shall be the number of Common Shares outstanding at the
close of business on the date immediately preceding the Record Date plus the
number of shares which the aggregate offering

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price of the total number of Common Shares so offered (or the aggregate
conversion price of the Convertible Notes so offered, which shall be determined
by multiplying the number of Common Shares issuable upon conversion of such
Convertible Notes by the Conversion Price Common Share pursuant to the terms of
such Convertible Notes) would purchase at the Current Market Price on the
Trading Day immediately preceding the Record Date for such issuance. Such
adjustment shall be made successively whenever any such rights or warrants are
issued, and shall become effective on the day following the date of
announcement of such issuance. If at the end of the period during which such
rights or warrants are exercisable not all rights or warrants shall have been
exercised, the adjusted Conversion Rate shall be immediately readjusted to what
it would have been based upon the number of additional Common Shares actually
issued (or the number of Common Shares issuable upon conversion of Convertible
Notes actually issued).

     (c) In case the Company shall distribute to all or substantially all
holders of its Common Shares, any shares of Capital Stock of the Company (other
than Common Shares), Extraordinary Cash Dividends or any evidences of
Indebtedness or other non-cash assets (including securities of any person other
than the Company but excluding dividends or distributions referred to in
subsection (a) of this Section 4.2), or shall distribute to all or
substantially all holders of its Common Shares rights or warrants to subscribe
for or purchase any of its Convertible Notes (excluding those rights and
warrants referred to in subsection (b) of this Section 4.2, then in each such
case the Conversion Rate shall be adjusted so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect immediately prior
to such distribution by a fraction of which the numerator shall be the Current
Market Price on the Record Date for such distribution and the denominator shall
be the Current Market Price on such Record Date less the fair market value on
such Record Date (as determined by the Board of Directors, whose determination
shall be conclusive evidence of such fair market value and which shall be
evidenced by an Officers’ Certificate delivered to the Trustee) of the portion
of the Capital Stock, evidences of Indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one Common Share
(determined on the basis of the number of Common Shares outstanding on the
Record Date). Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the Record
Date for such distribution.

     In the event the then fair market value (as so determined) of the portion
of the Capital Stock, evidences of Indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one Common Share is
equal to or greater than the Current Market Price on such Record Date, in lieu
of the foregoing adjustment, adequate provision shall be made so that each
holder of a Convertible Note shall have the right to receive upon conversion
the amount of Capital Stock, evidences of Indebtedness or other non-cash assets
so distributed or of such rights or warrants such holder would have received
had such holder converted each Convertible Note on such Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. If the Board of
Trustees determines the fair market value of any distribution for purposes of
this Section 4.2 by reference to the actual or when issued trading market for
any Convertible Notes, it must in doing so consider the prices in such market
over the same period used in computing the Current Market Price.

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     Rights or warrants distributed by the Company to all holders of Common
Shares entitling the holders thereof to subscribe for or purchase shares of the
Company’s Capital Stock (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
(“Trigger Event”) (i) are deemed to be transferred with such Common
Shares; (ii) are not exercisable; and (iii) are also issued in respect of
future issuances of Common Shares, shall be deemed not to have been distributed
for purposes of this Section 4.2 (and no adjustment to the Conversion Rate
under this Section 4.2 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 4.2. If any such right or
warrant, including any such existing rights or warrants distributed prior to
the date of this Indenture, are subject to events, upon the occurrence of which
such rights or warrants become exercisable to purchase different securities,
evidences of Indebtedness or other non-cash assets, then the date of the
occurrence of any and each such event shall be deemed to be the date of
distribution and Record Date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section 4.2
was made, (i) in the case of any such rights or warrants, all of which shall
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as
though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder or holders of Common Shares with respect
to such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Shares as of the date of such
redemption or repurchase, and (ii) in the case of such rights or warrants which
shall have expired or been terminated without exercise by any holders thereof,
the Conversion Rate shall be readjusted as if such rights and warrants had not
been issued.

