Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.10  

 
 
PURCHASE AGREEMENT  

 Dated as of January 22, 2004  

 among  

 iSTAR FINANCIAL INC.  

 and  

 BEAR, STEARNS & CO. INC.  

 
TABLE OF CONTENTS  

	 
	 	 
	 	 
	 	Page

	PURCHASE AGREEMENT	 	1
	SECTION 1.	 	Representations and Warranties	 	2
	                (a)	 	Representations and Warranties by the Company	 	2
	 	 	(1)	 	SEC Documents	 	2
	 	 	(2)	 	No Material Liabilities	 	2
	 	 	(3)	 	Capitalization	 	2
	 	 	(4)	 	No Registration Rights	 	2
	 	 	(5)	 	No Equity Interests	 	2
	 	 	(6)	 	Market Manipulation	 	2
	 	 	(7)	 	Power and Authority	 	3
	 	 	(8)	 	Authorization of this Agreement	 	3
	 	 	(9)	 	Authorization of Registration Rights Agreement	 	3
	 	 	(10)	 	Authorization and Description of Securities	 	3
	 	 	(11)	 	Absence of Defaults and Conflicts	 	3
	 	 	(12)	 	No Violations	 	4
	 	 	(13)	 	Investment Company Act	 	4
	 	 	(14)	 	Title to Property	 	4
	 	 	(15)	 	Possession of Intellectual Property	 	4
	 	 	(16)	 	Possession of Licenses and Permits	 	4
	 	 	(17)	 	Independent Accountants	 	5
	 	 	(18)	 	Financial Statements	 	5
	 	 	(19)	 	Internal Accounting Controls	 	5
	 	 	(20)	 	Litigation	 	5
	 	 	(21)	 	Dividends and Distributions	 	5
	 	 	(22)	 	REIT Status	 	5
	 	 	(23)	 	Taxes	 	5
	 	 	(24)	 	Insurance	 	6
	 	 	(25)	 	Pension Plans	 	6
	 	 	(26)	 	Absence of Labor Dispute	 	6
	 	 	(27)	 	Environmental Laws	 	6
	 	 	(28)	 	Other Agreements	 	7
	 	 	(29)	 	Absence of Materially Adverse Change	 	7
	 	 	(30)	 	No Receiver or Liquidator	 	7
	 	 	(31)	 	Rule 144A Eligibility	 	7
	 	 	(32)	 	Integration; No General Solicitation	 	7
	                (b)	 	Officers' Certificates	 	8
	SECTION 2.	 	Sale and Delivery to the Initial Purchaser; Closing	 	8
	                (a)	 	Preferred Stock	 	8
	                (b)	 	Payment	 	8
	                (c)	 	Qualified Institutional Buyer; Accredited Investor	 	8
	                (d)	 	Denominations; Registration	 	8
	SECTION 3.	 	Covenants of the Company	 	8
	                (a)	 	Notice and Effect of Material Events	 	8
	                (b)	 	Blue Sky Qualifications	 	8
	                (c)	 	Rule 158	 	9
	                (d)	 	Reporting Requirements	 	9
	                (e)	 	Qualification as a REIT	 	9
	 	 	 	 	 	 	 

i

 

	                (f)	 	Ratings	 	9
	                (g)	 	Registration Rights Agreement	 	9
	                (h)	 	Liquidity	 	9
	SECTION 4.	 	Payment of Expenses	 	10
	                (a)	 	Expenses	 	10
	                (b)	 	Termination of Agreement	 	10
	SECTION 5.	 	Conditions of Initial Purchaser's Obligations	 	10
	                (a)	 	Execution of Registration Rights Agreement	 	10
	                (b)	 	Opinions of Counsel for Company	 	10
	                (c)	 	Opinion of Counsel for Initial Purchaser	 	10
	                (d)	 	Officers' Certificate	 	11
	                (e)	 	Maintenance of Rating	 	11
	                (f)	 	Additional Documents	 	11
	                (g)	 	Termination of this Agreement	 	11
	SECTION 6.	 	Indemnification	 	11
	                (a)	 	Indemnification of the Initial Purchaser by the Company	 	11
	                (b)	 	Actions against Parties; Notification	 	12
	SECTION 7.	 	Contribution.	 	12
	SECTION 8.	 	Representations, Warranties and Agreements to Survive Delivery	 	14
	SECTION 9.	 	Termination	 	14
	                (a)	 	Termination; General	 	14
	                (b)	 	Liabilities	 	14
	SECTION 10.	 	Default by the Company.	 	14
	SECTION 11.	 	Notices	 	15
	SECTION 12.	 	Parties	 	15
	SECTION 13.	 	GOVERNING LAW AND TIME	 	15
	SECTION 14.	 	Effect of Headings	 	15
	

SCHEDULE A	
 	

SUBSIDIARIES	
 	

Sch. A-1
	EXHIBIT A	 	FORM OF REGISTRATION RIGHTS AGREEMENT	 	Exh. A-1
	EXHIBIT B	 	FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY TO BE DELIVERED PURSUANT TO SECTION 5(b)	 	Exh. B-1

ii

   iSTAR FINANCIAL INC.
  (a Maryland corporation) 

3,300,000
Shares of Series H Variable Rate Preferred Stock 

Liquidation
Preference $25.00 per share 

PURCHASE
AGREEMENT 

January 22,
2004 

Bear,
Stearns & Co. Inc.

383 Madison Avenue

New York, New York 10179 

Ladies
and Gentlemen: 

        iStar
Financial Inc., a Maryland corporation (the "Company") confirms its agreement with Bear, Stearns & Co. Inc. (the "Initial Purchaser") with respect to the issue
and sale by the Company and the purchase by the Initial Purchaser of 3,300,000 shares of its Series H Variable Rate Preferred Stock, par value $.001 per share, with a liquidation preference of
$25.00 per share (the "Preferred Stock"). 

        The
Preferred Stock will be authorized by, and subject to the terms and conditions of, the Company's Articles Supplementary, as defined herein. 

        The
Initial Purchaser and its direct and indirect transferees shall be entitled to the benefits of a Registration Rights Agreement, to be dated as of the Closing Time (as hereinafter
defined) and to be substantially in the form attached hereto as Exhibit A (the "Registration Rights Agreement"). 

        All
references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the SEC Documents (as hereinafter defined)
(or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which are incorporated by reference in the SEC Documents, and
all references in this Agreement to amendments or supplements to the SEC Documents shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated by reference in the SEC Documents. 

        The
term "subsidiary" means a corporation, partnership or other entity, a majority of the outstanding voting stock, partnership interests or other equity interests, as the case may be,
of which is owned or controlled, directly or indirectly, by the Company or by one or more other subsidiaries of the Company. 

1

 

        SECTION 1.    Representations and Warranties.    

        (a)    Representations and Warranties by the Company.    The Company represents and warrants to the Initial Purchaser,
as of the date hereof and as of the Closing Time (as defined below) (in each case, a "Representation Date"), and agrees with the Initial Purchaser, as follows: 

        (1)    SEC Documents.    The Company has filed all documents with the Securities Exchange Commission (the
"Commission") that it is required to file under the Securities Act of 1933 (the "1933 Act") and the 1934 Act, as applicable (the "SEC Documents"), and, at the time so filed, such documents conformed
in all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder and, at the time so filed, none of such
documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and for so long as the Initial Purchaser owns any shares of the Preferred Stock, any further documents so filed and incorporated by reference
in the documents filed with the Commission or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder and will 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 the light of the circumstances under which they were made, not misleading. 

        (2)    No Material Liabilities.    Subsequent to the respective dates as of which information is given in the SEC
Documents (x) the Company and its subsidiaries, taken as a whole, have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in
the ordinary course of business; (y) the Company has not purchased any of its outstanding capital stock; and (z) there has not been any material change in the capital stock of the
Company, or in the short-term or long-term debt of the Company and its subsidiaries, taken as a whole, except in each case as described in or contemplated by the SEC Documents. 

        (3)    Capitalization.    The Company has an authorized, issued and outstanding capitalization as set forth in the SEC
Documents. All of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. 

        (4)    No Registration Rights.    No holder of securities of the Company or any of its subsidiaries will be entitled
to have such securities registered under the registration statement required to be filed by the Company pursuant to the Registration Rights Agreement. 

        (5)    No Equity Interests.    Except for the shares of capital stock of each of the subsidiaries owned by the Company
and such subsidiaries, neither the Company nor any such subsidiary owns any shares of stock or any other equity securities of any corporation or has any equity interest in any firm, partnership,
association or other entity, except in connection with an investment in its ordinary course of business, or as otherwise described in or contemplated by the SEC Documents. 

        (6)    Market Manipulation.    Neither the Company nor any of its affiliates, nor any person acting on behalf of any
of them has, directly or indirectly, taken any action designed to cause or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation
of the price of the Preferred Stock. 

2

 

        (7)    Power and Authority.    The Company has been duly incorporated and is validly existing as a corporation in good
standing under the law of its jurisdiction of incorporation with full power and authority to own, lease and operate its properties and assets and conduct its business as described in the SEC
Documents, is duly qualified to transact business and is in good standing in each jurisdiction in which its ownership, leasing or operation of its properties or assets or the conduct of its business
requires such qualification, except where the failure to be so qualified does not amount to a material liability or disability to the Company and its subsidiaries, taken as a whole, and has full power
and authority to execute and perform its obligations under this Agreement and the Registration Rights Agreement; each subsidiary of the Company is duly organized and validly existing and in good
standing under the laws of its jurisdiction of organization and is duly qualified to transact business and is in good standing in each
jurisdiction in which its ownership, leasing or operation of its properties or assets or the conduct of its business requires such qualification, except where the failure to be so qualified does not
amount to a material liability or disability to the Company and its subsidiaries, taken as a whole, and each has full power and authority to own, lease and operate its properties and assets and
conduct its business as described in the SEC Documents; all of the issued and outstanding shares of capital stock of each of the Company's subsidiaries have been duly authorized and are fully paid and
non-assessable and, except for SFT II, Inc., pledges made in connection with the Company's $300 million revolving credit facility maturing in July 2004 and as
otherwise set forth in the SEC Documents, are owned beneficially by the Company free and clear of any security interests, liens, encumbrances, equities or claims. The only subsidiaries of the Company
are the subsidiaries listed on Schedule A hereto. 

        (8)    Authorization of this Agreement.    The execution and delivery of this Agreement has been duly authorized by
all necessary corporate action of the Company, and this Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery by the other parties
hereto, will be the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms. 

        (9)    Authorization of Registration Rights Agreement.    The execution and delivery of the Registration Rights
Agreement has been duly authorized by all necessary corporate action of the Company, and the Registration Rights Agreement has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by the other parties hereto, will be the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms. 

        (10)    Authorization and Description of Securities.    The shares of Preferred Stock to be purchased by the Initial
Purchaser from the Company have been duly authorized for issuance and sale to the Initial Purchaser pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth herein, the Preferred Stock will be validly issued and fully paid and non-assessable; at or prior to the date hereof, the Company will have
executed and filed the Articles Supplementary (the "Articles Supplementary") to the Company's Charter establishing the terms of the Preferred Stock with the State Department of Assessments and
Taxation of Maryland; no holder of the Preferred Stock will be subject to personal liability by reason of being such a holder; and the issuance of the Preferred Stock is not subject to the preemptive
or other similar rights of any securityholder of the Company. 