     (d) In case the Company shall distribute a Regular Cash Dividend (a
“Triggering Distribution”) to all or substantially all holders of its
Common Shares in excess of $0.42 per share in any quarterly period, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying such Conversion Rate in effect on the Business Day
immediately preceding the Record Date for such Triggering Distribution by a
fraction of which the numerator shall be the Current Market Price on the Record
Date for such Triggering Distribution, and the denominator shall be the Current
Market Price on the Record Date for such Triggering Distribution less the
aggregate amount by which the cash so distributed applicable to one Common
Share (determined on the basis of the number of Common Shares outstanding on
the Record Date for such Triggering Distribution) exceeds $0.42 in any
quarterly period, such increase to become effective immediately prior to the
opening of the Business Day following the date on which the Triggering
Distribution is paid. It is expressly understood that a stock buyback,
repurchase or similar transaction or program shall in no event be considered a
Triggering Distribution for purposes of this Section 4.2(d) or Section 4.2(e).

     (e) In case the Company or any of its Subsidiaries shall purchase any of
the Company’s Common Shares (excluding stock options) by means of a tender
offer, other than an

-25-

 

odd-lot offer by the Company or any of its Subsidiaries, then, effective
immediately prior to the opening of Business Day after the last date (the
“Expiration Date”) tenders could have been made pursuant to such tender
offer (as it may be amended) (the last time at which such tenders could have
been made on the Expiration Date is hereinafter sometimes called the
“Expiration Time”), the Conversion Rate shall be adjusted so that the
same shall equal the rate determined by multiplying the Conversion Rate in
effect at the close of business on the Expiration Date by a fraction of which
the numerator shall be the sum of (i) the aggregate consideration (determined
as set forth below) payable to shareholders of the Company based on the
acceptance (up to any maximum specified in the terms of the tender offer) of
all shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
“Purchased Shares”) and (ii) the product of the number of Common Shares
outstanding (less any Purchased Shares) immediately after the Expiration Time
and the Current Market Price per share of the Common Shares, and the
denominator shall be the product of the number of Common Shares outstanding
(including Purchased Shares) immediately prior to the Expiration Time
multiplied by the Current Market Price as of the close of business on the
Expiration Date. For purposes of this Section 4.2(e), the aggregate
consideration in any such tender offer shall equal the sum of the aggregate
amount of cash consideration and the aggregate fair market value (as determined
by the Board of Trustees, whose determination shall be conclusive evidence
thereof and which shall be evidenced by an Officers’ Certificate delivered to
the Trustee) of any other consideration payable in such tender offer. In the
event that the Company is obligated to purchase Common Shares pursuant to any
such tender offer, but the Company is permanently prevented by applicable law
from effecting any or all such purchases or any or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate which would have been in effect based upon the number of Common Shares
actually purchased. If the application of this Section 4.2(e) to any tender
offer would result in a decrease in the Conversion Rate, no adjustment shall be
made for such tender offer under this Section 4.2(e). For purposes of this
Section 4.2(e), the term “tender offer” shall mean and include both tender
offers and exchange offers, all references to “purchases” of shares in tender
offers (and all similar references) shall mean and include both the purchase of
shares in tender offers and the acquisition of shares pursuant to exchange
offers, and all references to “tendered shares” (and all similar references)
shall mean and include shares tendered in both tender offers and exchange
offers.

     (f) In any case in which this Section 4.2 shall require that an adjustment
be made following a Record Date, an announcement date or a determination date
or Expiration Date, as the case may be, established for purposes of this
Section 4.2, the Company may elect to defer (but only until five Business Days
following the filing by the Company with the Trustee of the certificate
described in Section 4.5) issuing to the Holder of any Convertible Note
converted after such Record Date or announcement date or determination date or
Expiration Date the Common Shares and other Capital Stock of the Company
issuable upon such conversion over and above the Common Shares and other
Capital Stock of the Company issuable upon such conversion only on the basis of
the Conversion Rate prior to adjustment; and, in lieu of the shares the
issuance of which is so defined, the Company shall issue or cause its transfer
agents to issue due bills or other appropriate evidence prepared by the Company
of the right to receive such shares. If any distribution in respect of which
an adjustment to the Conversion Rate is required to be made as of the Record
Date or announcement date or determination date or Expiration Date therefor is
not thereafter made or paid by the Company for any reason, the

-26-

 

Conversion Rate shall be readjusted to the Conversion Rate which would
then be in effect if such record date had not been fixed or such announcement
date or effective date or determination date or Expiration Date had not
occurred.

     (g) No adjustment shall be made pursuant to this Section 4.2 if the
Holders may participate in the transaction that would otherwise give rise to an
adjustment pursuant to this Section 4.2 without conversion of such Holder’s
Convertible Notes.

     SECTION 4.3 When Adjustment May Be Deferred.

     No adjustment in the Conversion Rate need be made unless the adjustment
would require an increase or decrease of at least 1% in the Conversion Rate.
Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment.

     All calculations under this Article IV shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be.

     SECTION 4.4 When No Adjustment Required.

     No adjustment need be made for a transaction referred to in Section 4.2 or
4.8 if Holders of Convertible Notes are to participate in the transaction
without conversion on a basis and with notice that the Board of Directors of
the Company determines to be fair and appropriate in light of the basis and
notice on which holders of Common Shares participate in the transaction. No
adjustment need be made upon the issuance of any Common Shares pursuant to any
present or future plan providing for the reinvestment of dividends or interest
payable on securities of the Company and the investment of additional optional
amounts in Common Shares under any plan (including the Company’s existing
Dividend Reinvestment and Share Purchase Plan).

     No adjustment need be made upon the issuance of any Common Shares, options
to purchase Common Shares or phantom shares pursuant to any present or future
employee, officer, director or consultant benefit plan or program of or assumed
by the Company or any of its Subsidiaries.

     No adjustment need be made for a change in the par value or no par value
of the Common Shares or for any accrued and unpaid interest.

     To the extent the Convertible Notes become convertible pursuant to this
Article IV into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.

     SECTION 4.5 Notice of Adjustment.

     Whenever the Conversion Rate is adjusted, the Company shall promptly mail
to the Holders a notice of the adjustment. The Company shall file with the
Trustee and the Conversion Agent such notice and a certificate from the
Company’s independent public accountants briefly stating the facts requiring
the adjustment and the manner of computing it, The certificate shall be
conclusive evidence that the adjustment is correct. Neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect to
any such certificate except to exhibit the same to any Holder desiring
inspection thereof.

-27-

 

     SECTION 4.6 Voluntary Increase.

     The Company from time to time may increase the Conversion Rate as the
Board of Trustees considers advisable to avoid or diminish any income tax to
holders of Common Shares or rights to purchase our Common Shares resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. The Company may also, from time
to time, to the extent permitted by applicable law, increase the applicable
Conversion Rate by any amount for any period of at least 20 days if the Board
of Trustees has determined that such increase would be in the Company’s best
interests, which determination shall be conclusive. Whenever the Conversion
Rate is increased, the Company shall mail to Holders and file with the Trustee
and the Conversion Agent a notice of the increase. The Company shall mail the
notice at least 15 days before the date the increased Conversion Rate takes
effect. The notice shall state the increased Conversion Rate and the period it
will be in effect.

     SECTION 4.7 Notice of Certain Transactions.

     (a) Whenever any event described in Section 4.1 shall occur which shall
cause the Convertible Notes to become convertible into Common Shares, the
Company shall (i) promptly deliver in accordance with Sections 1.6 and 1.7 of
the Base Indenture, written notice of the convertibility of the Convertible
Notes to the Trustee and each Holder; and (ii) publicly announce that the
Convertible Notes have become convertible. Such written notice and public
announcement shall include a description of such event, a description of the
periods during which the Convertible Notes shall be convertible and the
procedures by which a Holder may convert its Convertible Notes.

     (b) If:

     (i) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 4.2 (unless no adjustment is to
occur pursuant to Section 4.4); or

     (ii) the Company takes any action that would require a supplemental
indenture pursuant to Section 4.8; or

     (iii) there is a liquidation or dissolution of the Company;

then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed Record Date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at
least 15 days before such date. Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.

     SECTION 4.8 Reorganization of the Company; Special
Distributions.

     If the Company is a party to a transaction subject to Section 8.1 of the
Base Indenture (other than a sale of all or substantially all of the assets of
the Company in a transaction in which

-28-

 

the holders of Common Shares immediately
prior to such transaction do not receive securities, cash or other assets of
the Company or any other person) or a merger or binding share exchange which
reclassifies or changes its outstanding Common Shares, the person obligated to
deliver securities, cash or other assets upon conversion of Convertible Notes
shall enter into a supplemental indenture. If the issuer of securities
deliverable upon conversion of Convertible Notes is an Affiliate of the
successor to the Company, that issuer shall join in the supplemental indenture.