        (11)    Absence of Defaults and Conflicts.    The execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement and the Registration Rights Agreement, the compliance by the Company with the provisions of this Agreement and the Registration Rights Agreement and
the consummation of the transactions herein and therein contemplated do not (x) require the consent, approval, authorization, 

3

 

registration
or qualification of or with any governmental authority, except such as have been obtained or made or such as may be required by the state securities or Blue Sky laws of the various states
of the United States of America or other U.S. jurisdictions in connection with resales of the Preferred Stock by the Initial Purchaser, or (y) conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or any of their respective properties are bound, or the charter documents or bylaws of the Company or any of its subsidiaries, or any statute
or any judgment, decree, order, rule or regulation of any court or other governmental authority or any arbitrator applicable to the Company or any of its subsidiaries. 

        (12)    No Violations.    Neither the Company nor any of its subsidiaries is in violation of any term or provision of
its charter documents or bylaws, or in breach of or in default under any statute or any judgment, decree, order, rule or regulation of any court or other governmental authority or any arbitrator
applicable to the Company or any of its subsidiaries, the consequence of which violation, breach or default would have a materially adverse effect on or constitute a materially adverse change in, or
constitute a development involving a prospective materially adverse effect on or change in, the condition (financial or otherwise), earnings, properties, business affairs or business prospects, net
worth or results of operations of the Company or of its subsidiaries, taken as a whole (a "Material Adverse Effect"). 

        (13)    Investment Company Act.    The Company is not an "investment company" and, after giving effect to the offering
of the Preferred Stock contemplated by this Agreement and the application of the proceeds therefrom to redeem the Company's outstanding 93/8% Series B Cumulative Redeemable
Preferred Stock and its 9.20% Series C Cumulative Redeemable Preferred Stock, will not be an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act"). 

        (14)    Title to Property.    The Company and each of its subsidiaries have good and marketable title in fee simple to
all items of real property and marketable title to all personal property owned by each of them, in each case free and clear of any security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of such property and do not interfere with the use made or proposed to be made of such property by the Company or such
subsidiary, and any real property and buildings held under lease by the Company or any such subsidiary are held under valid, subsisting and enforceable leases, with such exceptions as are not material
and do not interfere with the use made or proposed to be made of such property and buildings by the Company or such subsidiary, in each case except as described in or contemplated by the SEC
Documents. 

        (15)    Possession of Intellectual Property.    The Company and its subsidiaries own or possess, or can acquire on
reasonable terms, all material patents, patent applications, trademarks, service marks, trade names, licenses, know-how, copyrights, trade secrets and proprietary or other confidential
information necessary to operate the business now operated by them, and neither the Company nor any such subsidiary has received any notice of infringement of or conflict with asserted rights of any
third party with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect, except as
described in or contemplated by the SEC Documents. 

        (16)    Possession of Licenses and Permits.    The Company and its subsidiaries possess all consents, licenses,
certificates, authorizations and permits issued by the appropriate federal, 

4

 

state
or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any such subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, except as described in or contemplated by the SEC Documents. 

        (17)    Independent Accountants.    PriceWaterhouseCoopers LLP, who has certified certain financial statements of the
Company and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements and schedules included or incorporated in the SEC Documents, are
independent public accountants as required by the 1933 Act and the 1933 Act Regulations. 

        (18)    Financial Statements.    The consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included or incorporated in the SEC Documents were prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied throughout the periods
involved (except as otherwise noted therein) and they present fairly the financial condition of the Company as at the dates at which they were prepared and the results of operations of the Company in
respect of the periods for which they were prepared. The financial information included in the SEC Documents complies with the requirements of Regulation G and Item 10 of
Regulation S-K of the Commission. 

        (19)    Internal Accounting Controls.    The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (w) transactions are executed in accordance with management's general or specific authorizations; (x) transactions are
recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (y) access to assets is permitted only in accordance with
management's general or specific authorization; and (z) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. 

        (20)    Litigation.    No legal or governmental proceedings are pending or threatened to which the Company or any of
its subsidiaries is a party or to which the property of the Company or any of its subsidiaries is subject that would be required to be described in a prospectus filed pursuant to the 1933 Act and are
not described therein; and no statutes, regulations, contracts or other documents that are required to be described or incorporated in the SEC Documents are not described or incorporated therein as
required. 

        (21)    Dividends and Distributions.    The Company is not currently prohibited, directly or indirectly, from paying
any dividends or making any other distribution on its capital stock, in each case except for restrictions upon the occurrence of a default or failure to meet financial covenants or conditions under
existing agreements. 

        (22)    REIT Status.    The Company is organized in conformity with the requirements for qualification as a real
estate investment trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and its method of operation as described in the SEC Documents has
enabled it since January 1, 1998, and will enable it to continue, to meet the requirements for taxation as a REIT under the Code. 

        (23)    Taxes.    The Company has filed all foreign, federal, state and local tax returns that are required to be
filed or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect) and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it (except in any case in which the failure so to pay would not have a Material Adverse Effect), to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is 

5

 

currently
being contested in good faith or as described in or contemplated by the SEC Documents. 

        (24)    Insurance.    The Company and each of its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor any such subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect, except as described in
or contemplated by the SEC Documents. 

        (25)    Pension Plans.    The Company and each of its subsidiaries are in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA)
for which the Company would reasonably be expected to have any liability; the Company has not incurred and does not expect to incur liability under (x) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (y) Sections 412 or 4971 of the Code or the regulations and published interpretations thereunder; and each "pension plan" for
which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service to the effect
that it is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the plan to not be adversely affected by such determination. 

        (26)    Absence of Labor Dispute.    No labor dispute with the employees of the Company or any of its subsidiaries
exists or is threatened or imminent that could have a Material Adverse Effect, except as described in or contemplated by the SEC Documents. 

        (27)    Environmental Laws.    Except as described in or contemplated by the SEC Documents, and except as would not
otherwise reasonably be expected to have a Material Adverse Effect, (A) the Company and each of its subsidiaries is in compliance with and not subject to any known liability under applicable
Environmental Laws (as defined below), (B) the Company and each of its subsidiaries has made all filings and provided all notices required under any applicable Environmental Law,
(C) there is no civil, criminal or administrative action, suit, demand, claim, hearing, notice of violation, investigation, proceeding, notice or demand letter or request for information
pending or, to the best knowledge of the Company, threatened against the Company or any of its subsidiaries under any Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or property owned, operated or leased by the Company or any of its subsidiaries, (E) neither the Company nor any of its
subsidiaries has received notice that it has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable law, (F) no property owned or operated by the Company or any of its subsidiaries is (i) listed or, to the best knowledge of the Company, proposed for
listing on the National Priorities List under CERCLA or (ii) listed in the Comprehensive Environmental Response, Compensation and Liability Information System List promulgated pursuant to
CERCLA, or on any comparable list maintained by any governmental authority, (G) neither the Company nor any of its subsidiaries is subject to any order, decree or agreement requiring, or
otherwise obligated or required to perform any response or corrective action under any Environmental Law, (H) there are no past or present 

6

 

actions,
occurrences or operations which could reasonable be expected to prevent or interfere with compliance by the Company with any applicable Environmental Law or to result in liability under any
applicable Environmental Law. For purposes of this Agreement, "Environmental Laws" means the common law and all applicable foreign, federal, provincial, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder, relating to pollution or protection of public or employee health and safety or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to (i) emissions, discharges, releases
or threatened releases of Hazardous Materials into the environment, (ii) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of
Hazardous Materials and (iii) underground and aboveground storage tanks and related piping, and emissions, discharges, releases or threatened releases therefrom. "Hazardous Material" means any
pollutant, contaminant, waste, chemical, substance or constituent, including, without limitation, petroleum or petroleum products subject to regulation or which can give rise to liability under any
Environmental Laws. 

        (28)    Other Agreements.    No default exists, and no event has occurred which, with notice or lapse of time or both,
would constitute a default in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their respective properties is bound, except any default that would not have a Material
Adverse Effect. 

        (29)    Absence of Materially Adverse Change.    Subsequent to the respective dates as of which information is given
in the SEC Documents, neither the Company nor any of its subsidiaries has sustained any material loss or interference with their respective businesses or properties from fire, flood, hurricane,
accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding, and there has been no materially adverse change (including, without
limitation, a change in management or control), or development involving a prospective materially adverse change, in the condition (financial or otherwise), management, earnings, property, business
affairs or business prospects, stockholders' equity, net worth or results of operations of the Company or any of its subsidiaries, taken as a whole, other than as described in or contemplated by the
SEC Documents. 

        (30)    No Receiver or Liquidator.    No receiver or liquidator (or similar person) has been appointed in respect of
the Company or any subsidiary of the Company or in respect of any part of the assets of the Company or any subsidiary of the Company; no resolution, order of any court, regulatory body, governmental
body or otherwise, or petition or application for an order, has been passed, made or presented for the winding up of the Company or any subsidiary of the Company or for the protection of the Company
or any such subsidiary from its creditors; and the Company has not, and no subsidiary of the Company has, stopped or suspended payments of its debts, become unable to pay its debts or otherwise become
insolvent. 

        (31)    Rule 144A Eligibility.    No securities of the Company or any of its subsidiaries are of the same class
(within the meaning of Rule 144A under the 1933 Act) as the Preferred Stock and listed on a national securities exchange registered under Section 6 of the 1934 Act, or quoted in a U.S.
automated inter-dealer quotation system. 

        (32)    Integration; No General Solicitation.    None of the Company, or any of its subsidiaries or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D 

7

 

under
the 1933 Act) has directly, or through any agent, (i) sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any "security" (as defined in the 1933 Act)
that is or could be integrated with the sale of the Preferred Stock in a manner that would require the registration under the 1933 Act of the Preferred Stock or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in Regulation D under the 1933 Act) in connection with the offering of the Preferred Stock or in any manner involving a
public offering within the meaning of Section 4(2) of the 1933 Act. Assuming the accuracy of the representations and warranties of the Initial Purchaser in Section 2(c) hereof, it is not
necessary in connection with the offer, sale and delivery of the Preferred Stock to the Initial Purchaser in the manner contemplated by this Agreement to register any of the Preferred Stock under the
1933 Act. 

        (b)    Officers' Certificates.    Any certificate signed by any officer of the Company or any of its subsidiaries
delivered to the Initial Purchaser or to counsel for the Initial Purchaser shall be deemed a representation and warranty by the Company to the Initial Purchaser as to the matters covered thereby. 

        SECTION 2.    Sale and Delivery to the Initial Purchaser; Closing.    

        (a)    Preferred Stock.    On the basis of the representations and warranties contained herein and subject to the
terms and conditions herein set forth, the Company agrees to sell the Preferred Stock to the Initial Purchaser and the Initial Purchaser agrees to purchase the Preferred Stock from the Company, at a
price of $25.00 per share, or $82,500,000.00 in the aggregate. 

        (b)    Payment.    Payment of the purchase price for, and delivery of, the Preferred Stock shall be made at the office
of Clifford Chance US LLP, 200 Park Avenue, New York, New York 10166-0153, or at such other place as shall be agreed upon by the Initial Purchaser and the Company, at
11:00 A.M. (Eastern time) on January 22, 2004 (such time and date of payment and delivery being herein called "Closing Time"). 