     The supplemental indenture shall provide that the Holder of a Convertible
Note may convert it into the kind and amount of securities, cash or other
assets which such Holder would have received immediately after the
consolidation, merger, binding share exchange or transfer if such Holder had
converted the Convertible Note immediately before the effective date of the
transaction, assuming (to the extent applicable) that such Holder (i) was not a
constituent person or an Affiliate of a constituent person to such transaction;
(ii) made no election with respect thereto; and (iii) was treated alike with
the plurality of non-electing Holders. The supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be practical
to the adjustments provided for in this Article IV. The Company shall mail to
Holders a notice briefly describing the supplemental indenture.

     If this Section applies, Section 4.2 does not apply.

     If the Company makes a distribution to all holders of its Common Shares of
any of its assets, or debt securities or any rights, warrants or options to
purchase Convertible Notes of the Company that, but for the provisions of the
last paragraph of Section 4.4, would otherwise result in an adjustment in the
Conversion Rate pursuant to the provisions of Section 4.4, then, from and after
the record date for determining the holders of Common Shares entitled to
receive the distribution, a Holder of a Convertible Note that converts such
Convertible Note in accordance with the provisions of this Indenture shall upon
such conversion be entitled to receive, in addition to the shares of Common
Shares into which the Convertible Note is convertible, the kind and amount of
securities, cash or other assets comprising the distribution that such Holder
would have received if such Holder had converted the Convertible Note
immediately prior to the Record Date for determining the holders of Common
Shares entitled to receive the distribution.

     SECTION 4.9 Company Determination Final.

     Any determination that the Company or its Board of Trustees must make
pursuant to Section 4.1(d), 4.2, 4.3, 4.4, 4.8 or 4.11 is conclusive, absent
manifest error.

     SECTION 4.10 Trustee’s Adjustment Disclaimer.

     The Trustee has no duty to determine when an adjustment under this Article
IV should be made, how it should be made or what it should be. The Trustee has
no duty to determine whether a supplemental indenture under Section 4.8 need be
entered into or whether any
provisions of any supplemental indenture are correct. The Trustee shall
not be accountable for and makes no representation as to the validity or value
of any securities or assets delivered upon conversion of Convertible Notes.
The Trustee shall not be responsible for the Company’s failure to comply with
this Article IV. Each Conversion Agent shall have the same protection under
this

-29-

 

Section 4.10 as the Trustee. Unless and until the Trustee receives a
certificate from the Company setting forth the particulars of an adjustment
under this Article IV, the Trustee may assume without inquiry that no such
adjustment has been, or is required to be, made.

     SECTION 4.11 Simultaneous Adjustments.

     In the event that this Article IV requires adjustments to the Conversion
Rate under more than one circumstance set forth in Sections 4.2 and the record
dates for the distributions giving rise to such adjustments shall occur on the
same date, then such adjustments shall be made by applying the provisions of
Section 4.2.

     SECTION 4.12 Successive Adjustments.

     After an adjustment to the Conversion Rate under this Article IV, any
subsequent event requiring an adjustment under this Article IV shall cause an
adjustment to the Conversion Rate as so adjusted.

     SECTION 4.13 Savings Provisions.

     Notwithstanding any other provision of this Indenture, the Company shall
not be obligated to convert Convertible Notes into Common Shares with respect
to any Holder to the extent that such conversion would result in a violation of
the “Ownership Limit” as defined in Article VIII of the Company’s Declaration
of Trust.

ARTICLE V

COVENANTS

     SECTION 5.1 Restriction on Subsidiary Indebtedness and Preferred
Stock.

     (a) The Company shall not permit the Partnership or any Subsidiary (i) to
incur unsecured Indebtedness, except for (A) Indebtedness payable to the
Company and (B) Indebtedness (not to exceed $4.4 million) issued in exchange
for, or the net proceeds of which are used to refinance, refund, repay or
defease, currently outstanding unsecured Indebtedness payable to third parties
in the amount of $4.4 million, or any refinancings thereof in an amount not to
exceed the amount so refinanced, refunded, repaid or defeased (plus premiums,
accrued interest, fees and expenses) or (ii) to guarantee unsecured
Indebtedness, unless in each case the Convertible Notes will rank pari passu,
with such Indebtedness.

     (b) The Company shall not permit the Partnership to issue, other than to
the Company, preferred units of partnership interest in the Partnership, unless
the Convertible Notes will rank senior to any such preferred units.

     (c) If the Partnership issues its Guarantee of the Convertible Notes in
accordance with the Section 3.1 of the Base Indenture, such Guarantee shall be
deemed to satisfy the foregoing conditions. Notwithstanding the foregoing, the
Company and the Trustee agree that the satisfaction of the provisions of the
immediately preceding sentence shall not be the

-30-

 

exclusive means of satisfying
the restrictions set forth in Section 5.1(a) and 5.1(b) of this Supplemental
Indenture.

     SECTION 5.2 Provision of Financial Information.

     (a) If the Company shall be required to file reports with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act, it will file such reports
by the required date and, within 15 days of such date, deliver copies of all
such reports to the Trustee for, and transmit a copy to, each holder of the
Convertible Notes. If the Company is not required to file reports with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act, it will deliver
to the Trustee and transmit to each holder of the Convertible Notes reports
that contain substantially the same kind of information that would have been
included in annual and quarterly reports filed with the Commission had the
Company been required to file such reports, such information to be delivered or
transmitted within 15 days after the same would have been required to be filed
with the Commission had the Company been required to file such reports.

     (b) Notwithstanding the foregoing, if the Company is not required to file
reports with the Commission because information about the Company is contained
in the reports filed by another entity with the Commission, the delivery to the
Trustee for the Convertible Notes of the reports filed by such entity with the
Commission and the transmittal by mail to all holders of the Convertible Notes
of each annual and quarterly report filed with the Commission by such entity
within the time periods set forth in the preceding sentence shall be deemed to
satisfy the Company’s obligations to provide financial information under the
applicable provisions of the Base Indenture.

ARTICLE VI

MISCELLANEOUS PROVISIONS

     SECTION 6.1 Ratification and Incorporation of Base
Indenture.

     As supplemented by this Supplemental Indenture, the Base Indenture is in
all respects ratified and confirmed, and the Base Indenture together with this
Supplemental Indenture shall be read, taken and construed as one and the same
instrument.

     SECTION 6.2 Governing Law.

     This Supplement and the Convertible Notes shall be governed by, and
construed in accordance with, the laws of the state of New York (without
giving effect to the conflicts of laws principles thereof).

     SECTION 6.3 Counterparts.

     This Supplemental Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.

-31-

 

     SECTION 6.4 Entire Agreement.

     This Supplemental Indenture, together with the Base Indenture, constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof, and fully supersedes any prior of contemporaneous agreements
relating to such subject matter.

[SIGNATURE PAGE FOLLOWS]

-32-

 

     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the day and year first above written.

	 	 	 	 	 
	 	 	CAPITAL AUTOMOTIVE REIT,
	 	 	as Issuer
	 
	 	 	 	 
	 	 	By: /s/ Thomas D. Eckert
	

	 	 	 	

	 	 	Name: Thomas D. Eckert
	 	 	Title: President and Chief Executive Officer

	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	 	 	as Trustee
	 
	 	 	 	 
	 	 	By: /s/ Joseph P. O’Donnell
	

	 	 	 	

	 	 	Name: Joseph P. O’Donnell
	 	 	Title: Assistant Vice President

[SECOND SUPPLEMENTAL TRUST INDENTURE]

 

 

GLOBAL SECURITY

6% CONVERTIBLE NOTES DUE MAY 15, 2024

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

Exhibit A, Page 1

 

 

CAPITAL AUTOMOTIVE REIT

6% CONVERTIBLE NOTES DUE MAY 15, 2024

	 	 	 
	ISIN: US139733AB56
	 	 
	CUSIP No.: 139733AB5
	 	 
	Certificate No.

	 	U.S.$110,000,000

     Capital Automotive REIT, a real estate investment trust organized under
the laws of the State of Maryland (the “Company”), for value received,
hereby promises to pay to CEDE & CO., or registered assigns, the principal sum
of One Hundred Ten Million United States Dollars (U.S.$110,000,000) on May 15,
2024, unless prepaid prior thereto, together with accrued interest thereon at
the rate of 6% per annum.