        Payment
shall be made to the Company by wire transfer of same day funds payable to the order of the Company, against delivery to the Initial Purchaser or its designee. 

        (c)    Qualified Institutional Buyer; Accredited Investor.    The Initial Purchaser represents and warrants to, and
agrees with, the Company that it is a "qualified institutional buyer" within the meaning of Rule 144A under the 1933 Act and an "accredited investor" within the meaning of Rule 501(a)
under the 1933 Act. 

        (d)    Denominations; Registration.    The Preferred Stock shall be registered in the name of the Initial Purchaser.
The Preferred Stock shall be made available for examination by the Initial Purchaser in The City of New York at Closing Time. 

        SECTION 3.    Covenants of the Company.    

        The
Company covenants with the Initial Purchaser as follows: 

        (a)    Notice and Effect of Material Events.    The Company shall comply with the 1933 Act, and 1934 Act and the rules
and regulations of the Commission promulgated thereunder and immediately notify the Initial Purchaser, and confirm such notice in writing, of (x) any filing made by the Company of information
relating to the offering of the Preferred Stock with the Commission, the National Association of Securities Dealers, Inc. (the "NASD"), the New York Stock Exchange (the "NYSE") or any
securities exchange or any other regulatory body in the United States or any other jurisdiction, and (y) so long as the Initial Purchaser owns Preferred Stock, any material changes in or
affecting the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company which (i) make any statement in the SEC Documents false or misleading or
(ii) are not disclosed in the SEC Documents. In such event or if 

8

 

during
such time any event shall occur as a result of which it is necessary, in the reasonable opinion of any of the Company, its counsel, the Initial Purchaser or counsel for the Initial Purchaser,
to amend or supplement the SEC Documents in order that the SEC Documents not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances then existing, the Company shall forthwith amend or supplement the SEC Documents by preparing and furnishing to the Initial Purchaser an
amendment or amendments of, or a supplement or supplements to, the SEC Documents (in form and substance satisfactory in the reasonable opinion of counsel for the Initial Purchaser) so that, as so
amended or supplemented, the SEC Documents shall not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances, not misleading. 

        (b)    Blue Sky Qualifications.    The Company shall use its best efforts, in cooperation with the Initial Purchaser,
to qualify the Preferred Stock for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Initial Purchaser may designate and to
maintain such qualifications in effect for a period of not less than one year from the date of this Agreement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify or register as a foreign partnership or as a dealer in securities in any jurisdiction in which it is not so qualified
or registered, or provide any undertaking or make any change in its Charter or by-laws that the Board of Directors of the Company reasonably determines to be contrary to the best interests
of the Company or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Preferred Stock have been so
qualified or registered, the Company shall file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than
one year from the date of this Agreement. 

        (c)    Rule 158.    The Company shall timely file such reports pursuant to the 1934 Act as are necessary in
order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act. 

        (d)    Reporting Requirements.    The Company, during the period when the shares of Preferred Stock are outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3) under the 1933 Act,
shall file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934 Act Regulations. 

        (e)    Qualification as a REIT.    The Company shall use its best efforts to continue to meet the requirements to
qualify as a REIT under the Code, subject to the fiduciary duties of the Board of Directors of the Company to direct the management of the business of the Company in the best interest of the Company. 

        (f)    Ratings.    If the Preferred Stock is still outstanding on May 22, 2004 (the "Reset Date"), the Company
shall take all reasonable action necessary to enable Standard & Poor's Ratings Services ("S&P"), Moody's Investors Service, Inc. ("Moody's") or any other nationally recognized
statistical rating organization, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, to provide their respective credit ratings of the Preferred Stock. 

        (g)    Registration Rights Agreement.    The Company shall comply with all of the terms and conditions of the
Registration Rights Agreement. 

        (h)    Liquidity.    During the period prior to the Reset Date, unless and until the Preferred Stock is redeemed by
the Company, the Company will maintain a minimum liquidity amount equal 

9

 

to
no less than the par amount of the Preferred Stock of $82,500,000 (the "Liquidity Covenant"). The Liquidity Covenant can be satisfied through a combination of cash and cash equivalents, marketable
securities and/or any withdrawn liquidity under any of the Company's existing credit facilities. 

        SECTION 4.    Payment of Expenses.    

        (a)    Expenses.    The Company shall pay all expenses incident to the performance of its obligations under this
Agreement and the Registration Rights Agreement, including (i) the preparation, printing and delivery to the Initial Purchaser of this Agreement, the Registration Rights Agreement and such
other documents as may be required in connection with the offering, purchase, sale and delivery of the Preferred Stock, (ii) the preparation, issuance and delivery of certificates for the
Preferred Stock to the Initial Purchaser, including any transfer taxes, any stamp or other duties payable upon the sale, issuance and delivery of the Preferred Stock to the Initial Purchaser in
connection herewith, (iii) the fees and disbursements of the Company's counsel, accountants and other advisors or agents (including transfer agents and registrars), (iv) the
qualification of the Preferred Stock under state securities and real estate syndication laws in accordance with the provisions of Section 3(b) hereof, including filing fees and the reasonable
fees and disbursements of counsel for the Initial Purchaser in connection therewith and in connection with the preparation, printing and delivery of a blue sky survey, (v) the fees charged
by nationally recognized statistical rating organizations for the rating of the Preferred Stock, if applicable, and (vi) the reasonable fees and disbursements of counsel for the Initial
Purchaser. 

        (b)    Termination of Agreement.    If this Agreement is terminated by the Initial Purchaser in accordance with the
provisions of Section 5(g) or Section 9(a) hereof, the Company shall reimburse the Initial Purchaser for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Initial Purchaser. 

        SECTION 5.    Conditions of Initial Purchaser's Obligations.    

        The
obligations of the Initial Purchaser are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any
officer of the Company delivered pursuant to the provisions hereof, to the performance by the Company of their covenants and other obligations hereunder, and to the following further conditions: 

        (a)    Execution of Registration Rights Agreement.    At Closing Time, the Company shall have executed and delivered
the Registration Rights Agreement, substantially in the form attached hereto as Exhibit A. 

        (b)    Opinions of Counsel for Company.    At Closing Time, the Initial Purchaser shall have received the favorable
opinion, dated as of Closing Time, of Clifford Chance US LLP, special counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchaser, to the effect set forth in
Exhibit B hereto, and the favorable opinion of Venable LLP, Maryland counsel for the Company, in form and substance satisfactory to counsel for the Initial Purchaser. 

        (c)    Opinion of Counsel for Initial Purchaser.    At Closing Time, the Initial Purchaser shall have received the
favorable opinion, dated as of Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial Purchaser with respect to certain legal matters relating to this Agreement and
such other related matters as the Initial Purchaser may reasonably require. In giving such opinion such counsel need not opine as to matters governed by the laws of jurisdictions other than the law of
the State of New York and the federal law of the United States. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and certificates of public officials. 

10

 

        (d)    Officers' Certificate.    At Closing Time, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the SEC Documents, any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Initial Purchaser shall have received a certificate of the Chief Executive Officer of the Company and of the Chief Financial Officer of the Company, dated as of
Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties in Section 1(a) hereof are true and correct with the
same force and effect as though expressly made at and as of the Closing Time, as applicable, and (iii) the Company has complied with all agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Closing Time. 

        (e)    Maintenance of Rating.    If the Preferred Stock is still outstanding at the Reset Date, the Preferred Stock
shall be rated at least "Ba3" by Moody's and "B+" by S&P, and the Company shall deliver to the Initial Purchaser a letter dated the Reset Date, from each such rating agency, or other evidence
satisfactory to the Initial Purchaser, confirming that the Preferred Stock has such ratings; and at the Closing Time, since the date of this Agreement, there shall not have occurred a downgrading in
the rating assigned to any of the Company's other securities by any "nationally recognized statistical rating organization," as that term is defined by the Commission for purposes for
Rule 436(g)(2) under the 1933 Act, and no such securities rating agency shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating
of any of the Company's other securities. 

        (f)    Additional Documents.    At Closing Time, counsel for the Initial Purchaser shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Preferred Stock as herein contemplated, or in order to evidence the accuracy of
any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the
Preferred Stock as herein contemplated shall be satisfactory in form and substance to the Initial Purchaser and counsel for the Initial Purchaser. 

        (g)    Termination of this Agreement.    If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Initial Purchaser by notice to the Company at any time at or prior to the Closing Time, and such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof, and except that Sections 1, 6 and 7 hereof shall survive any such termination and
remain in full force and effect. 

        SECTION 6.    Indemnification.    

        (a)    Indemnification of the Initial Purchaser by the Company.    The Company shall indemnify and hold harmless the
Initial Purchaser and each person, if any, who controls the Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, (i) against any and
all losses, liabilities, claims, damages and expenses whatsoever as incurred (including but not limited to attorneys' fees and any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of
them may become subject under the 1933 Act, the 1934 Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in the SEC Documents, as originally filed or any amendment thereof, or in any supplement thereto or amendment thereof, 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, 

11

 

in
the light of the circumstances under which such statements were made, not misleading or (ii) against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred
(including but not limited to attorneys' fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or litigation) arising out of a breach by the Company of the representations and warranties contained in Section 1 hereof.
This indemnity agreement will be in addition to any liability which the Company may otherwise have, including but not limited to other liability under this Agreement. 

        (b)    Actions against Parties; Notification.    Promptly after receipt by an indemnified party under
subsection (a) above of notice of any claims or the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the Company under such
subsection, notify the Company in writing of the claim or the commencement thereof (but the failure so to notify the Company shall not relieve the Company from any liability which it may have under
this Section 6 to the extent that it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability that the Company may have otherwise than on
account of the indemnity agreement hereunder). In case any such claim or action is brought against any indemnified party, and it notifies the Company of the commencement thereof, the Company will be
entitled to participate, at its own expense in the defense of such action, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid
notice from the indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided however, that
counsel to the Company shall not (except with the written consent of the indemnified party) also be counsel to the indemnified party. Notwithstanding the foregoing, the indemnified party or parties
shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the Company shall not have employed
counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, (iii) the Company does not diligently defend the action after
assumption of the defense, or (iv) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to
those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company. In no event shall the Company be liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from its own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. The Company shall not, without the prior written consent of the Company, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any
pending or threatened claim, investigation, action or proceeding in respect of which indemnity or contribution may be or could have been sought by an indemnified party under this Section 6 or
Section 7 hereof (whether or not the indemnified party is an actual or potential party thereto), unless (x) such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such claim, investigation, action or proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or any failure to act, by or on behalf of the indemnified party, and (y) the Company confirms in writing its indemnification obligations hereunder with respect to such settlement,
compromise or judgment. 

        SECTION 7.    Contribution.    In order to provide for contribution in circumstances in which the
indemnification provided for in Section 6 hereof is for any reason held to be unavailable from the Company or is insufficient to hold harmless a party indemnified thereunder, the Company and
the 

12

 

Initial
Purchaser shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal
and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by the Company from persons, other than the Initial Purchaser, who may also be liable for contribution, including persons
who control the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, officers of the Company who signed the applicable SEC Documents and directors of
the Company) as incurred to which the Company and the Initial Purchaser may be subject, in such proportions as is appropriate to reflect the relative benefits received by the Company and the Initial
Purchaser from the sale of the Preferred Stock contemplated herein or, if such allocation is not permitted by applicable law, in such proportions as are appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the Initial Purchaser in connection with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company shall be deemed to equal the total proceeds from the sale of the
Preferred Stock contemplated herein received by the Company and (y) the relative benefits received by the Initial Purchaser shall be deemed to equal the difference, if any, between
(i) the total proceeds received by the Initial Purchaser upon the resale of the Preferred Stock and (ii) the amount the Initial Purchaser paid for the Preferred Stock pursuant to
Section 2(a) hereof (the relative benefits defined in this clause (y), the "Initial Purchaser Relative Benefits"). The relative fault of each of the Company and of the Initial Purchaser
shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Initial Purchaser and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The
Company and the Initial Purchaser agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations referred to above in this Section. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any judicial, regulatory or other legal or governmental agency or body, commenced or threatened, or any claim whatsoever based
upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 7, (i) the Initial Purchaser shall not be required to
contribute any amount in excess of the amount the Initial Purchaser Relative Benefits exceed the amount of any damages which the Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission and (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person, if any, who controls the Initial Purchaser
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Initial Purchaser, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, each officer of the Company who shall have signed the applicable SEC Documents and each
director of the Company shall have the same rights to contribution as the Company, subject in each case to clauses (i) and (ii) of the immediately preceding sentence. Any party entitled to
contribution will, promptly after receipt of notice of commencement of
any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this
Section 7 or otherwise. 

13

 

        SECTION 8.    Representations, Warranties and Agreements to Survive Delivery.    

        All
representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or authorized representatives of the Company submitted pursuant
hereto or thereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Initial Purchaser or any controlling person, or by or on behalf of
the Company, and shall survive delivery of and payment for the Preferred Stock. 

        SECTION 9.    Termination.    

        (a)    Termination; General.    The Initial Purchaser may terminate this Agreement, by notice to the Company, at any
time after the date hereof and at or prior to the Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is
given in the SEC Documents, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if any domestic or international event or act or occurrence has materially disrupted, or in the
opinion of the Initial Purchaser will in the immediate future materially disrupt, the market for the Company's securities or securities in general; or (iii) if trading on The New York Stock
Exchange ("the NYSE") or The NASDAQ National Market (the "NASDAQ") shall have been suspended or been made subject to material limitations, or minimum or maximum prices for trading shall have been
fixed, or maximum ranges for prices for securities shall have been required, on the NYSE or the NASDAQ or by order of the Commission or any other governmental authority having jurisdiction; or
(iv) if a banking moratorium has been declared by any state or federal authority or if any material disruption in commercial banking or securities settlement or clearance services shall have
occurred; or (v) if any downgrading shall have occurred in the Company's corporate credit rating or the rating accorded the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the 1933 Act) or if any such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the Company's debt securities or preferred stock; or (vi) (A) if there shall have occurred any outbreak or escalation
of hostilities or acts of terrorism involving the United States or there is a declaration of a national emergency or war by the United States or (B) if there shall have been any other calamity
or crisis or any change in political, financial or economic conditions if the effect of any such event in (ii) or (iii), in the judgment of the Initial Purchaser, makes it impracticable
or inadvisable to proceed with the sale and purchase of the Preferred Stock on the terms and in the manner contemplated by this Agreement. 

        (b)    Liabilities.    If this Agreement is terminated pursuant to this Section 9, such termination shall be
without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7 and 8 hereof shall survive such termination and
remain in full force and effect. 

        SECTION 10.    Default by the Company.    If the Company shall fail to sell and deliver the Preferred Stock
which the Company is obligated to sell hereunder, then the Initial Purchaser may, at its option, by notice to the Company, terminate this Agreement without any liability on the part of any
non-defaulting party except that the provisions of Sections 1, 4, 6, 7 and 8 hereof shall remain in full force and effect. No action taken pursuant to this Section 10 shall
relieve the Company so defaulting from liability, if any, in respect of such default. 

        In
the event of a default by the Company as referred to in this Section 10, each of the Initial Purchaser and the Company shall have the right to postpone Closing Time for a
period not exceeding seven days in order to effect any required change in the SEC Documents or in any other documents or arrangements. 

14

 

        SECTION 11.    Notices.    

        All
notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices
to the Initial Purchaser shall be directed to the Initial Purchaser at Bear, Stearns & Co. Inc., 383 Madison Avenue, New York, New York 10179, and notices to the Company shall be
directed to iStar Financial Inc., 1114 Avenue of the Americas, 27th Floor, New York, New York 10036. 

        SECTION 12.    Parties.    

        This
Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person, firm or corporation, other than the Initial Purchaser and the Company and their respective successors and the controlling persons and officers and directors referred
to in Sections 6 and 7 hereof and their heirs and legal representatives, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and thereto and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person,
firm or corporation. No purchaser of Preferred Stock from the Initial Purchaser shall be deemed to be a successor by reason merely of such purchase. 

        SECTION 13.    GOVERNING LAW AND TIME.    

        THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID
STATE. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

        SECTION 14.    Effect of Headings.    

        The
Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 

        If
the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this Agreement, along with all
counterparts, shall become a binding agreement between the Initial Purchaser, and the Company in accordance with its terms. 

	 	 	 	 	Very truly yours,
	

 	
 	

 	
 	
iSTAR FINANCIAL INC.
	

 	
 	

 	
 	

By:	
 	

/s/  CATHERINE D. RICE      
 Name:  Catherine D. Rice

Title:    Chief Financial Officer
	 	 	 	 	 	 	 

15

 

	

CONFIRMED AND ACCEPTED,

    as of the date first

    above written:
	
BEAR, STEARNS & CO. INC.
	

By:	
 	

/s/  CHRIS O'CONNOR      
 Name:  Chris O'Connor

Title:    Authorized Signatory	
 	

 	
 	

 

16

   Schedule A  

SUBSIDIARIES  

	767 STARS LLC
	1001 East Palm, LLC
	7555-7575 Colshire LLC
	Acquest Government Holdings, L.L.C.
	Acquest Government Holdings II, LLC
	Acquest Holdings FC, LLC
	ACRE CLS, LLC
	ACRE Dublin, LLC
	ACRE HPC, LLC
	ACRE IDG, LLC
	ACRE IDG Manager, LLC
	ACRE Partners, LLC
	ACRE Seymour, LLC
	ACRE Simon, L.L.C.
	American Corporate Real Estate, Inc.
	BM Center, LLC
	Corporate Technology Centre Associates LLC
	Corporate Technology Centre Associates II LLC
	CTC Associates I, L.P.
	CTC Associates II, L.P.
	CTC Associates I GenPar, LLC
	CTC Associates II GenPar, LLC
	CTL I Maryland, Inc.
	FMAC Starfund, L.L.P.
	F/S Subsidiary, L.L.C.
	iStar 85 10th L/C LLC
	iStar 100 LLC
	iStar 100 Management Inc.
	iStar 100 Riverview LLC
	iStar 200-300 LLC
	iStar 200-300 Management Inc.
	iStar 200-300 Riverview LLC
	iStar Asset Receivables Trust
	iStar Asset Services, Inc.
	iStar BEST Finance LLC
	iStar Bishops Gate LLC
	iStar Campbellsville LLC
	iStar CTL I, L.P
	iStar CTL I GenPar, Inc.
	iStar DB Seller, LLC
	iStar D.C., Inc.
	iStar Denver Place, L.L.C.
	iStar Dixon LLC
	iStar Eagle GenPar LLC
	iStar Eagle LP
	iStar Finance Sub 1000T LLC
	iStar Finance Sub V LLC
	 

Sch. A-1

 

	iStar Fort Collins USGS LLC
	iStar Funding, LLC
	iStar GT GenPar, LLC
	iStar GT, L.P.
	iStar Harborside LLC
	iStar Harborside Member LLC
	iStar Harrisburg Business Trust
	iStar Harrisburg GenPar LLC
	iStar Harrisburg, L.P.
	iStar HQ 2003 LP
	iStar HQ 2003 GenPar LLC
	iStar HQ 2003 Inc.
	iStar HQ I, Inc.
	iStar HQ I, L.P.
	iStar HQ I GenPar, Inc.
	iStar HQ I Maryland, Inc.
	iStar HQ GT Illinois, Inc.
	iStar HQ GT, Inc.
	iStar Las Vegas LLC
	iStar Merger Co. I
	iStar Merger Co. II
	iStar NG Gen Par Inc.
	iStar NG LP
	iStar Operating, Inc.
	iStar Poydras, LLC
	iStar Preferred Holdings, LLC
	iStar Real Estate Services, Inc.
	iStar Safeguard Preferred Holdings LLC
	iStar San Jose, L.L.C.
	iStar Square 24 LLC
	iStar Sterling LLC
	iStar Sunnyvale, LLC
	iStar Sunnyvale Partners, L.P.
	iStar Ventures, Inc.
	iStar Ventures Direct Holdings, LLC
	iStar Walden, LLC
	MD3 Cayman L.P.
	NewPar, LLC
	NewPar/New LLC
	P Funding, Inc.
	Red Lion G.P., Inc.
	RLH Partnership, LLP
	SFI I, LLC
	SFT I, Inc.
	SFT II, Inc.
	SFT/RLH, Inc.
	SFT Starbonds Inc.
	SFT Venturer, LLC
	SFT Whole Loans A, Inc.
	Starwood Financial Advisors II, LLC
	STARS I Corp.
	 

Sch. A-2

 

	STARS Investment I Corp.
	STW Holdings I, Inc.
	TriNet Concord Farms Partners III Limited Partnerships
	TriNet Corporate Partners II, L.P.
	TriNet Corporate Partners III, L.P.
	TriNet Corporate Realty Trust, Inc.
	TriNet Essential Facilities III, Inc.
	TriNet Essential Facilities VII, Inc.
	TriNet Essential Facilities VIIIR, Inc.
	TriNet Essential Facilities X, Inc.
	TriNet Essential Facilities XI, Inc.
	TriNet Essential Facilities XII, Inc.
	TriNet Essential Facilities XVIII, Inc.
	TriNet Essential Facilities XIX, Inc.
	TriNet Essential Facilities XX, Inc.
	TriNet Essential Facilities XXIII, Inc.
	TriNet Essential Facilities XXIV, Inc.
	TriNet Essential Facilities XXVI, Inc.
	TriNet Essential Facilities XXVII, Inc.
	TriNet Essential Facilities XXVIII, Inc.
	TriNet Essential Facilities XXIX, Inc.
	TriNet Management Operating Company, Inc.
	TriNet Milpitas Associates, LLC
	TriNet Property Partners, L.P.
	TriNet Realty Capital, Inc.
	TriNet Realty Investors I, Inc.
	TriNet Realty Investors II, Inc.
	TriNet Realty Investors III, Inc.
	TriNet Realty Investors IV, Inc.
	TriNet Realty Investors V, Inc.
	TriNet Sunnyvale Partners, L.P.
	W9/TriNet Poydras, LLC

Sch. A-3

   Exhibit A 

FORM
OF REGISTRATION RIGHTS AGREEMENT 

(Please
see attached copy of the Registration Rights Agreement.) 

Exh. A-1

   Exhibit B 

FORM OF OPINION OF SPECIAL COUNSEL

FOR THE COMPANY

TO BE DELIVERED PURSUANT TO SECTION 5(b) 

	(1)
	The
SEC Documents and each amendment thereto (in each case, including the documents incorporated by reference therein but not including the financial statements and other financial
information contained therein, as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the 1933 Act, the 1934 Act, the 1933 Act
Regulations and the 1934 Act Regulations.