	1.	 	Interest.

     Interest on this Convertible Note shall be due and payable in accordance
with the terms hereof and of the Indenture (defined below). Interest shall be
payable semi-annually in arrears on each May 15 and November 15, commencing on
November 15, 2004, to registered holders of the Convertible Notes on the last
day of the preceding month. Payments of interest on the Convertible Notes
shall include interest accrued to but excluding the respective Interest Payment
Dates. Interest payments for the Convertible Notes shall be computed and paid
on the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the Convertible Notes is not a Business
Day, then payment of the interest payable on such date shall be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on the date the payment was originally payable.

     Any interest that is not punctually paid or duly provided for on an
Interest Payment Date shall forthwith cease to be payable to the Holders on the
Regular Record Date and may either be paid to the Person or Persons in whose
name the Convertible Notes are registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the
Trustee, notice whereof shall be given to Holders of the Convertible Notes not
less than ten days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange, if any, on which the Convertible Notes shall be listed,
and upon such notice as may be required by any such exchange, all as more fully
provided in the Indenture.

	2.	 	Method of Payment.

     Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of the Redemption Price, Purchase Price, Change in
Control Purchase Price and the principal amount at Stated Maturity, as the case
may be, to the Holder who furnishes appropriate endorsements and transfer
documents relating to the Convertible Note, if required by the Paying Agent to
collect such payments in respect of the Convertible Note. The Company will pay
cash amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
interest, the Redemption Price,

Exhibit A, Page 2

 

Purchase Price, Change in Control Purchase Price and the principal amount
at Stated Maturity, as the case may be, by check or wire payable in such money;
provided, however that a Holder holding Convertible Notes with an aggregate
principal amount in excess of $2,000,000 will be paid by wire transfer in
immediately available funds at the election of such Holder. The Company may
mail an interest check to the Holder’s registered address. Notwithstanding the
foregoing, so long as this Convertible Note is registered in the name of a
Depositary or its nominee, all payments hereon shall be made by wire transfer
of immediately available funds to the account of the Depositary or its nominee.

	3.	 	Paying Agent, Conversion Agent and Registrar.

     Initially, Wells Fargo Bank, National Association (the “Trustee”)
will act as Paying Agent, Conversion Agent, and Registrar. The Company may
appoint and change any Paying Agent, Conversion Agent or Registrar without
notice, other than notice to the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent or Registrar.

	4.	 	Indenture.

     This Note is one of a duly authorized issue of 6% Convertible Notes due
May 15, 2024 (the “Convertible Notes”) issued and to be issued under an
indenture dated as of April 15, 2004 (the “Base Indenture”), as
supplemented by the Second Supplemental Indenture dated May 12, 2004 (the
“Supplemental Indenture,” and collectively with the Base Indenture, the
“Indenture”), by and between the Company and Wells Fargo Bank, National
Association, as trustee (the “Trustee,” which term includes any
successor trustee as permitted under the Indenture). Reference is hereby made
to the Indenture for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Convertible Notes and the terms upon which the Convertible Notes
are, and are to be, authenticated and delivered.

     Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Indenture.

	5.	 	Redemption at the Option of the Company.

     No sinking fund is provided for the Convertible Notes. The Convertible
Notes are not redeemable prior to May 15, 2009. On or after May 15, 2009, the
Convertible Notes are redeemable, at any time in whole or from time to time in
part, for a redemption price equal to 100% of the principal amount of the
Convertible Notes to be redeemed (“Redemption Price”) plus accrued and
unpaid interest up to but not including the Redemption Date; provided that, if
the Redemption Date is on or after a Regular Record Date but on or prior to the
related Interest Payment Date, interest will be payable to the Holders in whose
names the Convertible Notes are registered at the close of business on the
relevant Regular Record Date.

	6.	 	Purchase By the Company at the Option of the Holder.

     Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase at the option of the Holder, all or any portion of
the Convertible Notes held

Exhibit A, Page 3

 

by such Holder, in any integral multiple of $1,000, on May 15, 2009, May
15, 2014 and May 15, 2019 (each, a “Purchase Date”) at a purchase price
equal to 100% of the aggregate principal amount of the Convertible Note (the
“Purchase Price”), together with accrued and unpaid interest up to but
not including the Purchase Date; provided that if the Purchase Date is on or
after a Regular Record Date but on or prior to the related Interest Payment
Date, interest will be payable to the Holders in whose names the Convertible
Notes are registered at the close of business on the relevant Regular Record
Date upon delivery of a Purchase Notice containing the information set forth in
the Indenture, at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date, and upon delivery of the Convertible
Notes to the Paying Agent by the Holder as set forth in the Indenture. The
Company shall be required to pay the Purchase Price in cash, provided, however,
that if an Accounting Event (as defined in the Indenture) has occurred, the
Company may elect to pay the Purchase Price in cash or Common Shares valued at
the Current Market Price.