	(2)
	Such
counsel has no reason to believe that (other than the financial statements and other financial information contained therein, as to which such counsel need express no opinion)
the SEC Documents, as of the dates of the respective SEC Documents or the date of such opinion, included or includes any untrue statement of a material fact or omitted or omits to state any material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

	(3)
	The
Company and each of its "significant subsidiaries" (as defined in Rule 1.02(w) of Regulation S-X under the 1934 Act) have been duly organized and are
validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation and are duly qualified to transact business as foreign corporations and are in good
standing under the laws of all other jurisdictions where such counsel has been advised that the failure to be so qualified would amount to a material liability or disability to the Company and its
subsidiaries, taken as a whole; the Company and each of its significant subsidiaries have full power and authority to own, lease and operate their respective properties and assets and conduct their
respective businesses as described in the SEC Documents, and the Company has corporate power to enter into this Agreement and the Registration Rights Agreement and to carry out all the terms and
provisions hereof and thereof and of the Preferred Stock to be carried out by it; all of the issued and outstanding shares of capital stock of each of the Company's significant subsidiaries, except as
otherwise set forth in the SEC Documents, are owned beneficially by the Company free and clear of any perfected security interests or, to the best knowledge of such counsel, any other security
interests, liens, encumbrances, equities or claims, except for pledges of subsidiary stock under debt instruments.

	(4)
	The
execution and delivery of the Agreement and the Registration Rights Agreement have been duly authorized by all necessary corporate action of the Company and the Agreement and the
Registration Rights Agreement have been duly executed and delivered by the Company.

	(5)
	The
shares of Preferred Stock to be purchased by the Initial Purchaser from the Company have been duly authorized for issuance and sale to the Initial Purchaser pursuant to the
Purchase Agreement and, when issued and delivered by the Company pursuant to the Purchase Agreement against payment of the consideration set forth in the Purchase Agreement, will be validly issued and
fully paid and non-assessable and no holder of the Preferred Stock is or will be subject to personal liability by reason of being such a holder; the Preferred Stock conforms to the
provisions of the Articles Supplementary; and the relative rights, preferences, interests and powers of the Preferred Stock are as set forth in the Articles Supplementary relating thereto, and all
such provisions are valid under the laws of the State of Maryland.

	(6)
	The
Company has an authorized, issued and outstanding capitalization as set forth in the SEC Documents; the shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable; and none of the outstanding 

Exh. B-1

 

shares
of capital stock of the Company was issued in violation of the preemptive or other similar rights of any securityholder of the Company. 

	(7)
	The
issuance and sale of the Preferred Stock by the Company to the Initial Purchaser is not subject to the preemptive or other similar rights of any securityholder of the Company
under the charter or bylaws of the Company or Maryland law.

	(8)
	The
form of certificate used to evidence the Preferred Stock complies in all material respects with all applicable statutory requirements and with any applicable requirements of the
charter and bylaws of the Company.

	(9)
	No
holder of securities of the Company has any right which has not been fully exercised or waived to require the Company to register the offer or sale of any securities owned by such
holder under the 1933 Act in connection with the registration statement to be filed under the Registration Rights Agreement.

	(10)
	The
Registration Rights Agreement has been duly authorized by the Company and, when duly executed and delivered by the Company (assuming due authorization, execution and delivery
thereof by the Initial Purchaser), will be a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally from time to time in effect and except that any rights to indemnity or contribution
thereunder may be limited by federal and state securities laws and public policy considerations).

	(11)
	The
execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the Registration Rights Agreement and the Preferred
Stock, the issuance, offering and sale of the Preferred Stock to the Initial Purchaser by the Company pursuant to this Agreement, the compliance by the Company with the other provisions of this
Agreement and the Registration Rights Agreement and the consummation of the other transactions herein and therein contemplated, including the application of the proceeds from the sale of the Preferred
Stock to redeem the Company's outstanding 93/8% Series B Cumulative Redeemable Preferred Stock and its 9.20% Series C Cumulative Redeemable Preferred Stock, and the
Company's right, pursuant to the Articles Supplementary, to redeem the Preferred Stock at any time prior to the Reset Date do not (x) require the consent, approval, authorization, registration
or qualification of or with any governmental authority, except such as have been obtained or made (and specified in such opinion) or such as may be required by the securities or Blue Sky laws of the
various states of the United States of America and other U.S. jurisdictions in connection with resales of the Preferred Stock by the Initial Purchaser, or (y) conflict with or result in a
breach or violation of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other material agreement or instrument, known to such
counsel, to which the Company or any of its significant subsidiaries is a party or by which the Company or any of its significant subsidiaries or any of their respective properties are bound, or the
charter documents or by-laws of the Company or any of its significant subsidiaries, or any statute or any judgment, decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to the Company or its significant subsidiaries;

	(12)
	The
Company is not an "investment company" and, after giving effect to the sale of the Preferred Stock to the Initial Purchaser and the application of the proceeds therefrom, will
not be an "investment company," as such term is defined in the 1940 Act.

	(13)
	Such
counsel does not know of any legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which the property of the
Company or any of its subsidiaries is subject that would be required to be described in a prospectus pursuant 

Exh. B-2

 

to
the 1933 Act that are not described in the SEC Documents, or any statutes, regulations, contracts or other documents that would be required to be described in a prospectus pursuant to the 1933 Act
that are not described or incorporated in the SEC Documents. 

	(14)
	Commencing
with the Company's taxable year ended December 31, 1998, the Company has been organized in conformity with the requirements for qualification as a real estate
investment trust ("REIT") under the Code, and its method of operation, as described in the SEC Documents and set forth in the Company's amended and restated charter, has enabled the Company to meet
and, provided that the Company continues to meet the applicable asset composition, source of income, shareholder diversification, distribution, record keeping and other requirements of the Code
necessary for a corporation to qualify as a REIT, will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code.

	(15)
	Assuming
the accuracy of the representation of the Initial Purchaser in Section 2(c) of the Agreement, no registration under the 1933 Act of the Preferred Stock is required in
connection with the sale of the Preferred Stock to the Initial Purchaser as contemplated by this Agreement. 

        In
rendering any such opinion, such counsel may rely, as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and public
officials and, as to matters involving the application of laws of any jurisdiction other than the State of New York or the United States or the General Corporation Law of the State of Delaware, to the
extent satisfactory in form and scope to counsel for the Underwriter, upon the opinion of Venable LLP. 

Exh. B-3

QuickLinks

PURCHASE AGREEMENTQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.20    
    

EXECUTION
COPY 

 
 

SECOND AMENDED AND RESTATED
  EMPLOYMENT AGREEMENT    
    

        This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is dated as of the
1st day of June 2003, by any between WILLIS GROUP HOLDINGS LIMITED, a company established under the laws of Bermuda ("Willis
Holdings"), WILLIS NORTH AMERICA, INC. ("Willis US", and collectively with Willis Holdings,
"Employer") and JOSEPH J. PLUMERI ("Executive"). 

        WHEREAS,
on October 15, 2000 (the "Commencement Date"), Willis US and Willis Group Limited (f/k/a/ Willis Group plc,
"Willis UK") entered into an employment agreement in order to employ Executive as Executive Chairman of Willis US and Chairman and Chief
Executive Officer of Willis UK, among other things; and 

        WHEREAS,
effective on or about May 8, 2001, as a result of the exchange of ordinary shares of TA I Limited, a company established under the laws of England and Wales and
the former ultimate parent company of Willis UK and Willis US, for shares of common stock of Willis Holdings (such stock, "Holdings
Stock"), Willis Holdings instead become the ultimate parent company of TA I Limited, Willis US and Willis UK (the "Share
Exchange"); and 

        WHEREAS,
in connection with the Share Exchange, as of March 26, 2001, Willis US and Willis UK, along with Willis Holdings (collectively, the
"Willis Group") agreed to amend and restate this Agreement (the "First Restatement"); and 

        WHEREAS,
Willis Holdings, as the ultimate parent of Willis US, desires to become jointly and severally liable with Willis US for all obligations hereunder; and 

        WHEREAS,
the parties desire to make certain changes to the First Restatement including, among other things, to (i) extend the term of this Agreement and additional three years
from the date the First Restatement would otherwise have expired, and (ii) make certain changes in the provisions with regard to Executive's Holding Stock (and options to purchase Holdings
Stock); and 

        WHEREAS,
Executive desires to accept such changes on the terms and conditions set forth in this Agreement. 

        NOW,
THEREFORE, in consideration of the mutual covenants and promises contained herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows: 

        1.     Employment, Compensation and Benefits.    During the period of this Agreement, Employer agrees to employ
Executive in the capacity, to pay the remuneration, and to provide the benefits, described below. 

        (a)   Titles and Duties

        (i)    During
the Term (as defined in Section 2 herein), Executive shall be employed as Executive Chairman of Willis US, and shall hold the offices of Executive
Chairman and Chief Executive Officer of Willis Holdings and Willis US and the officers of Chairman, Chief Executive Officer and Senior Managing Director of Willis UK. During the Term,
Executive shall also be a member of the Board of Directors of Willis Holdings (the "Board") (or such other most senior governing board of Willis
Holdings) and Executive Committee of Willis Holdings, Willis UK and Willis US. Executive shall also be appointed to such senior director and executive positions, as the Board, after
consultation with Executive, deems appropriate, of each subsidiary of Willis Holdings. 

        (ii)   Executive
shall have the customary duties, responsibilities and authority of a chairman and a chief executive officer at a corporation of a similar size and status as
the Willis Group. 

 

        (iii)  Executive
shall report directly to the Board. 

        (iv)  Executive's
principal office shall be located at an office of Willis US in Manhattan, New York City, New York. 

        (b)   Remuneration

        (i)    Basic Salary.    Beginning on the Commencement Date, Executive's base salary shall be at the rate of $1,000,000
per annum, payable in the United States in accordance with Willis U.S.'s normal payroll practices. On each anniversary of the Commencement Date, the amount of Executive's Base Salary shall be reviewed
and may, at the discretion of the Board, be adjusted (but never below the then Base Salary). Any such increased amount shall constitute "Base Salary"
hereunder. Unless otherwise specified hereunder, all dollar amounts referred to in this Agreement are in U.S. dollars and all amounts are to be paid in the United States. 

        (ii)   Bonus.    So long as Executive remains employed hereunder, Executive shall, unless otherwise waived in writing
by Executive, receive an annual cash bonus (a "Guaranteed Bonus") equal to 100% of Executive's Base Salary, in respect of each fiscal year ending during
the Term (the "Fiscal Year"), other than for Fiscal Years 2002 and 2003 (and, subject to Section 3 of this Agreement, prorated based on the
period within the Term for any partial Fiscal Year ending after the Term); the amount of which shall be payable within the first quarter following the end of each such Fiscal Year. An additional
annual or other bonus amount in excess of the Guaranteed Bonus shall be payable to Executive if extraordinary performance targets, established at the beginning of each Fiscal Year by the Board after
consultation with the Executive, are achieved. 

        (iii)  Deferral of Receipt of Remuneration.    Executive shall have the right to defer, on an annual basis, receipt
of his Base Salary and Guaranteed Bonus to the full extent provided and otherwise in accordance with the terms of Employer's deferred compensation plan in which Executive participates (or any
successor plan thereto) as in effect from time to time (the "Deferred Compensation Plan"). 

        (c)   Benefits

        (i)    Willis US Plans Generally.    Employer shall provide, or shall cause to be provided, Executive with
those benefits, including medical, life insurance, disability, pension and other benefit programs, plans and practices to which similarly-situated, full time executive employees of Willis US
and its subsidiaries
(commensurate with Executive's position with Willis US) are entitled (under the applicable benefit plans as in effect as of the Commencement Date or as may be amended from time to time), as set
forth in the Staff Handbook (the "Company Plans"), as well as fringe benefits commensurate with the Executive's position, including, at Employer's
expense, reasonable availability of private air transportation, as determined appropriate for business travel by Executive in his reasonable, good faith discretion and, when reasonably necessary for
security reasons, personal travel of Executive and his family, unless otherwise expressly waived by Executive in writing. 

        (ii)   Deferred Compensation Benefit.    So long as Executive remains employed by Employer hereunder, beginning on
October 15, 2003, Executive shall be entitled to receive an annual deferred compensation credit of $800,000 (the "Deferred Compensation Benefit")
under the Deferred Compensation Plan in respect of the Contract Year beginning on October 15, 2003 and each full (or partial) Contract Year occurring thereafter. Each such Deferred Compensation
Benefit shall be credited to an account established for Executive under the Deferred Compensation Plan (the "Deferral Account") in four equal
installments of $200,000 each, beginning on January 14, April 14, July 14, and October 14 of each Contract Year in respect of which such Deferred Compensation Benefit is
being credited. Notwithstanding anything set forth in this Agreement to the contrary, Executive shall be (A) entitled to receive an additional Deferred 

2

 

Compensation
Benefit credit in respect of the Contract Year ending on October 15, 2003, of which one-half shall be credited on each of July 14, 2003 and October 14,
2003 and (B) on each date that any Deferred Compensation Benefit is credited to the Deferral Account, Executive shall be vested in, but not then entitled to payment of, such credited amount.
Subject to the foregoing, all Deferred Compensation Benefits shall otherwise be treated under the Deferred Compensation Plan in the same manner (including, without limitation but subject to
Section 3(a)(ii) below) as any elective deferrals of Base Salary and Guaranteed Bonus amounts made by Executive under the Deferred Compensation Plan as provided in
Section 1(b)(iii) above. 

        (d)   U.K. Corporate Housing.    In addition to the benefits provided in Section 1(c)(i), above, Employer
shall make available, or cause to be made available, for use by Executive (and make payment of all rent, broker's fees and other related expenses for) an apartment in London, England, suitable to
Executive's status in his role as Executive Chairman and Chief Executive Officer of Willis Holdings. Such apartment shall be either the apartment made available to Executive as of the date hereof or
another apartment comparable thereto, as mutually and reasonably agreed upon by the Board and Executive. 

        (e)   Other Expenses.    All expenses of Executive incurred in connection with the performance of his services
hereunder or prior hereto, other than with respect to the commutation by Executive from his home in New Jersey to his office in New York City, shall be payable or reimbursed by Employer (including but
not limited to those fringe benefits set forth in Sections 1(c)(i) and 1(d), above) and, to the extent, if any, such benefits would be taxable to Executive, shall be grossed up by
Employer such that Executive has no after-tax cost for such expenses or additional gross-up amount. 

        (f)    Indemnification.    Employer shall provide Executive with Directors and Officers and Errors and Omissions
insurance in amounts reasonably acceptable to Executive. Willis Holdings and Willis US each agrees, and shall cause their respective subsidiaries to agree, to indemnify and defend Executive, to
the fullest extent permitted by applicable law and by their respective Articles of Incorporation and by-laws (or the applicable equivalent governing documents), with respect to any and all
claims which arise from or relate to Executive's duties as an officer, member of the Board (and any other board of directors (or equivalent governing entity) of Willis UK, Willis US or any of
their affiliates), employee of Willis US, and duties performed in connection with the officers of Willis UK and Willis Holdings held by Executive, or as a fiduciary of any employee
benefit plan or a similar capacity with any other entity for which Executive is performing services at Employer's request, whether performed heretofore or hereafter. 

        (g)   Equity Participation

        (i)    General.    On or about the Commencement Date, Executive invested $5,000,000 to purchase 1,721,407 shares of
Holdings Stock ("Purchased Shares"), at a per share purchase price equal to £2.00 (the "Initial Price Per
Share"). For each Purchased Share, Executive was granted an option to purchase three (3) shares of Holdings Stock, at a per share exercise price equal to the Initial
Price Per Share (the "Options"). The foregoing equity arrangements, to the extent not inconsistent with this Section 1(g), are governed by the
terms and conditions of certain documents, including the Management Shareholder and Subscription Agreement dated as of October 15, 2000 by and among Willis Holdings, Mourant & Co.
Trustees Limited and Executive as amended to give effect to the Share Exchange by a global amendment effective May 8, 2001 (the "Subscription
Agreement"), the Amended and Restated 1998 Share Purchase and Option Plan for Key Executives of Willis Holdings, and the Share Option Agreement (the
"Share Option Agreement"), the Sale Participation Agreement, and the Registration Rights Agreement (each entered into by Executive as of
October 15, 2000 and amended by a global amendment dated as of May 8, 2001) (all such agreements and documents collectively, the "Equity Participation Plan
Agreements"). 

3

 

        (ii)   Amendments to Equity Participation Plan Agreements.    Notwithstanding anything set forth in this Agreement or
the Equity Participation Plan Agreements to the contrary, Willis Holdings shall, and shall cause the Trinity Trustee (as such term is defined in the Subscription Agreement) to, agree to amend the
Subscription Agreement (and the Subscription Agreement is hereby deemed to be amended), effective as of the date hereof, as follows: (A) to the extent not previously contained therein, to
incorporate the terms set forth in the Addendum attached to this Agreement into the Subscription Agreement; and (B) to provide that, subject only to the limitations on transfer set forth in
Section 3 of the Subscription Agreement (but not subject to the transfer restrictions in Section 4 of the Subscription Agreement), Executive may: 

        (I)   so
long as Executive remains employed with the Willis Group, sell or otherwise dispose of such number of shares of his Holding Stock equal to, at any given time
following the date of this
Agreement, up to a percentage of the sum of (x) the aggregate number of his Purchased Shares and (y) the total of (aa) the aggregate number of shares of Holdings Stock subject to vested
(but unexercised) Options ("Available Option Shares") and (bb) the aggregate number of shares previously issued upon Executive's exercise of Options
("Option Shares"), which percentage shall be equal to a fraction, the numerator of which will be the aggregate number of shares of Holdings Stock (as of
the date that is ten business days, prior to the date on which Executive intends to sell or otherwise dispose of his Holdings Stock (the "Determination
Date")) sold or otherwise disposed of on or prior thereto by Profit Sharing (Overseas) Limited Partnership and its affiliates ("together, the "KKR
Partnerships") to any person or entity (other than an affiliate of any KKR Partnership or any member of the Willis Group) and the
denominator of which will be the aggregate number of shares of Holdings Stock (or TA I Limited, as applicable) held, as of the Commencement Date, by the KKR
Partnerships; and 

        (II)  at
such time as Executive ceases to be employed by the Willis Group, sell or otherwise dispose of all or any portion of Executive's Purchased Shares and Option Shares
(which includes any Available Option Shares that become Option Shares) not previously sold or otherwise disposed of by Executive. 

        (iii)  Right of First Refusal.    Willis Holdings and Executive hereby acknowledge that the criteria pertaining to
the expiration of the right of first refusal set forth in Section 5 of the Subscription Agreement have been met such that such right of first refusal no longer applies to Executive's Holdings
Stock. 

        (h)   Executive
shall be entitled to vacation time and holidays as are provided in general to executive employees of Willis US but shall, in any event, be entitled to
no less than four (4) weeks of vacation per year. Any unused days accrued in a particular year may not be carried over to a subsequent year. 

        2.     Term and Termination

        (a)   Term.    This Agreement shall become effective as of the Commencement Date. Unless terminated earlier pursuant
to Section 2(b), below, Executive's employment hereunder shall remain in effect until the day after the eighth anniversary of the Commencement Date. For purposes of this Agreement, the
eight-year employment term (which began on the Commencement Date) shall be deemed to be the "Term", and each twelve-month period commencing
on the Commencement Date and on each anniversary thereof occurring during the Term shall be deemed to be a "Contract Year". 

        (b)   Termination.    The Term shall terminate on the earlier to occur of (i) the expiration of the Term and
(ii) the date upon which Executive's employment is terminated by Employer or Executive. Subject to the conditions and procedures of Section 3(d)(iii) and (iv), below, either party
may terminate the Term and Executive's employment at any time by providing 90 days' prior written notice to the other party of the termination of Executive's employment. A termination by either
Employer shall be 

4

 

deemed
a termination by the Employer and all other members of the Willis Group and their respective subsidiaries. 

        3.     Effect of Certain Terminations

        (a)   Termination without Cause by Employer or Resignation with Good Reason by Executive.    If at any time during
the Term, Employer terminates Executive without Cause (as defined below) or the Executive terminates his employment with the Willis Group for Good Reason (as defined below), Executive shall be
entitled to the following: 

        (i)    Within
thirty (30) days after such termination, Employer shall pay to Executive an amount equal to the sum of (x) the lesser of (A) the product of
two times his Base Salary and Guaranteed Bonus (or, in the event the Executive is not entitled to receive a Guaranteed Bonus in respect of the Fiscal Year in which termination occurs, $1,000,000 (the
"Deemed Bonus")) and (B) Executive's Base Salary and Guaranteed Bonus (or Deemed Bonus, as applicable), payable for the balance of the Term  and
(y) his Accrued Amounts (as defined below); provided,
however, if (I) after the occurrence of a Change in Control (as defined in the Share Option
Agreement) (or prior thereto, at the direction of an anticipated successor or otherwise in connection therewith), Executive's employment is terminated for any reason by Employer (or their respective
successors) or (II) after the occurrence of a Change in Control, Executive's employment is terminated by Executive with or without Good Reason,  then,
in lieu of Executive's entitlements pursuant to Section 3(a)(i)(x), above, Employer (or its applicable successor) shall be required to pay
Executive, within thirty (30) days after such termination, an amount equal to the product of three times the sum of his Base Salary and Guaranteed Bonus (or Deemed Bonus, as applicable); and 

        (ii)   Employer
shall provide, or shall case to be provided, Executive with his Accrued Rights (as defined below); provided,  however, that any Deferred Compensation
Benefit that would otherwise have been credited to Executive's Deferral Account pursuant to
Section 1(c)(ii) above if Executive had remained employed by Employer hereunder for the balance of the Term shall instead be credited in full to the Deferral Account effective as of the
date of such termination, and all Deferred Compensation Benefits then credited to the Deferral Account shall otherwise be paid to Executive pursuant to and in accordance with the provisions of the
Deferred Compensation Plan. 

        (b)   Other Terminations.    In the case of any other termination not covered by Section 3(a) alone, Executive
shall only be entitled to his Accrued Amounts and Accrued Rights; provided, however, that after the
occurrence of a Change in Control, if Executive terminates his employment without Good Reason, Executive's Deferred Compensation Benefits shall be credited and payable in the same manner and pursuant
to the same terms as set forth in Section 3(a)(ii) above. 