     At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase the Convertible Notes
held by such Holder 45 Business Days after the occurrence of a Change in
Control of the Company (the “Change in Control Purchase Date”), for a
purchase price equal to 100% of the principal amount thereof (the “Change in
Control Purchase Price”) plus accrued and unpaid interest up to but not
including the Change in Control Purchase Date, which Change in Control Purchase
Price shall be paid in cash.

     Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent
a written notice of withdrawal in accordance with the provisions of the
Indenture.

     If cash sufficient to pay the Purchase Price or Change in Control Purchase
Price, as the case may be, and accrued and unpaid interest if any, of all
Convertible Notes or portions thereof to be purchased as of the Purchase Date
or the Change in Control Purchase Date, as the case may be, is deposited with
the Paying Agent on the Purchase Date or the Change in Control Purchase Date,
interest ceases to accrue on such Convertible Notes (or portions thereof) upon
such Purchase Date or Change in Control Purchase Date, and the Holder thereof
shall have no other rights as such other than the right to receive the Purchase
Price or Change in Control Purchase Price, as the case may be, upon surrender
of such Convertible Note.

	7.	 	Notice of Redemption.

     Notice of redemption pursuant to paragraph 5 of this Convertible Note will
be mailed at least 15 days but not more than 60 days before the Redemption Date
to each Holder of Convertible Notes to be redeemed at the Holder’s registered
address. If money sufficient to pay the Redemption Price of all Convertible
Notes (or portions thereof) to be redeemed on the Redemption Date is deposited
with the Paying Agent prior to or on the Redemption Date, immediately after
such Redemption Date interest ceases to accrue on such Convertible Notes or
portions thereof. Convertible Notes in denominations larger than $1,000 of
principal amount may be redeemed in part but only in integral multiples of
$1,000 of principal amount.

Exhibit A, Page 4

 

	8.	 	Conversion.

     A Holder of a Convertible Note may convert the principal amount of such
Convertible Note (or any portion thereof equal to $1,000 or any integral
multiple of $1,000 in excess thereof) into Common Shares on any Business Day,
subject to the conditions set forth in Section 4.1 of the Indenture; provided,
however, that if such Convertible Note is called for redemption or subject to
purchase upon a Change in Control or upon exercise of the purchase right
described in paragraph 6 above, the conversion right will terminate at the
close of business on the Business Day immediately preceding the Redemption
Date, the Change in Control Purchase Date or a Purchase Date, as the case may
be, for such Convertible Note or such earlier date as the Holder presents such
Convertible Note for redemption or purchase (unless the Company shall default
in paying the redemption payment, Change in Control Purchase Price or a
Purchase Price, as the case may be, when due, in which case the conversion
right shall terminate at the close of business on the date such default is
cured and such Convertible Note is redeemed or purchased, as the case may be).

     The initial conversion price is $35.5679. The initial Conversion Rate is
28.1152 Common Shares per $1,000 principal amount of Convertible Notes. The
number of Common Shares deliverable upon conversion of a Convertible Note is
determined by dividing (x) the principal amount of the Convertible Note, or the
portion thereof being converted, by (y) the Conversion Price in effect on the
Conversion Date.

     A Convertible Note in respect of which a Holder has delivered a Purchase
Notice or Change in Control Purchase Notice exercising the option of such
Holder to require the Company to purchase such Convertible Note may be
converted only if such notice of exercise is withdrawn in accordance with the
terms of the Indenture.

     To surrender a Convertible Note for conversion, a Holder must (i) complete
and manually sign a conversion notice (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent, (ii)
furnish appropriate endorsements and transfer documents, if required by the
Company, the Trustee or the Conversion Agent, (iii) pay any transfer or similar
tax, if required and (iv) in the case of a conversion pursuant to section
4.1(b)(1) of the Indenture, provide the Company with reasonable evidence that
the conditions to such conversion have been satisfied.