        (c)   No Mitigation; No Offset.    The amounts due under Section 3(a) shall be paid without any obligation of
mitigation or offset for future earnings or other amounts, and shall be paid without setoff, counterclaims or defense; provided,  however, that such amounts
shall be offset by any amounts payable to Executive pursuant to other severance plans of the Willis Group. 

        (d)   Definitions.    For purposes of this Agreement, the capitalized terms used above shall have the following
meanings: 

        (i)    "Accrued Amounts" shall mean (x) all accrued but unpaid Base Salary and vacation pay, (y) any bonus due but
unpaid for any completed Fiscal Year and (z) in respect of the Fiscal Year in which the termination occurs, payment of an amount (the "Prorated
Bonus") equal to pro rated portion of either (aa) the Guaranteed Bonus or (bb) if Executive is not entitled to receive a Guaranteed Bonus for such Fiscal Year, the
Deemed Bonus; provided, however, that upon a termination of Executive's employment for Cause or by
Executive without Good Reason (other than as a result of death, Disability or Retirement (as defined below)) prior to the end of the 

5

 

Term,
"Accrued Amounts" shall not include a Prorated Bonus in respect of the Fiscal Year in which the termination occurs. 

        (ii)   "Accrued Rights" shall mean any amounts or benefits due to Executive under any benefit or equity plan or program (other
than a severance plan), and Executive's rights under Sections 1(c), 1(e), 1(f), 4 and 7 hereof. 

        (iii)  "Cause" shall mean (A) Executive's conviction of, or pleading nolo contendere to, a felony or misdemeanour
involving sexual misconduct (other than a traffic infraction not involving actual imprisonment), (B) Executive's willful and continuous misconduct with regard to his material duties and
responsibilities which causes demonstrable harm of a material nature (C) Executive's serious or persistent breach of Executive's material obligations under this Agreement (including any
repeated failure to abide by the legal, written directives presented to him by the Board, which directives are not in violation of Section 1(a)(ii) hereof) or (D) gross negligence
(other then as a result of physical or mental impairment) with regard to his duties; provided, that, in the case of (B), (C) and (D), above, such
misconduct, breach or negligence was not resolved or cured within fifteen (15) days following the applicable Employer's written notice to Executive of the Employer's intention to terminate
Executive's employment for Cause as a result of such circumstances, which notice (pursuant to Section 2(b))
describes such circumstances with sufficient particularity to give Executive a reasonable opportunity to resolve or cure any such misconduct, breach or negligence. For purposes of this definition, an
act (or omission) shall not be deemed "willful", if, in the good faith belief of Executive, such act (or omission) was in the best interests of the
Willis Group (or any of their respective subsidiaries), and such belief was reasonable. 

        (iv)  "Good Reason" shall mean Executive terminates his employment as a result of (A) any diminution by any member of
the Willis Group of his titles, positions or status within the Willis Group, without Executive's written consent thereof, (B) any material diminution of his duties, responsibilities or
authority, or the assignment to him of any duties materially inconsistent with his positions within the Willis Group, without Executive's written consent thereof, (C) any relocation of his
principal office from New York, New York, without Executive's written consent thereof, (D) any material breach of this Agreement by Employer, (E) the occurrence of a Change in Control or
(F) the Board repeatedly overrides, supersedes or disregards reasonable decisions by Executive or recommendations made by Executive to the Board, such that the Board materially interferes with
Executive's ability to effectively function as the Executive Chairman and Chief Executive Officer, or the Board otherwise takes actions that constructively represent a lack of confidence in
Executive's ability to perform his duties and responsibilities; provided, that in all cases (other than (E) above), such action or breach is not
resolved or cured within fifteen (15) days following Executive's written notice (pursuant to Section 2(b)) to Employer of the event that he asserts is the basis for Good Reason, and
which event or behavior Employer does not resolve or cure during such 15-day period. 

        (v)   "Retirement" shall mean Executive's termination of employment with the Willis Group after Executive has been employed
with the Willis Group for at least five years following the Commencement Date. 

        (e)   Disability
Termination. Employer may terminate Executive's employment as a result of a "Disability" if Executive, as a
result of mental or physical incapacity, has been unable to perform his material duties for six (6) consecutive months (or 180 days in any 360-day period). Such termination
shall be only permitted while Executive is still so disabled and shall be effective on thirty (30) days written notice to Executive, provided that such termination shall not be effective if
Executive returns to full time performance of his material duties within such thirty (30) day period and continues in such full time capacity (which full time status shall be deemed to continue
even in the event that vacation or 

6

 

intermittent
and de minimis sick leave is taken) for six (6) consecutive months thereafter. For the avoidance of doubt, in the event that
Executive does return to full time performance but does not continue in such full time capacity for six (6)) consecutive months thereafter, the termination shall be deemed effective on thirty
(30) days written notice following the most recent date that Executive fails to continue in such full time capacity. 

        4.     Excise Tax

        (a)   In
the event it shall be determined that any payment, benefit or distribution (or combination thereof) by Employer, any of Employer's affiliates, one or more trusts
established by Employer for the benefit of its employees, or any other person or entity, to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement, or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, stock appreciation right,
phantom equity awards or similar right, or the lapse or termination of any restriction on the vesting or exercisability of any of the foregoing) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") by reason of being "contingent on a change in ownership or control" of Willis US or Willis Holdings, within Section 280G of the
Code (or any successor provision thereto) or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties,
hereinafter collectively referred to as the "Excise Tax"), then Executive shall be entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that after payment by Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and the Excise Tax imposed upon the Gross-Up Payment,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. 

        (b)   Subject
to the provisions of Section 4(a) hereof, all determinations required to be made under this Section 4, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally
recognized certified public accounting firm as may be designated by Employer, and reasonably satisfactory to Executive (the "Accounting Firm"), which
shall provide detailed supporting calculations both to Employer and Executive within fifteen (15) business days of Termination Date, or such earlier time as is requested by Employer;  provided that
for purposes of determining the amount of any Gross-Up Payment, Executive shall be deemed to pay federal income tax at the
highest marginal rates applicable to individuals in the calendar year in which any such Gross-Up Payment is to be made and deemed to pay state and local income taxes at the highest
effective rates applicable to individuals in the state or locality of Executive's residence or place of employment in the calendar year in which any such Gross-Up Payment is to be made,
net of the maximum reduction in federal income taxes that can be obtained from deduction of such state and local taxes, taking into account limitations applicable to individuals subject to federal
income tax at the highest marginal rates. All fees and expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up Payment, as determined pursuant to this
Section 4, shall be paid by Employer to Executive (or to the appropriate taxing authority on Executive's behalf) when due immediately prior to the date Executive is required to make payment of
any excise Tax or other taxes. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall so indicate to Executive in writing, with an opinion that Executive has
substantial authority not to report any Excise Tax on his/her federal state, local income or other tax return. Any determination by the Accounting Firm shall be binding upon Employer and the Executive
absent a contrary determination by the Internal Revenue Service or a court of competent jurisdiction; provided,  however, that no such determination shall
eliminate or reduce Employer's obligation to provide any Gross-Up Payment that shall be due as a
result of such contrary determination. As a result of the uncertainty in the application of Section 4999 of the Code (or any successor provision thereto) and the possibility of similar
uncertainty regarding state or local tax law at the time of any determination by the 

7

 

Accounting
Firm hereunder, it is possible that the amount of the Gross-Up Payment determined by the Accounting Firm to be due to (or on behalf of) Executive was lower than the amount
actually due ("Underpayment"). In the event that the Employer exhausts its remedies pursuant to Section 4(c) and Executive thereafter is required
to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred as promptly as possible and notify Employer and Executive of such
calculations, and any such Underpayment (including the Gross-Up Payment to Executive) shall be promptly paid by Employer to or for the benefit of Executive within five (5) business
days after receipt of such determination and calculations. 

        (c)   Executive
shall notify Employer in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Employer of any
Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten (10) business days after Executive is informed in writing of such claim and shall
apprise Employer of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the thirty (30) day
period following the date on which he gives such notice to Employer (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If Employer notifies
Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall (i) give Employer any information which is in Executive's possession
reasonably requested by Employer relating to such claim, (ii) take such action in connection with contesting such claim as Employer shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by Employer, (iii) cooperate with Employer in good faith in order to
effectively contest such claim, and (iv) permit Employer to participate in any proceedings relating to such claim; provided,  however, that Employer
shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result
of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 4(c), Employer shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as Employer shall determine; provided,  further,
that if Employer directs Executive to pay such claim and sue for a refund, Employer shall pay the amount of such claim to Executive, and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such payment
or with respect to any imputed income with respect to such payment (including the applicable Gross-Up Payment); provided,  further, that if Executive is
required to extend the statute of limitations to enable Employer to contest such claim, Executive may limit this extension
solely to such contested amount. Employer's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 

        (d)   If,
after the receipt by Executive of an amount paid by Employer pursuant to this Section 4, Executive becomes entitled to receive any refund with respect to a
Gross-Up Payment, Executive shall (subject to Employer's complying with the requirements of Section 4(c)) promptly pay to Employer the amount of such refund received (together with
any interest paid or credited thereon after taxes applicable thereto). 

        5.     Ownership of Business.    All business activity participated in by Executive as an employee of Employer, and
Executive's execution of his duties and responsibilities to the Willis Group and their 

8

 

related
entities as set forth in Section 1(a), above (the "Business Activity") shall be conducted solely on behalf of Employer and their related
entities. Executive shall have no right to share in any commission or fee resulting from such Business Activity, other than the compensation referred to in Section 1(b), above, and any monies
due to any member of the Willis Group or their related entities as a result of Business Activity which may be collected by Executive on behalf of the Willis Group or their related entities shall be
promptly paid over to of the Willis Group or their related entities, as applicable. 

        6.     Confidential Information; Noncompetition and Nonsolicitation.    In consideration of Employer entering into this
Agreement with Executive, Executive hereby agrees effective as of the Effective Date that, without Employer's prior written consent, Executive shall not: 

        (a)   While
employed and at any time thereafter, directly or indirectly, disclose any Confidential Information (as defined below) pertaining to the business of any member of
the Restricted Group (as defined below), except when required by law; or 

        (b)   At
any time during Executive's employment with Employer and thereafter during the Noncompete period, directly or indirectly (i) be engaged in or have financial
interest (other than an ownership position of less than 5% in any company whose shares are publicly traded or any non-voting non-convertible debt securities in any company or
through a mutual fund, private equity fund or other pooled account in which Executive has no discretion as to investment decisions) in any business in Competition (as defined below) with the
Restricted Group (as defined below), (ii) solicit, accept or perform, other than on the Restricted Group's behalf, (x) insurance or fidelity or surety bond brokerage, or agency,
business, (y) risk management, claims administration, self-insurance, or related consulting or (z) any other material types of business performed by the Restricted Group for
any client with whom Executive has had business dealings, or any prospective client from whom Executive has materially participated in soliciting business, in either case on behalf of the Restricted
Group within the last twelve (12) months of Executive's employment with Employer or (iii) other than in performing his duties for the Restricted Group, solicit any person who is or has
been employed by any member of the Restricted Group at any time during the 6 months prior to the date of such solicitation to Compete with any member of the Restricted Group,  provided that the
foregoing shall not prevent Executive from serving as a reference for any given individual employee.
 