	9.	 	Denominations; Transfer; Exchange.

     This Note is a Global Security deposited with the Trustee as custodian for
The Depositary Trust Company (“DTC”) acting as Depositary, and
registered in the name of CEDE & CO., a nominee of DTC, and CEDE & CO., as
holder of record of this Convertible Note, shall be entitled to receive
payments of principal and interest by wire transfer of immediately available
funds. The statements in the legend relating to DTC set forth above are an
integral part of the terms of this Convertible Note and by acceptance thereof
each holder of this Note agrees to be subject to and bound by the terms and
provisions set forth in such legend, if any.

     The Convertible Notes may be issued in denominations of $1,000 of
principal amount and integral multiples of $1,000. A Holder may transfer or
exchange Convertible Notes in

Exhibit A, Page 5

 

accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Convertible Notes selected for
redemption (except, in the case of a Convertible Note to be redeemed in part,
the portion of the Convertible Note not to be redeemed) or any Convertible
Notes in respect of which a Purchase Notice or a Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Convertible
Note to be purchased in part, the portion of the Convertible Note not to be
purchased) or any Convertible Notes for a period of 15 days before the mailing
of a notice of redemption of Convertible Notes to be redeemed.

	10.	 	Persons Deemed Owners.

     The registered Holder of this Convertible Note may be treated as the owner
of this Convertible Note for all purposes.

	11.	 	Amendment; Waiver.

     Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Convertible Notes may be amended with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Convertible Notes at the time outstanding and (ii) certain defaults or
noncompliance with certain provisions may be waived with the written consent of
the Holders of a majority in aggregate principal amount of the Convertible
Notes at the time outstanding. The Indenture or the Convertible Notes may be
amended without the consent of any Holders under circumstances set forth in
Section 9.1 of the Base Indenture.

	12.	 	Defaults and Remedies.

     Under the Indenture, Events of Default include (i) default for three days
in payment of any interest on any Convertible Notes, (ii) default in payment of
the principal amount, Redemption Price, Purchase Price or Change in Control
Purchase Price, as the case may be, in respect of the Convertible Notes when
the same becomes due and payable, (iii) default for 10 Business Days in
converting any Convertible Notes, (iv) failure by the Company to comply with
other agreements in the Indenture or the Convertible Notes, subject to notice
and lapse of time; (v) default by the Company under one or more agreements or
indentures under which the Company or certain related parties then has
outstanding indebtedness in excess of $10 million; and (vi) certain events of
bankruptcy or insolvency.

     Holders of Convertible Notes may not enforce the Indenture or the
Convertible Notes except as provided in the Indenture. The Trustee may refuse
to enforce the Indenture or the Convertible Notes unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority
in aggregate principal amount of the Convertible Notes at the time outstanding
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Convertible Notes notice of any continuing Default
(except a Default in payment of amounts specified in clause (i) or (ii) above)
if it determines that withholding notice is in their interests.

	13.	 	Authentication.

Exhibit A, Page 6

 

     This Convertible Note shall not be valid until an authorized signature of
the Trustee manually signs the Trustee’s Certificate of Authentication with
respect to this Convertible Note.

Exhibit A, Page 7

 

     IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.

Dated as of May 12, 2004.

CAPITAL AUTOMOTIVE REIT

	 	 	 	 	 
	By:

	 	

	 	 
	

	 	Name:	 	 
	

	 	Title:	 	 

CERTIFICATE OF AUTHENTICATION

     This is one of the 6% Convertible Notes due May 15, 2024 referred to in
the within-mentioned Indenture.

WELLS FARGO BANK, NATIONAL ASSOCIATION, AS TRUSTEE

	 	 	 	 	 
	By:

	 	

	 	 
	

	 	Authorized Signatory	 	 

Exhibit A, Page 8

 

ASSIGNMENT FORM

For value received                                                                                                                                                             

hereby sells, assigns and transfers unto

                                                                                                                                                                                                  

                                                                                                                                                                                                  

Please insert social security or

other identifying number of assignee

Please print or type name and address,

including zip code, of assignee:

                                                                                                                                                                                                  

                                                                                                                                                                                                  

                                                                                                                                                                                                  

                                                                                                                                                                                                  

the within Note and does hereby irrevocably constitute and appoint                    Attorney to
transfer the Note on the books of the Company with full power of substitution
in the premises.

	 	 	 
	Date:                     

	 	Your signature:                                                         
	

	 	(Sign exactly as your name
	

	 	appears on the Note)

Exhibit A, Page 9

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