        (c)   As
used in this Agreement, the term "Confidential Information" means all non-public information (were such
information is not otherwise public as a result of Executive's breach of this Section 6) concerning the financial data, strategic business plans, and other non-public, proprietary,
and confidential information of any member of the Willis Group or any of their subsidiaries (the "Restricted Group") as in existence during Executive's
employment with, or performance of any consulting services for, Employer (and/or any other member of the Restricted Group) and as of the date of any termination of such employment or such performance
of services. As used in this Agreement, a business shall be in "Competition" if, at the time of Executive joining such business, it is principally
engaged in (i) the insurance or surety or fidelity bond brokerage, or agency, business, (ii) risk management, claims administration, self-insurance, or risk management
consulting, (iii) other material business performed by any member of the Restricted Group at the time of Executive's termination of employment or (iv) if it is a business in which any
member of the Restricted Group has taken material steps toward engaging. The Executive shall not be in competition if he is involved in a portion of a business of a competitor that is itself not in
Competition. Finally the "Noncompete Period" shall mean upon a termination of employment at any time prior to the end of the Term, the lesser of
(x) twenty-four (24) months and (y) the remainder of the Term; provided,  however, that in no event shall the Noncompete Period be less than
twelve (12) months. 

        7.     Miscellaneous

        (a)   Integrated Agreement.    Except as otherwise provided in this Section 6, this document, together with
the letter agreement dated as of March 26, 2001, which shall remain in full force and effect, 

9

 

embodies
the complete understanding and agreement of the parties hereto relating to Executive's employment; provided,  however, that, except as otherwise provided in
Section 1(g), above, this Agreement shall be in addition to and not in lieu of the agreements
relating to Executive's subscription to, purchase of, and option to purchase, Holdings Stock, as referenced in Section 1(g), above. This Agreement may not be amended or terminated orally, but
only by a writing executed by the parties hereto. 

        (b)   Severability; Effect of Certain Securities Laws and Other Restrictions.    If any term of this Agreement is
rendered, declared or held to be invalid or unenforceable by any judicial, legislative or administrative action, the remaining provisions hereof shall remain in full force and effect, shall in no way
be affected, impaired or invalidated, and shall be enforced to the full extent permitted by law and equity. In addition, notwithstanding anything set forth in this Agreement to the contrary, in the
event and to the extent that any term of this Agreement (or benefit provided hereunder) is or becomes prohibited by applicable securities laws (and any rules or regulations promulgated thereunder) or
rules or regulations of any exchange on which Holdings Stock is traded, such term or benefit shall be suspended unless and until such term or benefit ceases to be prohibited by such laws, rules or
regulations, and Executive hereby acknowledges and agrees that any such suspension will not constitute a breach of this Agreement by Employer. 

        (c)   Notices.    Any notices given pursuant to this Agreement shall be sent by certified mail or a nationally
recognized courier service, with proof of delivery, to the addresses set forth below (or, in the event of an address change by either party, to the then-current address of the party, as
specified in any written change-of-address notice properly furnished under this Section 7(c)). 

	 
	 	 

	If to Employer, then to:	 	Willis North America, Inc.

26 Century Boulevard

Nashville, Tennessee 37214

Attention: Mary Caizzo, Esq.
	

-and-        	
 	

Willis Group Holdings Limited

c/o Willis of New York, Inc.

7 Hanover Square

New York, New York 10004

Attention: William Bowden, Esq.
	

With a copy to:	
 	

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Alvin Brown, Esq.
	

If to Executive:	
 	

To Executive's most recent address set forth in the personnel records of Willis US
	

With copy to:	
 	

Proskauer Rose LLP

1585 Broadway

New York, New York 10036

Attention: Michael S. Sirkin, Esq.

        (d)   Governing Law; Remedies.    The substantive laws of New York shall govern this Agreement, without giving effect
to its conflicts of law principles. Any disputes or issues arising out of or relating to any equity in Willis Holdings that Executive has received or may become entitled to receive shall also be
governed by the laws of the State of New York or, with respect to any stock options granted on Holdings Stock (except to the extent it involves interpretation under the Employment Agreement), the laws
of Bermuda, without regard to conflicts of law principles in any event. Executive acknowledges 

10

 

that
there is no adequate remedy at law for any breach of the provisions of Section 6 of this Agreement and that, in addition to any other remedies to which it may otherwise be entitled as a
matter of law, Employer shall be entitled to injunctive relief in the event of any such breach. 

        (e)   Waiver.    The waiver by any party of any breach of this Agreement shall not operate or be construed as a
waiver of that party's rights upon any subsequent or different breach. 

        (f)    Successors and Assigns; Third-Party Beneficiaries.    This Agreement shall inure to the benefit of and be
binding upon and enforceable against the heirs, legal representatives and assigns of Executive and the successors and permitted assigns of Employer. Any amounts due Executive as of his death shall be
paid to his designated beneficiary, or if none, his estate. Willis Holdings' direct and indirect subsidiaries are intended third-party beneficiaries of all promises and convenants made by Executive
herein in favor of Willis US in Section 6 hereof. As such, insofar as they are affected by any breach of this Agreement by Executive, Willis Holdings' direct and indirect subsidiaries
may enforce Executive's covenants and promises herein to the same extent that Employer has a right to do so. Neither Willis Holdings nor Willis US may assign this Agreement or its rights
hereunder except as part of a sale of, and to the acquirer of, all or substantially all of the securities and/or assets of Willis Holdings or Willis US and then only if the assignee and the
ultimate parent entity of the assignee (if applicable) promptly deliver to Executive a written assumption of the obligations hereunder in a form reasonably acceptable to Executive (or, to the extent
otherwise required to bind an entity other than an entity incorporated under the laws of the United States, the equivalent documentation therefor). 

        (g)   Counterparts.    This Agreement may be signed in counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same instrument. 

        (h)   Legal Fees.    Employer shall promptly pay Executive's reasonable legal and financial advisory fees incurred in
connection with entering into this Agreement and shall, to the extent such amounts would be taxable to Executive, fully gross up such payments so that Executive shall have no net after-tax
cost in respect of such payments. 

        (i)    Arbitration.    Any dispute hereunder or with regard to any document or agreement referred to herein, other
than injunctive relief under Section 7(d) hereof, shall be resolved by arbitration before the American Arbitration Association in New York City, New York. The determination of the arbitrator
shall be final and binding on the parties hereto and may be entered in any court of competent jurisdiction. In the event of any arbitration or other disputes with regard to this Agreement or any other
document or agreement referred to herein, Employer shall pay Executive's legal fees and disbursements promptly upon presentation of invoices thereof, subject to an obligation of Executive to repay
such amounts if an arbitrator finds Executive's positions in such arbitration or dispute to have been frivolous or made in bad faith. 

        (j)    Jurisdiction.    Willis US and Willis Holdings each hereby consents to the jurisdiction of the federal
and state courts in the State of New York, irrevocable waives any objection it may now or hereafter have to laying of the venue of any suit, action, or proceeding in connection with this Agreement in
any such court, and agrees that service upon it shall be sufficient if made by registered mail, and agrees not to asset the defense of forum
nonconveniens. 

        (k)   Joint and Several Liability.    Willis US and Willis Holdings shall each be jointly and severally liable
to Executive for all obligations of Employer hereunder and, in the event of any failure of such obligations to be timely fulfilled, Executive may seek applicable remedies against either
Willis US or Willis Holdings, or both, without adversely affecting his rights under this Agreement. Any determination by an arbitrator against either Willis US or Willis Holdings shall
be deemed a determination with regard to both such entities. 

[Signatures on next page] 

11

   
        IN WITNESS WHEREOF, the parties hereto have executed this Second Amended and Restated Employment Agreement as of the date first above
written. 

	 
	 
	 
	 	 

	WILLIS NORTH AMERICA, INC.	 	 
	

By:	

/s/  WILLIAM P BOWDEN JR.      
	
 	

 
	

Name:	

William P Bowden Jr.
	
 	

 
	

Title:	

Group General Counsel
	
 	

 
	

AND, signed as a Deed and delivered	

)	
 	

/s/  PERRY GOLKIN      

	By WILLIS GROUP HOLDINGS	)	 	Director
	LIMITED	)	 	 
	 	 	 	 	/s/  SCOTT C. NUTTALL      

	 	 	 	 	Director/Secretary
	
EXECUTIVE:	
 	

 
	

/s/  JOSEPH J. PLUMERI      
	
 	

 
	Joseph J. Plumeri	 	 

12

   ADDENDUM TO

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT  

	Effect of Certain Events on Option Shares and Options to Purchase Holding Stock

	Event
 
	 	Holdings Stock held by Executive upon exercise of vested Options and not theretofore sold ("Option Shares")(1)
	 	Options on Holdings Stock held

by Executive ("Options")

	Death/Disability	 	No Call.	 	No Call.

  

All Options become fully vested (to the extent not already vested and exercised). All Options remain outstanding for two years following termination.
	

Termination for Cause	
 	

Right to call at FMV, any Option Shares not previously sold, with FMV to be calculated on the 90th day following the date of press release announcing termination of employment, within such 90-day period.

 

If call not exercised, Executive may sell or retain Option Shares.	
 	

Right to call vested but unexercised Options at FMV (as calculated for Option Shares) over exercise price during same 90-day call period for Option Shares; unvested Options terminate immediately without payment.

  

If call not exercised, Options may be exercised no later than 120 days after the date of such press release.
	

Prohibited Transfers(2)	
 	

Right to call at lesser of FMV and exercise price.

 

If call not exercised, Executive may sell or retain Option Shares.	
 	

All Options terminate immediately without payment.
	

Quit Without Good Reason (other than Retirement (as Defined in the Subscription Agreement))	
 	

Right to call at FMV, with FMV any Option Shares not previously sold, to be calculated on the 90th day following the date of press release announcing termination of employment, within such 90-day period.

  

If call not exercised, Executive may sell or retain Option Shares.	
 	

Right to call vested but unexercised Options at FMV (as calculated for Option Shares) over exercise price during same 90-day call period for Option Shares; unvested Options terminate immediately without payment.

  

If call not exercised, all then vested Options remain outstanding for two years following termination.
	

Termination without Cause/Quit for Good Reason/Retirement	
 	

No Call.	
 	

No Call.

  

Upon Termination without Cause or quit for Good Reason, the vesting of Options that otherwise would have occurred in the 12-month period following such termination will accelerate. All then vested Options remain outstanding for two years following
termination; unvested Options terminate immediately without payment.
	

Change in Control	
 	

Already fully vested.	
 	

All Options become fully vested (to the extent not already vested and exercised).

	(1)
	For
the avoidance of doubt, pursuant to Section 4.3(b) of his Share Option Agreement and to the extent not prohibited by applicable securities laws or exchange rules, Executive
may effectuate a "cashless exercise" of his vested Options pursuant to a broker/dealer arrangement to cover exercise price and income tax withholding requirements.

	(2)
	Prohibited
Transfers do not include a transfer of any Holdings Stock or vested Options held by Executive to a charitable organization (which qualifies under Section 501(c) of
the Internal Revenue Code) following reasonable advance written notice to Willis Holdings of such intended transfer and execution by the transferee of an agreement to be bound by the same terms and
conditions as Executive with respect to the treatment of Executive's Holdings Stock and vested Options. 

13

QuickLinks

Exhibit 10.20

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]